Exhibit 10.3
FORM OF
ASSET TRANSFER AGREEMENT
By and Between
NEWCO,
and
INTEL CORPORATION
Dated as of                                     , 200           

 

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TABLE OF CONTENTS

              Page  
INTEL ASSET TRANSFER AGREEMENT
    1  
 
       
ARTICLE I DEFINITIONS
    1  
 
       
1.1 Definitions
    1  
 
       
1.2 Defined Terms Generally
    1  
 
       
ARTICLE II Transfer Of Assets
    2  
 
       
2.1 Intel Transferred Assets
    2  
 
       
2.2 Intel Excluded Assets
    3  
 
       
2.3 Intel Transferred Liabilities
    5  
 
       
2.4 Intel Excluded Liabilities
    6  
 
       
2.5 Assignment of Contracts and Rights
    7  
 
       
2.6 Consideration
    8  
 
       
2.7 Inventory Adjustment to Consideration
    9  
 
       
2.8 Intel Transferred Employee Purchase Price Adjustment
    10  
 
       
2.9 Capital Expenditures
    11  
 
       
2.10 Deliveries by Newco
    12  
 
       
2.11 Pre Closing Deliveries by Intel
    13  
 
       
2.12 Closing
    13  
 
       
2.13 Post Closing Registrations
    14  
 
       
ARTICLE III REPRESENTATIONS AND WARRANTIES OF INTEL
    14  
 
       
3.1 Existence and Good Standing
    15  
 
       
3.2 Authorization and Enforceability
    15  
 
       
3.3 Governmental Authorization
    15  
 
       
3.4 Non-Contravention
    15  

 

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              Page  
3.5 Personal Property
    16  
 
       
3.6 Real Property
    16  
 
       
3.7 Litigation
    17  
 
       
3.8 Intel Transferred Contracts and Consents
    17  
 
       
3.9 Compliance with Applicable Laws
    17  
 
       
3.10 Tax Matters
    18  
 
       
3.11 Intellectual Property
    20  
 
       
3.12 Employee Matters
    21  
 
       
3.13 Financial Information
    22  
 
       
3.14 Absence of Certain Changes
    23  
 
       
3.15 Environmental Matters
    24  
 
       
3.16 Product Warranties
    24  
 
       
3.17 Transferred Assets
    25  
 
       
3.18 Customers
    25  
 
       
3.19 Insurance
    25  
 
       
3.20 Inventories
    25  
 
       
3.21 Advisory Fees
    25  
 
       
3.22 Representations Regarding Intel Transferred Entities and Intel Transferred
Interests
    25  
 
       
3.23 Investment Representations
    27  
 
       
3.24 Disclaimer of Warranties
    27  
 
       
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF NEWCO
    27  
 
       
4.1 Existence and Good Standing
    28  
 
       
4.2 Authorization and Enforceability
    28  
 
       
4.3 Non-Contravention
    28  
 
       
4.4 Capitalization
    28  

 

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              Page  
4.5 Valid Issuance of Shares
    29  
 
       
4.6 Exempt Offering
    29  
 
       
4.7 Lack of Registration Rights and Voting Agreements
    30  
 
       
4.8 Reliance
    30  
 
       
ARTICLE V COVENANTS
    30  
 
       
5.1 Access to Information
    30  
 
       
5.2 Compliance with Terms of Governmental Approvals and Consents
    31  
 
       
5.3 Use of Marks
    31  
 
       
5.4 Cooperation in Third Party Litigation
    32  
 
       
5.5 Assignments
    32  
 
       
5.6 Reasonable Efforts
    32  
 
       
5.7 Allocation of Non-Tax Operating Expenses
    32  
 
       
5.8 Tax Matters
    33  
 
       
5.9 Accounts Receivable
    36  
 
       
5.10 Accounts Payable
    37  
 
       
5.11 Employees
    37  
 
       
5.12 Protection of Privacy
    39  
 
       
5.13 Export Compliance
    39  
 
       
5.14 Satisfaction of Intel Pre-Closing Product Obligations
    40  
 
       
5.15 Additional Intel Financial Statements
    40  
 
       
5.16 Settlement of Claims
    40  
 
       
5.17 Back-end Equipment
    40  
 
       
5.18 Master Agreement Covenants
    41  
 
       
5.19 Further Assurances
    41  
 
       
5.20 Outstanding Checks; Bank Accounts
    42  

 

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              Page  
5.21 Release of Liens
    42  
 
       
ARTICLE VI INDEMNIFICATION
    42  
 
       
6.1 General Survival
    42  
 
       
6.2 Indemnification
    42  
 
       
6.3 Manner of Indemnification
    45  
 
       
6.4 Third-Party Claims
    45  
 
       
6.5 Exclusive Remedy and Waiver and Release of Certain Claims
    46  
 
       
6.6 Subrogation
    47  
 
       
6.7 Damages
    47  
 
       
6.8 Environmental Indemnification Procedures
    47  
 
       
ARTICLE VII MISCELLANEOUS
    49  
 
       
7.1 Notices
    49  
 
       
7.2 Amendments; Waivers
    51  
 
       
7.3 Expenses
    52  
 
       
7.4 Successors and Assigns
    52  
 
       
7.5 Governing Law
    52  
 
       
7.6 Counterparts; Effectiveness
    52  
 
       
7.7 Entire Agreement
    52  
 
       
7.8 Captions
    52  
 
       
7.9 Severability
    52  
 
       
7.10 Dispute Resolution
    53  
 
       
7.11 Submission to Jurisdiction; Waiver of Jury Trial
    55  
 
       
7.12 Third Party Beneficiaries
    55  
 
       
7.13 Specific Performance
    55  
 
       
7.14 No Presumption Against Drafting Party
    56  

 

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FORM OF
INTEL ASSET TRANSFER AGREEMENT1
     THIS INTEL ASSET TRANSFER AGREEMENT (the “Intel Asset Transfer Agreement”
and, as referred to herein, this “Agreement”), dated as of                     
___, 200___, is by and between Intel Corporation, a Delaware corporation
(“Intel”), and [NEWCO], a company with limited liability organized under the
laws of The Netherlands (“Newco”). Intel and Newco are sometimes referred to
herein as the “Parties” and each individually as a “Party.”
     A. Intel desires to transfer, and to cause certain of its Affiliates to
transfer (Intel and such Affiliates, collectively, the “Intel Transferors”) to
Newco and its Affiliates, and Newco desires to acquire, and to cause its
Affiliates to acquire, from Intel and such Intel Affiliates, the Intel
Transferred Assets in consideration for the issuance by Newco of the Intel Newco
Shares, the payment by Newco of the Intel Cash Consideration, and the assumption
by Newco or its Affiliates of the Intel Transferred Liabilities, all on the
terms and conditions set forth in this Agreement.
     B. Intel, ST, FP and FP Holdco entered into that certain Master Agreement,
dated May 22, 2007, that provides, among other things, for the simultaneous
consummation of the transactions contemplated by this Agreement, the ST Asset
Contribution Agreement and the Share Purchase Agreement, subject to the terms
and conditions set forth in such agreements and the Master Agreement.
     C. The Parties intend that, for United States federal income tax purposes,
the transfer of the Intel Transferred Assets and issuance of the Intel
Consideration, as contemplated by this Agreement, be treated as described on
Schedule 2.6 to the Intel ATA Disclosure Letter.
     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
     1.1 Definitions. Capitalized terms used in this Agreement shall have the
respective meanings ascribed to such terms in Appendix A to this Agreement.
     1.2 Defined Terms Generally. The definitions set forth or referred to in
Appendix A shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed
 

1   Intel Transferors and Newco Affiliates to be added as Parties.

 

