First Amendment to Second Amended and Restated Investors Rights Agreement




 Exhibit 10.5 
 SIGMATEL, INC. 
  
 FIRST
AMENDMENT 
 TO 
 SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 
  
 The First Amendment to Second Amended and Restated Investors’ Rights Agreement (the “Agreement”) is entered into as of November 17, 2000 by and between SigmaTel, Inc., a Texas corporation having its
principal place of business at 2700 Via Fortuna, Suite 500, Austin, Texas 78746 (the “Company”) and Cirrus Logic, Inc., a Delaware corporation having its principal place of business at 4210 South Industrial Drive, Austin, Texas
78744 (“Cirrus”). 
  
 RECITALS 

 
 A.    The Company, Crystal Semiconductor Corporation
(“Crystal”), and Cirrus have been parties to litigation in the United States District Court for the Western District of Texas, Civil Action No. A-99-CA-588-SS (“the Lawsuit”), in which Crystal and Cirrus alleged that
SigmaTel (i) had infringed United States Patent No. 4,851,841 and (ii) had committed various state-law violations; 
  
 B.    Crystal, Cirrus, and the Company have signed a “Confidential Settlement and License Agreement” dated November 17, 2000
(the “Settlement Agreement”) to settle the lawsuit. Pursuant to a “Stock Purchase Agreement” dated November 17, 2000 entered into between Cirrus and the Company as required by the Settlement Agreement, the Company
has issued to Cirrus 1,200,000 shares of SigmaTel Common Stock (the “Settlement Shares”); 
  
 C.    Pursuant to the terms of the Stock Purchase Agreement, the Company has agreed to grant registration rights to Cirrus with
respect to (i) the Settlement Shares and (ii) additional shares of Common Stock (the “Warrant Shares”) which Cirrus might acquire pursuant to terms of a warrant (the “Warrant”) possibly to be issued to Cirrus by
SigmaTel pursuant to Section 6.1 of the Stock Purchase Agreement. 
  
 D.    The Company has previously granted registration rights to certain of its shareholders pursuant to the terms of that certain Second Amended and Restated Investors’ Rights Agreement dated as of August 15, 2000,
by and among the Company and the signatories thereto (the “Original Agreement”), a copy of which is attached hereto as Schedule A. The Company proposes to grant registration rights to Cirrus by amending the Original Agreement to add
Cirrus as a party thereto for the purpose of registration rights only. 
  
 E.    The parties hereto wish to further amend the Original Agreement to clarify that the issuance of the Settlement Shares, the Warrant, and the Warrant Shares are not subject to the Right of First Offer under Section 3
of the Original Agreement. 
  

 1 









 AGREEMENT 
  

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto amend the Original
Agreement as follows: 
  
 1.    Cirrus
Added as Party to Original Agreement.    The Original Agreement is hereby amended to add Cirrus as an “Investor” under Article 1 (labeled “Registration Rights”) and Article 4 (labeled
“Miscellaneous”) of the Original Agreement only, on the same terms as other Investors under Article 1 and Article 4 of the Original Agreement and with the same force and effect as if Cirrus were originally a party thereto. Cirrus agrees
and acknowledges that its rights under the Investors’ Rights Agreement are specifically limited to (i) registration rights under Article 1 of the Investors’ Rights Agreement and (ii) the miscellaneous provisions of Article 4 of the
Investors’ Rights Agreement, and that it shall have no rights as an Investor or otherwise under Article 2 (labeled “Covenants of the Company” and Article 3 (labeled “Rights to Purchase Additional Shares”) of the Original
Agreement. As an illustration of the effect of this paragraph, the Settlement Shares and the Warrant Shares shall be included among the class of “Registrable Securities,” and Cirrus shall be included among the class of “Holders,”
under Article 1 of the Original Agreement. 
  
