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Exhibit 3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Stock Option Agreement"), dated as of
October 13, 1999, is by and between Intel Corporation, a Delaware corporation
("Grantee"), and DSP Communications, Inc., a Delaware corporation ("Issuer").
RECITALS
A. Grantee, CWC Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of Grantee ("Acquisition"), and Issuer are
simultaneously entering into an Agreement and Plan of Merger (the "Merger
Agreement") which provides, among other things, that upon the terms and subject
to the conditions thereof, Acquisition will commence a tender offer (the
"Offer") for all the issued and outstanding shares of Issuer's common stock,
$.001 par value ("Issuer Common Stock"), and, after accepting for payment the
shares tendered in the Offer (the "Tendered Shares"), Acquisition will merge
with and into Issuer with Issuer to continue as the surviving corporation as a
wholly-owned subsidiary of Grantee (the "Merger").
B. As a condition to its willingness to enter into the Merger Agreement,
Grantee has required that Issuer agree, and Issuer has agreed, to enter into
this Stock Option Agreement, which provides, among other things, that Issuer
grant to Grantee an option to purchase shares of Issuer Common Stock, upon the
terms and subject to the conditions provided for herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained in this Stock Option Agreement and the Merger
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. GRANT OF OPTION. Issuer hereby grants to Grantee an irrevocable
option (the "Option") to purchase Eight Million (8,000,000) shares of Issuer
Common Stock (the "Option Shares"), in the manner set forth below, at an
exercise price of Thirty-Six Dollars ($36.00) per share of Issuer Common Stock,
subject to adjustment as provided below (the "Option Price"). Initially
capitalized terms used but not defined herein shall have the meanings set forth
in the Merger Agreement. Issuer represents and warrants to Grantee that the
number of Option Shares constitutes less than twenty percent (20%) of the number
of outstanding shares of Issuer's Common Stock on the date hereof.
2. EXERCISE OF OPTION.
(a) Subject to the satisfaction or waiver of the conditions set
forth in Section 9 of this Stock Option Agreement, prior to the
termination of this Stock Option Agreement in accordance with its terms,
Grantee may exercise the Option, in whole or in part, at any time or
from time to time on or after the occurrence of a Triggering Event (as
defined
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below). The Option shall terminate and not be exercisable at any time
following the Expiration Date (as defined in Section 11). The term
"Triggering Event" means the earlier to occur of (i) the time
immediately prior to the occurrence of any of the events (or the last of
any series of events, as applicable) specified in Section 7.3(a) of the
Merger Agreement giving rise to the obligation of the Company to pay the
fee specified in Section 7.3(a) and (ii) the date on which Acquisition
has accepted for payment the Tendered Shares; provided, however, that
clause (ii) of this sentence shall only constitute a Triggering Event if
the number of Option Shares plus the number of Tendered Shares will,
upon issuance of the Option Shares, equal at least ninety percent (90%)
of the issued and outstanding shares of Issuer Common Stock.
(b) If Grantee wishes to exercise the Option at such time as the
Option is exercisable and has not terminated, Grantee shall deliver
written notice (the "Exercise Notice") to Issuer specifying Grantee's
intention to exercise the Option, the total number of Option Shares it
wishes to purchase and a date and time for the closing of such purchase
(a "Closing"), which date shall not be less than two (2) nor more than
thirty (30) business days after the later of (i) the date such Exercise
Notice is given and (ii) the expiration or termination of any applicable
waiting period under the HSR Act. If, subsequent to a Triggering Event
and prior to the Expiration Date, any Third Party shall have acquired
fifty percent (50%) or more of the then outstanding shares of Issuer
Common Stock (a "Share Acquisition"), or Issuer shall have entered into
a written definitive agreement with any Third Party providing for a
Company Acquisition (as defined below), then Grantee, in lieu of
exercising the Option, shall have the right at any time thereafter (for
so long as the Option is exercisable under Section 2(a) hereof) to
request in writing that Issuer pay, and promptly (but in any event not
more than twenty (20) business days) after the giving by Grantee of such
request, Issuer shall pay to Grantee, in cancellation of the Option, an
amount in cash (the "Cancellation Amount") equal to: (1) the excess over
the Option Price of the greater of (A) the last sale price of a share of
Issuer Common Stock as reported on the New York Stock Exchange on the
last trading day prior to the date of the Exercise Notice, and (B) (I)
the highest price per share of Issuer Common Stock offered to be paid or
paid by any Third Party pursuant to or in connection with such Share
Acquisition or Company Acquisition or (II) if such Company Acquisition
consists of a purchase and sale of assets, the sum of (a) the aggregate
consideration offered to be paid or paid in any transaction or proposed
transaction in connection with a Company Acquisition and (b) the amount
of cash receivable by Issuer upon the exercise or conversion of
outstanding in-the-money options, warrants, rights or convertible
securities, divided by the sum of (x) the number of shares of Issuer
Common Stock then outstanding plus (y) the number of shares issuable
upon exercise or conversion of outstanding in-the-money options,
warrants, rights or convertible securities, multiplied by (2) the number
of Option Shares then covered by the Option. If all or a portion of the
price per share of Issuer Common Stock offered, paid or payable or the
aggregate consideration offered, paid or payable for the stock or assets
of Issuer, each as contemplated by the immediately preceding sentence,
consists of non-cash
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consideration, such price or aggregate consideration shall be the cash
consideration, if any, plus the fair market value of the non-cash
consideration as determined jointly by the investment bankers of Issuer
and the investment bankers of Grantee.