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by the phrase “without limitation”. All references herein to Articles, Sections
and Exhibits and Schedules shall be deemed to be references to Articles and
Sections of, and Exhibits and Schedules to, this Agreement unless the context
shall otherwise require. Unless the context shall otherwise require, any
reference to any contract, instrument, statute, rule or regulation is a
reference to it as amended and supplemented from time to time (and, in the case
of a statute, rule or regulation, to any successor provision). Any reference in
this Agreement to a “day” or a number of “days” (without the explicit
qualification of “Business”) shall be interpreted as a reference to a calendar
day or number of calendar days.
ARTICLE II
TRANSFER OF ASSETS
     2.1 Intel Transferred Assets. Upon the terms and subject to the conditions
of this Agreement, at the Closing, Newco (or, to the extent indicated on
Schedule 2.6 of the Intel ATA Disclosure Letter, an Affiliate of Newco) shall
acquire from the Intel Transferors, and Intel shall transfer, assign and convey
to Newco (or, to the extent indicated on Schedule 2.6 of the Intel ATA
Disclosure Letter, a Subsidiary of Newco), or cause to be transferred, assigned
and conveyed by the other Intel Transferors to Newco (or an Affiliate of Newco,
in each case, as set forth on Schedule 2.6 of the Intel ATA Disclosure Letter),
free and clear of all Liens other than Permitted Liens, all right, title and
interest of the Intel Transferors in, to and under the following assets, as the
same shall exist at the Effective Time, after giving effect to any changes
therein pursuant to Sections 4.9 and 4.12 of the Master Agreement (subject to
the ultimate paragraph hereof with respect to assets transferred, assigned and
conveyed to a Intel Transferred Entity prior to the Closing) (collectively, the
“Intel Transferred Assets”):
     (a) the Intel Equipment;
     (b) the Intel Transferred Purchase Orders;
     (c) the Intel Transferred Sales Orders, including any rights that Intel or
any Subsidiary of Intel may have in any Post-Closing Accounts Receivable of
Newco and its Subsidiaries or the Intel Business (including those of the Intel
Transferred Entities);
     (d) subject to Section 2.5, the Owned Intel Real Property, the Leased Intel
Real Property, and the Intel Leases, in each case as and to the extent
contemplated by the Intel Facility Transfer Term Sheets;
     (e) subject to Section 2.5, the Intel Transferred Contracts;
     (f) the Intel Prepayments;
     (g) the Intel Transferred Patents;
     (h) the Intel Transferred Trade Secrets;
     (i) the Intel Transferred Copyrights;
     (j) the Intel Transferred Trademarks;

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     (k) the Intel Transferred Permits;
     (l) the Intel Books and Records;
     (m) the Intel Transferred Interests;
     (n) the Intel Transferred Inventory;
     (o) the Intel Transferred Claims;
     (p) the Intel Transferred Entity Books and Records;
     (q) the Intel Transferred Systems;
     (r) the licenses and other rights transferred by Intel to Newco pursuant to
the Intel Intellectual Property Agreement; and
     (s) any assets or properties listed in any new schedule to the Intel ATA
Disclosure Letter delivered to Newco pursuant to Section 4.12 of the Master
Agreement;
     provided that in no event shall the Intel Transferred Assets include any
Intel Excluded Asset.
     The Intel Transferred Intellectual Property shall be subject to any
(i) licenses retained by Intel or its Affiliates or granted to Intel or its
Affiliates pursuant to any Intel Ancillary Agreement, (ii) licenses and
Contracts with use restrictions existing on the date hereof granted to or by
Intel or its Subsidiaries and (iii) licenses and Contracts with use restrictions
entered into by Intel or its Subsidiaries in the ordinary course of business not
in violation of this Agreement prior to the Closing Date. The Intel Transferred
Intellectual Property may be further obligated (either prior to the date of the
Master Agreement or in the ordinary course of business between such date and the
Closing Date) to be non-exclusively licensed as a result of Intel’s or its
Affiliate’s participation in various Special Interest Groups (SIGs), Standard
Definition Organizations (SDOs), and similar organizations which may impose
obligations to non-exclusively license Intel Transferred Intellectual Property
to third parties. To the extent that Intel is required to ensure that successors
with respect to the Intel Transferred Patents assume such obligations to
license, Newco hereby assumes such obligations.
     Notwithstanding the foregoing, with respect to any Intel Transferred Asset
owned by a Intel Transferred Entity at the Effective Time, in lieu of
transferring such Intel Transferred Asset, Intel shall transfer, assign and
convey, or cause another Intel Transferor to transfer, assign and convey, free
and clear of all Liens other than Permitted Liens, all of the outstanding equity
interests of such Intel Transferred Entity, which interests shall be included in
the Intel Transferred Interests.
     2.2 Intel Excluded Assets. Newco and Intel expressly understand and agree
that all assets of Intel and its Subsidiaries other than the Intel Transferred
Assets (collectively, the “Intel Excluded Assets”), shall be excluded from the
Intel Transferred Assets, including, but not limited to:

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     (a) all assets, tangible or intangible, real or personal, that are not
specifically identified under Section 2.1, including all of Intel’s Intellectual
Property other than the Intel Transferred Intellectual Property;
     (b) all Contracts that are not Intel Transferred Contracts;
     (c) all Prepayments of Intel associated with Contracts that are not Intel
Transferred Contracts or other obligations not assumed by Newco;
     (d) all Pre-Closing Accounts Receivable of Intel and its Subsidiaries;
     (e) all Cash and Cash Equivalents of Intel and its Subsidiaries;
     (f) all bank accounts of Intel and its Subsidiaries, other than bank
accounts of the Intel Transferred Entities;
     (g) all Intel Employee Plans;
     (h) all Intel Excluded Claims;
     (i) all rights to or claims for refunds or credits of Taxes (including
penalties) paid by Intel or any of its Subsidiaries, or any member of any
consolidated, affiliated, combined or unitary group of which Intel is or has
been a member, other than refunds of Taxes with respect to a Post-Closing Tax
Period paid by the Intel Transferred Entities or Newco or any of its
Subsidiaries;
     (j) all rights, properties, and assets which have been used in the Intel
Business and which shall have been transferred (including transfers by way of
sale), licensed or otherwise disposed of in the ordinary course of business
(other than to Intel or any Subsidiary of Intel) prior to the Effective Time and
not in violation of the terms of this Agreement or Section 4.9 of the Master
Agreement;
     (k) except as expressly provided in Section 2.1(q), all enterprise
software, database management systems and networks of Intel or its Subsidiaries,
including all sales management, engineering, materials, business planning,
manufacturing, logistics, finance and accounting systems utilized by the Intel
Business;
     (l) the minute books, stock ledgers, accounting records, Tax Returns and
others records relating to Taxes, in each case of Intel or any of its
Subsidiaries (other than the Intel Transferred Entities), other than the Intel
Books and Records;
     (m) internal reports relating to the business activities of Intel and its
Subsidiaries that are not Intel Transferred Assets;
     (n) insurance policies and rights, claims or causes of action thereunder,
including Claims which Intel or any of its Affiliates may have under any
insurance contracts or policies insuring the Intel Transferred Assets;