 2.    No Right of First Offer with Respect to the Settlement Shares, the Warrant, or the Warrant Shares.     The Original Agreement is hereby amended by adding a new subsection 3.1(d)(x) to the
Original Agreement, reading as follows: 
  
 “(x) Shares to
opposing parties as part of the settlement of pending or threatened litigation (including, without limitation, the settlement of Civil Action No. A-99-CA-558-SS pending in the United States District Court for the Western District of Texas, Austin
Division, between the Company, Cirrus Logic, Inc., and Crystal Semiconductor Corporation), provided that such settlement is approved by the Board of Directors of the Company.” 
  
 3.    Consent.    Pursuant to Section 4.7 of the Investors’ Rights
Agreement, this Amendment has been approved by written consent of the Holders holding at least two-thirds (2/3) of the Registrable Securities then outstanding, through their signature to this Amendment. Prior to the issuance of the Settlement Shares
to Cirrus, there were approximately 35,852,124 shares of Registrable Securities under the Investors’ Rights Agreement, 27,539,291 of which were held by the entities signing signature pages to this Amendment. 
  
 4.    Counterparts; Facsimile
Signature.    Each of the signatories to this Amendment may sign by facsimile and/or may sign a separate signature page to this Amendment, all of which together shall constitute one instrument. 
  
 5.    Defined Terms.    All
capitalized terms not otherwise herein defined herein shall have the meanings ascribed to them in the Original Agreement. 
  
 6.    Original Agreement Remains in Effect.    Except as provided above, the Original Agreement shall
remain unmodified and in full force and effect. 
  

 2 









 IN WITNESS WHEREOF, the undersigned parties hereto have executed this Amendment as of the date first
written above. 
  

	 THE COMPANY:
  
 SIGMATEL, INC.

		
	 By:
	 	 /s/    TIMOTHY W. MARKISON


	 	 	 Timothy W. Markison, Vice
 President and General Counsel



  

	Address:	 	 2700 Via Fortuna, Suite 500
 Austin, Texas
78746



  

	  
 CIRRUS LOGIC , INC.

		
	 By:
	 	 /s/    STEVEN D. OVERLY


	 	 	 Steven D. Overly, Senior Vice
 President, Human Resources and
 General Counsel



  

	Address:	 	 4210 South Industrial Drive
 Austin, Texas
78744



  

 3 










	CTI Limited
		
	 By:
	 	 /s/    Ng Keh Long


		
	 Printed Name:
	 	 Ng Keh Long


		
	 Title:
	 	 Director


	 	 	 


  

	CTI II Limited
		
	 By:
	 	 /s/    Ng Keh Long


		
	 Printed Name:
	 	 Ng Keh Long


		
	 Title:
	 	 Director


	 	 	 


  
 SIGNATURE PAGE
TO SIGMATEL, INC. FIRST AMENDMENT TO SECOND 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 









	BATTERY VENTURES V, L.P.
		
	 By:
	 	 /s/    KENNETH P. LAWLER


		
	 Printed Name:
	 	 Kenneth P. Lawler


		
	 Title:
	 	 General Partner


	 	 	 


  

	 BATTERY VENTURES CONVERGENCE
 FUND, L.P.

		
	 By:
	 	 /s/    KENNETH P. LAWLER


		
	 Printed Name:
	 	 Kenneth P. Lawler


		
	 Title:
	 	 General Partner


	 	 	 


  

	BATTERY INVESTMENT PARTNERS V, LLC
		
	 By:
	 	 /s/    KENNETH P. LAWLER


		
	 Printed Name:
	 	 Kenneth P. Lawler


		
	 Title:
	 	 General Partner


	 	 	 


  
 SIGNATURE PAGE
TO SIGMATEL, INC. FIRST AMENDMENT TO SECOND 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 
  









	Telesoft Partners IA, L.P.
		
	 By:
	 	TeleSoft IA-GP, Inc.
	 Its:
	 	General Partner
		
	 By:
	 	 /s/    ARJUN GUPTA





	 Printed Name:    
	 	 Arjun Gupta





	Title:	 	 President of the General Partner




  
 SIGNATURE PAGE
TO SIGMATEL, INC. FIRST AMENDMENT TO SECOND 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT