REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
the 24th day of February 2000, by and between GlobeSpan, Inc., a Delaware
corporation (the "Company") and PairGain Technologies, Inc., a Delaware
corporation ("PairGain")."
RECITALS
WHEREAS, the Company and PairGain are parties to that certain Asset
Purchase Agreement dated January 21, 2000 (the "Asset Purchase Agreement"),
pursuant to which the Company purchased from PairGain all of the assets
("Assets") used in or necessary to PairGain's conduct, through its
microelectronics engineering development group, of the business of the design,
development, license and supply of intellectual property necessary for the
manufacture, have-manufacture and sale of integrated circuits and related
systems and software;
WHEREAS, the consideration paid by the Company to PairGain for the
Assets consists of (i) 1,081,197 shares of common stock, par value
$0.001("Common Stock"), of the Company (the "Shares") and (ii) a convertible
subordinated promissory note (the "Note") in the principal amount of
$90,000,000, which convertible subordinated promissory note is convertible,
under certain circumstances, into 973,078 shares of Common Stock (any shares of
Common Stock issued or issuable upon conversion of the Note are defined herein
as the "Conversion Shares")); and
WHEREAS, in order to induce PairGain to enter into the Asset Purchase
Agreement, PairGain and the Company hereby agree that this Agreement shall
govern the rights of PairGain to cause the Company to register the Shares and
any Conversion Shares issued or issuable to PairGain, and certain other matters
as set forth herein.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. REGISTRATION RIGHTS. The Company covenants and agrees as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The term "Act" means the Securities Act as amended.
(b) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the 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.
(c) The term "Holder" means PairGain or any person owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.10 hereof.
(d) The term "1934 Act" means the Securities Exchange Act of
1934, as amended.
(e) The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(f) The term "Registrable Securities" means (i) the Shares,
(ii) the Conversion Shares and (iii) any Common Stock 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, the shares referenced in (i) or (ii)
above, excluding in all cases, however, any Registrable Securities sold by a
person in a transaction in which his rights under this Section 1 are not
assigned.
(g) The number of shares of "Registrable Securities"
outstanding shall be determined by the number of shares of Common Stock
outstanding and the number of Conversion Shares that are Registrable Securities.
(h) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 REQUEST FOR REGISTRATION.
(a) Subject to the conditions of this Section 1.2, if the
Company shall receive at any time, a written request from the Holder that the
Company file a registration statement under the Act covering the registration of
Registrable Securities with an anticipated aggregate offering price of at least
$30,000,000, then the Company shall use reasonable efforts to effect, as soon as
practicable, the registration under the Act of all Registrable Securities that
the Holder requests to be registered.
(b) If the 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 1.2.
In such event the right of the Holder to include its Registrable Securities in
such registration shall be conditioned upon the Holder's participation in such
underwriting and the Holder's execution of an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company (which underwriter or underwriters shall be
reasonably acceptable to the Holder). Notwithstanding any other provision of
this Section 1.2, if the underwriter advises the Company that marketing factors
require a limitation of the number of securities underwritten (including
Registrable Securities), then the Company shall so advise the Holder, and the
number of Registrable Securities that may be included in the underwriting may be
reduced; provided, however, that the number of shares of Registrable Securities
to be included in such underwriting shall not be reduced unless all other
securities are proportionately reduced, subject to the provisions of Section
1.2(d) below. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(c) The Company shall not be required to effect a
registration pursuant to this Section 1.2:
(i) in any particular state in which under relevant
Blue Sky law the Company would be required to execute a general consent to
service of process in effecting such registration, unless the Company is already
subject to service in such jurisdiction and except as may be required under the
Act; or
(ii) if the Company has, within the six (6) month
period preceding the date of such request, already effected a registration for
the Holder pursuant to this Section 1.2; or
(iii) if not more than thirty (30) days prior to
receipt of a written notice of a request for registration pursuant to this
Section 1.2, the Company shall have (x) circulated to prospective underwriters
and their counsel a draft of a registration statement for a primary offering of
equity securities on behalf of the Company, (y) solicited bids for a primary
