EXHIBIT 10(h)

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made and entered into
as of July 18, 2004, between Motorola, Inc., a Delaware corporation
(“Motorola”), and Freescale Semiconductor, Inc., a Delaware corporation (the
“Company”).

 

WHEREAS, Motorola and the Company have entered into a Master Separation and
Distribution Agreement (the “Separation and Distribution Agreement”) and certain
ancillary agreements;

 

WHEREAS, Motorola currently owns all of the issued and outstanding shares of the
Class B common stock, par value $.01, of the Company (the “Class B Common
Stock”);

 

WHEREAS, the Company is offering and selling to the public (the “IPO”) by means
of a Registration Statement (File No. 333-111250) initially filed with the
Securities and Exchange Commission (the “SEC”) on Form S-1 on December 17, 2003
(the “Registration Statement”) shares of Class A common stock, par value $.01,
of the Company (the “Class A Common Stock,” and together with the Class B Common
Stock, the “Common Stock”);

 

WHEREAS, Motorola currently intends to evaluate its strategic options with
respect to its entire ownership interest in the Company remaining after the IPO;

 

WHEREAS, Motorola and the Company desire to make certain arrangements to provide
Motorola with registration rights with respect to shares of Common Stock it
holds;

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged and intending to be legally bound
hereby, the parties hereby agree as follows:

 

Section 1. Effectiveness of Agreement; Term.

 

1.1 Effective Date. This Agreement shall become effective upon the consummation
of the IPO (the “Effective Date”).

 

1.2 Shares Covered. This Agreement covers all shares of Common Stock that are
beneficially owned by Motorola or any Permitted Transferee (as defined in
Section 2.5) from time to time, whether or not held immediately following the
IPO (subject to the provisions of Section 7, the “Shares”). The Shares shall
include any securities issued or issuable with respect to the Shares by way of a
stock dividend or a stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.

 

Motorola and any Permitted Transferees are each referred to herein as a “Holder”
and collectively as the “Holders” and the Holders of Shares proposed to be
included in any registration under this Agreement are each referred to herein as
a “Selling Holder” and collectively as the “Selling Holders.”

 

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Section 2. Demand Registration.

 

2.1 Notice. Upon the terms and subject to the conditions set forth herein, upon
written notice of any Holder requesting that the Company effect the registration
under the Securities Act of 1933, as amended (the “Securities Act”), of any or
all of the Shares held by it, which notice shall specify the intended method or
methods of disposition of such Shares (which methods may include, without
limitation, a Shelf Registration, a Convertible Registration or an Exchange
Registration (as such terms are defined in Section 2.6)), the Company will,
within five days of receipt of such notice from any Holder, give written notice
of the proposed registration to all other Holders, if any, and will use its best
efforts to effect (at the earliest reasonable date) the registration under the
Securities Act of such Shares (and the Shares of any other Holders joining in
such request as are specified in a written notice received by the Company within
15 days after receipt of the Company’s written notice of the proposed
registration) for disposition in accordance with the intended method or methods
of disposition stated in such request (each registration request pursuant to
this Section 2.1 is sometimes referred to herein as a “Demand Registration”);
provided, however, that:

 

(a) The Company shall not be obligated to effect registration with respect to
Shares pursuant to this Section 2 within 90 days after the effective date of a
previous registration, other than a Shelf Registration, effected with respect to
Shares pursuant to this Section 2;

 

(b) if at the time a Demand Registration is requested pursuant to this Section
2, the Company determines in the good faith judgment of the general counsel of
the Company, to be confirmed within 15 days by the Company’s board of directors
(the “Board”), that such registration would reasonably be expected to require
the disclosure of material information that the Company has a bona fide business
purpose to keep confidential and the disclosure of which would have a material
adverse effect on any active proposal by the Company or any of its subsidiaries
to engage in any material acquisition, merger, consolidation, tender offer,
other business combination, reorganization, securities offering or other
material transaction, the Company may postpone the filing or effectiveness of
such registration until the earlier of (i) 15 business days after the date of
disclosure of such material information, or (ii) 75 days after the Company makes
such determination; provided, however, that the Company may delay a Demand
Registration hereunder only once in any 12 month period;

 

(c) except in the case of a Convertible Registration or an Exchange
Registration, the number of the Shares originally requested to be registered
pursuant to any registration requested pursuant to this Section 2 shall cover
Shares representing more than 10% of the total shares of Common Stock then
outstanding held by the Holders;

 

(d) if a Demand Registration is an underwritten offering and the managing
underwriters advise the Company in writing that in their opinion the number of
Shares requested to be included in such offering exceeds the number of Shares
which can be sold in an orderly manner in such offering within a price range
acceptable to the Holders of a majority of the Shares initially requesting such
registration or without materially adversely affecting the market for the Common
Stock, the Company shall include in such registration the number of Shares
requested by Holders of a majority of the Shares to be included therein which,
in the opinion of such Holders based upon advice of the managing underwriters,
can be sold in an orderly manner

