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:
-------------------------------------
Name:
Title:
INVESTORS:
QUANTUM INDUSTRIAL PARTNERS LDC
By:
-------------------------------------
Name:
Title:
S-C PHOENIX HOLDINGS, L.L.C.
By:
-------------------------------------
Name:
Title:
WINSTON PARTNERS, L.P.
By: Chatterjee Fund Management, its
general partner
By:
--------------------------------
Name:
Title:
WINSTON PARTNERS II LDC
By:
-------------------------------------
Name:
Title:
WINSTON PARTNERS II L.L.C.
By: Chatterjee Advisors L.L.C., its
manager
By:
--------------------------------
Name:
Title:
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