offering of shares of Common Stock of the Company or (z) otherwise reached an
understanding with an underwriter with respect to a primary offering of shares
of Common Stock of the Company, subject to the provision of Section 1.3 hereof,
the Company may preempt the registration requested pursuant to this Section 1.2
with such primary offering by delivering notice of such intention (the
"PREEMPTION NOTICE") to the Holder within five days after the Company has
received such notice of request for registration; PROVIDED that the period of
preemption may be up to thirty (30) days following the date of Preemption
Notice;
(iv) if the Holder proposes to dispose of Registrable
Securities that may be registered on Form S-3 pursuant to Section 1.4 hereof; or
(v) if the Company shall furnish to Holder a
certificate signed by the Company's Chief Executive Officer or Chairman of the
Board 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 stockholders
for such registration to be effected at such time, in which event the Company
shall have the right to defer such registration for a period of not more than
forty-five (45) days after receipt of the request of the Holder, provided that
such right to delay a request shall be exercised by the Company not more than
twice in any twelve (12)-month period, provided, further, that if the Company
exercises such right more than once, then the second deferral of such
registration shall not be for a period of more than thirty (30) days and there
shall be at least forty-five (45) days between the first and second such
deferral (which forty-five (45) day period shall not include any days during
which the Holder shall be prohibited from selling any Registrable Securities
because of any "black-out" or similar policies instituted by GlobeSpan which
serve to prohibit sales of GlobeSpan securities by the Holder, while the Holder
is in possession, or is presumed to be in possession, of material non-public
information).
(d) If, following the receipt of a written notice of a
request for registration pursuant to this Section 1.2, the Company shall furnish
to Holder a certificate signed by the Company's Chief Executive Officer or
Chairman of the Board stating that (i) the Company intends to sell securities
pursuant to the registration statement to be filed pursuant to such written
notice and to use the net proceeds of such issuance to prepay that portion of
the Note not converted as of the time of the sale of such securities and (ii)
the prospective underwriters of such offering advise the Company that market
factors require a limitation on the number of securities underwritten, the
amount of Conversion Shares which have not yet been issued and which are
entitled to be included in such registration by Holder shall be reduced or
eliminated before the securities to be sold by the Company are reduced.
1.3 COMPANY REGISTRATION.
(a) If (but without any obligation to do so under this
Section 1) the Company proposes to register (including for this purpose a
registration effected by the Company for stockholders other than the Holder) any
of its stock or other securities under the Act in connection with the public
offering of such securities (other than a registration relating solely to the
sale of securities to participants in a Company stock plan or a registration
relating to a corporate reorganization or other transaction under Rule 145 of
the Act or a registration on any form that does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of the Registrable Securities), the Company shall, at such
time, promptly give the Holder written notice of such registration. Upon the
written request of the Holder given within twenty (20) days after receipt of
such notice from the Company in accordance with Section 2.5, the Company shall,
subject to the provisions of Section 1.3(c), use its best efforts to cause to be
registered under the Act all of the Registrable Securities that the Holder has
requested to be registered.
(b) RIGHT TO TERMINATE REGISTRATION. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 1.3 prior to the effectiveness of such registration whether or not the
Holder has elected to include securities in such registration. The expenses of
such withdrawn registration shall be borne by the Company in accordance with
Section 1.7 hereof.
(c) UNDERWRITING REQUIREMENTS. In connection with any
offering involving an underwriting of shares of the Company's capital stock, the
Company shall not be required under this Section 1.3 to include any of the
Holder's securities in such underwriting unless it accepts the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it and enter into an underwriting agreement in customary form with an
underwriter or underwriters selected by the Company; PROVIDED, that the Holder
may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
the Holder and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement be conditions precedent to
the obligations of the Holder; PROVIDED FURTHER, that the Holder shall not be
required to make any representations or warranties to or agreements with the
Company other than representations, warranties or agreements regarding the
Holder, the Holder's Registrable Securities and the Holder's intended method of
distribution and any other representation required by law or with respect to
matters incidental to the foregoing as reasonably requested by the underwriters.