 

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within the price range of such offering and without materially adversely
affecting the market for the Common Stock, pro rata among the respective Holders
thereof on the basis of the amount of Shares owned by each Holder requesting
inclusion of Shares in such registration; and

 

(e) The Company shall not be required to effect more than 10 Demand
Registrations pursuant to this Section 2.1; provided, however, that the
foregoing limitation shall not be effective if, at the time of the 10th Demand
Registration, the Company is prohibited under then-existing SEC rules from
registering all remaining Shares pursuant to a Shelf Registration, regardless of
whether the Holder or Holders has requested that such 10th Demand Registration
be a Shelf Registration or otherwise.

 

2.2 Registration Expenses. All Registration Expenses (as defined in Section 8)
for any registration requested pursuant to this Section 2 (including any
registration that is delayed or withdrawn) shall be paid by the Company;
provided, however, that the expenses of a Demand Registration made in connection
with a Distribution (as defined in the Separation and Distribution Agreement)
shall be borne by the Holder or Holders.

 

2.3 Selection of Professionals. The Holders of a majority of the Shares included
in any Demand Registration shall have the right to select the investment
banker(s) and manager(s) to underwrite or otherwise administer the offering. The
Holders of a majority of the Shares included in any Demand Registration shall
have the right to select the financial printer, the solicitation and/or exchange
agent (if any) and one counsel for the Selling Holders. The Company shall select
its own outside counsel and independent auditors.

 

2.4 Third Person Shares. The Company shall have the right to cause the
registration of securities for sale for the account of any Person (as defined in
Section 6(e)) (including the Company) other than the Selling Holders (the “Third
Person Shares”) in any registration of the Shares requested pursuant to this
Section 2 so long as the Third Person Shares are disposed of in accordance with
the intended method or methods of disposition requested pursuant to this Section
2; provided, however, that the Company shall not have the right to cause the
registration of such securities of such other Persons if the registration
requested pursuant to this Section 2 is a Convertible Registration or an
Exchange Registration.

 

If a Demand Registration in which the Company proposes to include Third Person
Shares is an underwritten offering and the managing underwriters advise the
Company in writing that in their opinion the number of Shares and Third Person
Shares requested to be included in such offering exceeds the number of Shares
and Third Person Shares which can be sold in an orderly manner in such offering
within a price range acceptable to the Holders of a majority of the Shares
initially requesting such registration or without materially adversely affecting
the market for the Common Stock (the “Maximum Number”), the Company shall not
include in such registration any Third Person Shares unless all of the Shares
initially requested to be included therein are so included, and then only to the
extent of the Maximum Number.

 

2.5

Permitted Transferees. As used in this Agreement, “Permitted Transferees” shall
mean any transferee, whether direct or indirect, of Shares designated by
Motorola (or a subsequent Holder) in a written notice to the Company as provided
for in Section 9.3. Any Permitted Transferees of the Shares shall be subject to
and bound by all of the terms and conditions

 

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herein applicable to Holders. The notice required by this Section 2.5 shall be
signed by both the transferring Holder and the Permitted Transferees so
designated and shall include an undertaking by the Permitted Transferees to
comply with the terms and conditions of this Agreement applicable to Holders.

 

2.6 Shelf Registration; Convertible Registration; Exchange Registration;
Distribution. With respect to any Demand Registration, the requesting Holders
may request the Company to effect a registration of the Shares (a) under a
registration statement pursuant to Rule 415 under the Securities Act (or any
successor rule) (a “Shelf Registration”); (b) in connection with such Holders’
registration under the Securities Act of securities (the “Convertible
Securities”) convertible into, exercisable for or otherwise related to the
Shares (a “Convertible Registration”); or (c) in connection with such Holders’
distribution of, or exchange of or offer to exchange the Shares for any debt or
equity securities of such Holders, a subsidiary or affiliate thereof or any
other Person (an “Exchange Registration”) or (d) in the form of a Distribution
as defined in the Separation and Distribution Agreement.

 

2.7 SEC Form. The Company shall use its best efforts to cause Demand
Registrations to be registered on Form S-3 (or any successor form), and if the
Company is not then eligible under the Securities Act to use Form S-3, Demand
Registrations shall be registered on Form S-1 (or any successor form). If a
Demand Registration is a Convertible Registration or an Exchange Registration,
the Company shall effect such registration on the appropriate Form under the
Securities Act for such registrations. The Company shall use its best efforts to
become eligible to use Form S-3 and, after becoming eligible to use Form S-3,
shall use its best efforts to remain so eligible. All such Demand Registrations
shall comply with applicable requirements of the Securities Act and the SEC’s
rules and regulations thereunder, and, together with each prospectus included,
filed or otherwise furnished by the Company in connection therewith, shall not
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Company shall timely file all reports on Forms 10-K, 10-Q and
8-K (or any successor forms), and all material required to be filed, pursuant to
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to the
extent that such filing shall be a condition to initial filing or continued use
or effectiveness of any Demand Registration.

