MINDSPEED TECHNOLOGIES, INC
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>5
<FILENAME>a03904exv10w1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.1

                     $40,000,000 AGGREGATE PRINCIPAL AMOUNT

                          MINDSPEED TECHNOLOGIES, INC.

                     3.75% CONVERTIBLE SENIOR NOTES DUE 2009

                               PURCHASE AGREEMENT

                                                                December 2, 2004
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019

Ladies and Gentlemen:

         Mindspeed Technologies, Inc., a Delaware corporation (the "COMPANY"),
proposes, subject to the terms and conditions stated herein, to issue and sell
$40,000,000 aggregate principal amount of its 3.75% Convertible Senior Notes due
2009 (the "FIRM NOTES") to Lehman Brothers Inc. (the "INITIAL PURCHASER"). In
addition, the Company proposes to grant to the Initial Purchaser an option to
purchase up to an additional $6,000,000 aggregate principal amount of its 3.75%
Convertible Senior Notes due 2009 on the terms set forth in Section 2 (the
"OPTION NOTES" and, together with the Firm Notes, the "NOTES"). This is to
confirm the agreement between the Company and the Initial Purchaser concerning
the offer, issue and sale of the Notes.

         The Notes will be issued pursuant to an indenture (the "INDENTURE") to
be dated as of the First Delivery Date (as defined in Section 2(a)), between the
Company and Wells Fargo Bank, N.A., as Trustee (the "TRUSTEE"). The Notes will
be convertible into duly and validly issued, fully paid and non-assessable
shares of common stock, $0.01 par value per share (the "COMMON STOCK"), of the
Company, together with the rights (the "RIGHTS") evidenced by such Common Stock
to the extent provided in the Rights Agreement dated June 26, 2003 between the
Company and Mellon Investor Services LLC as rights agent, as amended (the
"RIGHTS AGREEMENT"), (such shares of Common Stock into which the Notes are
convertible, the "CONVERSION SHARES") on the terms, and subject to the
conditions, set forth in the Indenture.

         The Notes will be offered and sold to the Initial Purchaser without
being registered under the Securities Act of 1933, as amended, and the rules and
regulations of the Securities and Exchange Commission (the "COMMISSION")
thereunder (collectively, the "SECURITIES ACT"), in reliance upon an exemption
therefrom.

         Holders of the Notes (including the Initial Purchaser and its direct
and indirect transferees) will be entitled to the benefits of a Registration
Rights Agreement, dated as of the First Delivery Date, between the Company and
the Initial Purchaser (the "REGISTRATION RIGHTS AGREEMENT"), the form of which
is contained in Annex A hereof, pursuant to which the Company will agree, among
other things, to file with the Commission a shelf registration
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                                                                               2

statement pursuant to Rule 415 under the Securities Act (the "REGISTRATION
STATEMENT") covering the resale of the Notes and the Conversion Shares, and to
use its reasonable best efforts to cause the Registration Statement to be
declared effective within the time periods specified therein.

         Holders of the Notes will be entitled to the benefits of a Pledge
Agreement (the "PLEDGE AGREEMENT"), pursuant to which the Company will deposit
with and pledge to the Trustee for the benefit of the holders of the Notes a
portfolio of securities (the "PLEDGED SECURITIES") consisting of U.S. government
securities in such amount as the Company expects will be sufficient, upon
receipt of scheduled interest payments thereof, to provide for the payment of
the first four scheduled interest payments on the Notes when due. Pursuant to a
Control Agreement (the "CONTROL AGREEMENT"), the Pledged Securities shall be
held in an account maintained with a securities intermediary and depositary
bank.

         This Agreement, the Indenture, the Registration Rights Agreement, the
Pledge Agreement and the Control Agreement are referred to herein collectively
as the "TRANSACTION DOCUMENTS".

                  1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants to and agrees with, the Initial Purchaser that:

                           (a) The Company has prepared a preliminary offering
         memorandum dated December 2, 2004 (the "PRELIMINARY OFFERING
         MEMORANDUM") and will prepare an offering memorandum dated the date
         hereof (the "OFFERING MEMORANDUM") setting forth information concerning
         the Company, the Notes, the Common Stock, the Indenture, the Pledge
         Agreement and the Registration Rights Agreement, in form and substance
         satisfactory to you. Copies of the Preliminary Offering Memorandum have
         been, and copies of the Offering Memorandum will be, delivered by the
         Company to you. As used in this Agreement, "PRELIMINARY OFFERING
         MEMORANDUM" or "OFFERING MEMORANDUM" means the Preliminary Memorandum
         or Offering Memorandum, as the case may be, including the documents
         incorporated by reference therein, as amended or supplemented. Each of
         the Preliminary Offering Memorandum and the Offering Memorandum, will
         not as of its respective date, and the Offering Memorandum will not as
         of the applicable Delivery Date (as defined in Section 2(b)), contain
         any untrue statement of a material fact or omit to state a material
         fact necessary in order to make the statements therein, in the light of
         the circumstances under which they were made, not misleading; provided
         that, the Company makes no representation or warranty as to information
         contained in or omitted from the Preliminary Offering Memorandum or the
         Offering Memorandum in reliance upon and in conformity with the written
         information furnished to the Company by the Initial Purchaser
         specifically for inclusion therein.

                           (b) The documents incorporated by reference in the
         Offering Memorandum (the "INCORPORATED DOCUMENTS"), when they became
         effective or were filed with the Commission, as the case may be,
         conformed in all material respects to the requirements of the
         Securities Exchange Act of 1934, as amended, and the rules and
         regulations of the Commission thereunder (collectively, the "EXCHANGE
         ACT"), as applicable, and none of such documents contained any untrue
         statement of a material fact
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                                                                               3

         or omitted 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 any further documents
         so filed and incorporated by reference in the Offering Memorandum, when
         such documents are filed with the Commission will conform in all
         material respects to the requirements of the Exchange Act and will not
         contain any untrue statement of a material fact or omit 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.

                           (c) The Company has established and maintains
         disclosure controls and procedures (as such term is defined in Rule
         13a-14 under the Exchange Act); (ii) such disclosure controls and
         procedures are designed to ensure that material information relating to
         the Company, including its consolidated subsidiaries, is made known to
         the Company's principal executive officer and its principal financial
         officer by others within those entities, particularly during the
         periods in which the periodic reports required under the Exchange Act
         are being prepared; and (iii) such disclosure controls and procedures
         are effective in all material respects to perform the functions for
         which they were established.

                           (d) The Company's auditors and the audit committee of
         the board of directors have been advised of (i) all significant
         deficiencies and material weaknesses in the design or operation of
         internal control over financial reporting which are reasonably likely
         to adversely affect the Company's ability to record, process, summarize
         and report financial information; and (ii) any fraud, whether or not
         material, that involves management or other employees who have a
         significant role in the Company's internal control over financial
         reporting.

                           (e) Since the date of the most recent evaluation of
         such disclosure controls and procedures, there have been no significant
         changes in internal controls or in other factors that could
         significantly affect internal controls, including any corrective
         actions with regard to significant deficiencies and material
         weaknesses.

                           (f) The Company and each of its subsidiaries with
         active operations (each, a "Subsidiary" and collectively,
         "Subsidiaries") has been duly incorporated or formed, as the case may
         be, and is validly existing as a corporation, foreign corporation or
         limited liability company, as the case may be, in good standing under
         the laws of its jurisdiction of incorporation or formation, as the case
         may be, is duly qualified to do business and is in good standing as a
         foreign corporation or a limited liability company in each jurisdiction
         in which its ownership or lease of property or the conduct of its
         businesses requires such qualification, except where the failure to be
         so qualified could not reasonably be expected to have a material
         adverse effect on the business, financial condition, stockholders'
         equity or results of operations of the Company and its subsidiaries
         taken as a whole (a "MATERIAL ADVERSE EFFECT"), and has all power and
         authority necessary to own, lease or hold its properties and to conduct
         the businesses in which it is engaged.
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                                                                               4

                           (g) The Company has an authorized and issued
         capitalization as set forth in the Offering Memorandum, and all of the
         issued shares of capital stock of the Company have been duly and
         validly authorized and issued, are fully paid and non-assessable and
         conform to the description thereof contained in the Offering
         Memorandum; and all of the issued shares of capital stock of each
         subsidiary of the Company have been duly and validly authorized and
         issued and are fully paid and non-assessable and (except for directors'
         qualifying shares), and except as set forth in the Offering Memorandum,
         are owned directly or indirectly by the Company, free and clear of all
         liens, encumbrances, equities, claims or adverse interests
         (collectively, "LIENS") of any nature. There has been no change in the
         authorized or issued capitalization of the Company or any of its
         Subsidiaries since the date indicated in the Offering Memorandum except
         with respect to (i) changes occurring in the ordinary course of
         business and (ii) changes in outstanding Common Stock resulting from
         transactions relating to the Company's employee benefit plans.

                           (h) No relationship, direct or indirect, exists
         between or among the Company, on the one hand, and the directors,
         officers, stockholders, customers or suppliers of the Company, on the
         other hand, which would be required to be set forth in the Offering
         Memorandum if the Offering Memorandum were a prospectus included or
         incorporated by reference in a registration statement on Form S-3 that
         has not been so set forth.

                           (i) Except as set forth in the Offering Memorandum,
         there are no legal or governmental proceedings, actions, suits, claims,
         arbitrations, investigations or proceedings pending or, to the
         Company's knowledge, threatened to which the Company or any of its
         subsidiaries is or could be a party or to which any of their respective
         properties is or could be subject that would be required to be
         described in the Offering Memorandum if the Offering Memorandum were a
         prospectus included in a registration statement on Form S-1 and are not
         so described or that could reasonably be expected to have a Material
         Adverse Effect or would materially and adversely affect the ability of
         the Company to perform its obligations under the Transaction Documents;
         nor are there any statutes, regulations, contracts or other documents
         that would be required to be described in the Offering Memorandum if
         the Offering Memorandum were a prospectus included in a registration
         statement on Form S-1, in each case except as are set forth or
         incorporated by reference in the Offering Memorandum; and, to the
         Company's knowledge, no such proceedings are threatened or contemplated
         by governmental authorities or threatened by others.

                           (j) Except with respect to the rights contained in
         the Registration Rights Agreement and except as set forth in the
         Offering Memorandum, there are no contracts, agreements or other
         documents between the Company and any person granting such person the
         right to require the Company to file a registration statement under the
         Securities Act with respect to any securities of the Company owned or
         to be owned, directly or indirectly, by such person or to require the
         Company to include such securities in any registration statement filed
         by the Company.
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                                                                               5

                           (k) Neither the Company nor any of its Subsidiaries
         (i) is in violation of its charter or by-laws, (ii) is in default, and
         no event has occurred which, with notice or lapse of time or both,
         would constitute such a default, in the due performance or observance
         of any term, covenant or condition contained in any indenture,
         mortgage, deed of trust, loan agreement or other agreement or
         instrument to which it is a party or by which it is bound or to which
         any of its properties or assets is subject or (iii) is in violation of
         any law, ordinance, governmental rule, regulation or court decree to
         which it or its property or assets may be subject or has failed to
         obtain any material license, permit, certificate, franchise or other
         governmental authorization or permit necessary to the ownership of its
         property or to the conduct of its business, except in the case of
         clauses (ii) and (iii) above, for any such default, the occurrence of
         any such event, any violation or the failure to obtain any such
         license, permit, certificate, franchise or authorization that,
         individually or in the aggregate, could not reasonably be expected to
         have a Material Adverse Effect.

                           (l) Neither the Company nor any of its Subsidiaries
         has sustained, since the date of the latest audited financial
         statements included and incorporated by reference in the Offering
         Memorandum, any material loss or interference with its business from
         fire, explosion, flood or other calamity, whether or not covered by
         insurance, or from any labor dispute or court or governmental action,
         order or decree (a "MATERIAL LOSS"); and, since such date, there has
         not been any change in the capital stock, short-term debt or long-term
         debt of the Company or any of its Subsidiaries or any change or
         development involving a prospective change that could reasonably be
         expected to have a Material Adverse Effect.