If (i) the total amount of securities, including Registrable Securities,
requested by stockholders to be included in such offering exceeds the amount of
securities requested to be sold other than by the Company that the underwriters
determine in their good faith judgment is compatible with the success of the
offering and (ii) other stockholders of the Company who hold registration rights
are also restricted in their ability to include securities in such offering by
terms at least as restrictive as this Section 1.3(c), then the Company shall be
required to include in the offering only that number of such securities,
including Registrable Securities, that the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the stockholders of the Company who
hold registration rights on parity with those granted to the Holder pursuant to
this Section 1.3 and propose to sell their shares of Common Stock in such
offering, including the Holder, according to the total amount of securities
entitled to be included therein owned by each such stockholder or in such other
proportions as shall mutually be agreed to by all such stockholders). For
purposes of the preceding parenthetical concerning apportionment, for any
selling stockholder that holds registration rights on parity with those granted
to the Holder pursuant to this Section 1.3 and that is a partnership or
corporation, the partners, retired partners and stockholders of such
stockholder, 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 shall be
deemed to be single "selling stockholder," and any pro rata reduction with
respect to such "selling stockholder" shall be based upon the aggregate amount
of securities owned by all such related entities and individuals.
1.4 FORM S-3 REGISTRATION. In case the Company shall receive from
the Holder a written request that the Company effect a registration on Form S-3,
including pursuant to Rule 415 under the Act and any related qualification or
compliance with respect to all or part of the Registrable Securities owned by
the Holder, the Company shall:
(a) use reasonable efforts to effect, as soon as
practicable, such registration and all such qualifications and compliances as
may be so requested and as would permit or facilitate the sale and distribution
of all or such portion of the Holder's Registrable Securities as are specified
in such request, provided, however, that the Company shall not be obligated to
effect any such registration, qualification or compliance, pursuant to this
Section 1.4:
(i) if Form S-3 is not available for such offering by
the Holder; or
(ii) if the Holder, proposes to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public of less than $30,000,000; or
(iii) if the Company shall furnish to the Holder a
certificate signed by the Chief Executive Officer or Chairman of the Board 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
stockholders for such Form S-3 registration to be effected at such time, in
which event the Company shall have the right to defer such registration for a
period of not more than forty-five (45) days after receipt of the request of the
Holder under this Section 1.4; provided, however, that the Company shall not
utilize this right or the right set forth in Section 1.2(c)(v) more than twice
in any twelve (12) month period, provided, further, that if the Company
exercises such right more than once, then the second deferral of such
registration shall not be for a period of more than thirty (30) days and there
shall be at least forty-five (45) days between the first and second such
deferral (which forty-five (45) day period shall not include any days during
which the Holder shall be prohibited from selling any Registrable Securities
because of any "black-out" or similar policies instituted by GlobeSpan which
serve to prohibit sales of GlobeSpan securities by the Holder, while the Holder
is in possession, or is presumed to be in possession, of material non-public
information); or
(iv) if the Company has, within the six (6) month
period preceding the date of such request, already effected a registration on
Form S-3 for the Holder pursuant to this Section 1.4; or
(v) in any particular state in which under relevant
Blue Sky laws 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, unless the Company is already subject to service in
such jurisdiction and except as may be required under the Act.
(b) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request of the Holder.
1.5 OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement
with respect to such Registrable Securities (the "Shelf Registration Statement")
and use its reasonable best efforts to cause such registration statement to
become effective, and to keep such registration statement effective until the
distribution contemplated in the Registration Statement has been completed
except in the case of a "shelf registration" for which such period shall be the
earlier of two (2) years or until the date on which all securities registered
under such registration statement have been sold or withdrawn; PROVIDED THAT as
far in advance as practicable before filing each such registration statement,
the Company shall furnish copies of all such documents proposed to be filed to
counsel to the Holder;
(b) 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 Act with respect to the disposition of all securities covered
by such registration statement and to comply with the provisions of all
applicable securities laws with respect to the sale or other disposition of all
securities covered by such registration statement during such period in
accordance with the intended method or methods of disposition by the sellers
thereof set forth in such registration statement; PROVIDED that as far in
advance as practicable before filing each such amendment and supplement, the
Company shall furnish copies of all such documents proposed to be filed to
counsel to the Holder;
(c) furnish to the Holder such numbers of copies of such
registration statement (including amendments and supplements thereto) and the
prospectus, including the preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as the Holder may reasonably
request in order to facilitate the disposition of Registrable Securities;
(d) use 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
Holder, keep such registration or qualification in effect for so long as such
registration statement remains in effect, and do any and all other acts and
things which may be reasonably necessary or advisable to enable the Holder to
consummate the disposition in such jurisdictions of such securities owned by the
Holder; 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 or process in any such states or jurisdictions;
(e) 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;
(f) as soon as practicable notify the Holder at any time
when a prospectus relating to the registration statement covering the
Registrable Securities is required to be delivered under the Act or 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 the Company shall promptly prepare and furnish
to the Holder a reasonable number of copies of a supplement or amendment to such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein in the light of
circumstances under which were made, not misleading;
(g) cause all such Registrable Securities registered
pursuant hereunder to be listed, on or prior to the effective date of such
registration statement, on each securities exchange on which similar securities
issued by the Company are then listed;
(h) provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration;
(i) make available for inspection by the Holder, any
underwriter participating in any sale or other disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
the Company or any such underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by the Holder or any such underwriter,
attorney, accountant or agent in connection with such registration statement
(including the opportunity to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements) as shall be necessary, in the opinion of their respective counsel,
to conduct a reasonable investigation within the meaning of the Act; and give
the Holder, the underwriters and their respective attorneys, accountants or
agents the opportunity to participate in the preparation of such registration
statement, each prospectus included therein or each prospectus filed with the
Securities and Exchange Commission (the "COMMISSION") in connection therewith;
(j) promptly notify the Holder and each underwriter, if any:
(i) when such registration statement or any prospectus
used in connection therewith has been filed and, with respect to such
registration statement or any post-effective amendment thereto, when the same
has become effective;
(ii) of any written comments from the Commission with
respect to any filing referred to in clause (i) and of any written request by
the Commission for amendments or supplements to such registration statement or
prospectus;
(iii) of the notification to the Company by the
Commission or any other regulatory authority of its initiation of any proceeding
with respect to, or of the issuance by the Commission or any other regulatory
authority of, any stop order suspending the effectiveness of such registration
statement; and
(iv) of the receipt by the Company of any notice with
respect to the suspension of the qualification of any Registrable Shares for
sale under applicable securities or blue sky laws of any jurisdiction;
and, in the case of clauses (ii), (iii) and (iv), promptly use all reasonable
and diligent efforts (A) to respond satisfactorily to any such comments and to
file promptly any necessary amendments or supplements, (B) to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued and (C) to obtain the withdrawal of any such suspension or
qualification, respectively;
(k) furnish to the Holder a signed counterpart, addressed to
the Holder (and each underwriter, if any) of:
(i) an opinion of counsel to the Company, dated the
effective date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the closing under
the underwriting agreement), reasonably satisfactory in form and substance to
the Holder (and such underwriter); and
(ii) a "comfort" letter, dated the effective date of
such registration statement (and, if such registration includes an underwritten
public offering, dated the date of the closing under the underwriting
agreement), signed by the independent public accountants who have certified the
Company's financial statements included in such registration statement, provided
that the Holder provides such accountants with such certificates as are
reasonably and customarily requested by such accountants;
in each case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case of
the accountants' letter, with respect to events subsequent to the date of such
financial statements and other financial matters, as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities;
(l) otherwise use all reasonable and diligent efforts to
comply with all applicable securities laws; and
(m) cooperate with the Holder and each underwriter or agent
participating in the disposition of such Registrable Shares and their respective
counsel in connection with any filings required to be made with the National
Association of Securities Dealers, Inc.
; provided, however, that if the Company shall furnish to Holder, a certificate
signed by the Company's Chief Executive Officer or Chairman of the Board 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 stockholders for the shelf
registration to be effected at such time, in which event the Company shall have
the right to defer such shelf registration for a period of not more than
forty-five (45) days after receipt of the request of the Holder, provided that
such right to delay a request shall be exercised by the Company not more than
twice in any twelve (12)-month period, provided, further, that if the Company
exercises such right more than once, then the second deferral of such shelf
registration shall not be for a period of more than thirty (30) days and there
shall be at least forty-five (45) days between the first and second such
deferral (which forty-five (45) day period shall not include any days during
which the Holder shall be prohibited from selling any Registrable Securities
because of any "black-out" or similar policies instituted by GlobeSpan which
serve to prohibit sales of GlobeSpan securities by the Holder, while the Holder
is in possession, or is presumed to be in possession, of material non-public
information).
1.6 OBLIGATIONS OF HOLDER.
(a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of the Holder that (i) the Holder shall furnish to the
Company such information regarding itself (including, without limitation (if
PairGain is the Holder), all financial statements and other information required
by the Act and the Exchange Act and the rules and regulations thereunder), the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of the
Registrable Securities and (ii) if PairGain is the Holder, the Holder shall take
any other action the Company may reasonably request in connection with the
preparation and filing of the registration statement (including, without
limitation, causing PairGain's independent public accountants to prepare and
deliver all consents, reports, opinions or other information or instruments that
may be required by the Act, the Exchange Act and the rules and regulations
thereunder or as are otherwise necessary).
(b) The Holder agrees to notify the Company as promptly as
practicable of any inaccuracy or change in information previously furnished by
the Holder to the Company or of the occurrence of any event in either case as a
result of which any prospectus relating to any registration contains or would
contain an untrue statement of a material fact regarding the Holder or the
Holder's intended method of distribution of such Registrable Securities or omits
to state any material fact regarding the Holder or the Holder's intended method
of distribution of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing, and promptly to furnish to the Company any
additional information required so that such prospectus shall not, with respect
to the Holder or the Holder's intended method of distribution of such
Registrable Securities, contain an untrue statement of material fact or omit 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.
(c) The Holder shall provide written notice to the Company
at least 24 hours prior to the sale by Holder of any Registrable Securities
pursuant to the Shelf Registration Statement. Notwithstanding anything to the
contrary contained herein, upon the receipt of such notice, the Company shall
have the right to prohibit the sale of the Registrable Securities pursuant to
such Shelf Registration Statement provided that the Company provides written
notice to the Holder within 24 hours of its prohibition of such sale and (i) the
Company in its good faith judgment believes that it would be seriously
detrimental to the Company and its stockholders for such sale to be effected at
that time or (ii) upon the happening of any event, as a result of which the
prospectus filed under the shelf registration statement includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing, it being agreed that in the case of
the prohibitions contemplated (i) and (ii) above, the Company shall use
reasonable efforts to minimize the period of time in which it shall so prohibit
the sale of any Registrable Securities and in no event shall any period of time
during which all sales are prohibited hereunder exceed an aggregate of 45 days
in any twelve month period.
1.7 EXPENSES OF REGISTRATION. All expenses other than
underwriters discounts and commissions incurred in connection with
registrations, listings, filings, and qualifications pursuant to Sections 1.2,
1.3 and 1.4, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company and the reasonable fees and disbursements of one counsel
for the Holder shall be borne by the Company (whether or not such registrations
shall become effective).