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     (o) all of the assets specifically identified on Schedule 2.2(o) of the
Intel ATA Disclosure Letter; and
     (p) any asset of the Intel Transferred Entities that is not a Intel
Transferred Asset.
     On the Closing Date, immediately prior to the Closing, each Intel
Transferred Entity holding Intel Excluded Assets shall transfer, assign and
convey all of its right, title and interest in and to such Intel Excluded
Assets, including any and all intercompany Accounts Receivable of such Intel
Transferred Entity, to Intel or a Subsidiary of Intel designated by Intel, such
that no Intel Transferred Entity shall hold any Intel Excluded Asset as of the
Closing Date.
     2.3 Intel Transferred Liabilities. Upon the terms and subject to the
conditions of this Agreement and the Intel Ancillary Agreements, effective at
the Effective Time, Newco (or, to the extent indicated on Schedule 2.6 of the
Intel ATA Disclosure Letter, a Subsidiary of Newco) shall assume, and shall
fully pay, perform, fulfill and discharge when due, the following Liabilities of
Intel or its Subsidiaries, it being understood that certain of the Liabilities
set forth below may be a Liability of a Intel Transferred Entity, the interests
in which are transferred to Newco (or a Subsidiary of Newco as indicated on
Schedule 2.6 to the Intel ATA Disclosure Letter) (collectively, the “Intel
Transferred Liabilities”):
     (a) all Liabilities under or arising out of the Intel Transferred Contracts
that are required to be paid or performed on and after the Effective Time;
     (b) all Liabilities that are expressly assumed under this Agreement;
     (c) all Liabilities to the extent accruing, arising out of, or relating to
the operation and ownership of the Intel Business and the Intel Transferred
Assets by Newco and its Subsidiaries on and after the Effective Time;
     (d) all Liabilities (including any Intel Employee Agreements) that are
assumed by operation of Applicable Law related to the Intel Transferred
Employees;
     (e) any Taxes (x) of a Intel Transferred Entity, or arising from the Intel
Transferred Assets or Intel Business, in either case allocable to a Post-Closing
Tax Period, except to the extent otherwise allocated to Intel pursuant to
Section 5.8 or as described in clauses (i) and (ii) of Section 6.2(g) and
(y) otherwise allocated to Newco, pursuant to Section 5.8;
     (f) the Intel Post-Closing Product Obligations; and
     (g) all Intel Post-Closing Environmental Liabilities;
     provided that in no event shall the Intel Transferred Liabilities include
any Intel Excluded Liability.
     Notwithstanding the foregoing, with respect to any Intel Transferred
Liability owed by a Intel Transferred Entity at the Effective Time, in lieu of
the assumption by Newco of such Intel

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Transferred Liability from such Intel Transferred Entity, such Intel Transferred
Liability shall be retained at the Effective Time by such Intel Transferred
Entity, and Newco shall, or shall cause such Intel Transferred Entity, or
successor thereto, to pay or otherwise satisfy and discharge such Intel
Transferred Liability on a timely basis after the Effective Time.
     2.4 Intel Excluded Liabilities. Except for those Liabilities expressly
assumed by Newco pursuant to Section 2.3 and Section 5.8, Newco shall not assume
and shall not be liable for, and Intel shall retain and remain, as between Intel
and Newco, solely liable for and obligated to discharge, all of the debts,
expenses, contracts, agreements, commitments, obligations and other Liabilities
of any nature of Intel or any of its Subsidiaries (collectively, the “Intel
Excluded Liabilities”), including the following:
     (a) any Liability for breaches by Intel or its Subsidiaries prior to the
Effective Time of any Contract or any Liability for payments or amounts due
under any Contract prior to the Effective Time;
     (b) any Liability for Taxes attributable to or imposed upon Intel or any of
its Subsidiaries, or attributable to or imposed upon the Intel Business, the
Intel Transferred Entities or the Intel Transferred Assets for any Pre-Closing
Tax Period other than any Liability for Taxes allocated to Newco pursuant to
Section 5.8 and any Liability for Taxes otherwise allocated to Intel pursuant to
Section 5.8;
     (c) all Pre-Closing Accounts Payable of Intel and its Subsidiaries;
     (d) any and all Liabilities under Intel Employee Plans and Intel Employee
Agreements, including any Liabilities arising in connection with any
change-in-control or similar compensatory payment arrangement which is triggered
in whole or in part by the transactions contemplated by this Agreement and the
other Transaction Documents, including any retention bonus, stay bonus or
similar payment (other than the Intel Transferred Employee Payment Liabilities,
the Intel Funded Employee Plan Amounts, or those Liabilities assumed by Newco
pursuant to Section 5.11(c));
     (e) any Liabilities or obligations with respect to the Intel Business
Employees including the Intel Transferred Employees that arise prior to the
Effective Time (or, with respect to each Intel Transferred Employee, such other
date on which the Intel Transferred Employee ceases to be employed by Intel, if
later) (other than the Intel Transferred Employee Payment Liabilities, the Intel
Funded Employee Plan Amounts, or those Liabilities assumed by Newco pursuant to
Section 5.11(c));
     (f) any Liabilities or obligations with respect to any Intel Business
Employees who do not become Intel Transferred Employees and any Liabilities of
the Intel Transferred Entities with respect to any employee who does not become
a Intel Transferred Employee;
     (g) any Liability for or in respect of any Indebtedness, other than the
Contemplated Financing;
     (h) any Liability to the extent arising out of the Intel Excluded Assets;

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     (i) the Intel Pre-Closing Product Obligations;
     (j) any Liability of the Intel Transferred Entities that is not a Intel
Transferred Liability;
     (k) any Intel Pre-Closing Environmental Liabilities; and
     (l) any Liability of Intel or any of its Subsidiaries that is the subject
of any existing Proceedings as of the Closing Date, including the Proceedings
set forth in Schedule 3.7 and the claims against Intel or its Subsidiaries set
forth in Schedule 3.11 to the Intel ATA Disclosure Letter, in each case, to the
extent arising or accruing prior to the Effective Time, but in any event not
including any Liability to the extent arising or accruing after the Effective
Time.
     On the Closing Date, immediately prior to the Closing, Intel, or a
Subsidiary of Intel designated by Intel and reasonably acceptable to Newco shall
assume, and shall thereafter pay, perform, fulfill and discharge when due any
Intel Excluded Liability of each Intel Transferred Entity, including any and all
Indebtedness of, and intercompany Accounts Payable to, Intel and its
Subsidiaries, pursuant to an assumption of liability agreement in a form to be
mutually agreed between Intel and Newco (“Intel Assumption of Excluded
Liabilities”).
     2.5 Assignment of Contracts and Rights.
     (a) Anything in this Agreement or any other Transaction Document to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any Intel Transferred Contract, Intel Transferred Permit, or other Intel
Transferred Asset, or any claim, right or benefit arising thereunder or
resulting therefrom if an attempted assignment thereof, without the consent of a
party thereto or the receipt of any Governmental Approvals or the satisfaction
of any other requirement applicable to such assignment, would constitute a
breach or other contravention thereof or in any way result in the loss of any
material benefit under, or any material modification to, the rights of Newco,
Intel or any of Intel’s Subsidiaries thereunder. Intel and Newco will use
commercially reasonable efforts (but without any payment of money by Intel) to
obtain the consent of the other parties to any such Intel Transferred Contract,
Intel Transferred Permit or other Intel Transferred Asset or any claim, right or
benefit arising thereunder for the assignment thereof to Newco as Newco may
reasonably request; provided, however, that except as provided in Section 2.5 of
the Intel Intellectual Property Agreement with respect to the sublicensing of
certain Third Party Claims to Newco, Intel shall have no obligation to transfer
or assign any license of any Intellectual Property other than the Intel
Transferred Intellectual Property or any licenses granted by Intel in connection
with the sale, distribution and license of the Intel Products in the ordinary
course of business that are not Intel Transferred Contracts. Subject to the
obligations of Intel set forth in Section 5.6, Section 4.3 of the Master
Agreement, Section 2.6 of the Intel Intellectual Property Agreement, the Intel
Transition Services Agreement and the Intel Supply Agreement, Newco agrees that
Intel shall not have any liability to Newco arising out of or relating to the
failure to obtain any such consent or to satisfy any other such requirement that
may be required in connection with the transactions contemplated

