EXHIBIT 99
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT.
ALPHA INDUSTRIES, INC.
WARRANT TO PURCHASE COMMON STOCK
JUNE 25,2002
THIS CERTIFIES THAT, for value received, Jazz Semiconductor, Inc., with
its principal address at 0000 Xxxxxxxx Xxxx xx Xxxxxxx Xxxxx, Xxxxxxxxxx (the
"HOLDER"), is entitled to subscribe for and purchase, at the Exercise Price
(defined below) from Alpha Industries, Inc., with its principal office at 00
Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxxx (the "COMPANY"), One Million Seventeen
Thousand Nine Hundred (1,017,900) shares of the Common Stock (as defined below),
subject to adjustment as provided herein.
Reference is made to the Warrant to Purchase Common Stock dated March
12, 2002 (the "CONEXANT WARRANT") by Conexant Systems, Inc. ("CONEXANT") in
favor of the Holder. In connection with the distribution (the "DISTRIBUTION") by
Conexant to the holders of Common Stock, par value $1 per share, of Conexant of
issued and outstanding shares of Common Stock, par value $.01 per share
("WASHINGTON COMMON STOCK"), of Washington Sub, Inc. ("WASHINGTON"), the
Conexant Warrant has been adjusted so that in addition to the Conexant Warrant
(with appropriate adjustments to the Conexant Warrant), the Holder holds a
warrant to purchase Washington Common Stock (the "WASHINGTON WARRANT"). In
connection with the merger of Washington with and into the Company, the
Washington Warrant is hereby cancelled and replaced with this Warrant.
1. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:
(A) "Closing Price", with respect to any security on any day,
means (i) if such security is listed or admitted for trading on a national
securities exchange, the reported last sales price regular way for such security
on such day or, (ii) if not listed or admitted for trading on a national
securities exchange, the last reported sales price for such security on such day
as reported by the National Association of Securities Dealers, Inc. Automatic
Quotation System - National Market System or (iii) if not so reported or listed
or admitted for trading, the last quoted sales price, or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market on
such day as reported by any New York Stock Exchange member firm reasonably
selected by the Company for such purpose.
(b) "Common Stock" means (i) the Common Stock, par value $0.25
per share, of the Company, or (ii) any class or series of stock into which such
common stock shall have been changed or any stock resulting from any
reclassification of such common stock.
1
(c) "Exercise Period" shall mean the period commencing on
September 11,2002 and ending on the date that is 20 days after the earlier of
(i) December 31, 2004 and (ii) the date on which a Termination Event (as defined
below) occurs.
(d) "Exercise Price" shall mean $24.02 per share, subject to
adjustment pursuant to Section 5 below.
(e) "Exercise Shares" shall mean the shares of the Common
Stock issuable upon exercise of this Warrant.
(f) "Fair Market Value" means the fair market value of the
asset, property or security in question, as determined in good faith by the
Board of Directors of the Company; provided, however, that the fair market value
of any security for which a Closing Price is available shall be the Market Price
of such security.
(g) "Market Price" with respect to any security on any day
means the average of the daily Closing Prices of a share or unit of such
security for the 15 consecutive trading days ending on the most recent trading
day for which a Closing Price is available; provided, however, that in the event
that, in the case of Common Stock, the Market Price is determined during a
period following the announcement by the Company of (A) a dividend or
distribution of Common Stock, or (B) any subdivision, combination or
reclassification of Common Stock, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Market Price
shall be appropriately adjusted to reflect the current market price per share
equivalent of Common Stock.
(h) "Nasdaq" shall mean The Nasdaq Stock Market, Inc.