1.8 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Section 1:
(a) To the fullest extent permitted by law, the Company
shall indemnify and hold harmless the Holder, the partners or officers,
directors and stockholders of the Holder, legal counsel and accountants for the
Holder, any underwriter (as defined in the Act) for the Holder and each person,
if any, who controls, is controlled by or under common control with the Holder
or underwriter within the meaning of the Act or the 1934 Act (collectively, the
"indemnified parties"), against any losses, claims, damages, penalties,
judgments, costs, expenses or liabilities (joint or several) to which they may
become subject under the Act, the 1934 Act or any state securities laws, insofar
as such losses, claims, damages, penalties, judgments, costs, expenses or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following (collectively a "Violation"): (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) 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, (iii) any violation or
alleged violation by the Company of the Act, the 1934 Act, any state securities
laws or any rule or regulation promulgated under the Act, the 1934 Act or any
state securities laws, (iv) any breach of any representation, warranty,
agreement or covenant made by the Company in this Agreement, any registration
statement (including any supplement or amendment), each periodic report or proxy
statement filed by the Company with the Commission under the 1934 Act and any
agreement or other document in furtherance of any of the foregoing, or (v) any
litigation, claims, suits or proceedings to which an indemnified party is made a
party (other than as a plaintiff) in its capacity as a direct or indirect holder
or owner of shares of Common Stock of the Company; and the Company will
reimburse the Holder, underwriter or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, penalty, judgment, cost, expense or
liability; provided, however, that the indemnity agreement contained in this
subsection 1.8(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, penalty, judgment, cost, expense or liability 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, penalty, judgment, cost, expense or liability
to the extent that it arises out of or is based upon a Violation that occurs in
reliance upon and in conformity with any information furnished expressly for use
in connection with such registration by the Holder or such underwriter or
controlling person.
(b) Promptly after receipt by an indemnified party under
this Section 1.8 of notice of the commencement of any action (including any
governmental action) such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.8, 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 the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right, but not the obligation, to participate, at its own expense, in
the defense thereof through counsel of its own choice and shall have the right,
but not the obligation, to assert any and all cross-claims or counterclaims it
may have; PROVIDED FURTHER that an indemnified party (together with all other
indemnified parties that may be represented without conflict by one counsel)
shall have the right to retain one separate counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party
and any other party represented by such counsel in such proceeding.
(c) If the indemnification provided for in this Section 1.8
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, penalty, judgment,
cost 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, penalty, judgment, cost or expense (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party or parties on the other hand or (ii)
if the allocation provided by clause (i) of this Section 1.8(c) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) in this Section 1.8(c) but also the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the Violation
that resulted in such loss, liability, claim, damage, penalty, judgment, cost or
expense, as well as any other relevant equitable considerations. In connection
with any registration statement filed with the Commission by the Company, (x)
the relative benefits received by the indemnifying party on the one hand and the
indemnified parties on the other hand shall be deemed to be in the same
respective proportions as the net proceeds from the offering of any securities
registered thereunder (before deducting expenses) received by the indemnifying
party and the net proceeds from the offering of any shares of Common Stock of
the Company (before deducting expenses) received by such indemnified parties,
bear to the aggregate public offering price of the securities registered
thereunder, (y) the relative fault of the indemnifying party on the one hand and
such indemnified parties on the other hand shall be determined by reference to,
among other things, whether any 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 parties and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission and (z) the indemnified
parties' respective obligations to contribute pursuant to this Section 1.8 are
several in proportion to the respective number of shares of Common Stock of the
Company they sell under any such registration statement, and not joint.
(d) The Company and the Holder agree that it would not be
just or equitable if contribution pursuant to this Section 1.8 were determined
by PRO RATA allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 1.8(c) hereof.
The amount paid or payable by an indemnified party as a result of any loss,
liability, claim, damage, penalty, judgment, cost or expense referred to in
Section 1.8(a) shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 1.8, in connection with any
registration statement filed by the Company, the Holder shall not be required to
contribute any amount in excess of the net proceeds from the offering of the
shares of Common Stock of the Company (before deducting expenses) received by
the Holder under any registration statement, by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 1.8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(e) The obligations of the Company and the Holder under this
Section 1.8 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise and
shall, in any event, remain in effect with respect to the Holder so long as the
Holder may, in the reasonable judgment of counsel for the Holder as evidenced by
a written opinion to such effect, constitute a "controlling person" with respect
to the Company, or be part of a group that may constitute such a "controlling
person," within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act; PROVIDED that the termination of Section 1.8 hereof shall not
be effective as to any loss, liability, claim, damage, penalty, judgment, cost
or expense or to any related facts that arose while Section 1.8 shall have been
in effect, and as to each of such loss, liability, claim, damage, penalty,
judgment, cost or expense the parties' rights and obligations hereunder shall
survive.