7

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by this Agreement or the Intel Ancillary Agreements or because of any
circumstances resulting from any such failure; provided, however, that nothing
in this Section 2.5(a) is intended to affect Intel’s representation in Section
3.8(b) regarding Intel Contractual Consents.
     (b) If any such consent is not obtained, or any such other requirement is
not satisfied, prior to the Closing and as a result thereof Newco shall be
prevented by such third party from receiving the rights and benefits with
respect to such Intel Transferred Contract, Intel Transferred Permit or other
Intel Transferred Asset intended to be transferred hereunder, or if any
attempted assignment would adversely affect the rights of Intel or any of its
Subsidiaries thereunder so that Newco would not in fact receive all such rights
or Intel or any of its Subsidiaries would forfeit or otherwise lose the benefit
of rights that Intel or any such Subsidiary is entitled to retain, Intel and
Newco shall cooperate to discuss, determine and implement in good faith a
mutually agreeable reasonable arrangement to the extent practicable, under which
(i) Newco would obtain the economic claims, rights and benefits under such asset
and assume the economic burdens and obligations with respect thereto in
accordance with this Agreement, including potentially by subcontracting,
sublicensing or subleasing to Newco (but not more extensive than the existing
rights of Intel and its Subsidiaries with respect to the Intel Business), or
(ii) Intel would enforce for the benefit of Newco, with Newco assuming Intel’s
obligations, any and all rights of Intel and its Subsidiaries against a third
party thereto; provided, that Newco shall reimburse Intel for all reasonable
out-of-pocket expenses that are imposed on Intel and any of its Subsidiaries in
bearing such economic burdens and obligations that otherwise would have been
borne by Newco if the applicable asset had been transferred to Newco at the
Effective Time. Newco agrees that neither Intel nor any of its Subsidiaries
shall have any liability to Newco arising out of or relating to the failure to
obtain any such consent, and no condition set forth in the Master Agreement,
other than the conditions set forth in Section 5.1(f) and Section 5.2(f) shall
be deemed not satisfied, as a result of (x) the failure to obtain any such
consent or any circumstances resulting therefrom or (y) any suit, action or
proceeding commenced or threatened by or on behalf of any Person arising out of
or relating to the failure to obtain any such consent or any circumstances
resulting therefrom; provided, however, that nothing in this Section 2.5(b) is
intended to affect Intel’s representation in Section 3.8(b) regarding Intel
Contractual Consents.
     (c) No other rights are granted hereunder, by implication, estoppel,
statute or otherwise, except as expressly provided in this Agreement or in any
other Transaction Document.
     2.6 Consideration. The consideration payable at the Closing by Newco and
its Affiliates to Intel and the other Intel Transferors for the Intel
Transferred Assets shall consist of:
     (a) [45.10% of the Shares] Ordinary Shares of Newco (the “Intel Newco
Shares”), reduced by the number of Ordinary Shares purchased by Intel or its
Affiliates pursuant to the Intel Option (the “Intel Option Shares”);

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     (b) cash in the amount of $432,000,000, increased by the amount, if any, of
the consideration paid by Intel or its Affiliates for Ordinary Shares pursuant
to the Intel Option (the “Intel Cash Consideration”); and
     (c) the assumption by Newco and certain of its Subsidiaries of the Intel
Transferred Liabilities being assumed by Newco (together with the Intel Newco
Shares, the Intel Option and the Intel Cash Consideration, the “Intel
Consideration”).
Such consideration shall be allocated among Intel and the other Intel
Transferors as described in Schedule 2.6 of the Intel ATA Disclosure Letter (as
such allocation shall be determined pursuant to Section 4.13 of the Master
Agreement and attached hereto at the Closing), and shall be treated as having
been paid by Newco on behalf of certain of its Subsidiaries also as provided in
Schedule 2.6 of the Intel ATA Disclosure Letter, which Schedule 2.6 shall be
prepared in a manner consistent with the Third Party Appraisal. Each of the
Parties hereto agrees to report the transactions contemplated hereby for U.S.
federal, state and foreign Tax purposes in accordance with such allocation of
the Intel Consideration and as set forth on such schedule. Intel shall prepare
Schedule 2.6 of the Intel ATA Disclosure Letter subject to Newco’s approval,
which approval shall not be unreasonably withheld. Such schedule shall be
adjusted for any changes to the Intel Cash Consideration, in a manner consistent
with the Third Party Appraisal and otherwise as Intel determines in its
reasonable discretion.
     2.7 Inventory Adjustment to Consideration. The Intel Cash Consideration
shall be subject to adjustment after the Closing Date in accordance with the
following procedure:
     (a) Promptly after the Closing Date, Intel will prepare and present to
Newco a statement in reasonable detail of the Intel Inventory Value as of the
end of Intel’s first fiscal quarter of 2007 and as of the Effective Time (the
“Preliminary Intel Inventory Statement”). The Preliminary Intel Inventory
Statement shall be delivered to Newco no later than 90 days after the Closing
Date.
     (b) Newco and its accountants shall have the right to review the work
papers of Intel and its accountants utilized in preparing the Preliminary Intel
Inventory Statement and shall have full access to the books, records, properties
and personnel of Intel for purposes of verifying the accuracy and fairness of
the presentation of the Intel Inventory Value in the Preliminary Intel Inventory
Statement. The Preliminary Intel Inventory Statement shall be binding on Newco,
unless Newco presents to Intel written notice of disagreement with the
Preliminary Intel Inventory Statement (“Intel Notice of Disagreement”) within
120 days after the Closing Date specifying in reasonable detail the nature and
extent of the disagreement.
     (c) During the 30-day period following the delivery of a Intel Notice of
Disagreement, Intel and Newco shall seek in good faith to resolve in writing any
differences which they may have with respect to any amount specified in the
Intel Notice of Disagreement. If Newco and Intel are unable to resolve any such
disagreement within 30 days after Intel receives the Newco Notice of
Disagreement, the disagreement shall be referred for final determination to
Deloitte & Touche USA LLP or if Deloitte & Touche

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USA LLP is unable or unwilling to make such final determination, to such other
independent accounting firm as the parties shall mutually designate. The
accounting firm so designated to make the final determination is hereinafter
referred to as the “Independent Accountants.”
     (d) Intel Inventory Value as of the end of Intel’s first fiscal quarter of
2007 and as of the Effective Time shall be deemed to have been finally
determined upon the first to occur of (i) acceptance of the Preliminary Intel
Inventory Statement, (ii) Newco’s failure to object thereto within 150 days
after the Closing Date, (iii) resolution by mutual agreement of the parties
after timely delivery of the Newco Notice of Disagreement or (iv) notification
by the Independent Accountants of their final determination thereof.
     (e) If the Intel Inventory Value as of the Effective Time, as finally
determined, is less than the Minimum Committed Intel Inventory Value, the Intel
Cash Consideration shall be deemed reduced by such difference. Intel shall cause
the amount of any such reduction in the Intel Cash Consideration to be refunded
to Newco by the Intel Transferor responsible for such reduction, as determined
by Intel, within 10 days after such final determination. If the Intel Inventory
Value as of the Effective Time, as finally determined, is equal to or greater
than the Minimum Committed Intel Inventory Value, there shall be no adjustment
in the Intel Cash Consideration.
     (f) The fees and disbursements of the accountants of Newco shall be paid by
Newco. The fees and disbursements of Intel’s accountants shall be paid by Intel.
The fees and disbursements of the Independent Accountants shall be paid based on
a ratable allocation made as a part of its determination, based on the
proportion by which the amount in dispute was determined in favor of Newco or
Intel.
     2.8 Intel Transferred Employee Purchase Price Adjustment. The Intel Cash
Consideration shall be subject to adjustment after the Closing Date in
accordance with the following procedure:
     (a) Promptly after the Closing Date, Intel shall prepare a statement (the
“Intel Preliminary Closing Statement”) setting forth the Intel Transferred
Employee Payment Liabilities as of the Effective Time, and containing reasonably
detailed supporting information, documents and calculations. Intel shall use
commercially reasonable efforts to cause such preparation and review to be
completed and the Preliminary Closing Statement to be delivered to Newco within
150 days after the Closing Date. The Preliminary Closing Statement shall be
prepared by Intel from the books and records of Intel consistent with past
practice and the Intel Financial Information and in accordance with GAAP.
     (b) Newco and its accountants shall have the right to review the work
papers of Intel and its accountants utilized in preparing the Intel Preliminary
Closing Statement and shall have full access to the books, records, properties
and personnel of Intel and its Subsidiaries for purposes of verifying the
accuracy and fairness of the presentation of the information in the Intel
Preliminary Closing Statement. The Intel Preliminary Closing Statement shall be
binding on Newco, unless Newco delivers to Intel written notice of