 

2.8 Other Registration Rights. The Company shall not grant to any Persons the
right to request the Company to register any equity securities of the Company,
or any securities convertible or exchangeable into or exercisable for such
securities, whether pursuant to “demand,” “piggyback,” or other rights, unless
such rights are subject and subordinate to the rights of the Holders under this
Agreement.

 

2.9 Withdrawal. The Holders may withdraw a Demand Registration at any time and
under any circumstances.

 

Section 3. Piggyback Registrations.

 

3.1

Notice and Registration. If the Company proposes to register any of its
securities for public sale under the Securities Act (whether proposed to be
offered for sale by the Company

 

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or any other Person), on a form and in a manner which would permit registration
of the Shares for sale to the public under the Securities Act (a “Piggyback
Registration”), it will give prompt written notice to the Holders of its
intention to do so, and upon the written request of any or all of the Holders
delivered to the Company within 20 days after the giving of any such notice
(which request shall specify the Shares intended to be disposed of by such
Holders), the Company will use its best efforts to effect, in connection with
the registration of such other securities, the registration under the Securities
Act of all of the Shares which the Company has been so requested to register by
such Holders (which shall then become Selling Holders), to the extent required
to permit the disposition (in accordance with the same method of disposition as
the Company proposes to use to dispose of the other securities) of the Shares to
be so registered; provided, however, that:

 

(a) if, at any time after giving such written notice of its intention to
register any of its other securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register such other securities, the
Company may, at its election, give written notice of such determination to the
Selling Holders (or, if prior to delivery of the Holders’ written request
described above in this Section 3.1, the Holders) and thereupon the Company
shall be relieved of its obligation to register such Shares in connection with
the registration of such other securities (but not from its obligation to pay
Registration Expenses to the extent incurred in connection therewith as provided
in Section 3.3), without prejudice, however, to the rights (if any) of any
Selling Holders immediately to request (subject to the terms and conditions of
Section 2) that such registration be effected as a registration under Section 2
or to include such Shares in any subsequent Piggyback Registration pursuant to
this Section 3;

 

(b) The Company shall not be required to effect any registration of the Shares
under this Section 3 incidental to the registration of any of its securities in
connection with mergers, acquisitions, exchange offers, subscription offers,
dividend reinvestment plans or stock option or other employee benefit plans of
the Company; and

 

(c) if a Piggyback Registration is an underwritten registration on behalf of the
Company (whether or not selling security holders are included therein) and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without materially adversely affecting
the marketability of the offering or the market for the Common Stock (the
“Maximum Number”), the Company shall include the following securities in such
registration up to the Maximum Number and in accordance with the following
priorities: (i) first, the securities the Company proposes to sell, (ii) second,
up to the number of Shares requested to be included in such registration, pro
rata among the Selling Holders of such Shares on the basis of the number of
Shares owned by each such Selling Holder, and (iii) third, up to the number of
any other securities requested to be included in such registration.

 

(d) No registration of the Shares effected under this Section 3 shall relieve
the Company of its obligation to effect a registration of Shares pursuant to
Section 2.

 

(e) Any Selling Holder may withdraw any or all of its Shares from a Piggyback
Registration at any time under any circumstances.

 

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3.2 Selection of Professionals. If any Piggyback Registration is an underwritten
offering and any of the investment banker(s) or manager(s) selected to
administer the offering was not one of the joint book-running managers of the
IPO, such investment banker or manager shall not administer such offering if the
Holders of a majority of the Shares included in such Piggyback Registration
reasonably object thereto. The Holders of a majority of the Shares included in
any Piggyback Registration shall have the right to select one counsel for the
Selling Holders. The Company shall select its own outside counsel and
independent auditors.

 

3.3 Registration Expenses. The Company will pay all of the Registration Expenses
in connection with any registration pursuant to this Section 3.

 

Section 4. Registration Procedures.