                           (m) The consolidated financial statements of the
         Company and its subsidiaries (including the related notes and
         supporting schedules) included or incorporated by reference in the
         Preliminary Offering Memorandum and Offering Memorandum present fairly
         in all material respects the financial condition, results of operations
         and changes in financial position of the Company and its subsidiaries
         on the basis stated therein at the respective dates or for the
         respective periods to which they apply; such statements and related
         schedules and notes have been prepared in accordance with generally
         accepted accounting principles consistently applied throughout the
         periods involved, except as disclosed therein; the supporting
         schedules, if any, included or incorporated by reference in the
         Preliminary Offering Memorandum or the Offering Memorandum present
         fairly in all material respects in accordance with generally accepted
         accounting principles the information required to be stated therein;
         and the other financial information and data set forth in the
         Preliminary Offering Memorandum and Offering Memorandum (and any
         amendment or supplement thereto) are, in all material respects,
         accurately presented and prepared on a basis consistent with such
         financial statements (including the related notes and supporting
         schedules) and the books and records of the Company.

                           (n) Deloitte & Touche LLP (the "ACCOUNTANTS"), who
         have audited the financial statements of the Company, whose report is
         incorporated by reference in the Offering Memorandum and who have
         delivered the initial letter referred to in Section 5(f)
<PAGE>
                                                                               6

         hereof, are an independent registered public accounting firm as
         required by the Securities Act; and the Accountants, whose report is
         incorporated by reference in the Offering Memorandum and who have
         delivered one of the initial letters referred to in Section 5(f)
         hereof, were an independent registered public accounting firm as
         required by the Securities Act during the periods covered by the
         financial statements on which they reported.

                           (o) Except as set forth in the Offering Memorandum,
         the Company and each of its subsidiaries have good and marketable title
         in fee simple to all real property and good and marketable title to all
         personal property owned by them, in each case free and clear of all
         liens, encumbrances and defects, except such as do not materially
         affect the value of such property and do not materially interfere with
         the use made and proposed to be made of such property by the Company
         and its subsidiaries; and all assets held under lease by the Company
         and its subsidiaries are held by them under valid, subsisting and
         enforceable leases, with such exceptions as are not material and do not
         interfere with the use made and proposed to be made of such property
         and buildings by the Company and its subsidiaries.

                           (p) The Company and each of its subsidiaries carry,
         or are covered by, insurance in such amounts and covering such risks as
         is adequate for the conduct of their respective businesses and the
         value of their respective properties from insurers of recognized
         financial responsibility and as is customary for companies engaged in
         similar businesses in similar industries. Neither the Company nor any
         of its subsidiaries (i) has received notice from any insurer or agent
         of such insurer that substantial capital improvements or other material
         expenditures will have to be made in order to continue such insurance
         or (ii) has any reason to believe that it will not be able to renew its
         existing insurance coverage as and when such coverage expires or to
         obtain similar coverage from similar insurers at a cost that could not
         reasonably be expected to have a Material Adverse Effect.

                           (q) The Company and each of its subsidiaries has such
         permits, licenses, consents, exemptions, franchises, authorizations and
         other approvals (each, an "AUTHORIZATION") of, and has made all filings
         with and notices to, all governmental or regulatory authorities and
         self-regulatory organizations and all courts and other tribunals,
         including, without limitation, under any applicable environmental law,
         ordinance, rule, regulation, order, judgment, decree or permit, as are
         necessary to own, lease, license and operate its respective properties
         and to conduct its business, except where the failure to have any such
         Authorization or to make any such filing or notice could not reasonably
         be expected to have a Material Adverse Effect; each such Authorization
         is valid and in full force and effect and the Company and each of its
         subsidiaries is in compliance with all the terms and conditions thereof
         and with the rules and regulations of the authorities and governing
         bodies having jurisdiction with respect thereto; and no event has
         occurred (including, without limitation, the receipt of any notice from
         any authority or governing body) which allows or, after notice or lapse
         of time or both, would allow, revocation, suspension or termination of
         any such Authorization or results or, after notice or lapse of time or
         both, would result in any other impairment of the rights of the holder
         of any such
<PAGE>
                                                                               7

         Authorization; and such Authorizations contain no restrictions that are
         burdensome to the Company or any of its subsidiaries, except where such
         failure to be valid and in full force and effect or to be in
         compliance, the occurrence of any such event or the presence of any
         such restriction, individually or in the aggregate, could not
         reasonably be expected to have a Material Adverse Effect.

                           (r) The Company and each of its subsidiaries own or
         possess adequate rights to use all material patents, patent rights,
         patent applications, trademarks, service marks, trade names, trademark
         registrations, service mark registrations, copyrights, inventions,
         know-how (including trade secrets and other unpatented and/or
         unpatentable proprietary of confidential information, systems or
         procedures) and licenses necessary for the conduct of their respective
         businesses and have no reason to believe that the conduct of their
         respective businesses will conflict with, and neither the Company nor
         any of its subsidiaries has received any notice of infringement of or
         conflict with, asserted rights of others with respect to any of such
         intellectual property which, individually or in the aggregate, would
         reasonably be expected to have a Material Adverse Effect.

                           (s) None of the Company and its subsidiaries is
         involved in any strike, job action or labor dispute with any group of
         employees that could reasonably be expected to have a Material Adverse
         Effect, and, to the Company's knowledge, no such action or dispute is
         threatened.

                           (t) The Company and each of its subsidiaries is in
         compliance in all material respects with all presently applicable
         provisions of the Employee Retirement Income Security Act of 1974, as
         amended, and the regulations and published interpretations thereunder
         (collectively, "ERISA"); no "reportable event" (as defined in ERISA)
         has occurred with respect to any "pension plan" (as defined in ERISA)
         for which the Company would have any liability; the Company has not
         incurred and does not expect to incur liability under (i) Title IV of
         ERISA with respect to termination of, or withdrawal from, any "pension
         plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
         1986, as amended, including the regulations and published
         interpretations thereunder (collectively, the "INTERNAL REVENUE CODE");
         and each "pension plan" for which the Company would have any liability
         that is intended to be qualified under Section 401(a) of the Internal
         Revenue Code is so qualified in all material respects and nothing has
         occurred, whether by action or by failure to act, which would cause the
         loss of such qualification.

                           (u) The Company and each of its subsidiaries has
         filed all federal, state and local income and franchise tax returns
         required to be filed through the date hereof and has paid all taxes
         (including withholding taxes, penalties and interest, assessments, fees
         and other charges) due thereon, except where the failure to file or pay
         such taxes could not reasonably be expected to have a Material Adverse
         Effect; and no tax deficiency has been determined adversely to the
         Company or any of its subsidiaries which has had (nor does the Company
         have any knowledge of any tax deficiency which, if determined adversely
         to the Company or any of its subsidiaries, could reasonably be expected
         to have) a Material Adverse Effect.
<PAGE>
                                                                               8

                           (v) Since the date as of which information is given
         in the Offering Memorandum through the date hereof and except as
         described in the Offering Memorandum, the Company has not (i) issued or
         granted any securities (other than grants of stock options or issuances
         of Common Stock pursuant to the Company's stock incentive and stock
         purchase plans), (ii) incurred any liability or obligation, direct or
         contingent, other than liabilities and obligations which were incurred
         in the ordinary course of business, and which are not material, (iii)
         entered into any transaction not in the ordinary course of business or
         (iv) declared or paid any dividend on any of its capital stock.

                           (w) The Company (i) makes and keeps accurate books
         and records and (ii) maintains internal accounting controls which
         provide reasonable assurance that (A) transactions are executed in
         accordance with management's authorization, (B) transactions are
         recorded and reported to the Company's management as necessary to
         permit preparation of its financial statements in conformity with
         United States generally accepted accounting principles and to maintain
         accountability for its assets, (C) access to its assets is permitted
         only in accordance with management's authorization and (D) the reported
         accountability for its assets is compared with existing assets at
         reasonable intervals and appropriate action is taken with respect to
         any differences.

                           (x) Since June 6, 2003, the Company has not, directly
         or indirectly, including through any subsidiary, extended or maintained
         credit, or arranged for the extension of credit, or renewed any
         extension of credit, in the form of a personal loan to or for any of
         its directors or executive officers in violation of the Sarbanes Oxley
         Act of 2002 and the rules and regulations promulgated in connection
         therewith (collectively, the "SARBANES-OXLEY ACT").

                           (y) There are no material off-balance sheet
         arrangements (as defined in Regulation S-K Item 303(a)(4)(ii)) that may
         have a material current or future effect on the Company's financial
         condition, changes in financial condition, results of operations,
         liquidity, capital expenditures or capital resources which are not
         disclosed or incorporated by reference in the Offering Memorandum.

                           (z) There is and has been no failure on the part of
         the Company and any of the Company's officers or directors, in their
         capacities as such, to comply with any applicable provisions of the
         Sarbanes-Oxley Act.

                           (aa) Neither the Company nor any of its subsidiaries,
         nor any director or officer, nor, to the Company's knowledge, any
         agent, employee or other person associated with or acting on behalf of
         the Company or any of its subsidiaries, has used any corporate funds
         for any unlawful contribution, gift, entertainment or other unlawful
         expense relating to political activity; made any direct or indirect
         unlawful payment to any foreign or domestic government official or
         employee from corporate funds; violated or is in violation of any
         provision of the Foreign Corrupt Practices Act of 1977, as amended, or
         made any bribe, rebate, payoff, influence payment, kickback or other
         unlawful payment.
<PAGE>
                                                                               9

                           (bb) There has been no storage, disposal, generation,
         manufacture, refinement, transportation, handling or treatment of toxic
         wastes, medical wastes, hazardous wastes or hazardous substances by the
         Company or any of its subsidiaries (or, to the Company's knowledge, any
         of their predecessors in interest) at, upon or from any of the property
         now or previously owned or leased by the Company or its subsidiaries in
         violation of any applicable law, ordinance, rule, regulation, order,
         judgment, decree or permit or which would require remedial action under
         any applicable law, ordinance, rule, regulation, order, judgment,
         decree or permit, except for any violation or remedial action which
         would not have, or could not reasonably be expected to have a Material
         Adverse Effect; there has been no material spill, discharge, leak,
         emission, injection, escape, dumping or release of any kind onto such
         property or into the land surrounding such property of any toxic
         wastes, medical wastes, solid wastes, hazardous wastes or hazardous
         substances due to or caused by the Company or any of its subsidiaries
         or with respect to which the Company or any of its subsidiaries have
         knowledge, except for any such spill, discharge, leak, emission,
         injection, escape, dumping or release which would not have or would not
         reasonably be expected to have a Material Adverse Effect; and the terms
         "hazardous wastes", "toxic wastes", "hazardous substances" and "medical
         wastes" shall have the meanings specified in any applicable local,
         state, federal and foreign laws or regulations with respect to
         environmental protection.

                           (cc) This Agreement has been duly authorized,
         executed and delivered by the Company; assuming due authorization,
         execution and delivery by the Initial Purchaser, this Agreement
         constitutes a legally valid and binding agreement of the Company,
         enforceable against the Company in accordance with its terms, subject
         to the effects of bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium and other similar laws relating to or
         affecting creditors' rights generally, general equitable principles
         (whether considered in a proceeding in equity or at law) and an implied
         covenant of good faith and fair dealing, and except with respect to the
         rights of indemnification and contribution hereunder, where enforcement
         hereof may be limited by federal or state securities laws or the
         policies underlying such laws; and this Agreement will conform in all
         material respects to the description thereof contained in the Offering
         Memorandum.

