EXHIBIT 10.1
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DENOTED HEREIN BY XXXXX.
AMENDED AND RESTATED PREFERRED STOCK PURCHASE AGREEMENT
THIS AMENDED AND RESTATED PREFERRED STOCK PURCHASE AGREEMENT (the
"AGREEMENT") is made on the 15th day of October, 2002 (the "EFFECTIVE DATE"), by
and between JAZZ SEMICONDUCTOR, INC., a Delaware corporation (the "COMPANY"),
and RF MICRO DEVICES, INC., a North Carolina corporation ("RFMD"), and amends
and fully restates in its entirety as set forth herein that certain Preferred
Stock Purchase Agreement dated as of August 22, 2002, by and between the Company
and RFMD (the "ORIGINAL PURCHASE AGREEMENT").
1. SUBSCRIPTION FOR AND ISSUANCE OF PREFERRED STOCK.
1.1. AUTHORIZATION AND SALE OF SERIES B PREFERRED STOCK.
(a) The Company has authorized the issuance to RFMD of up to an
aggregate of XXXXX (XXXXX) shares of Series B Preferred Stock (the "SHARES").
The rights, restrictions, privileges and preferences of the Series B Preferred
Stock shall be set forth in the Company's Certificate of Incorporation in the
form attached hereto as EXHIBIT A (the "CERTIFICATE"), the parties hereto
acknowledging and agreeing that EXHIBIT A attached hereto differs in certain
respects from Exhibit A attached to the Original Purchase Agreement. At or
before the Closing (as defined below), the Company shall adopt the Certificate
and file the same with the Secretary of State of the State of Delaware. The
total amount of common stock, par value $0.001 per share of the Company (the
"COMMON STOCK"), or other securities issuable upon conversion of the Shares is
referred to as the "CONVERSION STOCK."
(b) Subject to the terms and conditions of this Agreement, RFMD
agrees to purchase the Shares for an aggregate purchase price of Sixty Million
dollars ($60,000,000) (the "PURCHASE PRICE"). The Purchase Price shall be
comprised of (1) cash in the amount of Thirty Million dollars ($30,000,000) (the
"CASH PORTION") and (2) a Promissory Note in the principal amount of Thirty
Million dollars ($30,000,000) in substantially the form attached hereto as
EXHIBIT B (the "NOTE"). Payment of the Note shall be secured under a pledge
agreement in substantially the form attached hereto as EXHIBIT C (the "PLEDGE
AGREEMENT"). As used in this Agreement, the term "TRANSACTION DOCUMENTS" shall
mean the Note, the Pledge Agreement, the Stockholder Agreement, the Board
Representation Agreements, the Registration Rights Agreement, the Wafer Supply
Agreement and the Development Agreement, each as defined herein.
1.2. CLOSING.
(a) The Closing of the issuance of the Shares shall take place on
the second business day following the date upon which each of the conditions to
closing have been satisfied at the offices of Latham & Watkins, 650 Town Center
Drive, Costa Mesa, California 92626 (the "CLOSING") or at such other time and
place as the Company and RFMD mutually agree upon orally or in writing. The date
on which the Closing occurs is referred to herein as the "Closing Date."
(b) At the Closing, RFMD shall pay the Cash Portion in
immediately available funds by check or wire transfer to a bank account
designated by the Company and shall deliver the following to the Company:
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DENOTED HEREIN BY XXXXX.
(i) the Note, duly executed by RFMD;
(ii) the Pledge Agreement, duly executed by RFMD;
(iii) a Second Amended and Restated Stockholder Agreement
substantially in the form attached hereto as EXHIBIT D (the "STOCKHOLDER
AGREEMENT"), duly executed by RFMD, the parties hereto acknowledging and
agreeing that EXHIBIT D attached hereto differs in certain respects from Exhibit
D attached to the Original Purchase Agreement;
(iv) a Second Amended and Restated Carlyle Board
Representation Agreement substantially in the form attached hereto as EXHIBIT E
(the "CARLYLE BOARD REPRESENTATION AGREEMENT"), duly executed by RFMD;
(v) a Second Amended and Restated Conexant Board
Representation Agreement substantially in the form attached hereto as EXHIBIT F
(the "CONEXANT BOARD REPRESENTATION AGREEMENT"), duly executed by RFMD;
(vi) a RFMD Board Representation Agreement substantially in
the form attached hereto as EXHIBIT G (the "RFMD BOARD REPRESENTATION AGREEMENT"
and, together with the Carlyle Board Representation Agreement and the Conexant
Board Representation Agreement, the "BOARD REPRESENTATION AGREEMENTS"), duly
executed by RFMD;
(vii) a Registration Rights Agreement substantially in the
form attached hereto as EXHIBIT H (the "REGISTRATION RIGHTS AGREEMENT"), duly
executed by RFMD;
(viii) a Wafer Supply Agreement substantially in the form
attached hereto as EXHIBIT I (the "WAFER SUPPLY AGREEMENT"), duly executed by
RFMD, the parties hereto acknowledging and agreeing that EXHIBIT I attached
hereto differs in certain respects from Exhibit I attached to the Original
Purchase Agreement;
(ix) a Master Joint Technology Development Agreement
substantially in the form attached hereto as EXHIBIT J (the "DEVELOPMENT
AGREEMENT"), duly executed by RFMD; and
(x) a certificate or certificates, duly executed by the
Chief Executive Officer or Chief Financial Officer of RFMD and dated as of the
Closing Date, certifying the fulfillment of the conditions specified in SECTIONS
5.2(A), (B), (C) and (F) hereof (the "RFMD COMPLIANCE CERTIFICATE").