 

4.1 Registration and Qualification. If and whenever the Company is required to
use its best efforts to effect the registration of any of the Shares under the
Securities Act as provided in Sections 2 and 3, including an underwritten
offering pursuant to a Shelf Registration, the Company will as promptly as is
practicable (but in no event, in the case of the initial filing of the
registration statement, later than 30 days after the date of a demand under
Section 2 if the applicable registration form is Form S-3 or a successor form,
and for any other form, 90 days from the date of such demand):

 

(a) prepare and file with the SEC a registration statement with respect to such
Shares and use its best efforts to cause such registration statement to become
effective as soon as practicable after the initial filing thereof (provided that
before filing a registration statement or prospectus or any amendments or
supplement thereto, the Company shall furnish to the counsel selected by the
Holders of a majority of the Shares covered by such registration statement
copies of all such documents proposed to be filed (which documents shall be
subject to the review and comment of such counsel));

 

(b) except in the case of a Shelf Registration, Convertible Registration or
Exchange Registration, prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all of the Shares until the earlier of (i) such time as all of
such Shares have been disposed of in accordance with the intended methods of
disposition set forth in such registration statement or (ii) the expiration of
nine months after such registration statement becomes effective, plus the number
of days that any filing or effectiveness has been delayed under Section 2.1(b);

 

(c) in the case of a Shelf Registration (but not including any Convertible
Registration), prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
Shares subject thereto for a period ending on the earlier of (i) 24 months after
the effective date of such registration statement plus the number of days that
any

 

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filing or effectiveness has been delayed under Section 2.1(b) and/or suspended
under Section 4.3(a), and (ii) the date on which all the Shares subject thereto
have been sold pursuant to such registration statement (the “Shelf Effective
Period”);

 

(d) in the case of a Convertible Registration or an Exchange Registration,
prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all of the
Shares subject thereto until such time as the rules, regulations and
requirements of the Securities Act and the terms of the Convertible Securities
no longer require such Shares to be registered under the Securities Act (the
“Convertible Effective Period”);

 

(e) furnish to the Selling Holders and to any underwriter of such Shares such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act, such documents
incorporated by reference in such registration statement or prospectus, and such
other documents as the Selling Holders or such underwriter may reasonably
request;

 

(f) use its best efforts to register or qualify all of the Shares covered by
such registration statement under such other securities or blue sky laws of such
jurisdictions as the Selling Holders or any underwriter of such Shares shall
reasonably request, and do any and all other acts and things which may be
necessary or advisable to enable the Selling Holders or any underwriter to
consummate the disposition in such jurisdictions of the Shares covered by such
registration statement, except that the Company shall not for any such purpose
be required to qualify generally to do business as a foreign corporation in any
jurisdiction where it is not so qualified, or to subject itself to taxation in
any such jurisdiction, or to consent to general service of process in any such
jurisdiction;

 

(g) (i) furnish to the Selling Holders, addressed to them, an opinion of counsel
for the Company and (ii) use its best efforts to furnish to the Selling Holders,
addressed to them, a “cold comfort” letter signed by the independent public
accountants who have certified the Company’s financial statements included in
such registration statement, covering substantially the same matters with
respect to such registration statement (and the prospectus included therein)
and, in the case of such accountants’ letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered in opinions
of issuer’s counsel and in accountants’ letters delivered to underwriters in
underwritten public offerings of securities and such other matters as the
Selling Holders may reasonably request, in each case, in form and substance and
as of the dates reasonably satisfactory to the Selling Holders;

 

(h) immediately notify the Selling Holders, at any time when a prospectus
relating to a registration pursuant to Section 2 or 3 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 any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and at
the request of the

 

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Selling Holders prepare and furnish to the Selling Holders a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Shares,
such prospectus shall not include an 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, in light of the circumstances under which they are made, not
misleading.

 

(i) permit any Selling Holder(s) comprising holders of a majority of the Shares
to be included in such registration, in their sole and exclusive judgment, to
participate in the preparation of such registration or comparable statement
(including but not limited to having prompt access to any SEC comment letters or
other communications in connection with such registration and the Company’s
responses thereto) and to require the insertion therein of material, furnished
to the Company in writing, which in the reasonable judgment of such Selling
Holder(s) and their counsel should be included;

 

(j) to make available members of management of the Company, as selected by the
Holders of a majority of the Shares included in such registration, for
assistance in the selling effort relating to the Shares covered by such
registration, including, but not limited to, the participation of such members
of the Company’s management in road show presentations.

 

(k) in the event of the issuance of any stop order suspending the effectiveness
of a registration statement, or of any order suspending or preventing the use of
any related prospectus or suspending the qualification of any securities
included in such registration statement for sale in any jurisdiction, the
Company shall use it best efforts promptly to obtain the withdrawal of such
order; and

 

(l) use its best efforts to cause Shares covered by such registration statement
to be registered with or approved by such other government agencies or
authorities as may be necessary to enable the sellers thereof to consummate the
disposition of such Shares.

 

The Company may require the Selling Holders to furnish the Company with such
information regarding the Selling Holders and the distribution of such Shares as
the Company may from time to time reasonably request in writing and as shall be
required by law, the SEC or any securities exchange on which any shares of
Common Stock are then listed for trading in connection with any registration.