1.9 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Holder the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit the
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times;
(b) take such action, as is necessary to enable the Holder
to utilize Form S-3 for the sale of its Registrable Securities, such action to
be taken as soon as practicable after the end of the fiscal year in which the
first registration statement filed by the Company for the offering of its
securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the 1934 Act; and
(d) furnish to the Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144,
the Act and the 1934 Act (at any time after it has become subject to such
reporting requirements), or that it qualifies as a registrant whose securities
may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested in availing the Holder of any rule or regulation
of the SEC that permits the selling of any such securities without registration
or pursuant to such form.
1.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by the Holder to a transferee
or assignee of such securities that is an affiliate, or a subsidiary, parent,
partner, limited partner, retired partner or shareholder, of the Holder;
provided: (a) the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; (b) such transferee or assignee agrees in writing to be bound by
and subject to the terms and conditions of this Agreement; and (c) such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
1.11 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. From and after
the date of this Agreement, the Company shall not, without the prior written
consent of the Holder, enter into any agreement with any holder or prospective
holder of any securities of the Company that would grant to such holder or
prospective holder registration rights that are senior to the registration
rights set forth in this Section 1.
1.12 TERMINATION OF REGISTRATION RIGHTS. The Holder shall not be
entitled to exercise any right provided for in this Section 1 at such time at
which (i) the Holder holds less than one percent (1%) of the Company's
outstanding stock and (ii) all Registrable Securities held by the Holder (and
any affiliate of the Holder with whom such Holder must aggregate its sales under
Rule 144) can be sold in any three (3)-month period without registration in
compliance with Rule 144 under the Act.
1.13 MARKET STAND-OFF. The Holder hereby agrees that, so long as
it holds five percent (5%) or more of the total outstanding shares of Common
Stock and Preferred Stock of the Company on a fully-diluted basis and all
officers and directors of the Company are also restricted in their ability to
transfer securities of the Company after an underwritten offering of the
Company's securities by terms at least as restrictive as this Section 1.13, it
will not, without the prior written consent of the managing underwriter, during
the period commencing on the date of the final prospectus relating to any such
offering and ending on the date specified by the Company and the managing
underwriter (such period not to exceed sixty (60) days) (i) lend, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (whether such shares or any such securities are then owned by the
Holder or are thereafter acquired), or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The underwriters in
connection with any such offering are intended third party beneficiaries of this
Section 1.13 and shall have the right, power and authority to enforce the
provisions hereof as though they were a party hereto. In order to enforce the
foregoing covenant, the Company may impose stop-transfer instructions with
respect to the Registrable Securities of the Holder (and the shares or
securities of every other person subject to the foregoing restriction) until the
end of such period.
2. MISCELLANEOUS.
2.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
2.2 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
2.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.4 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.5 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
delivery by confirmed facsimile transmission, nationally recognized overnight
courier service, or upon deposit with the United States Post Office, by
registered or certified mail, 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 address as such party may designate by ten (10) days' advance
written notice to the other parties.
2.6 EXPENSES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
2.7 ENTIRE AGREEMENT: AMENDMENTS AND WAIVERS. This Agreement
(including the Exhibits hereto, if any) constitutes the full and entire
understanding and agreement among the parties with regard to the subjects hereof
and thereof. Any term of 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 the Holder. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
Registrable Securities each future holder of all such Registrable Securities,
and the Company.
2.8 SEVERABILITY. If one ore more provisions of this Agreement
are held to be unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provisions were so excluded and shall be enforceable in
accordance with its terms.
2.9 AGGREGATION OF STOCK. All shares of Registrable Securities
held or acquired by affiliated entities or persons shall be aggregated together
for the purpose of determining the availability of any rights under this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE "COMPANY"
GLOBESPAN, INC.
By:/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
Title: President and Chief Financial Officer
THE "HOLDER"
PAIRGAIN TECHNOLOGIES, INC.
By:/s/ Xxxxxx Xxxxx
Title: Executive Vice President-
Business Development