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disagreement with any Intel Transferred Employee Payment Liabilities set forth
therein (“Notice of Disagreement”) within 150 days the Closing Date specifying
in reasonable detail the nature and extent of the disagreement, in which case
the Intel Preliminary Closing Statement shall be binding on Newco only in
respect of the Intel Transferred Employee Payment Liabilities set forth therein
which are not the subject of a Notice of Disagreement.
     (c) During the 30-day period following the delivery of a Notice of
Disagreement, Intel and Newco shall seek in good faith to resolve in writing any
differences which they may have with respect to any Intel Transferred Employee
Payment Liabilities specified in the Notice of Disagreement. If Newco and Intel
are unable to resolve any such disagreement within 30 days after Intel receives
a Notice of Disagreement, the disagreement shall be referred for final
determination to Deloitte & Touche USA LLP or if Deloitte & Touche USA LLP is
unable or unwilling to make such final determination, to such other independent
accounting firm as the parties shall mutually designate. The accounting firm so
designated to make the final determination is hereinafter referred to in this
Section 2.8 as the “Intel Cash Independent Accountants.”
     (d) The Intel Transferred Employee Payment Liabilities shall be deemed to
have been finally determined upon the first to occur of (i) Newco’s failure to
deliver to Intel a Notice of Disagreement with respect to such Intel Transferred
Employee Payment Liabilities 150 days after the Closing Date, (ii) resolution by
mutual agreement of the parties after timely delivery of a Notice of
Disagreement or (iii) notification by the Intel Cash Independent Accountants of
their final determination thereof. Within ten days after the date on which all
of the Intel Transferred Employee Payment Liabilities (as they may be revised
pursuant to this Section 2.8) shall have become final and binding (the “Final
Payment Date”), Intel shall pay Newco an amount equal to the Intel Transferred
Employee Payment Liabilities.
     2.9 Capital Expenditures.
     (a) Within 90 days after the Closing Date, Intel shall deliver to Newco a
schedule setting forth in reasonable detail the amount of all capital
expenditures made by Intel in accordance with the Intel Business Capital
Expenditures Plan between April 1, 2007 and the Closing Date (“Actual Intel
Capital Expenditures”). For purposes hereof, “Planned Intel Capital
Expenditures” means (i) the planned amount of capital expenditures set forth in
the Intel Business Capital Expenditures Plan for each fiscal quarter completed
during the period from April 1, 2007 through the end of the last full fiscal
quarter ending prior to the Closing Date plus (ii) a prorated amount equal to
the planned amount of capital expenditures set forth in the Intel Business
Capital Expenditures Plan for the fiscal quarter in which the Closing Date
occurs multiplied by a fraction the numerator of which is the number of days
elapsed in such fiscal quarter through the Closing Date and the denominator of
which is the total number of days in such fiscal quarter. In the event that the
Closing shall not have occurred on or before the expiration of the then current
Intel Business Capital Expenditures Plan, the Parties will agree in good faith
on the modification of such Intel Business Capital Expenditures Plan to add
additional planned amounts of capital expenditures for the following fiscal
quarter

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or quarters. Newco shall have full access to the Intel Books and Records, for
purposes of verifying the accuracy and fairness of the schedule of Actual Intel
Capital Expenditures delivered by Intel to Newco hereunder.
     (b) The schedule of Actual Intel Capital Expenditures shall be binding on
Newco, unless Newco presents to Intel written notice of disagreement with the
schedule of Actual Intel Capital Expenditures (“Intel Cap Ex Notice of
Disagreement”) within 150 days after the Closing Date specifying in reasonable
detail the nature and extent of the disagreement.
     (c) During the 30-day period following the delivery of a Intel Cap Ex
Notice of Disagreement, Intel and Newco shall seek in good faith to resolve in
writing any differences which they may have with respect to any amount specified
in the Intel Cap Ex Notice of Disagreement. If Newco and Intel are unable to
resolve any such disagreement within 30 days after Intel receives the Intel Cap
Ex Notice of Disagreement, the disagreement shall be referred for final
determination to Deloitte & Touche USA LLP or if Deloitte & Touche USA LLP is
unable or unwilling to make such final determination, to such other independent
accounting firm as the parties shall mutually designate. The accounting firm so
designated to make the final determination is hereinafter referred to as the
“Cap Ex Independent Accountants.”
     (d) Actual Intel Capital Expenditures as of the Effective Time shall be
deemed to have been finally determined upon the first to occur of (i) acceptance
of the schedule of Actual Intel Capital Expenditures, (ii) Newco’s failure to
object thereto within 150 days after the Closing Date, (iii) resolution by
mutual agreement of the parties after timely delivery of the Intel Cap Ex Notice
of Disagreement or (iv) notification by the Cap Ex Independent Accountants of
their final determination thereof.
     (e) In the event the Actual Intel Capital Expenditures are less than the
Planned Intel Capital Expenditures for the period from April 1, 2007 through the
Closing Date, Intel shall pay to Newco within 10 days after the final
determination the amount of the difference.
     (f) The fees and disbursements of the accountants of Newco shall be paid by
Newco. The fees and disbursements of Intel’s accountants shall be paid by Intel.
The fees and disbursements of the Cap Ex Independent Accountants shall be paid
based on a ratable allocation made as a part of its determination, based on the
proportion by which the amount in dispute was determined in favor of Newco or
Intel.
     2.10 Deliveries by Newco. Newco shall, on or before the Closing, execute
and deliver or cause to be delivered to the civil law notary (“civil law
notary”), who shall execute and deliver the notarial deed of issue in respect of
the Intel Newco Shares (with a copy to Intel):

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     (a) a certificate issued by a registered accountant as referred to in
Section 2:204b Dutch Civil Code relating to the value of the Intel Transferred
Assets to be contributed to Newco against the issuance of the Intel Newco
Shares;2
     (b) a true and complete copy of the resolutions duly and validly adopted by
the Managing Director and the shareholders of Newco evidencing their
authorization of the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby including the issuance of
the Intel Newco Shares;
     (c) a duly executed power of attorney by Newco with respect to the
execution of the notarial deed of issue of shares in respect of the Intel Newco
Shares; and
     (d) a certificate of the Managing Director certifying the names and
signatures of the Persons authorized to sign this Agreement and the other
documents to be delivered hereunder.
     2.11 Deliveries by Intel. Prior to the Closing, Intel shall deliver to the
civil law notary executing the deed of issue in respect of the Intel Newco
Shares, a duly executed power of attorney by Intel with respect to the execution
of the notarial deed of issue in respect of the Intel Newco Shares, which power
of attorney shall be legalized and affixed with an apostille and shall be
accompanied by a legal opinion certifying that the signatory or signatories of
the power has or have the authority to represent Intel with respect to the
matters to which the power pertains.3
     2.12 Closing. At the Closing:
     (a) The Intel Transferors shall deliver to Newco and its Affiliates the
Intel Bills of Sale and, Intel, through its officers, agents and employees,
will, except as set forth on Schedule 2.12(a), put Newco and its Affiliates, as
applicable, in possession of all tangible Intel Transferred Assets at the
facilities where they are located as of the Effective Time (other than such
Intel Transferred Assets that are already owned by Intel Transferred Entities);
     (b) Intel and Newco and their respective Affiliates, as applicable, each
shall execute and deliver each of the Intel Ancillary Agreements to which it is
a party and shall make any deliveries required thereunder;
 

2   This provision assumes issuance of shares in consideration of assets
contributed only to Intel, and not Intel Affiliates. If any Newco shares are
issued to Affiliates, we will need similar certificates with respect to assets
contributed by each Affiliate.   3   If Newco shares will be issued to any
Affiliates of Intel, each such Affiliate will also need to deliver a POA.