(c) Notwithstanding anything to the contrary contained herein,
(1) Grantee's Total Payment (as defined below), if any, which Grantee
may derive hereunder shall in no event exceed Fifty-Five Million Dollars
($55,000,000) and Grantee shall pay any excess over such amount to the
Issuer and (2) the Option may not be exercised for a number of Shares as
would, as of the date of exercise, result in a Notional Total Payment
(as defined below), together with the actual Total Payment immediately
preceding such exercise, exceeding Fifty-Five Million Dollars
($55,000,000); provided that if any exercise of the Option would result
in a Notional Total Payment, together with the actual Total Payment
immediately preceding such exercise, exceeding Fifty-Five Million
Dollars ($55,000,000), then Grantee, at its election, may either (A)
reduce the number of shares of Issuer Common Stock subject to the
Option, (B) deliver to Issuer for cancellation shares of Issuer Common
Stock previously purchased by Grantee, (C) pay cash to Issuer or (C)
take any action representing any combination of the preceding clauses
(A), (B) and (C), so that Grantee's Notional Total Payment, when
aggregated with the actual Total Payment immediately preceding such
exercise, does not exceed Fifty-Five Million Dollars ($55,000,000) after
taking into account the foregoing actions. As used herein, (1) "Total
Payment" shall mean the sum (before taxes) of the following: (i) any
Cancellation Amount received by Grantee pursuant to Section 2(b) hereof,
(ii) (x) the net cash amounts received by Grantee pursuant to the sale,
within twelve (12) months following exercise of the Option, of Option
Shares (or any other securities into which such Option Shares shall be
converted or exchanged) to any unaffiliated party, less (y) the
aggregate Option Price for such shares, (iii) any amounts received by
Grantee upon transfer of the Option (or any portion thereof) to any
unaffiliated party, and (iv) the amount actually received by Grantee
pursuant to Section 7.3(a) of the Merger Agreement; and (2) "Notional
Total Payment" with respect to any number of Option Shares as to which
Grantee may propose to exercise the Option shall be the Total Payment
determined as of the date of such proposed exercise assuming that the
Option were exercised on such date for such number of shares and
assuming further that such shares, together with all other Option Shares
held by Grantee as of such date, were sold for cash at the closing
market price for the Issuer Common Stock as of the close of business on
the preceding trading day (less customary brokerage commissions). For
purposes of this Section 2, references to Grantee shall be deemed to
include references to Acquisition or any other affiliate of Grantee.
(d) As used herein, "Company Acquisition" means the occurrence of
any of the following events: (i) the acquisition by a Third Party of
fifty percent (50%) or more of the assets of the Issuer and its
subsidiaries, taken as a whole; (ii) the acquisition by a Third Party of
fifty percent (50%) or more of the outstanding shares of Issuer Common
Stock or any securities convertible into or exchangeable for shares of
Issuer Common
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Stock that would constitute fifty percent (50%) or more of the
outstanding shares of Issuer Common Stock upon such conversion or
exchange, or any combination of the foregoing; (iii) the acquisition by
the Issuer of the assets or stock of a Third Party if, as a result of
which the outstanding shares of Issuer Common Stock immediately prior
thereto are increased by one hundred percent (100%) or more, or (iv) the
merger, consolidation or business combination of the Issuer with or into
a Third Party, where, following such merger, consolidation or business
combination, the stockholders of the Issuer immediately prior to such
transaction do not hold, immediately after such transaction, securities
of the surviving entity constituting more than fifty percent (50%) of
the total voting power of the surviving entity.