                           (dd) The Company has all necessary power and
         authority to execute and deliver the Indenture and perform its
         obligations thereunder; the Indenture has been duly authorized by the
         Company and, upon the effectiveness of the Registration Statement, will
         be qualified under the Trust Indenture Act of 1939, as amended, and the
         rules and regulations of the Commission thereunder (collectively, the
         "TRUST INDENTURE ACT"); when the Indenture is duly executed and
         delivered by the Company, assuming due authorization, execution and
         delivery of the Indenture by the Trustee, it will constitute a legally
         valid and binding agreement of the Company, enforceable against the
         Company in accordance with its terms, subject to the effects of
         bankruptcy, insolvency, fraudulent conveyance, reorganization,
         moratorium and other similar laws relating to or affecting creditors'
         rights generally, general equitable principles (whether considered in a
         proceeding in equity or at law) and an implied covenant of good faith
         and fair dealing;
<PAGE>
                                                                              10

         and the Indenture will conform, when executed, in all material respects
         to the description thereof contained in the Offering Memorandum.

                           (ee) The Company has all necessary power and
         authority to execute, issue and deliver the Notes and perform its
         obligations thereunder; the Notes have been duly authorized by the
         Company and when the Notes are executed, authenticated and issued in
         accordance with the terms of the Indenture and delivered to and paid
         for by the Initial Purchaser pursuant to this Agreement on the
         applicable Delivery Date, assuming due authentication of the Notes by
         the Trustee, such Notes will constitute legally valid and binding
         obligations of the Company entitled to the benefits of the Indenture,
         enforceable against the Company in accordance with their terms, subject
         to the effects of bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium and other similar laws relating to or
         affecting creditors' rights generally, general equitable principles
         (whether considered in a proceeding in equity or at law) and an implied
         covenant of good faith and fair dealing; and the Notes will conform,
         when issued, in all material respects to the description thereof
         contained in the Offering Memorandum.

                           (ff) The Company has all necessary power and
         authority to execute, issue and deliver the Conversion Shares; the
         Conversion Shares have been duly and validly authorized and reserved
         for issuance upon conversion of the Notes and are free of preemptive
         rights; all Conversion Shares, when issued and delivered upon such
         conversion in accordance with the terms of the Indenture, will be duly
         and validly authorized and issued, fully paid and non-assessable and
         will be free and clear of any Liens; and the Conversion Shares will
         conform, if issued, in all material respects to the description thereof
         in the Offering Memorandum.

                           (gg) The Company has all necessary power and
         authority to execute and deliver the Registration Rights Agreement and
         perform its obligations thereunder; the Registration Rights Agreement
         and the transactions contemplated thereby have been duly authorized by
         the Company and, when the Registration Rights Agreement is duly
         executed and delivered by the Company, assuming due authorization,
         execution and delivery by the Initial Purchaser, it will be a legally
         valid and binding agreement of the Company, enforceable against the
         Company in accordance with its terms, except as the enforceability
         thereof may be limited by bankruptcy, insolvency, fraudulent
         conveyance, reorganization, moratorium and other similar laws relating
         to or affecting creditors' rights generally, subject to general
         principles of equity and to limitations on availability of equitable
         relief, including specific performance (whether considered in a
         proceeding in equity or at law) and an implied covenant of good faith
         and fair dealing, and except with respect to the rights of
         indemnification and contribution thereunder, where enforcement thereof
         may be limited by federal or state securities laws or the policies
         underlying such laws; and the Registration Rights Agreement will
         conform, when executed and delivered, in all material respects to the
         description thereof contained in the Offering Memorandum.

                           (hh) The Company has all necessary power and
         authority to execute and deliver the Pledge Agreement and the Control
         Agreement and perform its obligations thereunder; the Pledge Agreement,
         the Control Agreement and the transactions contemplated thereby have
         been duly authorized by the Company and, when the Pledge
<PAGE>
                                                                              11

         Agreement and the Control Agreement are duly executed and delivered by
         the Company, assuming due authorization, execution and delivery by the
         Trustee and, in the case of the Control Agreement, the securities
         intermediary party thereto, each of such agreement will be a legally
         valid and binding agreement of the Company, enforceable against the
         Company in accordance with its terms, except as the enforceability
         thereof may be limited by bankruptcy, insolvency, fraudulent
         conveyance, reorganization, moratorium and other similar laws relating
         to or affecting creditors' rights generally, subject to general
         principles of equity and to limitations on availability of equitable
         relief, including specific performance (whether considered in a
         proceeding in equity or at law) and an implied covenant of good faith
         and fair dealing; and the Pledge Agreement and the Control Agreement
         will conform, when executed and delivered, in all material respects to
         the description thereof contained in the Offering Memorandum.

                           (ii) The execution, delivery and performance by the
         Company of the Transaction Documents, the issuance of the Notes and the
         Conversion Shares, if at all, the compliance by the Company with all
         the provisions hereof and thereof and the consummation of the
         transactions contemplated hereby and thereby will not (i) conflict with
         or result in a breach or violation of any of the terms or provisions
         of, or constitute a default under, any indenture, mortgage, deed of
         trust, loan agreement, lease or other agreement or instrument to which
         the Company or any of its subsidiaries is a party or by which the
         Company or any of its subsidiaries is bound or to which any of the
         property or assets of the Company or any of its subsidiaries is
         subject, (ii) result in any violation of the provisions of the charter
         or by-laws of the Company or the organizational documents of any of its
         subsidiaries, (iii) result in any violation of any statute or any
         order, rule or regulation of any court or governmental agency or body
         having jurisdiction over the Company or any of its subsidiaries or any
         of their properties or assets, (iv) other than pursuant to the terms of
         the Pledge Agreement and the other documents contemplated thereby,
         result in the imposition or creation of (or the obligation to create or
         impose) a Lien under any agreement or instrument to which the Company
         or any of its subsidiaries is a party or by which the Company or any of
         its subsidiaries or their respective properties or assets is bound or
         (v) result in the suspension, termination or revocation of any
         Authorization of the Company or any of its subsidiaries or any other
         impairment of the rights of the holder of any such Authorization,
         except, in the case of clauses (i), (iii), (iv) and (v), for any such
         conflict, breach, violation, default, imposition or creation of a Lien,
         or suspension, termination, revocation or impairment of any
         Authorization that could not, individually or in the aggregate,
         reasonably be expected to have a Material Adverse Effect.

                           (jj) Except (i) with respect to the transactions
         contemplated by the Registration Rights Agreement as may be required
         under the Securities Act and the Exchange Act and the qualification of
         the Indenture under the Trust Indenture Act, (ii) with respect to the
         filing of any financing statements as contemplated by the Pledge
         Agreement, (iii) as required by applicable state securities or "blue
         sky" laws and (iv) for such consents, approvals, authorizations,
         orders, filings or registrations which have been obtained or made, no
         consent, approval, authorization or order of, or filing or registration
         with, any court or governmental agency or body having jurisdiction over
         the Company
<PAGE>
                                                                              12

         or any of its subsidiaries or any of their respective properties or
         assets is required for the execution, delivery and performance of the
         Transaction Documents by the Company, the issuance of the Notes, and
         the Conversion Shares, if at all, and the consummation of the
         transactions contemplated hereby and thereby.

                           (kk) Neither the Company nor any subsidiary is or, as
         of the applicable Delivery Date, after giving effect to the issuance of
         the Notes and the application of the net proceeds therefrom as set
         forth in the Offering Memorandum, will be an "investment company" as
         defined, and subject to regulation, under the Investment Company Act of
         1940, as amended, and the rules and regulations of the Commission
         thereunder (collectively, the "INVESTMENT COMPANY ACT").

                           (ll) Except as disclosed in the Offering Memorandum,
         there are no outstanding securities convertible into or exchangeable
         for, or warrants, options or rights issued by the Company to purchase,
         any shares of the capital stock of the Company; there are no statutory,
         contractual, preemptive or other rights to subscribe for or to purchase
         any Common Stock; and there are no restrictions upon transfer of the
         Common Stock pursuant to the Company's charter or bylaws.

                           (mm) Assuming the accuracy of the representations and
         warranties of the Initial Purchaser contained in Section 6 and its
         compliance with the agreements set forth therein, it is not necessary,
         in connection with the issuance and sale of the Notes to the Initial
         Purchaser, the offer, resale and delivery of the Notes by the Initial
         Purchaser and the conversion of the Notes into Conversion Shares, in
         the manner contemplated by this Agreement, the Indenture, the
         Registration Rights Agreement and the Offering Memorandum, to register
         the Notes or the Conversion Shares under the Securities Act or to
         qualify the Indenture under the Trust Indenture Act.

                           (nn) No securities of the same class (within the
         meaning of Rule 144A(d)(3) under the Securities Act) as the Notes are
         listed on any national securities exchange registered under Section 6
         of the Exchange Act or quoted on an automated inter-dealer quotation
         system.

                           (oo) None of the Company or any of its Affiliates (as
         defined in Rule 501(b) of Regulation D, an "Affiliate"), has, directly
         or through an agent, engaged in any form of general solicitation or
         general advertising in connection with the offering of the Notes or the
         Conversion Shares (as those terms are used in Regulation D) under the
         Securities Act or in any manner involving a public offering within the
         meaning of Section 4(2) of the Securities Act; and the Company has not
         entered into any contractual arrangement with respect to the
         distribution of the Notes or the Conversion Shares, except for this
         Agreement and the Registration Rights Agreement, and the Company will
         not enter into any such arrangement.

                           (pp) None of the Company or any of its Affiliates
         has, directly or through any agent, sold, offered for sale, solicited
         offers to buy or otherwise negotiated in respect of, any "security" (as
         defined in the Securities Act) which is or will be integrated
<PAGE>
                                                                              13

         with the sale of the Notes or the Conversion Shares in a manner that
         would require the registration under the Securities Act of the Notes or
         the Conversion Shares.

                           (qq) Except as disclosed in the Offering Memorandum,
         the Company has not sold or issued any shares of Common Stock, any
         security convertible into shares of Common Stock, or any security of
         the same class as the Notes during the six-month period preceding the
         date of the Offering Memorandum, including any sales pursuant to Rule
         144A ("RULE 144A"), Regulation D ("REGULATION D") or Regulation S
         ("REGULATION S") under the Securities Act, other than shares issued
         pursuant to employee benefit plans, qualified stock option plans or
         other employee compensation plans or pursuant to outstanding options,
         rights or warrants.

                           (rr) Neither the Company, nor to its knowledge, any
         of its Affiliates, has taken, directly or indirectly, any action (A)
         designed to cause or result in, or which has constituted or which might
         reasonably be expected to constitute, the stabilization or manipulation
         of the price of the Notes or Common Stock to facilitate the sale or
         resale of such securities or (B) prohibited by Regulation M under the
         Exchange Act.

                           (ss) The indebtedness represented by the Notes is
         being incurred for proper purposes and in good faith and the Company is
         and will be on any Delivery Date (after giving effect to the
         application of the proceeds from the issuance of the Notes) solvent,
         and has and will have on any Delivery Date (after giving effect to the
         application of the proceeds from the issuance of the Notes) sufficient
         capital for carrying on its business and is and will be on the Delivery
         Date (after giving effect to the application of the proceeds from the
         issuance of the Notes) able to pay its existing and current debts as
         they mature.

                           (tt) No event has occurred nor has any circumstance
         arisen which, had the Notes been issued on such Delivery Date, would
         constitute a default or an Event of Default under the Indenture as
         summarized in the Offering Memorandum.

                           (uu) Each certificate signed by any officer of the
         Company and delivered to the Initial Purchaser or counsel to the
         Initial Purchaser shall be deemed to be a representation and warranty
         by the Company to the Initial Purchaser as to the matters covered
         thereby.

            2. Purchase, Sale and Delivery of Notes.

                           (a) Subject to the terms and conditions and in
         reliance upon the representations and warranties herein set forth, the
         Company agrees to sell to the Initial Purchaser, and the Initial
         Purchaser agrees to purchase from the Company, at a purchase price of
         95.50% of the principal amount thereof (the "PURCHASE PRICE"), the Firm
         Notes.

                           Delivery of and payment for the Firm Notes shall be
         made at the offices of Simpson Thacher & Bartlett LLP, 1999 Avenue of
         the Stars, Los Angeles, California 90067, at 8:00 a.m., Pacific
         Standard Time, on December 8, 2004, or such later date as the Initial
         Purchaser shall designate, which date and time may be postponed by
<PAGE>
                                                                              14

         agreement between the Initial Purchaser and the Company (such date and
         time of delivery and payment for the Firm Notes being referred to
         herein as the "FIRST DELIVERY DATE"). Delivery of the Firm Notes by the
         Company shall be made to the Initial Purchaser against payment of the
         purchase price by the Initial Purchaser; and payment for the Firm Notes
         by the Initial Purchaser shall be made against delivery to the Initial
         Purchaser of the Firm Notes as set forth below and effected either by
         wire transfer of immediately available funds to an account with a bank
         in The City of New York, the account number and the ABA number for such
         bank to be provided by the Company to the Initial Purchaser at least
         two business days in advance of the First Delivery Date, or by such
         other manner of payment as may be agreed by the Company and the Initial
         Purchaser.

                           Subject to the terms and conditions and in reliance
          upon the representations and warranties herein set forth, the Company
          hereby grants the option to the Initial Purchaser to purchase the
          Option Notes at the same purchase price as the Initial Purchaser will
          pay for the Firm Notes. The option may be exercised in whole or in
          part at any time and from time to time upon notice in writing or by
          facsimile by Lehman Brothers Inc. to the Company setting forth the
          amount (which shall be an integral multiple of $1,000 principal
          amount) of Option Notes as to which such option is being exercised;
          provided that the Option Delivery Date (as defined below) must not be
          more than 30 days subsequent to the date of this Agreement; and
          provided further that Option Notes may not be issued in whole or in
          part after the period which ends 13 days after the date hereof
          (counting the date hereof as the first day) unless the Initial
          Purchaser determines that such Option Notes would not be treated as
          having been issued with "original issue discount" for purposes of
          Sections 1271-1275 of the Internal Revenue Code and the applicable
          Treasury regulations promulgated thereunder.

                           The date for the delivery of and payment for the
          Option Notes, being herein referred to as an "OPTION DELIVERY DATE",
          which may be the First Delivery Date (the First Delivery Date and the
          Option Delivery Date, if any, being referred to as a "DELIVERY DATE"),
          shall be determined by the Initial Purchaser but shall not be later
          than five full business days after written notice of election to
          purchase Option Notes is given. Delivery of the Option Notes by the
          Company shall be made to the Initial Purchaser against payment of the
          purchase price therefor by the Initial Purchaser; and payment for the
          Option Notes by the Initial Purchaser shall be made against delivery
          to the Initial Purchaser of the Option Security as set forth below and
          effected either by wire transfer of immediately available funds to an
          account with a bank in The City of New York, the account number and
          the ABA number for such bank to be provided by the Company to the
          Initial Purchaser at least two business days in advance of the Option
          Delivery Date, or by such other manner of payment as may be agreed by
          the Company and the Initial Purchaser.

                           (b) The Company will deliver against payment of the
         purchase price the Notes initially sold to qualified institutional
         buyers ("QIBS"), as defined in Rule 144A, in the form of one or more
         permanent global certificates (the "GLOBAL NOTES"), registered in the
         name of Cede & Co., as nominee for The Depository Trust Company
<PAGE>
                                                                              15

         ("DTC"). Beneficial interests in the Notes initially sold to QIBs will
         be shown on, and transfers thereof will be effected only through,
         records maintained in book-entry form by DTC and its participants. The
         Global Notes will be made available, at the request of the Initial
         Purchaser, for checking at least 24 hours prior to such Delivery Date.

                           (c) Notwithstanding the foregoing, at each Delivery
         Date, the Company shall irrevocably instruct the Initial Purchaser to
         (i) purchase Pledged Securities on behalf of the Company using a
         portion of the net proceeds from the issuance of the Notes in such
         amount as the Company expects will be sufficient, upon receipt of
         scheduled interest and principal payments thereof, to provide for the
         payment of the first four scheduled interest payments on the Notes when
         due and (ii) deliver such Pledged Securities on behalf of the Company
         to the Trustee, for its benefit and the ratable benefit of the holders
         of the Notes, pursuant to the Pledge Agreement.

                           (d) Time shall be of the essence, and delivery at the
         time and place specified pursuant to this Agreement is a further
         condition of the obligations of the Initial Purchaser hereunder.

            3. Further Agreements of the Company. The Company agrees:

                           (a) To prepare the Offering Memorandum in a form
         approved by Lehman Brothers Inc.;

                           (b) To advise the Initial Purchaser promptly of any
         proposal to amend or supplement the Offering Memorandum and not to
         effect any such amendment or supplement without the consent of the
         Initial Purchaser. If, at any time prior to completion of the resale of
         the Notes by the Initial Purchaser, any event shall occur or condition
         exist as a result of which it is necessary to amend or supplement the
         Offering Memorandum in order that the Offering Memorandum will not
         include an untrue statement of a material fact or omit to state a
         material fact necessary in order to make the statements therein, in the
         light of the circumstances existing at the time it is delivered to a
         purchaser, not misleading, to promptly notify the Initial Purchaser and
         prepare, subject to the first sentence of this Section 3(b), such
         amendment or supplement as may be necessary to correct such untrue
         statement or omission;

                           (c) To furnish promptly to the Initial Purchaser and
         to Simpson Thacher & Bartlett LLP, counsel to the Initial Purchaser,
         copies of the Preliminary Offering Memorandum and the Offering
         Memorandum (and all amendments and supplements thereto), as soon as
         available and in such quantities as the Initial Purchaser reasonably
         requests for internal use and for distribution to prospective
         purchasers; and to furnish to the Initial Purchaser on the date hereof
         four copies of the Offering Memorandum signed by duly authorized
         officers of the Company, one of which will include the independent
         auditors' report therein manually signed by such independent auditors.
         The Company will pay the expenses of printing and distributing to the
         Initial Purchaser all such documents;
<PAGE>
                                                                              16

                           (d) Promptly from time to time, to take such action
         as the Initial Purchaser may reasonably request, to qualify the Notes
         for offering and sale under the securities laws of such jurisdictions
         as the Initial Purchaser may request and to comply with such laws so as
         to permit the continuance of sales and dealings therein in such
         jurisdictions for as long as may be necessary to complete the resale of
         the Notes; provided that, in connection therewith, the Company shall
         not be required to qualify as a foreign corporation or to file a
         general consent to service of process in any jurisdiction in which the
         Company is not already so qualified or has not so consented;

                           (e) For a period of two years following the First
         Delivery Date, to furnish to the Initial Purchaser upon request copies
         of all materials furnished by the Company to its stockholders and all
         public reports and all reports and financial statements furnished by
         the Company to the principal national securities exchange upon which
         the Notes or Common Stock may be listed pursuant to requirements of or
         agreements with such exchange or to the Commission pursuant to the
         Exchange Act; provided, however, that the Company shall not be required
         to provide the Initial Purchaser with any such reports or similar forms
         that have been filed with the Commission by electronic transmission
         pursuant to EDGAR;

                           (f) For a period of 90 days from the date hereof, not
         to, directly or indirectly, (1) announce an offering of, or file any
         registration statement with the Commission relating to, debt or equity
         securities of the Company (other than the offering contemplated by the
         Registration Rights Agreement or the filing of a Form S-8 with respect
         to the Company's employee benefit plans) or offer for sale, sell,
         pledge or otherwise dispose of (or enter into any transaction or device
         which is designed to, or could be expected to, result in the
         disposition or purchase by any person at any time in the future of) any
         debt or equity securities of the Company (other than the Notes), any
         securities convertible into or exchangeable for Common Stock or
         substantially similar securities (other than the Notes, the Conversion
         Shares and Common Stock to be issued in the ordinary course under the
         Company's employee benefit plans, qualified stock option plans or other
         employee compensation plans existing on the date hereof or pursuant to
         currently outstanding options, warrants or rights) or sell or grant
         options, warrants or rights with respect to any shares of Common Stock
         or securities convertible into or exchangeable for Common Stock (other
         than the grant of options, warrants or rights pursuant to option or
         other employee compensation plans existing on the date hereof) or (2)
         enter into any swap or other derivatives transaction that transfers to
         another, in whole or in part, any of the economic benefits or risks of
         ownership of such shares of Common Stock, whether any such transaction
         described in clause (1) or (2) above is to be settled by delivery of
         Common Stock or other securities, in cash or otherwise, without the
         prior written consent of the Initial Purchaser; and to cause each
         executive officer and director of the Company to furnish to the Initial
         Purchaser, on or prior to the date hereof, a letter substantially in
         the form of Annex B hereto; provided however, that notwithstanding the
         foregoing, the Company may take any action required to be taken by it
         under those registration rights agreements described in the Offering
         Memorandum;
<PAGE>
                                                                              17

                           (g) To use its best efforts to assist the Initial
         Purchaser in arranging to cause the Notes to be accepted to trade in
         The PORTAL Market ("PORTAL") of the National Association of Securities
         Dealers, Inc. ("NASD");

                           (h) To use its best efforts to cause the Conversion
         Shares to be approved for trading on The NASDAQ Stock Market (the
         "NASDAQ") prior to the effectiveness of the Registration Statement;

                           (i) Not to take, directly or indirectly, any action
         which is designed to stabilize or manipulate, or which constitutes or
         which might reasonably be expected to cause or result in stabilization
         or manipulation, of the price of any security of the Company in
         connection with the offering of the Notes;

                           (j) To use its best efforts to cause the Notes to be
         accepted for clearance and settlement through the facilities of DTC;

                           (k) To execute and deliver the Indenture, the
         Registration Rights Agreement, the Pledge Agreement and the Control
         Agreement in form and substance reasonably satisfactory to Initial
         Purchaser;

                           (l) To apply the proceeds from the sale of the Notes
         as set forth under "Use of Proceeds" in the Offering Memorandum;

                           (m) To take such steps as shall be necessary to
         ensure that neither the Company nor any of its subsidiaries shall
         become an "investment company" as defined, and subject to regulation,
         under Investment Company Act;

                           (n) For so long as any of the Notes are "restricted
         securities" within the meaning of Rule 144(a)(3) under the Securities
         Act, to provide to any holder of the Notes or to any prospective
         purchaser of the Notes designated by any holder, upon request of such
         holder or prospective purchaser, information required to be provided by
         Rule 144A(d)(4) of the Securities Act if, at the time of such request,
         the Company is not subject to the reporting requirements under Section
         13 or 15(d) of the Exchange Act;

                           (o) During the period of two years after the First
         Delivery Date or, if later, the Option Delivery Date, the Company will
         not, and will not permit any of its Affiliates to, resell any of the
         Notes which constitute "restricted securities" under Rule 144 that have
         been reacquired by any of them.

                           (p) To ensure that each of the Notes and the
         Conversion Shares will bear, to the extent applicable, the legend
         contained in the Offering Memorandum under the caption "Notice to
         Investors" for the time period and upon the other terms stated therein,
         except after the Notes are resold pursuant to a registration statement
         effective under the Securities Act;

                           (q) Except following the effectiveness of the
         Registration Statement, not to, and will cause its respective
         Affiliates not to, solicit any offer to buy or offer to
<PAGE>
                                                                              18

         sell the Notes by means of any form of general solicitation or general
         advertising (as those terms are used in Regulation D under the
         Securities Act) or in any manner involving a public offering within the
         meaning of Section 4(2) of the Securities Act;

                           (r) Not to, and will cause its respective affiliates
         not to, sell, offer for sale or solicit offers to buy or otherwise
         negotiate in respect of any "security" (as defined in the Securities
         Act) in a transaction that could be integrated with the sale of the
         Notes in a manner that would require the registration under the
         Securities Act of the Notes; and

                           (s) To comply, in all material respects, with the
         provisions of the Sarbanes-Oxley Act.

                  4. Expenses. The Company agrees to pay the following expenses,
whether or not the transactions contemplated by this Agreement are consummated
or this Agreement is terminated:

                           (a) the costs incident to the authorization,
         issuance, sale and delivery of the Notes and the Conversion Shares, if
         applicable, and any taxes payable in that connection;

                           (b) the costs incident to the preparation, printing
         and distribution of the Preliminary Offering Memorandum, the Offering
         Memorandum and any amendment or supplement to the Offering Memorandum,
         all as provided in this Agreement;

                           (c) the costs of producing and distributing the
         Transaction Documents;

                           (d) the filing fees incident to securing any required
         review by the NASD of the terms of sale of the Notes and any applicable
         listing or other fees, including all expenses and fees in connection
         with the application for inclusion of the Conversion Shares on NASDAQ;

                           (e) the fees and expenses of qualifying the Notes and
         the Conversion Shares under the securities laws of the several
         jurisdictions as provided in Section 3(d) and of preparing, printing
         and distributing a U.S. Blue Sky memorandum, if any (including related
         fees and expenses of counsel to the Initial Purchaser);

                           (f) all costs and expenses incident to the
         preparation of a "road show" presentation or comparable marketing
         materials used in connection with the offering of the Notes;

                           (g) all fees and expenses incurred in connection with
         any rating of the Notes;

                           (h) the costs of preparing the Notes;

                           (i) the fees and expenses (including fees and
         disbursements of counsel, if applicable) of Company, the Accountants,
         the Trustee (in relation to the
<PAGE>
                                                                              19

         Indenture, the Pledge Agreement and the Control Agreement) and the
         costs and charges of any registrar, transfer agent, paying agent or
         conversion agent under the Indenture;

                           (j) all expenses and fees in connection with the
         application for inclusion of the Notes in The PORTAL Market; and

                           (k) the fees and expenses (including fees and
         disbursements of counsel) of the Company in connection with approval of
         the Notes by DTC for "book-entry" transfer; and

                           (l) all other costs and expenses incident to the
         performance of the obligations of the Company under this Agreement;

provided that, except as provided in this Section 4 and in Section 9, the
Initial Purchaser shall pay its own costs and expenses, including the costs and
expenses of its counsel.

                  5. Conditions of the Initial Purchaser's Obligations. The
obligations of the Initial Purchaser hereunder are subject to the accuracy, when
made and on the applicable Delivery Date, of the representations and warranties
of the Company contained herein, to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and
conditions:

                           (a) The Initial Purchaser shall not have discovered
         and disclosed to the Company prior to or on such Delivery Date that the
         Offering Memorandum or any amendment or supplement thereto, in the
         opinion of Simpson Thacher & Bartlett LLP, counsel to the Initial
         Purchaser, contains an untrue statement of a material fact or omits to
         state a material fact necessary in order to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading.

                           (b) All corporate proceedings and other legal matters
         incident to the authorization, form and validity of the Offering
         Memorandum, the Transaction Documents, the Notes and the Conversion
         Shares and all other legal matters relating to the offering, issuance
         and sale, as applicable, of the Notes and the Conversion Shares and the
         transactions contemplated hereby and thereby shall be satisfactory in
         all material respects to counsel to the Initial Purchaser; and the
         Company shall have furnished to such counsel all documents and
         information that they may reasonably request to enable them to pass
         upon such matters.

                           (c) Morrison & Foerster LLP, counsel to the Company,
         shall have furnished to the Initial Purchaser its written opinion
         addressed to the Initial Purchaser and dated such Delivery Date, in
         form and substance reasonably satisfactory to the Initial Purchaser, to
         the effect that:

                                    (i) The Company has been duly incorporated
                  and is validly existing as a corporation in good standing
                  under the laws of the State of Delaware and is duly qualified
                  to do business and is in good standing as a foreign
                  corporation in each jurisdiction in which its ownership or
                  lease of property or the
<PAGE>
                                                                              20

                  conduct of its business requires such qualification, and has
                  all corporate power and authority necessary to own or hold its
                  properties and conduct the businesses in which they are
                  engaged;

                                    (ii) Each domestic Subsidiary of the Company
                  has been duly incorporated or formed, as the case may be, and
                  is validly existing as a corporation or limited liability
                  company, as the case may be, in good standing under the laws
                  of the jurisdiction of its incorporation or formation, as the
                  case may be, and is duly qualified to do business and is in
                  good standing as a foreign corporation or limited liability
                  company, as the case may be, in each jurisdiction in which its
                  ownership or lease of property or the conduct of its business
                  requires such qualification, and has all power and authority
                  (corporate and otherwise) necessary to own or hold its
                  properties and conduct the business in which it is engaged;

                                    (iii) The Company has all necessary
                  corporate right, power and authority to execute and deliver
                  each of the Transaction Documents, to perform its obligations
                  thereunder, to issue, sell and deliver to the Notes to the
                  Initial Purchaser and to issue and deliver the Conversion
                  Shares upon the conversion of any of the Notes.

                                    (iv) This Agreement has been duly
                  authorized, executed and delivered by the Company.

                                    (v) The Indenture has been duly authorized,
                  executed and delivered by the Company and, assuming due
                  authorization, execution and delivery thereof by the Trustee,
                  constitutes a legally valid and binding agreement of the
                  Company enforceable against the Company in accordance with its
                  terms, except as the enforceability thereof may be limited by
                  bankruptcy, insolvency, reorganization, moratorium and other
                  similar laws relating to or affecting creditors' rights
                  generally, subject to general principles of equity and to
                  limitations on availability of equitable relief, including
                  specific performance (regardless of whether such
                  enforceability is considered in a proceeding in equity or at
                  law) or by an implied covenant of good faith and fair dealing.

                                    (vi) The Notes have been duly authorized by
                  the Company and when executed, issued and authenticated in
                  accordance with terms of the Indenture and delivered to and
                  paid for by the Initial Purchaser, will constitute legally
                  valid and binding obligations of the Company entitled to the
                  benefits of the Indenture, enforceable against the Company in
                  accordance with their terms, except as the enforceability
                  thereof may be limited by bankruptcy, insolvency,
                  reorganization, moratorium and other similar laws relating to
                  or affecting creditors' rights generally, subject to general
                  principles of equity and to limitations on availability of
                  equitable relief, including specific performance (regardless
                  of whether such enforceability is considered in a proceeding
                  in equity or at law) or by an implied covenant of good faith
                  and fair dealing.
<PAGE>
                                                                              21

                                    (vii) The Registration Rights Agreement has
                  been duly authorized, executed and delivered by the Company
                  and, assuming due authorization, execution and delivery
                  thereof by the Initial Purchaser, constitutes a valid and
                  legally binding agreement of the Company enforceable against
                  the Company in accordance with its terms, except as the
                  enforceability thereof may be limited by bankruptcy,
                  insolvency, reorganization, moratorium and other similar laws
                  relating to or affecting creditors' rights generally, subject
                  to general principles of equity and to limitations on
                  availability of equitable relief, including specific
                  performance (regardless of whether such enforceability is
                  considered in a proceeding in equity or at law), by an implied
                  covenant of good faith and fair dealing, and except with
                  respect to the rights of indemnification and contribution
                  thereunder, where enforcement thereof may be limited by
                  federal and state securities laws or the policies underlying
                  such laws.

                                    (viii) Each of the Pledge Agreement and the
                  Control Agreement has been duly authorized, executed and
                  delivered by the Company and, assuming due authorization,
                  execution and delivery thereof by the Trustee and, in the case
                  of the Control Agreement, the securities intermediary party
                  thereto, constitutes a valid and legally binding agreement of
                  the Company enforceable against the Company in accordance with
                  its terms, except as the enforceability thereof may be limited
                  by bankruptcy, insolvency, reorganization, moratorium and
                  other similar laws relating to or affecting creditors' rights
                  generally, subject to general principles of equity and to
                  limitations on availability of equitable relief, including
                  specific performance (regardless of whether such
                  enforceability is considered in a proceeding in equity or at
                  law), by an implied covenant of good faith and fair dealing,

                                    (ix) The Conversion Shares have been duly
                  authorized and validly reserved for issuance upon conversion
                  of the Notes and are free of preemptive rights arising under
                  statute, regulation, the Company's charter or by-laws, and to
                  such counsel's knowledge, except as identified in the opinion,
                  any agreement or instrument to which the Company is a party or
                  other rights to subscribe for or to purchase any shares of
                  Common Stock; and the Conversion Shares, when so issued and
                  delivered upon such conversion in accordance with the terms of
                  the Indenture, will be duly and validly authorized and issued,
                  fully paid and non-assessable.

                                    (x) The statements made in the Offering
                  Memorandum under the caption "Description of the Notes",
                  insofar as they purport to constitute summaries of the
                  Indenture, the Registration Rights Agreement and the Notes,
                  constitute accurate summaries in all material respects.

                                    (xi) The statements made in the Offering
                  Memorandum under the caption "Description of Capital Stock",
                  insofar as they purport to constitute summaries of the
                  provisions of the Company's capital stock, including the
                  Common Stock (including the Conversion Shares) or Delaware
                  General Corporation Law are accurate and complete in all
                  material respects.
<PAGE>
                                                                              22

                                    (xii) The Company has an authorized and
                  issued capitalization as set forth in the Offering Memorandum,
                  and all of the issued shares of capital stock of the Company
                  have been duly and validly authorized and issued, are fully
                  paid and non-assessable and conform to the description thereof
                  contained in the Offering Memorandum.

                                    (xiii) Except as set forth in the Offering
                  Memorandum with respect to the rights contained in the
                  Registration Rights Agreement, there are no preemptive or
                  other rights to subscribe for or to purchase from the Company,
                  or any restriction upon the voting or transfer of, any shares
                  of Common Stock pursuant to any agreement or other instrument,
                  known to such counsel, to which the Company is a party.

                                    (xiv) To the knowledge of such counsel and
                  other than as set forth in the Offering Memorandum, there are
                  no legal or governmental proceedings pending or threatened to
                  which the Company or any of its subsidiaries is a party or of
                  which any property or assets of the Company or any of its
                  subsidiaries is the subject which, if determined adversely to
                  the Company or any of its subsidiaries, would reasonably be
                  expected to have a Material Adverse Effect.

                                    (xv) The statements made in the Offering
                  Memorandum under the caption "Material United States Federal
                  Income Tax Considerations", insofar as they purport to
                  constitute summaries of matters of United States federal
                  income tax law and regulations or legal conclusions with
                  respect thereto, constitute accurate summaries of the matters
                  set forth therein in all material respects.

                                    (xvi) The execution, delivery and
                  performance by the Company of the Transaction Documents, the
                  issuance of the Notes and the Conversion Shares, if at all,
                  the compliance by the Company with all the provisions hereof
                  and thereof and the consummation of the transactions
                  contemplated hereby and thereby will not (A) conflict with or
                  result in a breach or violation of any of the terms or
                  provisions of, or constitute a default under, any material
                  indenture, mortgage, deed of trust, loan agreement, lease or
                  other agreement or instrument to which the Company or any of
                  its subsidiaries is a party or by which the Company or any of
                  its subsidiaries is bound or to which any of the property or
                  assets of the Company or any of its subsidiaries is subject or
                  (B) result in any violation of the provisions of the charter
                  or by-laws of the Company or any of its subsidiaries or any
                  statute or any order, rule or regulation known to such counsel
                  of any court or governmental agency or body having
                  jurisdiction over the Company or any of its subsidiaries or
                  any of their properties or assets.

                                    (xvii) No consent, approval, authorization
                  or order of, or filing or registration with, any such U.S. or
                  foreign court or governmental agency or body having
                  jurisdiction over the Company or any of its domestic
                  subsidiaries or any of their respective properties or assets
                  is required for the execution, delivery and performance of
                  this Agreement or any of the other documents to be entered
                  into in
<PAGE>
                                                                              23

                  connection with the issuance of the Notes and the Conversion
                  Shares by the Company and the consummation of the transactions
                  contemplated hereby and thereby, except (A) with respect to
                  the transactions contemplated by the Registration Rights
                  Agreement as may be required under the Securities Act and the
                  qualification of the Indenture under the Trust Indenture Act,
                  (B) such consents, approvals, authorizations, registrations or
                  qualifications as may be required under the Exchange Act and
                  applicable state securities laws in connection with the
                  purchase and distribution of the Notes by the Initial
                  Purchaser (as to which such counsel need express no opinion
                  beyond that set forth in paragraph (xviii) below), (C) filings
                  contemplated to be made pursuant to the Pledge Agreement and
                  (D) for such consents, approvals, authorizations, orders,
                  filings or registrations as have been obtained or made.

                                    (xviii) The Company is not in violation of
                  its charter or by-laws.

                                    (xix) Assuming (A) the accuracy of the
                  representations and warranties of the Company and the Initial
                  Purchaser contained herein, (B) the Company and the Initial
                  Purchaser comply with the agreements and covenants contained
                  herein, (C) the accuracy of the representations and warranties
                  of purchasers to whom the Initial Purchaser initially resell
                  the Notes as contemplated herein and (D) compliance by the
                  Initial Purchaser of the offering and transfer procedures and
                  restrictions described in the Offering Memorandum, no
                  registration of the Notes or the Conversion Shares under the
                  Securities Act, and no qualification of the Indenture under
                  the Trust Indenture Act, is required in connection with the
                  offer, sale and delivery of the Notes by the Company to the
                  Initial Purchaser or by the Initial Purchaser of the Notes to
                  the initial purchasers therefrom or in connection with the
                  conversion of the Notes into Conversion Shares, in each case
                  in the manner contemplated by the Offering Memorandum, this
                  Agreement and the Indenture (it being understood that no
                  opinion is given as to any subsequent resale of the Notes or
                  the Conversion Shares).

                                    (xx) The Company is not, and upon
                  application of the net proceeds from the sale of the Notes as
                  set forth in the Offering Memorandum, will not be, an
                  "investment company" as defined, and subject to regulation,
                  under the Investment Company Act.

                                    (xxi) The Pledge Agreement is effective to
                  create in favor of the Trustee for the benefit of the holders
                  of Notes a security interest under the New York UCC in the
                  rights of the Company in (A) the Pledged Account (as defined
                  therein) and the financial assets (as defined in the New York
                  UCC Section 8-102) from time to time credited to such Pledged
                  Account and (B) the deposit account identified in the Control
                  Agreement and the collateral from time to time credited to
                  such account.

                                    (xxii) The execution and delivery of the
                  Control Agreement by the parties thereto operate to perfect
                  such security interest.
<PAGE>
                                                                              24

                  In rendering such opinion, such counsel may state that their
         opinion is limited to matters governed by the federal laws of the
         United States of America and the laws of the States of California, New
         York and Delaware. In rendering such opinion, such counsel may rely (A)
         as to matters involving the application of laws of any jurisdiction
         other than the States of California, New York, Delaware or the United
         States, to the extent they deem proper and specified in such opinion,
         upon the opinion of other counsel of good standing whom they believe to
         be reliable and who are reasonably satisfactory to counsel for the
         Initial Purchaser and (B) as to matters of fact, to the extent they
         deem proper, on certificates of responsible officers of the Company and
         public officials. References to the Offering Memorandum in this
         paragraph (c) include any supplements thereto at the Closing Date. Such
         opinion shall also include a statement to the effect that (x) such
         counsel has acted as counsel to the Company in connection with the
         preparation of the Offering Memorandum and participated in conferences
         with officers and other representatives of the Company, the Company's
         independent accountants and the Initial Purchaser and their counsel, at
         which the contents of the Offering Memorandum were discussed (although
         such counsel may state that it has not independently verified the
         accuracy, completeness or fairness of such statements except as set
         forth in clauses (x), (xi) and (xv) above), and (y) based on the
         foregoing, no facts have come to the attention of such counsel which
         lead such counsel to believe that the Offering Memorandum (except for
         the financial statements, supporting schedules, footnotes and other
         financial and statistical information included or incorporated by
         reference therein, as to which such counsel need express no belief), as
         of its date or as of the applicable Delivery Date, contained or
         contains any untrue statement of a material fact or omitted or omits to
         state a material fact necessary in order to make the statements
         therein, in light of the circumstances under which they were made, not
         misleading.

                           (d) Morrison & Foerster LLP, counsel to the Company,
         shall have furnished to the Trustee a reliance letter addressed to the
         Trustee and dated such Delivery Date permitting the Trustee to rely on
         such counsel's opinions set forth in clauses (xxi) and (xxii) of
         Section 5(c) above.

                           (e) Morrison & Foerster MNP, counsel to Microcosm
         Communications Ltd. ("MICROCOSM"), a subsidiary of the Company
         domiciled in the United Kingdom, shall have furnished to the Initial
         Purchaser its written opinion addressed to the Initial Purchaser and
         dated such Delivery Date, in form and substance reasonably satisfactory
         to the Initial Purchaser, to the effect that:

                                    (i) Microcosm is a private limited company,
                  duly incorporated and subsisting under the laws of England. So
                  far as is discoverable from certain searches specified in such
                  counsel's opinion, Microcosm is not in liquidation and no
                  order or resolution for the winding-up of Microcosm has been
                  made and no receiver, administrative receiver, administrator
                  or liquidator in respect of Microcosm (or any of its assets or
                  properties) has been appointed.

                                    (ii) Microcosm has requisite corporate power
                  and authority to carry on the business disclosed in its
                  Memorandum of Association.
<PAGE>
                                                                              25

                                    (iii) The issued share capital of Microcosm
                  is 4,856,636 ordinary shares of 0.0333p each, all of which are
                  held by Mindspeed Technologies, Inc.

                           (f) Nishimura & Partners, counsel to Mindspeed
         Technologies K.K. ("MTKK"), a subsidiary of the Company domiciled in
         Japan, shall have furnished to the Initial Purchaser its written
         opinion addressed to the Initial Purchaser and dated such Delivery
         Date, in form and substance reasonably satisfactory to the Initial
         Purchaser, to the effect that:

                                    (i) MTKK has been duly formed and is validly
                  existing as a foreign corporation, in good standing under the
                  laws of Japan (to the extent such concepts exist in such
                  jurisdiction), and is duly qualified to do business and is in
                  good standing as a foreign corporation (to the extent such
                  concepts exist in such jurisdiction), in each jurisdiction in
                  which its ownership or lease of property or the conduct of its
                  business requires such qualification, and has all power and
                  authority (corporate and otherwise) necessary to own or hold
                  its properties and conduct the business in which it is
                  engaged.

                                    (ii) All of the issued shares of capital
                  stock of MTKK have been duly and validly authorized and issued
                  and are fully paid, non-assessable and (except for directors'
                  qualifying shares) are owned directly or indirectly by the
                  Company, free and clear of all Liens.

                           (g) Simpson Thacher & Bartlett LLP shall have
         furnished to the Initial Purchaser its written opinion, as counsel to
         the Initial Purchaser, addressed to the Initial Purchaser and dated
         such Delivery Date, in form and substance reasonably satisfactory to
         the Initial Purchaser.

                           (h) At the time of execution of this Agreement, the
         Initial Purchaser shall have received from the Accountants a letter or
         letters, in form and substance reasonably satisfactory to the Initial
         Purchaser, addressed to the Initial Purchaser and dated the date hereof
         (i) confirming that they are an independent registered public
         accounting firm within the meaning of the Securities Act and are in
         compliance with the applicable requirements relating to the
         qualification of accountants under Rule 2-01 of Regulation S-X of the
         Commission and (ii) stating, as of the date hereof (or, with respect to
         matters involving changes or developments since the respective dates as
         of which specified financial information is given in the Offering
         Memorandum, as of a date not more than five days prior to the date
         hereof), the conclusions and findings of such firm with respect to the
         financial information and other matters ordinarily covered by
         accountants' "comfort letters" to Initial Purchaser in connection with
         registered public offerings.

                           (i) With respect to the letter of the Accountants
         referred to in the preceding paragraph and delivered to the Initial
         Purchaser concurrently with the execution of this Agreement (the
         "INITIAL COMFORT LETTER"), the Company shall have furnished to the
         Initial Purchaser a letter (the "BRING-DOWN COMFORT LETTER") of such
<PAGE>
                                                                              26

         accountants, addressed to the Initial Purchaser and dated such Delivery
         Date (i) confirming that they are an independent registered public
         accounting firm within the meaning of the Securities Act and are in
         compliance with the applicable requirements relating to the
         qualification of accountants under Rule 2-01 of Regulation S-X of the
         Commission, (ii) stating, as of the date of the bring-down letter (or,
         with respect to matters involving changes or developments since the
         respective dates as of which specified financial information is given
         in the Offering Memorandum, as of a date not more than five days prior
         to the date of the bring-down letter), the conclusions and findings of
         such firm with respect to the financial information and other matters
         covered by the initial letters and (iii) confirming in all material
         respects the conclusions and findings set forth in the initial comfort
         letter.

                           (j) The Company shall have furnished to the Initial
         Purchaser on the applicable Delivery Date a certificate, dated such
         Delivery Date and delivered on behalf of the Company by its chief
         executive officer and its chief financial officer, in form and
         substance reasonably satisfactory to the Initial Purchaser, to the
         effect that:

                           (i) the representations, warranties and agreements of
                  the Company in Section 1 of this Agreement are true and
                  correct as of such Delivery Date; and the Company has complied
                  in all material respects with all its agreements contained
                  herein to be performed prior to or on such Delivery Date and
                  the conditions set forth in Sections 5(m) and 5(n) have been
                  fulfilled;

                           (ii) since the respective dates as of which
                  information is given in the Offering Memorandum, other than as
                  set forth in the Offering Memorandum (exclusive of any
                  amendments or supplements thereto subsequent to the date of
                  this Agreement), (A) there has not occurred any change or any
                  development that could reasonably be expected to have a
                  Material Adverse Effect, (B) there has not been any change in
                  the capital stock, the short-term debt, or the long-term debt
                  of the Company or any of its subsidiaries that could
                  reasonably be expected to have a Material Adverse Effect, (C)
                  neither the Company nor any of its subsidiaries has incurred
                  any material liability or obligation, direct or contingent,
                  (D) a Material Loss has not occurred, (E) the Company has not
                  declared or paid any dividend on its capital stock, except for
                  dividends declared in the ordinary course of business and
                  consistent with past practice, and, (F) except as set forth in
                  the Offering Memorandum, neither the Company nor any of its
                  subsidiaries has entered into any transaction or agreement
                  (whether or not in the ordinary course of business) material
                  to the Company and its subsidiaries taken as a whole; and

                           (iii) such officer has carefully examined the
                  Offering Memorandum and, in such officer's opinion (A) the
                  Offering Memorandum, as of its date and the applicable
                  Delivery Date, did not and does not include any untrue
                  statement of a material fact and did not and does not omit to
                  state any material fact necessary to make the statements
                  therein, in the light of the circumstances under which they
                  were made, not misleading, and (B) since the date of the
                  Offering Memorandum, no event has occurred which should have
                  been set forth in a supplement or amendment to the Offering
                  Memorandum.
<PAGE>
                                                                              27

                           (k) The Indenture (in form and substance reasonably
         satisfactory to the Initial Purchaser) shall have been duly executed
         and delivered by the Company and the Trustee, and the Notes shall have
         been duly executed and delivered by the Company and duly authenticated
         by the Trustee.

                           (l) The Pledge Agreement and the Control Agreement
         (each in form and substance reasonably satisfactory to the Initial
         Purchaser) shall have been duly executed and delivered by the Company
         and the Trustee, and the Company shall have given irrevocable
         instructions to the Initial Purchaser to purchase Pledged Securities
         (as defined in the Pledge Agreement) on behalf of the Company with a
         portion of the proceeds of the offering. In addition, the Company shall
         have:

                           (i) made all filings and taken such other actions
                  (including, without limitation, (A) actions necessary to
                  obtain control of the Pledged Securities as provided in
                  Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and (B)
                  actions necessary to perfect the Trustee's security interest
                  with respect to the Pledged Securities evidenced by a
                  certificate of ownership) necessary to perfect the security
                  interest in the Pledged Securities created under the Pledge
                  Agreement and so that such security interest is in full force
                  and effect, and created in favor of the Trustee for its
                  benefit and the ratable benefit of the Holders of the Notes a
                  valid and, together with such filings and other actions, a
                  perfected first priority security interest in the Pledged
                  Securities;

                           (ii) delivered to the Initial Purchaser evidence
                  satisfactory to the Initial Purchaser that upon such purchase
                  and delivery, the Trustee for its benefit and the ratable
                  benefit of the Holders of the Notes will have a valid and,
                  together with such filings and other actions, a perfected
                  first priority security interest in the Pledged Securities.
                  All filing fees and taxes in connection with such recordings
                  or filings shall have been paid and the Initial Purchaser
                  shall have received evidence satisfactory to it of such
                  recordation, filings and payments, including in the case of
                  any financing statements, the secured party's copy of all such
                  financing statements bearing evidence of filing; and

                           (m) The Company and the Initial Purchaser shall have
         executed and delivered the Registration Rights Agreement (in form and
         substance satisfactory to the Initial Purchaser), and the Registration
         Rights Agreement shall be in full force and effect.

                           (n) The Initial Purchaser shall have received from
         each executive officer and director of the Company an executed lock-up
         letter agreement contemplated by Section 3(f) hereof.

                           (o) The NASD shall have accepted the Notes for
         trading on PORTAL.

                           (p) Neither the Company nor any of its subsidiaries
         shall have sustained since the date of the latest audited financial
         statements included or incorporated by reference in the Offering
         Memorandum (A) any Material Loss, otherwise than as set forth or
         contemplated in the Offering Memorandum (exclusive of any amendments or
<PAGE>
                                                                              28

         supplements thereto subsequent to the date of this Agreement), or (B)
         since such date there shall not have been any change in the capital
         stock, short-term debt or long-term debt of the Company or any of its
         subsidiaries or any change, or any development involving a prospective
         change, in or affecting the general affairs, management, financial
         position, prospects, stockholders' equity or results of operations of
         the Company and its subsidiaries, otherwise than as set forth or
         contemplated in the Offering Memorandum (exclusive of any amendments or
         supplements thereto subsequent to the date of this Agreement), the
         effect of which, in any such case set forth in clause (A) or (B), is,
         in the judgment of the Initial Purchaser, so material and adverse as to
         make it impracticable or inadvisable to proceed with the offering or
         the delivery of the Notes being delivered on the applicable Delivery
         Date on the terms and in the manner contemplated in the Offering
         Memorandum and this Agreement.

                           (q) Subsequent to the execution and delivery of this
         Agreement, there shall not have occurred any of the following: (i)
         trading in securities generally on the New York Stock Exchange or the
         American Stock Exchange or the NASDAQ or in the over-the-counter
         market, or trading in any securities of the Company on any exchange or
         in the over-the-counter market, shall have been suspended or the
         settlement of such trading generally shall have been materially
         disrupted or minimum prices shall have been established on any such
         exchange or such market by the Commission, by such exchange or by any
         other regulatory body or governmental authority having jurisdiction,
         (ii) a banking moratorium shall have been declared by Federal or state
         authorities of the United States, (iii) the United States shall have
         become engaged in hostilities, there shall have been an escalation in
         hostilities involving the United States, there shall have been a
         declaration of a national emergency or war by the United States or
         there shall have occurred any other substantial, national or
         international calamity or crisis, (iv) there shall have occurred such a
         material adverse change in general domestic or international economic,
         political or financial conditions, including without limitation as a
         result of terrorist activities, or the effect of international
         conditions on the financial markets in the United States shall be such,
         as to make it, in the judgment of the Initial Purchaser impracticable
         or inadvisable to proceed with the public offering or delivery of the
         Notes being delivered on such Delivery Date on the terms and in the
         manner contemplated in the Offering Memorandum.

         The Company shall have furnished to the Initial Purchaser such further
information, certificates and documents as the Initial Purchaser may reasonably
request to evidence compliance with the conditions set forth in this Section 5.
All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel to the
Initial Purchaser.

                  6. Representations, Warranties and Agreements of Initial
Purchaser. The Initial Purchaser represents and warrants to and agrees with the
Company that it (i) is an institutional "accredited investor" within the meaning
of Rule 501(a) under the Securities Act, (ii) is purchasing the Notes pursuant
to a private sale exempt from registration under the Securities Act without the
intent to distribute the Notes in violation of the Securities Act, (iii)
<PAGE>
                                                                              29

will not solicit offers for, or offer or sell, the Notes by means of any form of
general solicitation or general advertising or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act and (iv) will
solicit offers for the Notes only from, and will offer, sell or deliver the
Notes, as part of its initial offering, only to persons whom it reasonably
believes to be QIBs, or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to it that each such account is a QIB, to
whom notice has been given that such sale or delivery is being made in reliance
on Rule 144A in transactions under Rule 144A.

                  7. Indemnification and Contribution.

                           (a) The Company shall indemnify and hold harmless the
         Initial Purchaser, its directors, officers and employees and each
         person, if any, who controls the Initial Purchaser within the meaning
         of the Securities Act, from and against any loss, claim, damage or
         liability, joint or several, or any action in respect thereof
         (including, but not limited to, any loss, claim, damage, liability or
         action relating to purchases and sales of the Notes), to which the
         Initial Purchaser, director, officer, employee or controlling person
         may become subject, insofar as such loss, claim, damage, liability or
         action arises out of, or is based upon, (i) any untrue statement or
         alleged untrue statement of a material fact contained in any (A)
         Preliminary Offering Memorandum, the Offering Memorandum or in any
         amendment or supplement thereto or (B) materials or information
         provided to investors by, or with the approval of, the Company in
         connection with the marketing of the offering of the Notes ("MARKETING
         MATERIALS"), including any roadshow or investor presentations made to
         investors by the Company (whether in person or electronically), (ii)
         the omission or alleged omission to state in the Preliminary Offering
         Memorandum, the Offering Memorandum or in any amendment or supplement
         thereto or in any Marketing Materials any material fact necessary to
         make the statements therein not misleading or (iii) any act or failure
         to act or any alleged act or failure to act by the Initial Purchaser in
         connection with, or relating in any manner to, the Notes or the
         offering contemplated hereby, and which is included as part of or
         referred to in any loss, claim, damage, liability or action arising out
         of or based upon matters covered by clause (i) or (ii) above (provided
         that, the Company shall not be liable under this clause (iii) to the
         extent that it is determined in a final judgment by a court of
         competent jurisdiction that such loss, claim, damage, liability or
         action resulted directly from any such acts or failures to act
         undertaken or omitted to be taken by the Initial Purchaser through its
         gross negligence or willful misconduct), and shall reimburse the
         Initial Purchaser and each such director, officer, employee or
         controlling person promptly upon demand for any legal or other expenses
         reasonably incurred by that Initial Purchaser, director, officer,
         employee or controlling person in connection with investigating or
         defending or preparing to defend against any such loss, claim, damage,
         liability or action as such expenses are incurred; 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 arises out of,
         or is based upon, any untrue statement or alleged untrue statement or
         omission or alleged omission made in any Preliminary Offering
         Memorandum, the Offering Memorandum, or in any such amendment or
         supplement, in reliance upon and in conformity with the written
         information concerning the Initial Purchaser furnished to the Company
         by the
<PAGE>
                                                                              30

         Initial Purchaser specifically for inclusion therein, which information
         consists solely of the information specified in Section 7(e). The
         foregoing indemnity agreement is in addition to any liability which the
         Company may otherwise have to the Initial Purchaser or to any director,
         officer, employee or controlling person of the Initial Purchaser.

                           (b) The Initial Purchaser shall indemnify and hold
         harmless the Company, its directors, officers and employees and each
         person, if any, who controls the Company within the meaning of the
         Securities Act from and against any loss, claim, damage or liability,
         joint or several, or any action in respect thereof, to which the
         Company or any such director, officer, employee or controlling person
         may become subject, under the Securities Act or otherwise, insofar as
         such loss, claim, damage, liability or action arises out of, or is
         based upon, (i) any untrue statement or alleged untrue statement of a
         material fact contained in any Preliminary Offering Memorandum or the
         Offering Memorandum or in any amendment or supplement thereto or (ii)
         the omission or alleged omission to state in any Preliminary Offering
         Memorandum or the Offering Memorandum or in any amendment or supplement
         thereto, any material fact necessary to make the statements therein not
         misleading, but in each case only to the extent that the untrue
         statement or alleged untrue statement or omission or alleged omission
         was made in reliance upon and in conformity with the written
         information concerning the Initial Purchaser furnished to the Company
         by the Initial Purchaser specifically for inclusion therein and set
         forth in Section 7(e), and shall reimburse the Company and any such
         director, officer, employee or controlling person promptly upon demand
         for any legal or other expenses reasonably incurred by the Company or
         any such director, officer, employee or controlling person in
         connection with investigating or defending or preparing to defend
         against any such loss, claim, damage, liability or action as such
         expenses are incurred. The foregoing indemnity agreement is in addition
         to any liability which the Initial Purchaser may otherwise have to the
         Company or any such director, officer, employee or controlling person.

                           (c) Promptly after receipt by an indemnified party
         under this Section 7 of notice of any claim or the commencement of any
         action, the indemnified party shall, if a claim in respect thereof is
         to be made against the indemnifying party under this Section 7, notify
         the indemnifying party in writing of the claim or the commencement of
         that action; provided, however, that the failure to notify the
         indemnifying party shall not relieve it from any liability which it may
         have under this Section 7 except to the extent it has been materially
         prejudiced by such failure and, provided, further, that the failure to
         notify the indemnifying party shall not relieve it from any liability
         which it may have to an indemnified party otherwise than under this
         Section 7. If any such claim or action shall be brought against an
         indemnified party, and it shall notify the indemnifying party thereof,
         the indemnifying party shall be entitled to participate therein and, to
         the extent that it wishes, jointly with any other similarly notified
         indemnifying party, to assume the defense thereof with counsel
         satisfactory to the indemnified party. After notice from the
         indemnifying party to the indemnified party of its election to assume
         the defense of such claim or action, the indemnifying party shall not
         be liable to the indemnified party under this Section 7 for any legal
         or other expenses subsequently incurred by the indemnified party in
         connection with the defense thereof other than reasonable costs of
         investigation;
<PAGE>
                                                                              31

         provided, however, that the Initial Purchaser shall have the right to
         employ separate counsel to represent jointly the Initial Purchaser and
         their respective directors, officers, employees and controlling persons
         who may be subject to liability arising out of any claim in respect of
         which indemnity may be sought by the Initial Purchaser against the
         Company under this Section 7 if, in the reasonable judgment of the
         Initial Purchaser it is advisable for the Initial Purchaser and such
         directors, officers, employees and controlling persons to be jointly
         represented by separate counsel, and in that event the fees and
         expenses of such separate counsel shall be paid by the Company. No
         indemnifying party shall, (i) without the prior written consent of the
         indemnified parties (which consent shall not be unreasonably withheld),
         settle or compromise or consent to the entry of any judgment with
         respect to any pending or threatened claim, action, suit or proceeding
         in respect of which indemnification or contribution may be sought
         hereunder (whether or not the indemnified parties are actual or
         potential parties to such claim or action) unless such settlement,
         compromise or consent includes an unconditional release of each
         indemnified party from all liability arising out of such claim, action,
         suit or proceeding, or (ii) be liable for any settlement of any such
         action effected without its written consent (which consent shall not be
         unreasonably withheld), but if settled with its written consent or if
         there be a final judgment of the plaintiff in any such action, the
         indemnifying party agrees to indemnify and hold harmless any
         indemnified party from and against any loss or liability by reason of
         such settlement or judgment.