 

4.2

Underwriting. If requested by the underwriters for any underwritten offering in
connection with a registration requested hereunder (including any registration
under Section 3 which involves, in whole or in part, an underwritten offering),
the Company will enter into an underwriting agreement with such underwriters for
such offering, such agreement to contain such representations and warranties by
the Company and such other terms and provisions as are customarily contained in
underwriting agreements with respect to that offering, including, without
limitation, indemnities and contribution to the effect and to the extent
provided in Section 6 and the provision of opinions of counsel and accountants’
letters to the effect and to the extent provided in Section 4.1(g). The Company
may require that the Shares requested to be registered pursuant to Section 3 be
included in such underwriting on the same terms and conditions as shall be
applicable to the other securities being sold

 

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through underwriters under such registration; provided, however, that no Selling
Holder shall be required to make any representations or warranties to the
Company or the underwriters (other than representations and warranties regarding
such Holder and such Holder’s intended method of distribution) or to undertake
any indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in Section 6 hereof. The Selling Holders
shall be parties to any such underwriting agreement, and the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such Selling Holders.

 

4.3 Blackout Periods for Shelf Registrations.

 

(a) At any time when a Shelf Registration effected pursuant to Section 2
relating to the Shares is effective, upon written notice from the Company to the
Selling Holders that the Company determines in the good faith judgment of the
general counsel of the Company, to be confirmed within 15 days by the Board,
that (i) the Selling Holders’ sale of the Shares pursuant to the Shelf
Registration would require disclosure of material information which the Company
has a bona fide business purpose for preserving as confidential and the
disclosure of which would have a material adverse effect on the Company or (ii)
the Company is unable to comply with SEC requirements for continued use or
effectiveness of the Shelf Registration (in the case of either clause (i) or
(ii), for convenience, referred to as an “Information Blackout”), the Selling
Holders shall suspend sales of the Shares pursuant to such Shelf Registration
until the earlier of (A) the date upon which such material information is
disclosed to the public or ceases to be material, (or the Company otherwise
complies with applicable SEC requirements) (B) 90 days after the general counsel
of the Company made such good faith determination (as subsequently confirmed by
the Board) unless resuming use of the Shelf Registration is then prohibited by
applicable SEC rules or published interpretations, or (C) such time as the
Company notifies the Selling Holders that sales pursuant to such Shelf
Registration may be resumed (the number of days from such suspension of sales of
the Selling Holders until the day when such sales may be resumed hereunder is
hereinafter called a “Sales Blackout Period”).

 

(b) If there is an Information Blackout and the Selling Holders do not notify
the Company in writing of their desire to cancel such Shelf Registration, the
period set forth in Section 4.1(c)(i) shall be extended for a number of days
equal to the number of days in the Sales Blackout Period. The fact that a Sales
Blackout Period is required under this Section 4.3 or SEC rules shall not
relieve the contractual duty of the Company as set forth in Section 2.7 to file
timely reports and otherwise file material required to be filed under the
Exchange Act.

 

4.4

Listing and Other Requirements. In connection with the registration of any
offering of the Shares pursuant to this Agreement, the Company agrees to use its
best efforts to effect the listing of such Shares on any securities exchange on
which any shares of the Common Stock are then listed and otherwise facilitate
the public trading of such Shares. The Company will take all other lawful
actions reasonably necessary and customary under the circumstances to expedite
and facilitate the disposition by the Selling Holders of Shares registered
pursuant to this Agreement as described in the prospectus relating thereto,
including without limitation timely preparation and delivery of stock
certificates in appropriate denominations and furnishing any required
instructions or legal opinions to the Company’s

 

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transfer agent in connection with Shares sold or otherwise distributed pursuant
to an effective registration statement.

 

4.5 Holdback Agreements.

 

(a) The Company shall not effect any public sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and during the 90-day period
beginning on the effective date of any registration statement in connection with
a Demand Registration (other than a Shelf Registration) or a Piggyback
Registration, except pursuant to registrations on Form S-8 or any successor form
or unless the underwriters managing any such public offering otherwise agree.

 

(b) If the Holders of Shares notify the Company in writing that they intend to
effect an underwritten sale of Shares registered pursuant to a Shelf
Registration pursuant to Section 2 hereof, the Company shall not effect any
public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for its equity securities,
during the seven days prior to and during the 90-day period beginning on the
date such notice is received, except pursuant to registrations on Form S-8 or
any successor form or unless the underwriters managing any such public offering
otherwise agree.

 

(c) If the Company completes an underwritten registration with respect to any of
its securities (whether offered for sale by the Company or any other Person) on
a form and in a manner that would have permitted registration of the Shares, if
no Holder requested the inclusion of any Shares in such registration, and if the
Company gives each Holder at least 20 days prior written notice of the
approximate date on which such offering is expected to be commenced, the Holders
shall not effect any public sales or distributions of equity securities of the
Company, or any securities convertible into or exchangeable or exercisable for
such securities, until the termination of the holdback period required from the
Company by any underwriters in connection with such previous registration,
provided that the holdback period applicable to the Holders shall (i) in no
event be longer than a period of 7 days before and 90 days after the effective
date of such registration or apply to the Holders more than once in any 12 month
period, (ii) not apply to any Distribution under the Separation and Distribution
Agreement, (iii) not apply to any securities of the Company acquired on the open
market, (iv) not apply to any Holder owning less than 10% of the Company’s
outstanding voting securities, and (v) not apply unless all directors and
officers of the Company and holders of 10% or more of the Company’s outstanding
voting securities are bound by the same holdback restrictions as are intended to
apply to the Holders.

 

Section 5. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering the Shares
under the Securities Act and each sale of the Shares thereunder, the Company
will give the Selling Holders and the underwriters, if any, and their respective
counsel and accountants, access to its financial and other records, pertinent
corporate documents and properties of the Company and such opportunities to
discuss the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of the Selling Holders and such underwriters or their respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.

 

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Section 6. Indemnification and Contribution.

 

(a) In the event of any registration of any of the Shares hereunder, the Company
will enter into customary indemnification arrangements to indemnify and hold
harmless each of the Selling Holders, each of their respective directors and
officers, each Person who participates as an underwriter in the offering or sale
of such securities, each officer and director of each underwriter, and each
Person, if any, who controls each such Selling Holder or any such underwriter
within the meaning of the Securities Act (collectively, the “Covered Persons”)
against any losses, claims, damages, liabilities and expenses, joint or several,
to which such Person may be subject under the Securities Act or otherwise
insofar as such losses, claims, damages, liabilities or expenses (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any
related registration statement filed under the Securities Act, any preliminary
prospectus or final prospectus included therein, or any amendment or supplement
thereto, or any document incorporated by reference therein, or (ii) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
Company will reimburse each such Covered Person, as incurred, for any legal or
any other expenses reasonably incurred by such Covered Person in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus or final
prospectus, amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Selling Holder or such
underwriter specifically for use in the preparation thereof. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of any such Covered Person and shall survive the transfer of such
securities by the Selling Holders. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (a) any Holder exercising rights under this Agreement, or any controlling
person of any such Holder, makes a claim for indemnification pursuant to this
Section 6, but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 6 provides for
indemnification in such case, or (b) contribution under the Securities Act may
be required on the part of any such Selling Holder or any such controlling
person in circumstances for which indemnification is provided under this Section
6; then, and in each such case, the Company and such Holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such Holder
is responsible for the portion represented by the percentage that the public
offering price of its Shares offered by and sold under the registration
statement bears to the public offering price of all securities offered by and
sold under such registration statement, and the Company and other Selling
Holders are responsible for the remaining portion; provided, however, that, in
any such case: (i) no such Holder will be required to contribute any amount in
excess of the net amount of proceeds of all such Shares offered and sold by such
Holder pursuant to such registration statement; and (ii) no person or entity
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be

 

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entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.

 

(b) Each of the Selling Holders, by virtue of exercising its respective
registration rights hereunder, agrees and undertakes to enter into customary
indemnification arrangements to indemnify and hold harmless (in the same manner
and to the same extent as set forth in clause (a) of this Section 6) the
Company, its directors and officers, each Person who participates as an
underwriter in the offering or sale of such securities, each officer and
director of each underwriter, and each Person, if any, who controls the Company
or any such underwriter within the meaning of the Securities Act, with respect
to any statement in or omission from such registration statement, any
preliminary prospectus or final prospectus included therein, or any amendment or
supplement thereto, if such statement or omission is contained in written
information furnished by such Selling Holder to the Company specifically for
inclusion in such registration statement or prospectus; provided, however, that
the obligation to indemnify shall be individual, not joint and several, for each
Selling Holder and shall be limited to the net amount of proceeds received by
such Selling Holder from the sale of Shares pursuant to such registration
statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any such director,
officer or Person and shall survive the transfer of the registered securities by
the Selling Holders.

 

(c) Any Person entitled to indemnification hereunder shall (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification (provided, however, that the failure to give prompt notice
shall not impair any Person’s rights to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party’s reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without the indemnifying party’s consent (but such
consent shall not be unreasonably withheld). An indemnifying party who is not
entitled to (as a result of a conflict of interest, as determined in the
indemnified party’s reasonable judgment), or who elects not to, assume the
defense of a claim shall not be obligated to pay the fees and expenses of more
than one counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim.