(c) At the Closing, the Company shall deliver to RFMD:
(i) the Pledge Agreement, duly executed by the Company;
(ii) the Stockholder Agreement, duly executed by each of
Carlyle Partners III, L.P., a Delaware limited partnership ("CP III"), CP III
Coinvestment, L.P., a Delaware limited partnership ("CP III COINVESTMENT"),
Carlyle High Yield Partners, L.P., a Delaware limited partnership ("CARLYLE HIGH
YIELD" and, together with CP III and CP III Coinvestment, "CARLYLE"), Conexant
Systems, Inc., a Delaware corporation ("CONEXANT" and, together with Carlyle,
the "EXISTING STOCKHOLDERS") and the Company;
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DENOTED HEREIN BY XXXXX.
(iii) the Board Representation Agreements, duly executed by
all parties thereto other than RFMD;
(iv) the Registration Rights Agreement, duly executed by
Conexant, Carlyle and the Company;
(v) an opinion letter from the Company's counsel, Latham &
Watkins, addressed to RFMD and substantially in the form attached hereto as
EXHIBIT K (the "OPINION"), the parties hereto acknowledging and agreeing that
EXHIBIT K attached hereto differs in certain respects from Exhibit K attached to
the Original Purchase Agreement;
(vi) the Wafer Supply Agreement, duly executed by Newport
Fab, LLC, a Delaware limited liability company ("NEWPORT FAB");
(vii) the Development Agreement, duly executed by Newport
Fab;
(viii) evidence of the election of RFMD's designee to the
Board of Directors of the Company pursuant to the RFMD Board Representation
Agreement;
(ix) an indemnification agreement duly executed by the
Company in favor of RFMD's designee on the Board of Directors of the Company in
accordance with SECTION 4.5 of this Agreement;
(x) a certificate or certificates, duly executed by the
Chief Executive Officer or Chief Financial Officer of the Company and dated as
of the Closing Date, certifying the fulfillment of the conditions specified in
SECTIONS 5.1(A), (B) (C), (D) and (G) (the "COMPANY COMPLIANCE CERTIFICATE");
(xi) a true and correct copy of a certificate or
certificates evidencing the Shares, which original certificates shall be dated
as of the Closing Date and delivered to the Company to hold as Pledged
Collateral under the Pledge Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a material inducement
to RFMD to enter into this Agreement and purchase the Shares hereunder, the
Company hereby represents and warrants to RFMD that:
2.1. ORGANIZATION AND STANDING. The Company is a corporation duly
organized, validly existing under, and in good standing under, the laws of the
State of Delaware. The Company has all requisite corporate power and authority
to own and operate its properties and assets and to carry on its business as
presently conducted. The Company is duly qualified and authorized to do business
and is in good standing as a foreign corporation in the State of California and
in each jurisdiction in which the failure to be so qualified would have a
material adverse effect on the Company's business as presently conducted or its
assets, liabilities, results of operation or financial condition, taken as a
whole (a "MATERIAL ADVERSE EFFECT").
2.2. CORPORATE POWER. The Company has full power and authority to
enter into this Agreement and the other Transaction Documents and to carry out
the provisions of this Agreement and the other Transaction Documents, and such
agreements constitute the Company's valid and legally binding obligation,
enforceable in accordance with their terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
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DENOTED HEREIN BY XXXXX.
application affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies. The Certificate and the Company's Bylaws,
attached hereto as EXHIBIT L (the "BYLAWS"), are, as of August 22, 2002, true
and complete copies of the Company's Certificate of Incorporation and Bylaws,
including all amendments to each.
2.3. AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution, delivery and performance by the Company of this Agreement and the
other Transaction Documents, the due authorization, issuance (or reservation for
issuance), sale and delivery of the Shares and the Conversion Stock, and the
performance of all of the Company's obligations hereunder and thereunder has
been taken (with respect to this Agreement) or will be taken (with respect to
the other Transaction Documents) prior to the Closing. The Conversion Stock will
have been duly and validly reserved for issuance prior to the Closing. The
Shares, when issued, sold and delivered in compliance with the provisions of
this Agreement, and the Conversion Stock, when issued in compliance with the
provisions of the Certificate, will be duly authorized, validly issued, fully
paid and nonassessable and issued in compliance with applicable federal
securities laws, the Shares will have the rights, preferences and privileges
described in the Certificate, and the Shares and the Conversion Stock will be
free and clear of all liens, claims and encumbrances and any "adverse claim" (as
such term is defined in Section 8102 of the California Commercial Code),
assuming RFMD takes the Shares and the Conversion Stock with no notice thereof,
other than any liens or encumbrances created by or imposed upon RFMD and
encumbrances imposed by any law, rule, regulation, ordinance or restriction
promulgated by any governmental authority; provided, however, that the Shares
and the Conversion Stock may be subject to restrictions on transfer under
applicable securities laws and otherwise as set forth herein and in the
Stockholder Agreement and the lien and encumbrances created by the Pledge
Agreement.