2. EXERCISE OF WARRANT.
(a) This Warrant may be exercised at any time and from time to
time during the Exercise Period (in whole or in part) according to the schedule
set forth in Section 2(b) below, by delivery of the following to the Company at
its address set forth above (or at such other address as it may designate by
notice in writing to the Holder):
(i) An executed Notice of Exercise in the form
attached hereto;
(ii) Payment of the Exercise Price with respect to
the number of shares of Common Stock for which this Warrant is
then being exercised, which payment shall be made (at the
option of the Holder) (A) in cash or by wire transfer of
immediately available funds or (B) by delivery of a notice to
the Company that the Holder is exercising this Warrant by
authorizing the Company to reduce the number of shares of
Common Stock subject to this Warrant by that number of shares
of Common Stock having a Fair Market Value equal to the
aggregate Exercise Price then payable for the shares of Common
Stock for which this Warrant is then being exercised; and
2.
(iii) This Warrant.
(b) This Warrant shall be exercisable as follows:
(i) This Warrant may be exercised with respect to
one-fourth (l/4) of the Exercise Shares at any time during
the Exercise Period;
(ii) This Warrant may be exercised with respect to an
additional one-fourth (l/4) of the Exercise Shares at any time
after March 11, 2003 (which Exercise Shares shall be in
addition to that number of shares that may be issued upon
exercise of this Warrant pursuant to clause (i) of this
Section 2(b));
(iii) This Warrant may be exercised with respect to
an additional one-fourth (l/4) of the Exercise Shares at any
time after September 11, 2003 (which Exercise Shares shall be
in addition to that number of shares issuable upon exercise of
this Warrant pursuant to clauses (i) and (ii) of this Section
2(b)); and
(iv) This Warrant may be exercised with respect to an
additional one-fourth (l/4) of the Exercise Shares at any time
after March 11, 2004 (which Exercise Shares shall be in
addition to that number of shares issuable upon exercise of
this Warrant pursuant to clauses (i), (ii) and (iii) of this
Section 2(b));
provided, however, that this Warrant shall become exercisable with respect to
all of the Exercise Shares immediately prior to the closing of a Termination
Event. For purposes of this Warrant, "TERMINATION EVENT" shall mean any
transaction, occurrence or event where, in connection therewith, Stock
Appreciation Rights granted under the Stock Appreciation Rights Plan of Holder
dated as of March 12, 2002 (the "SAR PLAN") become fully vested and exercisable
pursuant to such plan. To the extent this Warrant has not been exercised on or
prior to the end of the Exercise Period, this Warrant will expire and thereafter
be null and void.
(c) Upon the exercise of this Warrant, a certificate or
certificates for the Exercise Shares so purchased, registered in the name of the
Holder shall be issued and delivered to the Holder within a reasonable time
after this Warrant shall have been so exercised but in any event within ten (10)
business days. If this Warrant shall have been exercised only in part, the
Company shall, at the time of delivery of such certificate or certificates,
deliver to the Holder a new Warrant evidencing the right to purchase the
remaining shares of Common Stock called for by this Warrant, which new Warrant
shall in all other respects be identical to this Warrant.
(d) The Holder shall be deemed to have become the holder of
record of the Exercise Shares to be issued upon any exercise of this Warrant on
the date on which this Warrant was surrendered and payment of the Exercise Price
was made, irrespective of the date of delivery of such certificate or
certificates, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Company are closed, such person shall be
deemed to have become the holder of such shares at the close of business on the
next succeeding date on which the stock transfer books are open.
3.
(e) The Company shall pay and solely be responsible for any
and all costs, fees, commissions or other payments payable or otherwise accruing
in connection with the exercise of this Warrant.
3. COVENANTS OF THE COMPANY.
3.1 COVENANTS AS TO EXERCISE SHARES.
The Company covenants and agrees that all Exercise Shares that may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be validly issued and outstanding, fully paid and nonassessable, and
free from all taxes, liens and charges with respect to the issuance thereof. The
Company further covenants and agrees that the Company will at all times during
the Exercise Period have authorized and reserved, free from preemptive rights, a
sufficient number of shares of Common Stock to provide for the exercise of this
Warrant.
3.2 NO IMPAIRMENT. Except and to the extent as waived or consented
to by the Holder, the Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may be necessary or appropriate in order to
protect the exercise rights of the Holder against impairment.
3.3 NOTICES OF RECORD DATE. In the event of any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in previous
quarters) or other distribution, the Company shall mail to the Holder, at least
five (5) days prior to the date on which any such record is to be taken for the
purpose of such dividend or distribution, a notice thereof.
3.4 REGISTRATION OF EXERCISE SHARES. The Exercise Shares shall be
registered by the Company pursuant to the Registration Rights Provisions
attached hereto as Exhibit A. The terms of Exhibit A constitute a legally
binding and enforceable agreement between the Company and the Holder.
3.5 DISPOSITION OF WARRANT AND EXERCISE SHARES.
(a) The Holder agrees not to make any disposition of all or
any part of the Warrant or Exercise Shares except in accordance with Section 8
hereof and unless and until:
(i) The Holder shall be entitled to rely on an
exemption from registration under the Act for such
disposition; or
4.
(ii) There is then in effect a registration statement
under the Act covering such proposed disposition and such
disposition is made in accordance with said registration
statement.
(b) The Holder understands and agrees that all certificates
evidencing Exercise Shares may bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT.
Such legend shall be removed by the Company at the request of the Holder in
connection with any sale which the Company reasonably determines to be pursuant
to an effective registration statement under the Act or pursuant to a valid
exemption from the registration requirements of the Act.
4. [RESERVED].
5. ADJUSTMENT OF EXERCISE SHARES AND EXERCISE PRICE.
(a) If the Company shall after the date of issuance of this
Warrant subdivide its outstanding shares of Common Stock into a greater number
of shares or consolidate its outstanding shares of Common Stock into a smaller
number of shares (any such event being called a "COMMON STOCK REORGANIZATION"),
then (i) the Exercise Price shall be adjusted, effective immediately after the
record date at which the holders of shares of Common Stock are determined for
purposes of such Common Stock Reorganization, to a price determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding on such record date before giving effect to such Common Stock
Reorganization and the denominator of which shall be the number of shares of
Common Stock outstanding after giving effect to such Common Stock
Reorganization, and (ii) the number of Exercise Shares shall be adjusted,
effective at such time, to a number determined by multiplying the number of
Exercise Shares issuable upon exercise in full of this Warrant immediately
before such Common Stock Reorganization by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding after giving effect to
such Common Stock Reorganization and the denominator of which shall be the
number of shares of Common Stock outstanding immediately before such Common
Stock Reorganization.
(b) If the Company shall after the date of issuance of this
Warrant issue or distribute to all or substantially all holders of shares of
Common Stock, any securities of the Company or another entity, and if such
issuance or distribution does not constitute a Common Stock Reorganization (any
such event being herein called a "DIVIDEND"), the Company shall make appropriate
provision so that the Holder will receive upon exercise of this Warrant the
number and kind of securities of the Company or such other entity which
5.
such Holder would have received if this Warrant had been exercised immediately
prior to the record date for such Dividend (providing for subsequent adjustments
with respect to any securities distributed in connection with such Dividend
equivalent to the adjustments provided for in this Section 5 as a result of
events occurring subsequent to the effective date of such Dividend).
(c) If, after the date of issuance of this Warrant there shall
be any consolidation or merger to which the Company is a party, other than a
consolidation or a merger in which the Company is the surviving corporation and
which does not result in any reclassification of, or change (other than a Common
Stock Reorganization or a change in par value), in, outstanding shares of Common
Stock, or any sale or conveyance of the property of the Company as an entirety
or substantially as an entirety (any such event being called a "CAPITAL
REORGANIZATION"), then, effective upon the effective date of such Capital
Reorganization, the Holder shall have the right to purchase, upon exercise of
this Warrant, the kind and amount of shares of stock and other securities and
property (including cash) which the Holder would have owned or have been
entitled to receive after such Capital Reorganization if this Warrant had been
exercised immediately prior to such Capital Reorganization, assuming the Holder
(i) is not a person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
conveyance was made, as the case may be ("constituent person"), or an affiliate
of a constituent person and (ii) failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash or other property receivable
upon such Capital Reorganization. The provisions of this Section 5 shall
similarly apply to successive Capital Reorganizations.
(d) If any event occurs after the date of issuance of this
Warrant as to which the foregoing provisions of this Section 5 are not strictly
applicable or, if strictly applicable, would not fairly protect the purchase
rights of the Warrants in accordance with the essential intent and principles of
such provisions, then the Board of Directors of the Company shall make such
adjustments in the application of such provisions, in accordance with such
essential intent and principles, as it shall determine to be reasonably
necessary to protect such purchase rights as aforesaid, but in no event shall
any such adjustment have the effect of increasing the Exercise Price or
decreasing the number of shares of Common Stock subject to purchase upon
exercise of this Warrant, or otherwise adversely affect the Holders.
(e) Any adjustments pursuant to this Section 5 shall be made
successively whenever an event referred to herein shall occur.
(f) Not less than 10 nor more than 60 days prior to the record
date or effective date, as the case may be, of any action which would require an
adjustment or readjustment pursuant to this Section 5, the Company shall give
notice to the Holder of such event, describing such event in reasonable detail
and specifying the record date or effective date, as the case may be, and, if
determinable, the required adjustment and the computation thereof. If the
required adjustment is not determinable at the time of such notice, the Company
shall give notice to each Holder of such adjustment and computation promptly
after such adjustment becomes determinable.
6.
6. FRACTIONAL SHARES. No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto. All
Exercise Shares (including fractions) issuable upon exercise of this Warrant may
be aggregated for purposes of determining whether the exercise would result in
the issuance of any fractional share. If, after aggregation, the exercise would
result in the issuance of a fractional share, the Company shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such
fraction a sum in cash equal to the product resulting from multiplying the then
current Fair Market Value of an Exercise Share by such fraction.
7. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Company.
8. TRANSFER OF WARRANT, EXERCISE SHARES. This Warrant and all rights
hereunder may not be transferred by the Holder other than to a Permitted
Transferee (as defined below) so long as such Permitted Transferee takes and
holds this Warrant subject to the terms and conditions of this Warrant. Without
limiting the generality of the foregoing, the Holder shall not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction relating to, this Warrant and/or, prior
to the issuance thereof upon the exercise of this Warrant pursuant to Section 2
above, any Exercise Shares. For purposes of this Warrant, "PERMITTED TRANSFEREE"
shall mean any surviving corporation or entity or acquiring corporation or
entity of Holder that, in connection with a Corporate Transaction (as defined in
the SAR Plan) (i) may assume Stock Appreciation Rights outstanding under the SAR
Plan as provided in Section 8 thereof and (ii) agrees in writing to assume such
outstanding Stock Appreciation Rights.
9. REPRESENTATIONS AND WARRANTIES OF HOLDER. In connection with the
purchase of this Warrant, and the Exercise Shares upon the exercise of this
Warrant, the Holder hereby makes the following representations and warranties to
the Company, effective as of the date hereof and upon the exercise of this
Warrant in whole or in part:
(a) the Holder is an "accredited investor" as such term is
defined in Regulation D under the Act;
(b) the Holder is acquiring the Warrant or the Exercise
Shares, as applicable, for the Holder's own account for investment and not with
a view to, or for sale in connection with, any distribution thereof in violation
of the Act, nor with any present intention of distributing or selling the same
in violation of the Act;
(c) the Holder understands that the Warrant and the Exercise
Shares have not been registered under the Act, in reliance upon exemptions
contained in the Act and applicable regulations promulgated thereunder or
interpretations thereof, and cannot be offered for sale, sold or otherwise
transferred unless such sale or transfer is so registered or qualifies for
exemption from registration under the Act, and that the certificates
representing such shares may bear a legend substantially in the form set forth
in Section 3.5(b) hereof; and
7.
(d) the Holder further understands that it may be required to
hold the Warrant and the Exercise Shares for an indefinite period of time unless
the Warrant and the Exercise Shares are subsequently registered under the Act or
unless an exemption from registration is otherwise available.