 

(d) Indemnification and contribution similar to that specified in the preceding
subdivisions of this Section 6 (with appropriate modifications) shall be given
by the Company and the Selling Holders with respect to any required registration
or other qualification of such Shares under any federal or state law or
regulation of governmental authority other than the Securities Act.

 

(e) “Person” means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity, or any
department, agency or political subdivision thereof.

 

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Section 7. Benefits and Termination of Registration Rights. The Holders may
exercise the registration rights granted hereunder in such manner and
proportions as they shall agree among themselves. The registration rights
hereunder shall cease to apply to any particular Shares and such securities
shall cease to be Shares when: (a) a registration statement with respect to the
sale of such Shares shall have become effective under the Securities Act and
such Shares shall have been disposed of in accordance with such registration
statement; (b) such Shares shall have been sold to the public pursuant to Rule
144 under the Securities Act (or any successor provision); (c) such Shares shall
have been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration or
qualification of them under the Securities Act or any similar state law then in
force; (d) such Shares shall have ceased to be outstanding or (e) in the case of
Shares held by a Permitted Transferee, when such Shares become eligible for sale
pursuant to Rule 144(k) under the Securities Act (or any successor provision).

 

Section 8. Registration Expenses. As used in this Agreement, the term
“Registration Expenses” means all expenses incident to the Company’s performance
of or compliance with the registration requirements set forth in this Agreement
including, without limitation, the following: (a) the fees, disbursements and
expenses of the Company’s counsel and accountants in connection with the
registration of the Shares to be disposed of under the Securities Act; (b) all
expenses in connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final prospectus, any
other offering document and amendments and supplements thereto and the mailing
and delivering of copies thereof to the underwriters and dealers and directly to
securityholders in the case of an Exchange Registration; (c) the cost of
printing and producing any agreements among underwriters, underwriting
agreements, and blue sky or legal investment memoranda, any selling agreements
and any amendments thereto or other documents in connection with the offering,
sale or delivery of the Shares to be disposed of; (d) all expenses in connection
with the qualification of the Shares to be disposed of for offering and sale
under state securities laws, including the fees and disbursements of counsel for
the underwriters in connection with such qualification and in connection with
any blue sky and legal investment surveys; (e) the filing fees incident to
securing any required review by the New York Stock Exchange and any other
securities exchange on which the Common Stock is then traded or listed of the
terms of the sale of the Shares to be disposed of and the trading or listing of
all such Shares on each such exchange; (f) the costs of preparing stock
certificates; (g) the costs and charges of the Company’s transfer agent and
registrar; and (h) the fees and disbursements of any custodians, solicitation
agents, information agents and/or exchange agents. Registration Expenses shall
not include underwriting discounts and underwriters’ commissions attributable to
the Shares being registered for sale on behalf of the Selling Holders, which
shall be paid by the Selling Holders.

 

Section 9. Miscellaneous.

 

9.1

Entire Agreement. This Agreement, the Separation and Distribution Agreement, all
the other Ancillary Agreements (as defined in the Separation and Distribution
Agreement) and all other Exhibits and Schedules attached hereto and thereto
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof and supersede all

 

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prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof and thereof.

 

9.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware regardless of the laws that
might otherwise govern under principles of conflicts of laws applicable thereto.

 

9.3 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered in person, by
telecopy with answer back, by express or overnight mail delivered by a
nationally recognized air courier (delivery charges prepaid), or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
parties as follows:

 

if to Motorola:

Motorola, Inc. 1303 East Algonquin Road Schaumburg, Illinois 60196 Attention:   
General Counsel Telecopy:    (847) 576-3628 with a copy to: Motorola, Inc. 1303
East Algonquin Road Schaumburg, Illinois 60196 Attention:    Chief Financial
Officer and Chief Accounting Officer Telecopy:    (847) 576-4768 if to the
Company: Freescale Semiconductor, Inc. 7700 West Parmer Lane Austin, TX 78729
Attention:    General Counsel Telecopy:    (512) 996-7697 with a copy to:
Freescale Semiconductor, Inc. 6501 William Cannon Drive Austin, Texas 78737
Attention:    Chief Financial Officer Telecopy:    (512) 895-8696

 

or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by telecopy

 

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shall be deemed effective on the day at the place such notice or communication
is received if confirmed by return facsimile. Any notice or communication sent
by air courier shall be deemed effective on the day at the place at which such
notice or communication is received if delivery is confirmed by the air courier.
Any notice or communication sent by registered or certified mail shall be deemed
effective on the fifth Business Day (as defined below) at the place from which
such notice or communication was mailed following the day on which such notice
or communication was mailed. “Business Day” means any day other than a Saturday,
a Sunday, or a day on which banking institutions located in Chicago, Illinois
are authorized or obligated by law or executive order to close.