2.4. NO CONFLICT OR BREACH. The execution, delivery and performance by
the Company of this Agreement and the Transaction Documents do not and will not
(a) assuming compliance with the requirements of the HSR Act (as defined
herein), conflict with or constitute a violation of any law, statute, judgment
or regulation of any legislative body, court, administrative agency,
governmental authority or arbitrator applicable to the Company; (b) conflict
with or constitute a violation of the Certificate of Incorporation or Bylaws of
the Company; or (c) constitute or cause a breach or violation of any covenant,
agreement or obligation binding upon the Company or affecting any of its
properties, except, in the case of such conflicts, violations or breaches
described in the foregoing (a) or (c), such as would not have a Material Adverse
Effect.
2.5. CAPITALIZATION
(a) As of the Closing, the authorized capital stock of the
Company will consist of 225,000,000 shares of Common Stock and 200,000,000
shares of Preferred Stock, $0.001 par value, of which 55,000,000 shares shall
have been designated Series A Preferred Stock and 58,071,888 shares shall have
been designated Series B Preferred Stock. Immediately prior to the Closing,
XXXXX shares of Common Stock, XXXXX shares of Series A Preferred Stock and XXXXX
shares of Series B Preferred Stock will be issued and outstanding. SCHEDULE
2.5(A) contains a table setting forth (i) a list of all holders of Preferred
Stock as of August 22, 2002, including the number of shares of Preferred Stock
held by each such holder, (ii) the total number of shares of Common Stock
outstanding as of August 22, 2002 and (iii) the total number of options to
purchase shares of capital stock or other securities of the Company outstanding
as of August 22, 2002. All issued and outstanding shares of the Company's
capital stock have been duly authorized and validly
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DENOTED HEREIN BY XXXXX.
issued, are fully paid and nonassessable, and were issued in compliance with
applicable federal securities laws. As of August 22, 2002, except as stated in
this SECTION 2.5(A) above or in SCHEDULE 2.5(A) and except for (i) the
conversion privileges of the Preferred Stock (ii) XXXXX shares of Common Stock
reserved for issuance under the Company's 2002 Equity Incentive Plan and (iii)
the preemptive rights provided in the Amended and Restated Stockholder Agreement
dated as of July 30, 2002, by and among the Existing Stockholders, there are no
other outstanding shares of capital stock, stock appreciation rights, phantom
stock or similar rights, or outstanding rights of first refusal or rights to
purchase or otherwise acquire from the Company any securities of the Company,
preemptive rights or other rights, options, warrants, conversion rights, or
other agreements or understandings either directly or indirectly for the
purchase or acquisition from the Company of any shares of its capital stock.
With the exception of the Stockholder Agreement and the Board Representation
Agreements, the Company is not, and as of immediately after the Closing will not
be, a party or otherwise subject to any agreement or understanding that affects
or relates to the voting or giving of written consents with respect to any
security of the Company, or the voting by or for a director of the Company,
including without limitation voting trusts or agreements, stockholders'
agreements, pledge agreements, buy-sell agreements, rights of first refusal or
proxies relating to capital stock of the Company.
(b) As of the Closing, the Company will not be subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any of its securities or any options, warrants or other rights to acquire
any of its securities.
(c) As of the Effective Date, the Company does not own or
control, either directly or indirectly, more than 50% of the ownership or voting
interests of any entity, except for those entities set forth on SCHEDULE 2.5(C).
The Company's ownership in each of the entities set forth on SCHEDULE 2.5(C) is
free from liens, claims and encumbrances other than any liens or encumbrances
created by or imposed by any law, rule, regulation, ordinance or restriction
promulgated by any governmental authority or restrictions on transfer under
applicable securities laws.
2.6. OUTSTANDING INDEBTEDNESS. Except as set forth in the Financial
Statements (as such term is defined below) or identified on SCHEDULE 2.5(C), the
Company has no indebtedness for borrowed money which the Company has directly or
indirectly created, incurred, assumed or guaranteed, or with respect to which
the Company has become directly or indirectly liable.
2.7. FINANCIAL STATEMENTS. The Company has delivered to RFMD its
unaudited balance sheet as of June 28, 2002 (the "STATEMENT DATE") and unaudited
statement of income and cash flows for the fiscal months ended April 26, 2002,
May 24, 2002, and the fiscal three months ended June 28, 2002, (collectively,
the "FINANCIAL STATEMENTS"). Except as set forth in SCHEDULE 2.7, each of the
Financial Statements, is complete and correct in all material respects, has been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent throughout the periods indicated and consistent with the
other Financial Statements, except as disclosed therein, and presents fairly, in
all material respects, the financial position and operating results of the
Company as of the Statement Date or for the periods indicated therein; provided,
however, that the Financial Statements are subject to year-end audit adjustments
as well as opening balance sheet purchase accounting adjustments and do not
contain footnotes required under generally accepted accounting principles.
2.8. GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority on the
5
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DENOTED HEREIN BY XXXXX.
part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except for such filings, if any,
required pursuant to applicable securities laws, which filings will be duly
effected within all required statutory periods, and except as may be required by
the HSR Act (as defined herein).