3. PAYMENT OF OPTION PRICE AND DELIVERY OF CERTIFICATE. Any Closings
under Section 2 of this Stock Option Agreement shall be held at the principal
executive offices of Issuer, or at such other place as Issuer and Grantee may
agree. At any Closing hereunder, (a) Grantee or its designee shall make payment
to Issuer of the aggregate price for the Option Shares being so purchased by
delivery of a certified check, official bank check or wire transfer of funds
pursuant to Issuer's instructions payable to Issuer in an amount equal to the
product obtained by multiplying the Option Price by the number of Option Shares
to be purchased, and (b) upon receipt of such payment, Issuer shall deliver to
Grantee or its designee a certificate or certificates representing the number of
validly issued, fully paid and non-assessable Option Shares so purchased, in the
denominations and registered in such names designated to Issuer in writing by
Grantee.
4. REGISTRATION AND LISTING OF OPTION SHARES.
(a) Grantee may, by written notice (a "Registration Notice"),
request at any time or from time to time within two (2) years
following a Triggering Event (the "Registration Period"), in order to
permit the sale, transfer or other disposition of the Option Shares
that have been acquired by or are issuable to Grantee upon
exercise of the Option ("Registrable Securities"), that Issuer register
under the Securities Act of 1933, as amended (the "Act"), the offering,
sale and delivery, or other transfer or disposition, of the Registrable
Securities by Grantee. Any such Registration Notice must relate to a
number of Registrable Securities equal to at least twenty percent (20%)
of the Option Shares, unless the remaining number of Registrable
Securities is less than such amount, in which case Grantee shall be
entitled to exercise its rights hereunder but only for all of the
remaining Registrable Securities (a "Permitted Offering"). Grantee's
rights hereunder shall terminate at such time as Grantee shall be
entitled to sell all of the remaining Registrable Securities pursuant
to Rule 144(k) under the Act. Issuer shall use all reasonable efforts
to qualify any Registrable Securities Grantee desires to sell or
otherwise dispose of under applicable state securities or "blue sky"
laws; provided, however, that Issuer shall not be required to qualify
to do business, consent to general service of process or submit to
taxation in any jurisdiction by reason of this provision. Without
Grantee's prior written consent (which may be withheld in its sole
discretion), no
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other securities may be included in any such registration. Issuer will
use all reasonable efforts to cause each such registration statement to
become effective as promptly as possible, to obtain all consents or
waivers of other persons that are required therefor and to keep such
registration statement effective for a period of at least ninety (90)
days from the day such registration statement first becomes effective.
The obligations of Issuer hereunder to file a registration statement and
to maintain its effectiveness may be suspended for one or more periods
not exceeding ninety (90) days in the aggregate if the Board of
Directors of Issuer shall have determined in good faith that the filing
of such registration statement or the maintenance of its effectiveness
would require disclosure of nonpublic information that would materially
and adversely affect Issuer, or Issuer is required under the Act to
include audited financial statements for any period in such registration
statement and such financial statements are not yet available for
inclusion in such registration statement. Grantee shall be entitled to
make up to two (2) requests for registration of Options Shares under
this Section 4(a). For purposes of determining whether the two (2)
requests have been made under this Section 4(a), only requests relating
to a registration statement that has become effective under the Act will
be counted.