 

9.4 Parties in Interest. This Agreement shall be binding upon and inure solely
to the benefit of each party hereto and their legal representatives and
successors, and each affiliate of the parties hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person,
other than any Permitted Transferee, any rights or remedies of any nature
whatsoever under or by reason of this Agreement.

 

9.5 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original but all of which shall constitute one and the
same agreement.

 

9.6 Assignment. This Agreement may not be assigned by any party hereto other
than by Motorola to a Permitted Transferee as provided for in Section 2.5;
provided, further, that Motorola may assign this Agreement in connection with
the sale of all or substantially all of its assets.

 

9.7 Amicable Resolution. Motorola and the Company mutually desire that friendly
collaboration will continue between them. Accordingly, they will try to resolve
in an amicable manner all disagreements and misunderstandings connected with
their respective rights and obligations under this Agreement, including any
amendments hereto. In furtherance thereof, in the event of any dispute or
disagreement (“Dispute”) between Motorola and the Company as to the
interpretation of any provision of this Agreement (or the performance of
obligations hereunder), the matter, upon written request of either party, will
be referred for resolution to a steering committee established pursuant to the
Separation and Distribution Agreement (the “Steering Committee”) and treated as
a “Dispute” under the applicable provisions of the Separation and Distribution
Agreement concerning the Steering Committee. For purposes of this Section 9.7,
the Steering Committee shall be governed by and its decisions will have the
effect, if any, set forth in the applicable provisions of the Separation and
Distribution Agreement. Notwithstanding anything to the contrary in this Section
9.7, no amendment to the terms of this Agreement will be effected except in
writing signed by an authorized officer of both parties.

 

9.8 Mediation and Alternate Dispute Resolution.

 

(a) In the event any Dispute cannot be resolved in a friendly manner as set
forth in Section 9.7, the parties intend that such Dispute be resolved by ADR as
defined and set forth in the Separation and Distribution Agreement . Nothing in
this paragraph shall prevent either Motorola or the Company from commencing
formal litigation proceedings if (i) good faith efforts to resolve the Dispute
under these procedures have been unsuccessful, or (ii) any delay

 

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resulting from efforts to mediate such dispute could result in serious and
irreparable injury to either Motorola or the Company. The use of any ADR
procedures will not be construed under the doctrines of laches, waiver or
estoppel to affect adversely the rights of either party.

 

(b) Each of Motorola and the Company will bear its costs of mediation or ADR,
but both parties shall share the costs of the mediation or ADR equally.

 

9.9 Jurisdiction. In the event a Dispute under this Agreement is to be submitted
to judicial proceedings, each of Motorola and the Company consents to the
exclusive jurisdiction of the federal or state courts of Delaware for any such
legal action, suit or proceeding and agrees that any such action, suit, or
proceeding may be brought only in such courts. Each of Motorola and the Company
further waives any objection to the laying of venue for any suit, action or
proceeding in such courts. Each party also waives its rights to a trial by jury.
Each party agrees to accept and acknowledge service of any and all process that
may be served in any suit, action or proceeding. Each party agrees that any
service of process upon it mailed by registered or certified mail, return
receipt requested to such party at the address provided in Section 9.3 above
will be deemed in every respect effective service of process upon such party in
any such suit, action or proceeding. Each party agrees to waive any right it
might have to a trial by jury in any such suit, action or proceeding.

 

9.10 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the fullest extent
possible.

 

9.11 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further exercise thereof
or of any other right. Subject to Section 9.7, all rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.

 

9.12 Amendment. No change, amendment or waiver will be made to this Agreement,
except by an instrument in writing signed on behalf of each of the parties
hereto.

 

9.13

Authority. Each of the parties hereto represents to the other that (a) it has
the corporate or other requisite power and authority to execute, deliver and
perform this Agreement, (b) the execution, delivery and performance of this
Agreement by it have been duly authorized by all necessary corporate or other
action, (c) it has duly and validly executed and delivered this Agreement, and
(d) this Agreement is a legal, valid and binding obligation, enforceable against
it in accordance with its terms subject to applicable bankruptcy, insolvency,

 

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reorganization, moratorium or other similar laws affecting creditors’ rights
generally and general equity principles.

 

9.14. Interpretation. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. When a reference is made in this Agreement to an Article or a
Section, such reference shall be to an Article or Section of this Agreement
unless otherwise indicated. All references made herein to the Company as a party
which operate as of a time following the Effective Date shall be deemed to refer
to the Company and its subsidiaries as a single party.

 

*     *     *

 

[SIGNATURES ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date and year first written above.

 

MOTOROLA, INC. By:  

/s/ David W. Devonshire

Its:

 

Executive Vice President and Chief Financial

Officer

FREESCALE SEMICONDUCTOR, INC. By:  

/s/ Karen Roscher

Its:

 

Vice President, Director of Planning and

Analysis

 

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