2.9. LITIGATION. Except for certain actions and proceedings described
in SCHEDULE 2.9, there is no action, suit, proceeding or investigation pending
or to the best of the Company's knowledge, currently threatened against the
Company that questions the validity of this Agreement or the right of the
Company to enter into this Agreement or to consummate the transactions
contemplated hereby, or that might result, either individually or in the
aggregate, in any Material Adverse Effect.
2.10. CHANGES. Except in connection with the Transaction Documents, as
contemplated in the Company's Operating Budget as of or prior to the Effective
Date (which Operating Budget has previously been delivered by the Company to
RFMD), or as described in SCHEDULE 2.10, since the Statement Date:
(a) no Material Adverse Effect has occurred;
(b) there has been no damage, destruction or loss not covered by
insurance that has resulted in a Material Adverse Effect;
(c) no other event or condition of any character has occurred
that could be reasonably expected to have a Material Adverse Effect;
(d) the Company has not sold, leased, transferred, or assigned
any of its assets, tangible or intangible, having a value greater than
$10,000,000 in the aggregate;
(e) the Company has not entered into any agreement, contract,
commitment, lease, or license (or series of related agreements, contracts,
commitments, leases, and licenses) involving more than $15,000,000 per year,
other than in the ordinary course of business;
(f) no party (including the Company) has accelerated, terminated,
modified, or cancelled any agreement, contract, lease, or license (or series of
related agreements, contracts, leases, and licenses) to which the Company is a
party or by which the Company or its assets are bound which obligates any party
thereto to provide goods and/or services having a value, or to make payments
aggregating, in excess of $5,000,000 per year;
(g) the Company has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of any other person (or
series of related capital investments, loans, and acquisitions) involving more
than $5,000,000, other than in the ordinary course of business;
(h) the Company has not issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation (but, in any event, excluding
indebtedness and accounts payable incurred in the ordinary course of business)
involving more than $1,000,000 in the aggregate;
(i) the Company has not made any loan to, or entered into any
other transaction with, any of its directors, officers and employees outside the
ordinary course of business;
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DENOTED HEREIN BY XXXXX.
(j) the Company has not issued shares of capital stock or granted
stock appreciation rights, phantom stock or similar rights, options, warrants,
rights of first refusal, preemptive rights, conversion rights or other rights,
or entered into any arrangements or understandings either directly or indirectly
for the purchase or acquisition from the Company of any shares of its capital
stock, except for options to purchase Company stock issued under the 2002 Equity
Incentive Plan and common stock issued upon the exercise or conversion of
securities convertible into the Company's common stock that are set forth on
SCHEDULE 2.5(A);
(k) the Company has not committed to do any of the foregoing.
2.11. PROPRIETARY ASSETS. To the Company's knowledge and except as set
forth on SCHEDULE 2.11:
(a) the Company owns, or otherwise possesses sufficient rights to
use, all of the patents, patent applications, trademarks, service marks,
trademark and service mark applications, trade names, copyright registrations,
and licenses currently used by the Company or necessary for the conduct of the
Company's business as currently conducted (the "PROPRIETARY ASSETS");
(b) the business of the Company as currently conducted does not
infringe or violate any of the patents, trademarks, service marks, trade names,
copyrights, mask-works, licenses, trade secrets, processes, data or know-how
("INTELLECTUAL PROPERTY RIGHTS") of any other person, except such as would not
have a Material Adverse Effect, and the Company has not received any notices of
infringement with respect to the Intellectual Property Rights or the businesses
of the Company; and
(c) no person (including employees of the Company) is infringing,
misappropriating or otherwise making any unauthorized use or disclosure of any
Intellectual Property Rights of the Company, except such as would not have a
Material Adverse Effect.
2.12. COMPLIANCE WITH DECREES AND LAWS. There is not outstanding any
material order, writ, injunction or decree of any court, governmental agency or
arbitration tribunal against or involving the Company or any of its assets (a
"GOVERNMENTAL ORDER"), and the Company has not received any written notice of
any pending or threatened Governmental Order. The Company is currently, and has
been at all times, in material compliance with all material laws, statutes,
rules, regulations, orders and licensing requirements ("RULES") of federal,
state, local and foreign agencies and authorities applicable to the business,
properties and operations of the Company (including, without limitation, those
relating to antitrust and trade regulation, civil rights, labor and
discrimination, safety and health). To the knowledge of the Company, there has
been no allegation of any violation of any such Rules, and no investigation or
review by any federal, state or local body or agency is, to the knowledge of the
Company, pending, threatened or planned with respect to the Company or any of
its assets.
2.13. TAXES. No tax returns, reports or declarations of estimated tax
("TAX RETURNS") have been required to be filed before the date hereof with any
United States, state and local governmental agencies or foreign countries and
political subdivisions thereof. The Company has timely made all withholdings of
tax required to be made under all applicable United States, state and local tax
regulations, and such withholdings have either been paid or will be paid to the
respective governmental agencies or set aside in accounts for such purpose or
accrued, reserved
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DENOTED HEREIN BY XXXXX.
against and entered upon the books of the Company. Estimated income taxes which
are not yet due to be paid to the Internal Revenue Service or any state or local
taxing authority have been accrued, reserved against and entered upon the books
of the Company. The Company is not a party to any pending action or proceeding,
nor to the knowledge of the Company, is there threatened any action or
proceeding, by any governmental authority for assessment or collection of Taxes,
and the Company has not been notified by any governmental authority that an
audit or review of any tax matter is contemplated.