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     (c) on behalf of itself and its Affiliates, Newco shall pay to Intel for
Intel’s account and/or for the account of the applicable Intel Transferors the
Intel Cash Consideration by wire transfer of immediately available funds to a
bank account designated in writing by Intel prior to the Closing;
     (d) Newco shall instruct the civil law notary to execute the notarial deed
of issue in respect of the Intel Newco Shares and, upon the execution of such
deed (i) register or cause to be registered the issue of the Intel Newco Shares
in the share register of Newco and (ii) deliver a copy of the deed of issue in
respect of the Intel Newco Shares and the registration of such issuance in the
share register of Newco to Intel or one of its Affiliates;
     (e) Newco and Intel shall execute and deliver a delivery protocol relating
to the manner for delivery of any intangible property that is a Intel
Transferred Asset;
     (f) Intel shall deliver, or cause to be delivered, all certificates or
instruments representing the Intel Transferred Interests duly endorsed and
accompanied by necessary documentation for transfer;
     (g) Intel shall furnish Newco with the following documents regarding the
Intel Transferred Entities:
     (i) the charter documents of each Intel Transferred Entity and all
amendments thereto, duly certified by the proper officials of the jurisdiction
of organization of each such Intel Transferred Entity;
     (ii) resignations, effective on the Closing Date, of the officers and
directors of each Intel Transferred Entity, unless otherwise specified by Newco
prior to the Closing Date; and
     (iii) the complete and correct corporate minute books and reports filed
with Governmental Authorities as required by Applicable Law (including
registration of stock transfers) of the Intel Transferred Entities.
     2.13 Post Closing Registrations. Within eight days after the Closing, Newco
shall (a) file with the Commercial Register the certificate issued by the
registered accountant as referred to in Section 2.10(a) above and (b) register
with the Commercial Register the increase in its capital.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INTEL
     Subject to the exceptions that are disclosed in the Intel ATA Disclosure
Letter, Intel hereby makes the following representations and warranties to
Newco. Such representations and warranties are made to Newco as if made and
effective (a) on May 22, 2007 (except that with respect to any representation
and warranty that specifies another date, such representation and warranty shall
be made as of such specified date) and (b) as of the date hereof (except that
with

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respect to any representation and warranty that specifies another date, such
representation and warranty shall be made as of such specified date), as
follows:
     3.1 Existence and Good Standing. Each of the Intel Transferors is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization (to the extent such concept is recognized in such
jurisdiction) and has all requisite power and authority required to carry on its
business as now conducted and to own and operate the Intel Business as now owned
and operated by it. Each of the Intel Transferors is qualified to conduct
business and is in good standing in each jurisdiction in which it conducts the
Intel Business (to the extent such concept is recognized in such jurisdiction)
other than such jurisdictions where the failure to be so qualified would not
reasonably be expected to have a Intel Material Adverse Effect.
     3.2 Authorization and Enforceability. Each of the Intel Transferors has all
requisite power and authority to execute and deliver each of the Transaction
Documents to which it is or will be a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by each Intel Transferor of each of the
Transaction Documents to which it is a party, and the performance by each Intel
Transferor of its obligations contemplated hereby and thereby, have been duly
and validly authorized by all necessary corporate action. The Transaction
Documents have been duly and validly executed and delivered by the Intel
Transferor which is a party thereto and, assuming the due execution and delivery
of this Agreement and the other Transaction Documents to which it is a party by
Newco (or a Subsidiary of Newco) and the other parties thereto, this Agreement
constitutes, and each of the Transaction Documents to which a Intel Transferor
is a party constitutes, the legal, valid and binding agreement of such Intel
Transferor, enforceable against such Intel Transferor in accordance with their
respective terms, except to the extent (a) that their enforceability may be
subject to any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors’ rights generally
or to general principles of equity or (b) indemnification provisions contained
in the Shareholders’ Agreement may be limited by applicable securities laws.
     3.3 Governmental Authorization. Other than the Intel Approvals and ST
Approvals, the execution, delivery and performance by each Intel Transferor of
the Transaction Document(s) to which it is a party, and the consummation by it
of the transactions contemplated thereby, require no Governmental Approval.
     3.4 Non-Contravention.
     (a) The execution, delivery and performance by the Intel Transferors of the
Transaction Documents to which it is a party, and the consummation of the
transactions contemplated thereby, do not and will not: (i) contravene or
conflict with the certificate of incorporation, bylaws, articles of association
or other corporate organizational or governing documents of any Intel Transferor
or any Intel Transferred Entity; (ii) assuming receipt of the Intel Approvals,
contravene or conflict with or constitute a material violation of any provision
of any Applicable Law binding upon or applicable to any Intel Transferor, the
Intel Transferred Assets or the Intel Transferred Entities; or (iii) assuming
receipt of the Intel Approvals, the Newco Approvals and of the Intel Contractual
Consents, (A) constitute a default under, give rise to any right of termination,

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cancellation, modification, acceleration of, or a loss of any benefit under any
Intel Contract, including the Intel Transferred Contracts or (B) result in the
creation or imposition of any Lien (other than Permitted Liens) on any Intel
Transferred Asset, or (C) constitute a breach, default or violation of any
settlement agreement, judgment, injunction or decree, except in the case of
clause (ii) or (iii), for matters that would not reasonably be expected to have
a Intel Material Adverse Effect (provided that in determining whether a Intel
Material Adverse Effect would result, any adverse effect otherwise excluded by
clause (C) of the definition of “Intel Material Adverse Effect” shall be taken
into account).
     (b) The execution, delivery and performance by Intel of this Agreement and
the other Transaction Documents to which Intel is a party, and the consummation
of the transactions contemplated hereby and thereby, do not and will not, as of
the Closing Date, constitute a default under, give rise to any right of
termination, cancellation, modification, acceleration of, or a loss of any
material benefit under any Contract identified on Schedule 3.4(b) of the Intel
ATA Disclosure Letter; provided, however, that for the avoidance of doubt, the
Parties acknowledge and agree that the representations and warranties set forth
in this Section 3.4(b) shall not be deemed to be untrue or inaccurate in any
respect as a result of (i) any action or omission by Newco that constitutes or
results in a default by Intel or any Intel Affiliate or gives rise to any right
of termination, cancellation, modification, acceleration of, or a loss of any
material benefit under any such Contact; and (ii) any withdrawal or voiding
after the Closing of any consent granted prior to the Closing by a party to such
Contract, which withdrawal or voiding purports to have retroactive effect to the
Closing.
     3.5 Personal Property. The Intel Transferors and Intel Transferred Entities
together have good and marketable title to, or a valid and subsisting leasehold
interest in, all of the tangible personal property that is a Intel Transferred
Asset free and clear of any Lien, except for (a) Permitted Liens and (b) any
restriction contemplated by this Agreement or any of the other Transaction
Documents.
     3.6 Real Property.
     (a) Schedule 3.6(a) of the Intel ATA Disclosure Letter lists (i) the street
address of the Owned Intel Real Property and (ii) the current owner of such
Owned Intel Real Property. Intel or one of its Subsidiaries has good and
marketable fee title to the Owned Intel Real Property, free and clear of all
Liens, other than Permitted Liens.
     (b) Schedule 3.6(b) of the Intel ATA Disclosure Letter lists (i) the street
address of the Leased Intel Real Property and (ii) the identity of the lessor,
the lessee and the current occupant (if different from the lessee) of each such
parcel of Leased Intel Real Property. Intel or one of its Subsidiaries has a
valid leasehold estate in all Leased Intel Real Property, free and clear of all
Liens, other than Permitted Liens. Each of the Intel Leases (i) is valid and
binding on the Intel Transferor or Intel Transferred Entity which is party
thereto and, to the Knowledge of Intel, on the counterparties thereto, and is in
full force and effect and (ii) upon consummation of the transactions
contemplated by this Agreement and the Intel Ancillary Agreements, except to the
extent that any Intel

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Contractual Consents are not obtained, shall continue in full force and effect
without penalty or other adverse consequence. No Intel Transferor, nor any Intel
Transferred Entity, is in breach of, or default under, any Intel Lease to which
it is a party, except for such breaches or defaults that would not reasonably be
expected to have a Intel Material Adverse Effect. Except as would not reasonably
be expected to have a Intel Material Adverse Effect, to the Knowledge of Intel,
no other party to any Intel Lease is in breach thereof or default thereunder and
neither Intel nor any of its Subsidiaries has received any notice of
termination, cancellation, breach or default under any Intel Lease.
     3.7 Litigation. There is no Proceeding or to the Knowledge of Intel,
investigation pending or, to the Knowledge of Intel, threatened in writing, by
or against Intel or any of its Subsidiaries relating to the Intel Business or
any Intel Transferred Asset (a) seeking to prevent, enjoin, alter or delay the
transactions contemplated by this Agreement or any other Transaction Document or
to materially encumber any Intel Transferred Asset, or (b) that would otherwise
reasonably be expected to have a Intel Material Adverse Effect. There is no
Proceeding pending or, to the Knowledge of Intel, threatened by or against any
Intel Transferred Entity, except as would not reasonably be expected to have a
Intel Material Adverse Effect.
     3.8 Intel Transferred Contracts and Consents.
     (a) Except as would not reasonably be expected to have a Intel Material
Adverse Effect, each Intel Transferred Contract (i) is valid and binding on the
Intel Transferor or the Intel Transferred Entity which is party thereto and, to
the Knowledge of Intel, the counterparties thereto, and is in full force and
effect and (ii) upon consummation of the transactions contemplated by this
Agreement, except to the extent that any Intel Contractual Consents are not
obtained, shall continue in full force and effect without penalty or other
adverse consequence. No Intel Transferor, nor any Intel Transferred Entity is in
breach of, or default under, any Intel Transferred Contract to which it is a
party, except for such breaches or defaults that would not reasonably be
expected to have a Intel Material Adverse Effect. Except as would not reasonably
be expected to have a Intel Material Adverse Effect, to the Knowledge of Intel,
no other party to any Intel Transferred Contract is in breach thereof or default
thereunder and neither Intel, nor any of its Subsidiaries, has received any
notice of termination, cancellation, breach or default under any Intel
Transferred Contract.
     (b) Schedule 3.8(b) of the Intel ATA Disclosure Letter lists each material
Intel Transferred Contract that requires the consent of the other party or
parties thereto to be obtained by Intel or one of its Subsidiaries in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby to avoid the loss of any material benefit
under, or any material modification to, such Intel Transferred Contract (the
“Intel Contractual Consents”).
     3.9 Compliance with Applicable Laws.
     (a) Intel and its Subsidiaries have complied with any Applicable Laws
relating to the Intel Business or the operation and use of the Intel Transferred
Assets (including, in the case of the Intel Transferred Entities, Applicable
Laws relating to their

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business operations and employees) and the Intel Transferred Interests, except
where the failure to comply would not reasonably be expected to have a Intel
Material Adverse Effect. To the Knowledge of Intel, no Intel Transferor is
subject to any order, writ, injunction or decree of any Governmental Authority
directly relating to the Intel Transferred Assets. To the Knowledge of Intel, no
Intel Transferred Entity is subject to any material order, writ, injunction or
decree of any Governmental Authority.
     (b) Intel and its Subsidiaries are in possession of all Permits, except
where the failure to have, or the suspension or cancellation of, any of the
Permits would not reasonably be expected to have a Intel Material Adverse
Effect. Intel and its Subsidiaries are in compliance with all Permits and no
suspension or cancellation of any of the Permits is pending or, to the Knowledge
of Intel, threatened in writing, except, in each case, where the failure to so
comply, or the suspension or cancellation of, any of the Permits would not
reasonably be expected to have a Intel Material Adverse Effect. Except as would
not reasonably be expected to have a Intel Material Adverse Effect, (i) none of
the Intel Transferred Permits will, assuming the related Intel Approvals and
Newco Approvals have been obtained prior to the Closing Date, be terminated or
impaired or become terminable, in whole or in part, as a result of the
transactions contemplated hereby and by the Intel Ancillary Agreements and
(ii) upon consummation of such transactions, Newco or its Subsidiaries will,
assuming the related Intel Approvals and Newco Approvals have been obtained
prior to the Closing Date, have all of the right, title and interest in all of
the Intel Transferred Permits.
     (c) Except as would not reasonably be expected to have a Intel Material
Adverse Effect, the Intel Transferred Permits constitute all material
Governmental Approvals necessary for the ownership, lease or use of the Intel
Transferred Assets and the operation of the Intel Business after the Closing
Date.
     3.10 Tax Matters.
     (a) Intel has paid or caused to be paid all material Taxes relating to the
Intel Transferred Assets and Intel Business allocable (as provided in
Section 5.8(b)(iii)) to the Pre-Closing Tax Period that could become a liability
of Newco or its Subsidiaries by reason of the transfer of the Intel Transferred
Assets to Newco or its Subsidiaries as described herein or that would reasonably
be expected to result in a Lien on any Intel Transferred Assets, other than
non-delinquent Taxes incurred in the ordinary course of business since the Intel
Financial Information Date in amounts consistent with prior periods (as adjusted
for changes in Tax rates and ordinary course fluctuations in operating results).
None of the Intel Transferors has an actual or contingent liability for Taxes
that will become a liability of Newco or its Subsidiaries by reason of the
transactions described herein, other than such non-delinquent Taxes described in
the immediately preceding sentence for which Newco or its Subsidiaries may
become liable by reason of statutory successor liability (or similar liability)
under Applicable Law.
     (b) No Governmental Authority has claimed that the Intel Transferred Assets
are subject to Tax in a jurisdiction in which the required Tax Returns have not
been filed by the Intel Transferors.