                           (d) If the indemnification provided for in this
         Section 7 shall for any reason be unavailable or insufficient to hold
         harmless an indemnified party under Section 7(a) or 7(b) in respect of
         any loss, claim, damage or liability, or any action in respect thereof,
         referred to therein, then each indemnifying party shall, in lieu of
         indemnifying such indemnified party, contribute to the amount paid or
         payable by such indemnified party as a result of such loss, claim,
         damage or liability, or action in respect thereof, (i) in such
         proportion as shall be appropriate to reflect the relative benefits
         received by the Company on the one hand and the Initial Purchaser on
         the other from the offering of the Notes, or (ii) if the allocation
         provided by clause (i) above is not permitted by applicable law, in
         such proportion as is appropriate to reflect not only the relative
         benefits referred to in clause (i) above but also the relative fault of
         the Company on the one hand and the Initial Purchaser on the other with
         respect to the statements or omissions or alleged statements or
         omissions which resulted in such loss, claim, damage or liability, or
         action in respect thereof, as well as any other relevant equitable
         considerations. The relative benefits received by the Company on the
         one hand and the Initial Purchaser on the other with respect to such
         offering shall be deemed to be in the same proportion as the total net
         proceeds from the offering of the Notes purchased under this Agreement
         (net of discounts and commissions but before deducting expenses)
         received by the Company on the one hand, and the total discounts and
         commissions received by the Initial Purchaser with respect to the Notes
         purchased under this Agreement, on the other hand, bear to the total
         gross proceeds from the offering of the Notes under this Agreement. The
         relative fault shall be determined by reference to whether the untrue
         or alleged untrue statement of a material fact or omission or alleged
         omission to state a material fact relates to information supplied by
         the Company or the Initial Purchaser, the intent of the parties and
         their relative knowledge, access to information and opportunity to
         correct or prevent such
<PAGE>
                                                                              32

         statement or omission. The Company and the Initial Purchaser agree that
         it would not be just and equitable if contributions pursuant to this
         Section 7(d) were to be determined by pro rata allocation or by any
         other method of allocation which does not take into account the
         equitable considerations referred to herein. The amount paid or payable
         by an indemnified party as a result of the loss, claim, damage or
         liability, or action in respect thereof, referred to above in this
         Section shall be deemed to include, for purposes of this Section 7(d),
         any legal or other expenses reasonably incurred by such indemnified
         party in connection with investigating or defending any such action or
         claim. Notwithstanding the provisions of this Section, no Initial
         Purchaser shall be required to contribute any amount in excess of the
         amount by which the total price at which the Notes resold by it in the
         initial placement of such Notes were offered to investors exceeds the
         amount of any damages which the Initial Purchaser has otherwise paid or
         become liable by reason of any untrue or alleged untrue statement or
         omission or alleged omission. No person guilty of fraudulent
         misrepresentation (within the meaning of Section 11(f) of the
         Securities Act) shall be entitled to contribution from any person who
         was not guilty of such fraudulent misrepresentation.

                           (e) The Initial Purchaser confirms, and the Company
         acknowledges, that the statements in paragraph numbers 3, 7, 8, 9, the
         last sentence of paragraph 5 and the first two sentences of paragraph
         15 under the caption "Plan of Distribution" in the Offering Memorandum
         are correct and constitute the only information concerning the Initial
         Purchaser furnished in writing to the Company by or on behalf of the
         Initial Purchaser specifically for inclusion in the Offering
         Memorandum.

                  8. Termination. The obligations of the Initial Purchaser
hereunder may be terminated by the Initial Purchaser by notice given to and
received by the Company prior to delivery of and payment for the Notes if, prior
to that time, any of the events described in Sections 5(m) or 5(n) shall have
occurred or if the Initial Purchaser shall decline to purchase the Firm Notes
for any reason permitted under this Agreement.

                  9. Reimbursement of Initial Purchaser's Expenses.

                           (a) If (i) the Company fails to tender the Notes for
         delivery to the Initial Purchaser by reason of any failure, refusal or
         inability on the part of the Company to perform any agreement on its
         part to be performed, or because any other condition of the Initial
         Purchaser's obligations hereunder required to be fulfilled by the
         Company is not fulfilled or (ii) the Initial Purchaser declines to
         purchase the Notes for any reason permitted under this Agreement
         (including the termination of this Agreement pursuant to Section 8),
         the Company shall reimburse the Initial Purchaser for all reasonable
         out-of-pocket expenses (including fees and disbursements of counsel)
         incurred by the Initial Purchaser in connection with this Agreement and
         the proposed purchase of the Notes, and upon demand the Company shall
         pay the full amount thereof to the Initial Purchaser.

                           (b) The Company shall reimburse the Initial Purchaser
         for all out-of-pocket expenses incurred by the Initial Purchaser in
         connection with the purchase and delivery of Pledged Securities on
         behalf of the Company pursuant to Section 2(c) hereof, and upon demand
         the Company shall pay the full amount thereof to the Initial Purchaser.
<PAGE>
                                                                              33

                  10. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:

                           (a) if to the Initial Purchaser, shall be delivered
         or sent by mail, telex or facsimile transmission to Lehman Brothers
         Inc., 745 Seventh Avenue, New York 10019, Attention: Syndicate
         Registration Department (Fax: 646-758-4231), with a copy, in the case
         of any notice pursuant to Section 7(c), to the Director of Litigation,
         Office of the General Counsel, Lehman Brothers Inc., 399 Park Avenue,
         10th Floor, New York, New York 10022 and

         with a copy to Simpson Thacher & Bartlett LLP, 425 Lexington Avenue,
         New York, New York 10017, Attention: John D. Lobrano, Esq. (Fax:
         212-455-2502; Telephone: (212) 455-2000);

                           (b) if to the Company, shall be delivered or sent by
         mail, telex or facsimile transmission to it at Mindspeed Technologies,
         Inc., 4000 MacArthur Boulevard, East Tower, Newport Beach, CA 92660,
         Attention: Simon Biddiscombe (Fax: 949-579-5289, Telephone:
         949-579-4160);

         with a copy to Morrison & Foerster LLP, 19900 MacArthur Boulevard, 12th
         Floor, Irvine, CA 92612, Attention: Robert M. Mattson, Jr., Esq. (Fax:
         949-251-7438, Telephone: 949-251-7500).

                  11. Persons Entitled to Benefit of Agreement. This Agreement
will inure to the benefit of and be binding upon the Initial Purchaser, the
Company and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement will also be deemed to be for the benefit of the
directors, officers and employees of the Initial Purchaser and the person or
persons, if any, who control the Initial Purchaser within the meaning of Section
15 of the Securities Act and (B) any indemnity agreement of the Initial
Purchaser contained in Section 7(b) of this Agreement will be deemed to be for
the benefit of directors, officers and employees of the Company and any person
controlling the Company within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 11, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.

                  12. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Initial Purchaser contained in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, will survive the delivery of and payment for the Notes and will
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any of them or
any person controlling any of them.

                  13. Definition of the Term "Business Day". For purposes of
this Agreement, "BUSINESS DAY" means any day on which the New York Stock
Exchange, Inc. is open for trading.
<PAGE>
                                                                              34

                  14. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

                  15. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.

                  16. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
<PAGE>
                                                                              35

                  If the foregoing correctly sets forth the agreement between
the Company and the Initial Purchaser, please indicate your acceptance in the
space provided for that purpose below.

                                    Very truly yours,

                                    Mindspeed Technologies, Inc.



                                    By: /s/ Simon Biddiscombe
                                        ----------------------------------------
                                        Name:  Simon Biddiscombe
                                        Title: Senior Vice President, Chief
                                               Financial Officer, Secretary and
                                               Treasurer

Accepted and agreed by:

Lehman Brothers Inc.


By:    /s/ Chris Colpitts
     -------------------------------
       Authorized Representative
<PAGE>
                                                                         ANNEX A

                      FORM OF REGISTRATION RIGHTS AGREEMENT

                               [SEPARATELY FILED]

                                      A-1
<PAGE>
                                     ANNEX B
                            LOCK-UP LETTER AGREEMENT

Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019

Dear Ladies and Gentlemen:

         The undersigned understands that you propose to enter into a purchase
agreement (the "PURCHASE Agreement") providing for the purchase by you (the
"INITIAL PURCHASER") of Convertible Senior Notes due 2009 (the "NOTES") of
Mindspeed Technologies, Inc., a Delaware corporation (the "COMPANY"), which are
convertible into fully paid, non-assessable shares of common stock, par value
$0.01 per share, of the Company (the "COMMON STOCK"), and that the Initial
Purchaser proposes to reoffer the Notes to certain qualified institutional
buyers under Rule 144A of the Securities Act of 1933, as amended (the
"OFFERING").

         In consideration of the execution of the Purchase Agreement by the
Initial Purchaser, and for other good and valuable consideration, the
undersigned hereby irrevocably agrees that, without the prior written consent of
the Initial Purchaser, the undersigned will not, directly or indirectly, (1)
offer for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result in
the disposition by any person at any time in the future of) any shares of Common
Stock or any securities convertible into or exchangeable for Common Stock or
substantially similar securities (or exercise any right to require the Company
to register any such securities under the Securities Act of 1933, as amended) or
sell or grant options, warrants or rights with respect to any shares of Common
Stock or securities convertible into or exchangeable for Common Stock or
substantially similar securities (the "LOCK-UP SHARES") or (2) enter into any
swap or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, for a period of 90 days after the date of the final Offering
Memorandum relating to the Offering.

         Notwithstanding the foregoing, if (1) during the last 17 days of the
90-day restricted period the Company issues an earnings release or material news
or a material event relating to the Company occurs or (2) prior to the
expiration of the 90-day restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the 90-day period, then the restrictions imposed by this letter shall continue
to apply until the expiration of the 18-day period beginning on the issuance of
the earnings release or the occurrence of the material news or material event.

         Notwithstanding the foregoing, the undersigned may transfer any or all
Lock-Up Shares (i) as a bona fide gift or gifts, provided that the donee or
donees thereof have executed and delivered to the Initial Purchaser a written
agreement providing their agreement to be bound by the restrictions set forth
herein, (ii) to any trust, partnership, limited liability company or other legal
entity commonly used for estate planning purposes which is established for the
direct or

                                      A-2
<PAGE>
indirect benefit of the undersigned or the immediate family of the undersigned,
provided that the trustee, general partner, manager or other administrator, as
the case may be, has executed and delivered to the Initial Purchaser a written
agreement providing their agreement to be bound by the restrictions set forth
herein, and provided further that any such transfer shall not involve a
disposition for value, (iii) any 10b5-1 trading plan in existence on the date
hereof, or (iv) with the prior written consent of the Initial Purchaser. For
purposes of this Lock-Up Letter Agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
Notwithstanding the foregoing, if options for Common Stock held by the
undersigned that are exercisable shall expire during the lock-up period
described herein unless exercised, the undersigned may exercise such options and
sell such number of shares received upon exercise to the extent necessary to
satisfy obligations under a cashless exercise arrangement, without the consent
of the Initial Purchaser, provided the shares issued upon the exercise of such
options shall be subject the terms of this Lock-Up Letter Agreement and deemed
Lock-Up Shares except to the extent sold pursuant to such cashless exercise.

         In furtherance of the foregoing, the Company and its transfer agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.

         The undersigned understands that the Company and the Initial Purchaser
will proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to the
Purchase Agreement, the terms of which are subject to negotiation between the
Company and the Initial Purchaser. In addition, it is understood that, if the
Company notifies you that it does not intend to proceed with the Offering, if
the Purchase Agreement is not executed, or if the Purchase Agreement (other than
the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Notes, the undersigned will
be released from its obligations under this Lock-Up Letter Agreement.

         This Lock-Up Letter Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

         The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.

                                  Very truly yours,
                                  [NAME]

                                  By:  ______________________________
                                          Name:
                                          Title:
Dated:  ________, 2004

                                      A-3

</TEXT>
</DOCUMENT>