(b) If, during the Registration Period, Issuer shall propose to
register under the Act the offering, sale and delivery of Issuer Common
Stock for cash for its own account or for any other stockholder of
Issuer pursuant to a firm commitment underwriting, it will, in addition
to Issuer's other obligations under this Section 4, allow Grantee the
right to participate in such registration so long as Grantee
participates in such underwriting on terms reasonably satisfactory to
the managing underwriters of such offering; provided, however, that, if
the managing underwriter of such offering advises Issuer in writing that
in its opinion the number of shares of Issuer Common Stock requested to
be included in such registration exceeds the number that it would be in
the best interests of Issuer to sell in such offering, Issuer will,
after fully including therein all shares of Issuer Common Stock to be
sold by Issuer, include the shares of Issuer Common Stock requested to
be included therein by Grantee pro rata (based on the number of shares
of Issuer Common Stock requested to be included therein) with the shares
of Issuer Common Stock requested to be included therein by persons other
than Issuer and persons to whom Issuer owes a contractual obligation
(other than any director, officer or employee of Issuer to the extent
any such person is not currently owed such contractual obligation).
(c) The expenses associated with the preparation and filing of
any registration statement pursuant to this Section 4 and any sale
covered thereby (including any fees related to blue sky qualifications
and filing fees in respect of SEC or the National Association of
Securities Dealers, Inc.) ("Registration Expenses") will be paid by
Issuer, except for underwriting discounts or commissions or brokers'
fees in respect of Option Shares to be sold by Grantee and the fees and
disbursements of Grantee's counsel; provided, however, that Issuer will
not be required to pay for any Registration Expenses with respect to
such registration if the registration request is subsequently withdrawn
at
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the request of Grantee unless Grantee agrees to forfeit its right to
request one registration; provided further, however, that, if at the
time of such withdrawal Grantee has learned of a material adverse change
in the results of operations, condition, business or prospects of Issuer
not known to Grantee at the time of the request and has withdrawn the
request within a reasonable period of time following disclosure by
Issuer to Grantee of such material adverse change, then Grantee shall
not be required to pay any of such expenses and shall not forfeit such
right to request one registration. Grantee will provide all information
reasonably requested by Issuer for inclusion in any registration
statement to be filed hereunder.
(d) In connection with each registration under this Section 4,
Issuer shall indemnify and hold each holder of the Option or Option
Shares participating in such offering (a "Holder"), its underwriters and
each of their respective affiliates harmless against any and all losses,
claims, damage, liabilities and expenses (including, without limitation,
investigation expenses and fees and disbursements of counsel and
accountants), joint or several, to which such Holder, its underwriters
and each of their respective affiliates may become subject, under the
Act or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any registration statement (including any prospectus
therein), or any amendment or supplement thereto, or arise out of or are
based upon 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, other than such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) that arise out
of or are based upon an untrue statement or alleged untrue statement of
a material fact contained in written information furnished by a Holder
to Issuer expressly for use in such registration statement.
(e) In connection with any registration statement pursuant to
this Section 4, Grantee shall cause each Holder to contractually agree
to furnish Issuer with such information concerning itself and the
proposed sale or distribution as shall reasonably be required in order
to ensure compliance with the requirements of the Act and to provide
representations and warranties customary for selling stockholders who
are unaffiliated with the issuer. In addition, Grantee shall, and
Grantee shall cause each Holder to contractually agree to, indemnify and
hold Issuer, its underwriters and each of their respective affiliates
harmless against any and all losses, claims, damages, liabilities and
expenses (including, without limitation, investigation expenses and fees
and disbursement of counsel and accountants), joint or several, to which
Issuer, its underwriters and each of their respective affiliates may
become subject under the Act or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in written information furnished
by any Holder to Issuer expressly for use in such registration
statement; provided, however, that in no event shall any indemnification
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amount contributed by a Holder hereunder exceed the proceeds of the
offering received by such Holder.
(f) Upon the issuance of Option Shares hereunder, Issuer will use
all commercially reasonable efforts to promptly list such Option Shares
on the New York Stock Exchange or with such national or other exchange
on which the shares of Issuer Common Stock are at the time listed.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby represents
and warrants to Grantee as follows:
(a) Issuer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to enter into and perform its
obligations under this Stock Option Agreement.
(b) The execution and delivery of this Stock Option Agreement and
the consummation of the transactions contemplated hereby have been duly
and validly authorized by the Board of Directors of Issuer and no other
corporate proceedings on the part of Issuer are necessary to authorize
this Stock Option Agreement or to consummate the transactions
contemplated hereby. The Board of Directors of Issuer has duly approved
the issuance and sale of the Option Shares, upon the terms and subject
to the conditions contained in this Stock Option Agreement, and the
consummation of the transactions contemplated hereby. This Stock Option
Agreement has been duly and validly executed and delivered by Issuer
and, assuming this Stock Option Agreement has been duly executed and
delivered by Grantee, constitutes a valid and binding obligation of
Issuer enforceable against Issuer in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting or relating to creditors' rights generally; the
availability of injunctive relief and other equitable remedies; and
limitations imposed by law on indemnification for liability under
federal securities laws.
(c) Issuer has taken all necessary action to authorize and
reserve for issuance and to permit it to issue, and at all times from
the date of this Stock Option Agreement through the date of expiration
of the Option will have reserved for issuance upon exercise of the
Option, a sufficient number of authorized shares of Issuer Common Stock
for issuance upon exercise of the Option, each of which shares, upon
issuance pursuant to this Stock Option Agreement and when paid for as
provided herein, will be validly issued, fully paid and nonassessable,
and shall be delivered free and clear of all claims, liens, charges,
encumbrances and security interests (other than those imposed by
Grantee, its affiliates or by Applicable Law).
(d) The execution, delivery and performance of this Stock Option
Agreement by Issuer and the consummation by it of the transactions
contemplated hereby, except as
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required by the HSR Act and any material foreign competition authorities
(if applicable), and, with respect to Section 4 hereof, compliance with
the provisions of the Act and any applicable state securities laws, do
not require the consent, waiver, approval, license or authorization of
or result in the acceleration of any obligation under, or constitute a
default under, any term, condition or provision of the Certificate of
Incorporation or bylaws, or any indenture, mortgage, lien, lease,
agreement, contract, instrument, order, judgment, ordinance, regulation
or decree or any restriction to which Issuer or any property of Issuer
or its subsidiaries is bound, except where failure to obtain such
consents, waivers, approvals, licenses or authorizations or where such
acceleration or defaults could not, individually or in the aggregate,
reasonably be expected to materially and adversely affect Grantee's
rights hereunder or to have a Material Adverse Effect on Issuer.
6. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee hereby represents
and warrants to Issuer that:
(a) Grantee is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has all
requisite corporate power and authority to enter into and perform its
obligations under this Stock Option Agreement.
(b) The execution and delivery of this Stock Option Agreement and
the consummation of the transactions contemplated hereby have been duly
and validly authorized by the Board of Directors of Grantee and no other
corporate proceedings on the part of Grantee are necessary to authorize
this Stock Option Agreement or to consummate the transactions
contemplated hereby. This Stock Option Agreement has been duly and
validly executed and delivered by Grantee and, assuming this Stock
Option Agreement has been duly executed and delivered by Issuer,
constitutes a valid and binding obligation of Grantee enforceable
against Grantee in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
or relating to creditors' rights generally; the availability of
injunctive relief and other equitable remedies; and limitations imposed
by law on indemnification for liability under federal securities laws.
(c) Grantee is acquiring the Option and it will acquire the
Option Shares issuable upon the exercise thereof for its own account and
not with a view to the distribution or resale thereof in any manner not
in accordance with Applicable Law.
7. COVENANTS OF GRANTEE. Grantee agrees not to transfer or otherwise
dispose of the Option or the Option Shares, or any interest therein, except that
Grantee may transfer or dispose of the Option Shares so long as such transaction
is in compliance with the Act and any applicable state securities laws. Grantee
further agrees to the placement of the following legend on the
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certificates representing the Option Shares (in addition to any legend required
under applicable state securities laws) and any legend referring to the
provisions of Section 12 hereof:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
APPLICABLE STATE LAW GOVERNING THE OFFER AND SALE OF SECURITIES. NO
TRANSFER OR OTHER DISPOSITION OF THESE SHARES, OR OF ANY INTEREST
THEREIN, MAY BE MADE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND SUCH OTHER STATE LAWS OR PURSUANT TO
EXEMPTIONS FROM REGISTRATION UNDER THE ACT, SUCH OTHER STATE LAWS, AND
THE RULES AND REGULATIONS PROMULGATED THEREUNDER."
8. HSR COMPLIANCE EFFORTS. Grantee and Issuer shall take, or cause to be
taken, all commercially reasonable actions to consummate and make effective the
transactions contemplated by this Stock Option Agreement, including, without
limitation, reasonable efforts to obtain any necessary consents of third parties
and Governmental Entities and the filing by Grantee and Issuer promptly of any
required HSR Act notification forms and the documents required to comply with
the HSR Act.
9. CERTAIN CONDITIONS. The obligation of Issuer to issue Option Shares
under this Stock Option Agreement upon exercise of the Option shall be subject
to the satisfaction or waiver of the following conditions:
(a) any waiting periods applicable to the acquisition of the
Option Shares by Grantee pursuant to this Stock Option Agreement under
the HSR Act and any material foreign competition laws shall have expired
or been terminated; and
(b) no statute, rule or regulation shall be in effect, and no
order, decree or injunction entered by any court of competent
jurisdiction or Governmental Entity in the United States shall be in
effect that prohibits the exercise of the Option or acquisition or
issuance of Option Shares pursuant to this Stock Option Agreement.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any
change in the number of issued and outstanding shares of Issuer Common Stock by
reason of any stock dividend, stock split, recapitalization, merger, rights
offering, share exchange or other change in the corporate or capital structure
of Issuer, Grantee shall receive, upon exercise of the Option, the stock or
other securities, cash or property to which Grantee would have been entitled if
Grantee had exercised the Option and had been a holder of record of shares of
Issuer Common Stock on the record date fixed for determination of holders of
shares of Issuer Common Stock entitled to receive such stock or other
securities, cash or property at the same aggregate price as the aggregate Option
Price of the Option Shares.
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11. EXPIRATION. The Option shall expire at the earlier of (y) the
Effective Time and (z) upon termination of the Merger Agreement in accordance
with its terms unless Grantee has the right, or has the possibility of obtaining
the right, to receive a termination fee pursuant to Section 7.3(a) of the Merger
Agreement, in which case the Option will not terminate until the later of (A) 5
business days following the time such termination fee becomes unconditionally
payable and (B) the expiration of the period in which the Grantee has such right
to receive such termination fee (such expiration date is referred to as the
"Expiration Date").
12. GENERAL PROVISIONS.
(a) Survival. All of the representations, warranties and
covenants contained herein shall survive a Closing and shall be deemed
to have been made as of the date hereof and as of the date of each
Closing.
(b) Further Assurances. If Grantee exercises the Option, or any
portion thereof, in accordance with the terms of this Stock Option
Agreement, Issuer and Grantee will execute and deliver all such further
documents and instruments and use all reasonable efforts to take all
such further action as may be necessary in order to consummate the
transactions contemplated thereby.
(c) Severability. It is the desire and intent of the parties that
the provisions of this Stock Option Agreement be enforced to the fullest
extent permissible under the law and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, in the event
that any provision of this Stock Option Agreement would be held in any
jurisdiction to be invalid, prohibited or unenforceable for any reason,
such provision, as to such jurisdiction, shall be ineffective, without
invalidating the remaining provisions of this Stock Option Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not be invalid, prohibited or unenforceable in
such jurisdiction, it shall, as to such jurisdiction, be so narrowly
drawn, without invalidating the remaining provisions of this Stock
Option Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
(d) Assignment; Transfer of Stock Option. This Stock Option
Agreement shall be binding on and inure to the benefit of the parties
hereto and their respective successors and permitted assigns; provided,
however, that Issuer and Grantee, without the prior written consent of
the other party, shall not be entitled to assign or otherwise transfer
any of its rights or obligations hereunder and any such attempted
assignment or transfer shall be void; provided further, that Grantee
shall be entitled to assign or transfer this Stock Option Agreement or
any rights hereunder to any wholly-owned subsidiary of Grantee without
Issuer's consent so long as such wholly-owned subsidiary agrees in
writing to be bound by the terms and provisions hereof.
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(e) Specific Performance. The parties acknowledge and agree that
in the event of a breach of any provision of this Stock Option
Agreement, the aggrieved party would be without an adequate remedy at
law. The parties therefore agree that in the event of a breach of any
provision of this Stock Option Agreement, the aggrieved party may elect
to institute and prosecute proceedings in any court of competent
jurisdiction to enforce specific performance or to enjoin the continuing
breach of such provisions, as well as to obtain damages for breach of
this Stock Option Agreement. By seeking or obtaining any such relief,
the aggrieved party will not be precluded from seeking or obtaining any
other relief to which it may be entitled.
(f) Amendments. This Stock Option Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery
of a written agreement executed by Grantee and Issuer.
(g) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to be
sufficient if contained in a written instrument and shall be deemed
given if delivered personally, telecopied, sent by
nationally-recognized, overnight courier or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the other
party at the following addresses (or such other address for a party as
shall be specified by like notice):
If to Grantee:
Intel Corporation
2200 Mission College Boulevard
Santa Clara, California 95052
Telecopier: (408) 765-1859
Attention: General Counsel
with a copy to:
Gibson, Dunn & Crutcher LLP
One Montgomery Street
Telesis Tower
San Francisco, California 94104
Telecopier: (415) 986-5309
Attention: Kenneth R. Lamb
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If to Issuer:
DSP Communications, Inc.
20300 Stevens Creek Boulevard
Cupertino, California 95015
Telecopier: (408) 777-2744
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Meagher & Flom, LLP
525 University Avenue
Palo Alto, California 94301
Telecopier: (650) 470-4570
Attention: Kenton J. King, Esq.
(h) Headings. The headings contained in this Stock Option
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Stock Option Agreement.
(i) Counterparts. This Stock Option Agreement may be executed in
one or more counterparts, each of which shall be an original, but all of
which together shall constitute one and the same agreement.
(j) Governing Law and Venue; Waiver of Jury Trial.
(1) THIS STOCK OPTION AGREEMENT SHALL BE DEEMED TO BE MADE
IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND
GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF
DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF. The parties hereby irrevocably submit to the
jurisdiction of the courts of the State of Delaware and the
Federal courts of the United States of America located in the
State of Delaware solely in respect of the interpretation and
enforcement of the provisions of this Stock Option Agreement and
of the documents referred to in this Stock Option Agreement, and
in respect of the transactions contemplated hereby, and hereby
waive, and agree not to assert, as a defense in any action, suit
or proceeding for the interpretation or enforcement hereof or of
any such document, that it is not subject thereto or that such
action, suit or proceeding may not be brought or is not
maintainable in said courts or that the venue thereof may not be
appropriate or that this Stock Option Agreement or any such
document may not be enforced in or by such courts, and the
parties hereto irrevocably agree that all claims with respect to
such action or proceeding shall be heard and determined in such a
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Delaware State or Federal court. The parties hereby consent to
and grant any such court jurisdiction over the person of such
parties and over the subject matter of such dispute and agree
that mailing of process or other papers in connection with any
such action or proceeding in the manner provided in Section 12(g)
or in such other manner as may be permitted by Applicable Law,
shall be valid and sufficient service thereof.
(2) The parties agree that irreparable damage would occur
and that the parties would not have any adequate remedy at law in
the event that any of the provisions of this Stock Option
Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Stock Option Agreement and to enforce
specifically the terms and provisions of this Stock Option
Agreement in any Federal court located in the State of Delaware
or in Delaware state court, this being in addition to any other
remedy to which they are entitled at law or in equity.
(3) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS STOCK OPTION AGREEMENT IS
LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS STOCK OPTION AGREEMENT BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 12(j).
(k) Entire Agreement. This Stock Option Agreement and the Merger
Agreement, and any documents and instruments referred to herein and
therein, constitute the entire agreement between the parties hereto and
thereto with respect to the subject
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matter hereof and thereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect
to the subject matter hereof and thereof. Nothing in this Stock Option
Agreement shall be construed to give any person other than the parties
to this Stock Option Agreement or their respective successors or
permitted assigns any legal or equitable right, remedy or claim under or
in respect of this Stock Option Agreement or any provision contained
herein.
(l) Expenses. Except as otherwise provided in this Stock Option
Agreement, each party shall pay its own expenses incurred in connection
with this Stock Option Agreement and the transactions contemplated
hereby.
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IN WITNESS WHEREOF, each of the parties has caused this Stock Option
Agreement to be duly executed as of the day and year first above written.
INTEL CORPORATION,
a Delaware corporation
By: /s/ ARVIND SODHANI
-------------------------------------------
Name: Arvind Sodhani
Title: Treasurer
DSP COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ DAVIDI GILO
-------------------------------------------
Name: Davidi Gilo
Title: Chairman of the Board
[SIGNATURE PAGE TO INTEL/DSP COMMUNICATIONS STOCK OPTION AGREEMENT]