2.14. DISCLOSURE. The representations and warranties of the Company
set forth in this Agreement (a) do not contain a misstatement of a material fact
or (b) intentionally omit to state a material fact necessary to make the
statements contained herein not misleading (except as for such omissions as
would not reasonably be expected to have a Material Adverse Effect).
2.15. STATUS OF COMPANY. Since March 12, 2002, except as described on
SCHEDULE 2.15, the Company has conducted its business as a separate and
independent corporation and not as a subsidiary of or otherwise controlled by
Conexant. RFMD acknowledges that the Company, in the normal course of its
separation from Conexant and through the Effective Date received and provided
services to Conexant under various agreements, including but not limited to, a
Transition Services Agreement pursuant to which Conexant and the Company have
agreed to the sharing and transitioning of certain support services related to
the wafer fabrication operations of the Company (the "TRANSITION AGREEMENT") and
the other Transactional Agreements (as such term is defined in the Stockholder
Agreement). As of the Effective Date, the Company is not, under any contractual
arrangement, understanding or otherwise, sharing with, furnishing to or being
provided by Conexant, or any affiliate of Conexant, with any material assets,
facilities, properties, equipment, personnel, operations, systems, services,
functions or resources except pursuant to the Transactional Agreements and the
agreements and arrangements listed on SCHEDULE 2.15. Any material services
previously provided by Conexant to the Company and not provided pursuant to the
Transactional Agreements or agreements or arrangements listed on SCHEDULE 2.15
have been terminated.
3. REPRESENTATIONS AND WARRANTIES OF RFMD. As a material inducement to the
Company to enter into this Agreement and sell the Shares hereunder, RFMD hereby
represents and warrants to the Company that:
3.1. ORGANIZATION AND STANDING. RFMD is a corporation duly organized,
validly existing under, and in good standing under, the laws of the State of
North Carolina. RFMD has all requisite corporate power and authority to own and
operate its properties and assets and to carry on its business as presently
conducted.
3.2. CORPORATE POWER. RFMD has full power and authority to enter into
this Agreement and the other Transaction Documents, and such agreements
constitute RFMD's valid and legally binding obligations, enforceable in
accordance with their terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.
3.3. AUTHORIZATION. All corporate action on the part of RFMD, its
officers, directors and stockholders necessary for the authorization, execution,
delivery and performance by the Company of this Agreement and the other
Transaction Documents, and the performance of all of
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DENOTED HEREIN BY XXXXX.
RFMD's obligations hereunder and thereunder, has been taken (with respect to
this Agreement) or will be taken (with respect to the other Transaction
Documents) prior to the Closing.
3.4. EXPERIENCE. RFMD is capable of evaluating the merits and risks of
its investment in the Company and has the capacity to protect its own interests.
RFMD is an "accredited investor," as such term is defined in Regulation D
promulgated under the Securities Act of 1933, as amended (the "SECURITIES ACT").
3.5. INVESTMENT. RFMD is acquiring the Shares (and the Conversion
Stock) for investment for its own account, not as a nominee or agent, and not
with the view to, or for resale in connection with, any distribution thereof.
RFMD understands that the Shares and the Conversion Stock have not been, and,
when issued, will not be, registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of RFMD's representations as expressed
herein.
3.6. RULE 144. RFMD acknowledges that the Shares and the Conversion
Stock must be held indefinitely unless subsequently registered under the
Securities Act or unless an exemption from such registration is available. RFMD
is aware of the provisions of Rule 144 promulgated under the Securities Act
which permit limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions, including, among other things, the
existence of a public market for the Shares, the availability of certain current
public information about the Company, the resale occurring not less than one
year after a party has purchased and paid for the security to be sold, the sale
being effected through a "broker's transaction" or in transactions directly with
a "market maker" and the number of Shares and shares of Conversion Stock being
sold during any three-month period not exceeding specified limitations.
3.7. NO PUBLIC MARKET. RFMD understands that no public market now
exists for any of the securities issued by the Company and that the Company has
made no assurances that a public market will ever exist for the Company's
securities.
3.8. ACCESS TO DATA. RFMD has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management and has also had an opportunity to ask questions of the Company's
officers, which questions were answered to its satisfaction.
3.9. BROKERS OR FINDERS. RFMD has not engaged any brokers, finders, or
agents and has not incurred, and will not incur, directly or indirectly, any
liability for brokerage or finder's fee or agents' commissions or any similar
charges in connection with this Agreement or the transactions contemplated
hereby.
4. COVENANTS.
4.1. HSR FILING. The Company and RFMD shall, as promptly as
practicable following the execution of this Agreement, in cooperation with each
other, complete and file with the appropriate authorities the premerger
notification forms and any other documents required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR ACT"). It is agreed that the Company and RFMD shall each
pay one half of all filing fees due from the parties in connection with
compliance with the HSR Act.
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4.2. ACCESS TO INFORMATION. The Company shall permit RFMD and its
counsel, accountants and other representatives reasonable access during normal
business hours to the properties, assets, books, records, agreements and other
documents of the Company reasonably determined by the Company as necessary for
RFMD to receive information comparable to the information that will be made
available to RFMD following the Closing under the Stockholder Agreement.
4.3. CONDUCT OF BUSINESS.
(a) Between the Effective Date and the Closing Date, except to
the extent necessary to give effect to the transactions contemplated by this
Agreement or the Transaction Documents, the Company:
(i) shall conduct its operations in the normal and customary
manner in the ordinary course of business, except as would not have a Material
Adverse Effect;
(ii) shall keep in full force and effect insurance on its
assets;
(iii) shall maintain its relationships with its employees,
suppliers and customers, except as would not have a Material Adverse Effect;
(iv) shall promptly advise RFMD of any Material Adverse
Effect in the condition of the Company, whether financial or tax (including
notification of audit or other tax investigation, tax lien filing or proposed
tax lien);
(v) shall promptly advise RFMD of the occurrence of any
event or circumstance which adversely affects the consummation of the
transactions contemplated by this Agreement or which, if in existence on the
Effective Date, would have been required to have been disclosed in a schedule to
this Agreement or would have caused a representation or warranty of the Company
in this Agreement to have been inaccurate;
(vi) shall not amend the Certificate or the Company's
Bylaws; and
(vii) shall not take any of the actions specified in
SECTIONS 2.10(D) through (K).
(b) Between the Effective Date and the Closing Date, RFMD:
(i) shall promptly advise the Company of any material
adverse change in the condition of RFMD, whether financial or tax (including
notification of audit or other tax investigation, tax lien filing or proposed
tax lien);
(ii) shall promptly advise the Company of the occurrence of
any event or circumstance which adversely affects the consummation of the
transactions contemplated by this Agreement or which, if in existence on the
Effective Date, would have been required to have been disclosed in a schedule to
this Agreement or would have caused a representation or warranty of RFMD in this
Agreement to have been inaccurate.
(c) From and after the Closing Date, the Company:
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(i) shall conduct its business as a separate and independent
company and not as a subsidiary or otherwise controlled by Conexant; provided
that (A) the Company may continue to obtain the benefits of and perform its
obligations under the Transactional Agreements and the agreements and
arrangements listed on SCHEDULE 2.15, and (B) nothing in this SECTION 4.3(C)(I)
shall prevent the Company from engaging in a Related Party Transaction (as
defined below) or series of related Related Party Transactions in which the
amount involved is less than $60,000;
(ii) shall not, directly or indirectly, enter into, or agree
to enter into, any contract, subcontract, license, option, loan or other
agreement, written or oral, or series of any related agreements with any
director, executive officer or holder of more than 1% of the outstanding capital
stock of the Company (each, a "RELATED PARTY TRANSACTION") in which the amount
involved equals or exceeds $100,000, without the affirmative approval of a
majority of the disinterested members of the Company's Board of Directors;
(iii) shall not, without the prior consent of a majority of
the disinterested directors, (A) take action to amend, modify, supplement,
terminate, extend, waive any right of the Company under or waive compliance by
any other party with any material provision of any Transactional Agreement or
(B) enter into new agreements, in either case, that may result in a breach of
confidentiality under the Stockholder Agreement or may materially impair the
Company's ability to perform its obligations under the RFMD Agreements (as such
term is defined in the Shareholder Agreement).
4.4. BEST EFFORTS. Each of the Company and RFMD shall use best efforts
to make or obtain all consents, approvals, authorizations, registrations and
filings with all federal, state or local judicial or governmental authorities or
administrative agencies as are required in connection with the consummation of
the transactions contemplated by this Agreement.
4.5. RFMD DESIGNEE. The Company shall take such commercially
reasonable steps as are necessary to effect, immediately after the Closing, the
election to the Board of Directors of the Company of Jerry Neal, or such other
designee as RFMD shall designate in writing to serve as the RFMD representative
pursuant to the Stockholder Agreement and the RFMD Board Representation
Agreement, and shall enter into an indemnification agreement with such designee
in substantially the form of the Company's indemnification agreements with
Carlyle's and Conexant's designees under their respective Board Representation
Agreements.
5. CONDITIONS TO CLOSING.
5.1. CONDITIONS TO RFMD'S OBLIGATIONS AT THE CLOSING. The obligations
of RFMD to purchase the Shares is subject to the fulfillment at or prior to the
Closing of the following conditions, any of which may be waived in whole or in
part by RFMD unless otherwise required by state or federal law:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by the Company in SECTION 2 that is qualified by materiality
shall be true and correct, and each of such representations and warranties of
the Company that is not so qualified shall be true and correct in all material
respects, as of the Closing Date, with the same force and effect as if they had
been made on and as of the Closing Date.
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(b) COVENANTS. All covenants, agreements, obligations and
conditions contained in this Agreement to be performed by the Company on or
prior to the Closing Date shall have been performed or complied with in all
material respects.
(c) CONSENTS. The Company shall have obtained all material
consents, permits and waivers necessary to consummate the transactions
contemplated by this Agreement and the Transaction Documents.
(d) RESERVATION OF CONVERSION STOCK. The shares of the Conversion
Stock issuable upon conversion of the Shares shall have been duly authorized and
reserved for issuance upon such conversion.
(e) PROCEEDINGS AND DOCUMENTS. All corporate, legal, and other
proceedings taken by the Company in connection with the transactions
contemplated hereby shall be reasonably satisfactory to RFMD. All documents to
be delivered to RFMD by the Company pursuant to SECTION 1.2(C) shall have been
so delivered, and RFMD shall have received all counterpart originals or
certified or other copies of such documents as it may reasonably request.
(f) FILING OF CERTIFICATE. The Certificate shall have been filed
with the Secretary of State of the State of Delaware.
(g) ADVERSE PROCEEDINGS. No suit, action or other proceeding
seeking to restrain, prevent or change the transactions contemplated hereby or
by the Transaction Documents or otherwise questioning the validity or legality
of such transactions shall have been instituted or be pending.
(h) HSR ACT WAITING PERIOD. All applicable HSR Act waiting
periods, if any, together with any extensions thereof, shall have expired or
terminated.
5.2. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING. The Company's
obligation to sell and issue the Shares at the Closing under this Agreement is
subject to the fulfillment to the Company's satisfaction on or prior to the
Closing Date of the following conditions, any of which may be waived in whole or
in part by the Company unless otherwise required by state or federal law:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by RFMD in SECTION 3 that is qualified by materiality shall
be true and correct, and each of such representations and warranties of RFMD
that is not so qualified shall be true and correct in all material respects, as
of the Closing Date, with the same force and effect as if they had been made on
and as of the Closing Date.
(b) COVENANTS. All covenants, agreements, obligations and
conditions contained in this Agreement to be performed by RFMD on or prior to
the Closing Date shall have been performed or complied with in all material
respects.
(c) CONSENTS. RFMD shall have obtained all material consents,
permits and waivers necessary to consummate the transactions contemplated by
this Agreement and the Transaction Documents.
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(d) PROCEEDINGS AND DOCUMENTS. All corporate, legal, and other
proceedings taken by RFMD in connection with the transactions contemplated
hereby shall be reasonably satisfactory to the Company. All documents to be
delivered to the Company by RFMD pursuant to SECTION 1.2(B) shall have been so
delivered, and the Company shall have received all counterpart originals or
certified or other copies of such documents as it may reasonably request.
(e) SECURITIES LAW COMPLIANCE. The offer and sale of the Shares
pursuant to this Agreement shall be in compliance with all federal securities
laws and the securities laws of any applicable states as necessary to offer and
sell the Shares to RFMD in compliance with all applicable laws.
(f) ADVERSE PROCEEDINGS. No suit, action or other proceeding
seeking to restrain, prevent or change the transactions contemplated hereby or
by the Transaction Documents or otherwise questioning the validity or legality
of such transactions shall have been instituted or be pending.
(g) HSR ACT WAITING PERIOD. All applicable HSR Act waiting
periods, if any, together with any extensions thereof, shall have expired or
terminated.
6. INDEMNIFICATION.
6.1. INDEMNIFICATION BY THE COMPANY. The Company shall indemnify,
defend and hold harmless RFMD and its officers, directors and affiliates (the
"RFMD INDEMNITEES") from, against and with respect to any and all action or
cause of action, loss, damage (including, without limitation, all foreseeable
and unforeseeable consequential damages), claim, obligation, liability, penalty,
fine, cost and expense (including, without limitation, reasonable attorneys' and
consultants' fees and costs and expenses incurred in investigating, preparing,
defending against or prosecuting any litigation, claim, proceeding, demand or
request for action by any governmental or administrative entity), of any kind or
character (a "LOSS") arising out of or in connection with any of the following:
(a) any breach of any of the representations or warranties of the
Company contained in or made pursuant to this Agreement; and
(b) any failure by the Company to perform or observe, or to have
performed or observed, in full, any covenant, agreement, obligation or condition
to be performed or observed by it pursuant to this Agreement;
6.2. INDEMNIFICATION BY RFMD. RFMD shall indemnify, defend and hold
harmless the Company and its officers, directors and affiliates (the "COMPANY
INDEMNITEES") from, against and with respect to any Loss arising out of or in
connection with any of the following:
(a) any breach of any of the representations and warranties of
RFMD contained in or made pursuant to this Agreement; and
(b) any failure by RFMD to perform or observe, or to have
performed or observed, in full, any covenant, agreement, obligation or condition
to be performed or observed by it pursuant to this Agreement.
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6.3. NOTICE OF CLAIM. Any party seeking to be indemnified hereunder
(the "INDEMNIFIED PARTY") shall promptly notify the party from whom indemnity is
sought (the "INDEMNITY OBLIGOR") in writing of any claim for recovery,
specifying in reasonable detail the nature of the Loss. The Indemnified Party
shall provide to the Indemnity Obligor as promptly as practicable thereafter all
information and documentation reasonably requested by the Indemnity Obligor to
verify the claim asserted.
6.4. DEFENSE. If the facts pertaining to a Loss arise out of the claim
of any third party, or if there is any claim against a third party available by
virtue of the circumstances of the Loss, the Indemnity Obligor may, by giving
written notice to the Indemnified Party within 15 days following its receipt of
the notice of such claim, elect to assume control of the defense or the
prosecution thereof, including the employment of counsel or accountants at its
cost and expense. The Indemnity Obligor shall be entitled (but not obligated),
if it so elects, to compromise or settle such claim, which compromise or
settlement shall be made within the sole discretion of the Indemnity Obligor
without the consent of the Indemnified Party if such settlement or compromise
only involves the payment of monetary amounts, but shall be made only with the
written consent of the Indemnified Party, such consent not to be unreasonably
withheld, if such settlement or compromise involves obligations other than the
payment of monetary amounts. The Indemnified Party shall have the right to
employ counsel separate from counsel employed by the Indemnity Obligor in any
such action and to participate therein, but the fees and expenses of such
counsel shall be at the Indemnified Party's own expense. Whether or not the
Indemnity Obligor chooses to so defend or prosecute such claim, all the parties
hereto shall cooperate in the defense or prosecution thereof and shall furnish
such records, information and testimony and shall attend such conferences,
discovery proceedings and trials as may be reasonably requested in connection
therewith.