10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity as it may reasonably impose (which shall, in the case of a mutilated
Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
11. NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by telex, telegram,
express mail or other form of rapid communications, if possible, and if not then
such notice or communication shall be mailed by first-class mail, postage
prepaid, addressed in each case to the party entitled thereto at the following
addresses: (a) if to the Company, to Alpha Industries, Inc. at 00 Xxxxxx Xxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 or at such other address as the Company shall have
notified the Holder in writing and (b) if to the Holder, to Jazz Semiconductor,
Inc., at 0000 Xxxxxxxx Xxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, or at such other
address as one party may furnish to the other in writing, with a copy to Xxxxxx
& Xxxxxxx, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxx X.
Xxxxxx. Notice shall be deemed effective on the date dispatched if by personal
delivery, telecopy, telex or telegram, two days after mailing if by express
mail, or three days after mailing if by first-class mail.
12. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.
13. GOVERNING LAW. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by the laws of the State of Delaware.
8.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer effective as of June 25, 2002.
ALPHA INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
----------------------------------
Title: Vice President,
---------------------------------
Chief Financial Officer,
Treasurer and Secretary
ACKNOWLEDGED AND ACCEPTED:
JAZZ SEMICONDUCTOR, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
-------------------------------------
Title: Chief Financial Officer
-------------------------------------
ACKNOWLEDGED AND ACCEPTED WITH RESPECT TO
SECTION 2.2 OF EXHIBIT A ONLY:
CONEXANT SYSTEMS, INC.
By: /s/ Xxxxxx X. X'Xxxxxx
-------------------------------------
Name: Xxxxxx X. X'Xxxxxx
-------------------------------------
Title: Senior Vice President,
General Counsel and Secretary
-------------------------------------
9.
NOTICE OF EXERCISE
TO: ALPHA INDUSTRIES, INC.
(1) The undersigned hereby elects to purchase________shares of the
Common Stock of ALPHA INDUSTRIES, INC. (the "COMPANY") pursuant to the terms of
the attached Warrant, and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------------------
(Name)
-------------------------------------
-------------------------------------
(Address)
------------------------------------- -------------------------------------
(Date) (Signature)
-------------------------------------
(Print name)
EXHIBIT A
REGISTRATION OF EXERCISE SHARES
SECTION 1. GENERAL.
1.1 DEFINITIONS. Capitalized terms used but not otherwise defined in
this Exhibit A shall have the meaning given such terms in the Warrant to
Purchase Common Stock to which this Exhibit A is attached. Notwithstanding the
foregoing, as used in this Exhibit A the following terms shall have the
following respective meanings:
(a) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(b) "HOLDER" shall mean Jazz Semiconductor, Inc., a Delaware
corporation, or any Permitted Transferee.
(c) "REGISTER," "REGISTERED," AND "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act with the SEC, and the declaration or ordering
of effectiveness by the SEC of such registration statement or document.
(d) "REGISTRABLE SECURITIES" means the Exercise Shares. Notwithstanding
the foregoing, Registrable Securities shall not include any securities sold by
the Holder to the public either pursuant to a registration statement or Rule 144
under the Securities Act or sold in a private transaction or otherwise
transferred to a transferee who shall not be a Permitted Transferee.
(e) "REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Section 2.1 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration.
(f) "SEC" means the Securities and Exchange Commission.
(g) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
(h) "SELLING EXPENSES" shall mean all selling commissions,
underwriters' discounts and other expenses, if any, applicable to the sale of
Registrable Securities and not included in Registration Expenses.
SECTION 2. REGISTRATION
2.1 SHELF REGISTRATION
(a) The Company shall prepare and, no later than 60 days after the date
on which the Warrant is issued, file with the SEC, and thereafter use
commercially reasonable efforts to
1.
cause to be declared effective as soon as practicable, a registration statement
on Form S-3 or such other form as the Company may be permitted to use (the
"SHELF REGISTRATION STATEMENT") relating to the offer and sale of the
Registrable Securities by the Holder from time to time in accordance with the
methods of distribution set forth in the Shelf Registration Statement and Rule
415 under the Securities Act (the "SHELF REGISTRATION").
(b) Subject to the terms and conditions set forth herein, the Company
shall use commercially reasonable efforts to keep the Shelf Registration
Statement continuously effective in order to permit the prospectus included
therein (the "PROSPECTUS") to be lawfully delivered by the Holder, until the
earlier of (A) twenty (20) days after December 31, 2004, (B) the date that is
twenty (20) days following a Termination Event, or (C) when all the Securities
covered by the Shelf Registration Statement have been sold pursuant thereto (in
any such case, such period being called the "SHELF REGISTRATION PERIOD").
Notwithstanding any other provision of this Exhibit A, the Holder understands
that there may be periods during which the Company's Board of Directors may
determine, in good faith, that it is in the best interest of the Company and its
stockholders to defer amendments or supplements to the Prospectus and that
during such periods sales of Registrable Securities and the effectiveness of the
Shelf Registration Statement may be suspended or delayed. The Holder agrees that
upon receipt of any written notice from the Company as to any circumstance
requiring an amendment or supplement to the Prospectus and advising the Holder
to discontinue the Holder's disposition of Registrable Securities pursuant to
the Shelf Registration Statement, the Holder will forthwith discontinue the
Holder's disposition of Registrable Securities pursuant to the Shelf
Registration Statement until the Holder's receipt of copies of an appropriately
supplemented or amended Prospectus and written notice from the Company advising
the Holder that it may resume sales and dispositions of Registrable Securities
pursuant to the Shelf Registration Statement. In the event the Company shall
give any such notice and Registrable Securities covered by the Shelf
Registration Statement remain unsold, the Shelf Registration Period shall be
extended by the number of days during the period from and including the date of
the giving of such notice to and including the date when the Holder shall have
received the copies of the appropriate supplemented or amended Prospectus.
2.2 EXPENSES OF REGISTRATION. Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.1 herein shall be borne by
Conexant Systems, Inc. ("CONEXANT"). At least ten days prior to filing the Shelf
Registration Statement with the SEC, the Company shall deliver to Conexant the
Company's reasonable estimate of the Registration Expenses. Not later than ten
days after the Company's delivery of the estimate referred to in the preceding
sentence, Conexant shall deliver to the Company, by wire transfer or certified
check, cash in the amount of such estimate together with an undertaking to
promptly pay any additional Registration Expenses which the Company may incur in
excess of such estimate. Notwithstanding any other provision hereof, the Company
shall not be required to effect any registration of Registrable Securities until
it has received payment from Conexant for estimated Registration Expenses as
provided in this Section 2.2. In the event that estimated amounts previously
paid by Conexant pursuant to this Section 2.2 exceed actual Registration
Expenses, the Company shall promptly refund any such excess to Conexant. All
Selling Expenses incurred in connection with any registration hereunder shall be
borne by the Holder.
2.
2.3 OBLIGATIONS OF THE COMPANY. In connection with the Shelf
Registration contemplated by Section 2.1 above, the Company shall:
(a) Upon effectiveness of the Shelf Registration Statement, furnish to
the Holder such number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the Holder may reasonably request in order to facilitate the
disposition of Registrable Securities owned by it.
(b) Notify the Holder at any time when, to the knowledge of the
Company, a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing. Upon the occurrence of any such event,
the Company will use commercially reasonable efforts to amend or supplement such
prospectus in order to cause such prospectus not to include any untrue statement
of a 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) Promptly notify the Holder in writing,
(1) when the Prospectus or any supplemental or post-effective
amendment has been filed, and, with respect to the Registration Statement or any
post-effective amendment, when the same has become effective,
(2) of any request by the SEC for amendments or supplements to
the Registration Statement or the Prospectus or for additional information,
(3) of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose, and
(4) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(d) Furnish to the Holder, without charge, at least one copy of the
Registration Statement, as first filed with the SEC, and of each amendment
thereto, including, if requested by the Holder, all documents incorporated by
reference therein and all exhibits (including exhibits incorporated therein by
reference).