6.5. EXCLUSIVE REMEDY. The foregoing indemnification provisions shall
constitute the sole and exclusive remedy of the Company and RFMD for any
inaccuracy, untruth, incompleteness or other breach of any representation,
warranty or covenant contained in or made by RFMD or the Company, as
appropriate, pursuant to this Agreement or in any certificates delivered at the
Closing in connection with or related to the consummation of the Transactions
contemplated by this Agreement.
6.6. LIMITATIONS ON LIABILITY. The maximum aggregate amount of Loss
for which RFMD shall be liable shall be limited to $6,000,000 and the maximum
aggregate amount of Loss for which the Company shall be liable shall be limited
to $6,000,000; PROVIDED THAT, with respect to such claims, neither the RFMD
Indemnities nor the Company Indemnities shall be entitled to be indemnified
until the aggregate amount of their Loss arising out of such claims exceeds
$500,000. Once the aggregate amount of the RFMD Indemnitees' or the Company
Indemnitees' Loss arising out of the foregoing claims exceeds $500,000, the
Company Indemnitees or the RFMD Indemnitees, as appropriate, shall be entitled
to indemnification for all Loss incurred, including the first $500,000, up to
the above limitations. Notwithstanding anything to the contrary herein, any Loss
of RFMD arising out of a breach of a representation, warranty or covenant that
involves a Loss or diminution in value of the Company shall be limited to RFMD's
pro rata portion of such Loss based upon RFMD's proportionate ownership interest
in the Company.
7. MISCELLANEOUS.
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7.1. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents, made and to be performed entirely within the State of Delaware.
7.2. SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive the Closing of the transactions
contemplated hereby until the earlier of (a) twelve (12) months from the Closing
Date and (b) the consummation of the Company's initial public offering of its
common stock registered under the Securities Act of 1933, as amended. All
statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto or in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder as of the date of such
certificate or instrument.
7.3. FINDER'S FEE. Each party represents that it neither is nor will
be obligated for any finder's fee or commission in connection with this
transaction. Each of RFMD and the Company agree to indemnify and hold harmless
each other party from any liability for any commission or compensation in the
nature of a finder's fee (and the costs and expenses of investigating and
defending against such liability or asserted liability, including, without
limitation, reasonable fees of counsel) for which RFMD or the Company, as the
case may be, is responsible.
7.4. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto.
7.5. ENTIRE AGREEMENT. This Agreement, the Exhibits hereto, the
Transaction Documents and the other documents delivered pursuant to this
Agreement constitute the full and entire understanding and agreement among the
parties with regard to the subjects hereof and thereof and no party shall be
liable or bound to any other party in any manner by any representations,
warranties, covenants, or agreements except as specifically set forth herein or
therein. Nothing in this Agreement, express or implied, is intended to confer
upon any party, other than the parties hereto and their respective successors,
executors, administrators, heirs and assigns, any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided herein.
7.6. SEVERABILITY. In case one or more provisions of this Agreement
become or are declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision or provisions; PROVIDED, HOWEVER, that no such
severability shall be effective if it materially changes the economic benefit of
this Agreement to any party.
7.7. AMENDMENT AND WAIVER. Any term of this Agreement may be amended
only with the written consent of the Company and RFMD.
7.8. NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
or RFMD at the respective address as set forth on the
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signature page hereof or at such other address as the Company or RFMD may
designate by ten (10) days advance written notice to the other.
7.9. TITLES AND SUBTITLES. The titles of the sections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
7.10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
[SIGNATURE PAGE FOLLOWS]
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Exhibit M
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Preferred Stock Purchase Agreement as of the date first above written.
COMPANY
JAZZ SEMICONDUCTOR, INC.,
a Delaware corporation
By: /S/ SHU LI
-------------------------------------
Shu Li
President and Chief Executive Officer
Address: 4321 Jamboree Blvd.
Newport Beach, CA 92660
Fax No.: (949) 435-8455
Attention: Legal Counsel
With a copy to:
Latham & Watkins
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626
Attn: Jonn R. Beeson
Facsimile: (714) 755-8290
RFMD
RF MICRO DEVICES, INC.,
a North Carolina corporation
By: /S/ JERRY D. NEAL
-----------------------------------
Jerry D. Neal
Executive Vice President of Marketing &
Strategic Development
Address: 7628 Thorndike Road
Greensboro, NC 27409
Fax No.: (336) 931-7655
Attention: Suzanne Rudy
With a copy to:
Womble Carlyle Sandridge & Rice, PLLC
200 West Second Street
Winston-Salem, NC 27101
Attn: Jeffrey C. Howland, Esq.
Facsimile: (336) 733-8371