(e) Cooperate with the Holder to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing
Registrable Securities properly sold under the Registration Statement and cause
such Registrable Securities to be in such denominations and registered in such
names as the Holder may reasonably request.
3.
(f) Cause all Registrable Securities covered by the Registration
Statement to be admitted for quotation on the National Association of Securities
Dealers Automated Quotation System - National Market System and listed on any
stock exchange on which the Common Stock of the Company is then listed.
2.4 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect upon
the expiration of the Shelf Registration Period.
2.5 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) The Holder shall have no right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of the Company
to take any action pursuant to Section 2.1 that the Holder shall furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of such securities as shall reasonably be
requested by the Company to effect the registration of the Registrable
Securities.
2.6 INDEMNIFICATION.
(a) To the extent permitted by law, the Company will indemnify and
hold harmless the Holder, the partners, officers and directors of the Holder and
each person, if any, who controls the Holder within the meaning of the
Securities Act against any losses, costs, expenses, claims, damages or
liabilities (joint or several) to which they may become subject, insofar as such
losses, costs, expenses, claims, damages 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 the Shelf Registration Statement or incorporated by reference
therein, 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, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law in connection with the
offering covered by the Shelf Registration Statement; and the Company will
reimburse the Holder, and each such partner, officer, director or controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided however, that the indemnity agreement contained in this Section
2.6(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company, which consent shall not be unreasonably withheld, nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon (i) a Violation
which occurs in reliance upon and in conformity with written information
furnished
4.
expressly for use in connection with such registration by or on behalf of the
Holder or any partner, officer, director or controlling person of the Holder or
(ii) a failure by the Holder or any partner, officer, director or controlling
person of the Holder to deliver a final Prospectus to Permitted Transferee if
any material change has been made to the preliminary Prospectus.
(b) To the extent permitted by law, the Holder will indemnify and hold
harmless the Company, each of its directors, its officers and, each person, if
any, who controls the Company within the meaning of the Securities Act against
any losses, costs, expenses, claims, damages or liabilities (joint or several)
to which the Company or any such director, officer or controlling person may
become subject, insofar as such losses, costs, expenses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
Violation, in each ease to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by or on behalf of the Holder or any partner, officer, director or
controlling person of the Holder for use in connection with such registration;
and the Holder will reimburse any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this Section 2.6(b) in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 2.6(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld;
provided further, that in no event shall any indemnity under this Section 2.6
exceed the net proceeds from the offering received by the Holder, except in the
case of willful misrepresentation or fraud by the Holder.
(c) Promptly after receipt by an indemnified party under this Section
2.6 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 2.6, 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
(together with all indemnified parties that may be represented without conflict
by a single counsel) shall have the right to retain one counsel, with the
reasonable 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. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 2.6, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2.6.
(d) If the indemnification provided for in this Section 2.6 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of
5.
indemnifying such indemnified party hereunder, shall to the extent permitted by
applicable law contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
Violation(s) that resulted in such loss, claim, damage or liability, as well as
any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by a court
of law by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the 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; provided, that in no event
shall any contribution by the Holder hereunder exceed the net proceeds from the
offering received by the Holder, except in the case of willful misrepresentation
or fraud by the Holder.
(e) The obligations of the Company and the Holder under this Section
2.6 shall survive completion of any offering of Registrable Securities in the
Shelf Registration Statement and the termination of the provisions set forth in
this Exhibit A. 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.
2.7 INFORMATION BY XXXXXX. The Holder shall furnish to the Company in
writing such information regarding the Holder and the distribution proposed by
the Holder as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification or compliance of
Registrable Securities.
2.8 NO ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 2 may not be
assigned by the Holder to any person or entity, other than a Permitted
Transferee, without the prior written consent of the Company.
6.