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     (c) No material issues have been raised in writing in any audits,
examinations or disputes pertaining to Taxes arising from the Intel Transferred
Assets that can reasonably be expected to be raised in similar examinations of
Newco or its Subsidiaries following the Closing.
     (d) With respect to each of the Intel Transferred Entities:
     (i) Each Intel Transferred Entity has properly prepared and timely filed
all Tax Returns required by law and has timely paid all Taxes due and payable
(whether or not shown on any Tax Return). All such Tax Returns are true, correct
and complete in all material respects. Each Intel Transferred Entity has
complied in all material respects with all Applicable Laws relating to Taxes.
None of the Intel Transferred Entities (A) is a party to or bound by any closing
agreement, offer in compromise, gain recognition agreement or any other
agreement with any Governmental Authority, except for those agreements
identified on Schedule 3.10(e) of the Intel ATA Disclosure Letter, or any Tax
indemnity or Tax sharing agreement with any Person, and (B) has actual or
contingent liabilities for Taxes, other than (x) Taxes accrued as a liability in
the Intel Financial Information, or (y) non-delinquent Taxes incurred in the
ordinary course of business since the Intel Financial Information Date in
amounts consistent with prior periods (if applicable), as adjusted for changes
in Tax rates and ordinary course fluctuations in operating results.
     (ii) There are and have been no (A) proposed, threatened or actual
assessments, audits, examinations or disputes as to Taxes relating to the Intel
Transferred Entities, (B) accounting method adjustments with respect to the
Intel Transferred Entities, or (C) waivers or extensions of the statute of
limitations with respect to Taxes for which the Intel Transferred Entities would
reasonably be expected to be held liable following the date hereof. No issues
have been raised in any audits, examinations or disputes pertaining to the Intel
Transferred Entities that can reasonably be expected to be raised in similar
examinations following the Closing. To the Knowledge of Intel, there is no basis
for the assertion by a taxing authority of a material Tax deficiency against the
Intel Transferred Entities. None of the Intel Transferred Entities is liable for
Taxes of any other Person.
     (iii) Schedule 3.10(d)(iii) of the Intel ATA Disclosure Letter sets forth,
on an entity-by-entity basis, all jurisdictions in which each of the Intel
Transferred Entities is subject to Tax and the type(s) of Tax. No Intel
Transferred Entity has engaged (or been treated as engaged) in the conduct of a
trade or business or had a permanent establishment (as defined in applicable tax
treaty) in a jurisdiction with respect to which the required Tax Returns have
not been filed.
     (iv) Each Intel Transferred Entity has complied with all information
reporting and record keeping requirements under all Applicable Laws, including
retention and maintenance of required records with respect thereto.

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     (v) None of the Intel Transferred Entities is a party to any joint venture,
partnership, other arrangement or which could be treated as a partnership for
any applicable income Tax purposes.
     (vi) There is no taxable income or other measure of Tax of any of the Intel
Transferred Entities that will be reportable in the Post-Closing Tax Period that
is attributable to a transaction or event that occurred in a Pre-Closing Tax
Period.
     (vii) No position has been taken on any Tax Return with respect to the
Intel Business or the Intel Transferred Assets that is contrary to any publicly
announced position of a Governmental Authority, or that is substantially similar
to any position that a Governmental Authority has successfully challenged in the
course of an examination of a Tax Return of the Intel Transferred Entities.
     (e) Schedule 3.10(e) of the Intel ATA Disclosure Letter sets forth in
reasonable detail, as to each Intel Transferred Entity, the Intel Business and
the Intel Transferred Assets, each applicable agreement, ruling or other
arrangement with respect to Taxes entered into with or received from any
Governmental Authority, including the terms of any agreement governing the
pricing of products sold to Affiliates of Intel (each, an “Intel Tax
Agreement”). Each of Intel, its Affiliates and the Intel Transferred Entities is
in compliance with each Intel Tax Agreement in all material respects, and no
Governmental Authority has claimed or is expected to claim that any material
breach of a Intel Tax Agreement has occurred. None of Intel, its Affiliates or
the Intel Transferred Entities currently has outstanding any requests for Tax
rulings pertaining to the Intel Transferred Entities, the Intel Business or the
Intel Transferred Assets that would reasonably be expected to affect the
liability for Taxes of Newco or its Subsidiaries after the Closing Date.
     (f) The representations and warranties contained in this Section 3.10 are
the only representations and warranties being made with respect to compliance
with or liability under Applicable Laws relating to the Tax matters contemplated
by this Section 3.10.
     3.11 Intellectual Property.
     (a) All material Intel Transferred Intellectual Property is free and clear
of any Liens other than Permitted Liens. One of the Intel Transferors owns or,
to Intel’s Knowledge, is licensed to use, all works of authorship and all
associated Copyrights that are embodied in the Intel Products. One of the Intel
Transferors has good and marketable sole title to the Intel Transferred
Intellectual Property (other than with respect to any moral rights therein or
relating thereto). With respect to the Intel Transferred Intellectual Property,
Schedule 3.11(a) identifies all material exclusive licenses granted by Intel or
its Subsidiaries. Except as provided in the Intel Intellectual Property
Agreement or other Transaction Documents, upon the Closing hereof, neither Intel
nor any of its Affiliates shall retain any material rights under the Intel
Transferred Intellectual Property.

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     (b) To the Knowledge of Intel, neither (i) the current use of the Intel
Transferred Intellectual Property by Intel or any of its Subsidiaries in its
current operation of the Intel Transferred Assets nor (ii) the current
manufacture, marketing, distribution or sale of any of the Intel Products by
Intel or its Subsidiaries in their current operation of the Intel Transferred
Assets infringes any Copyrights or Trade Secret rights of any third party. To
the Knowledge of Intel, Intel has not received any written claims currently
pending from any Person claiming that the Intel Products infringe or
misappropriate the Copyrights, Trade Secrets or Patents of such Person.
     (c) Intel has taken commercially reasonable steps to protect its rights in
Trade Secrets of Intel embodied in the Intel Products including taking
commercially reasonable steps to have all of its current and former employees,
consultants and contractors employed in the Intel Business execute and deliver
to Intel a proprietary information and invention assignment agreement. To the
Knowledge of Intel, it has not received written notice of any violation of or
non-compliance with such agreements.
     (d) To Intel’s Knowledge, neither Intel nor any of its Subsidiaries is
subject to any outstanding decree, order, or judgment that (i) restricts in any
material manner the use, transfer or licensing of the Intel Transferred
Copyrights, the Intel Transferred Patents, the Intel Transferred Trade Secrets
or the Intel Products, or (ii) adjudges any of the Intel Transferred
Intellectual Property to be unenforceable or invalid.
     (e) All Intel Transferred Patents are currently in material compliance with
formal legal requirements involving the payment of fees to Governmental
Authorities (including the payment of filing, examination and maintenance fees).
To the Knowledge of Intel, there are no proceedings or actions pending before
any court or tribunal (including the PTO or equivalent authority anywhere in the
world) that involve the validity, scope or priority of Intel Transferred
Intellectual Property. None of the Intel Transferred Copyrights are registered
Copyrights.
     (f) To Intel’s Knowledge, no software source code of material proprietary
value to the Intel Business is subject to obligations of public disclosure or
distribution, under any “open source license” or otherwise.
     3.12 Employee Matters.
     (a) Pension Plans. At no time has Intel or any other Person or entity under
common control with Intel within the meaning of Section 414(b), (c), (m) or
(o) of the Internal Revenue Code of 1986 and the regulations issued thereunder,
contributed to or been obligated to contribute to any Multiemployer Plan or any
plan maintained pursuant to a collective bargaining agreement or any plan
subject to Title IV of ERISA.
     (b) Labor. No work stoppage or labor strike against Intel or any of its
Subsidiaries is pending or, to Intel’s Knowledge, threatened in writing or
reasonably anticipated with respect to the Intel Business Employees. Intel has
no Knowledge of any activities or proceedings of any labor union to organize any
Intel Business Employees who are not currently represented by a labor or trade
union or employee representative

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body. There are no actions, suits, claims, labor disputes or grievances pending,
or, to the Knowledge of Intel, threatened in writing or reasonably anticipated
relating to any labor, safety or discrimination matters involving any Intel
Business Employee, including charges of unfair labor practices or discrimination
complaints, which, if adversely determined, would reasonably be expected to have
a Intel Material Adverse Effect. Neither Intel nor any of its Subsidiaries is
presently, nor has it been in the past, a party to, or bound by, any collective
bargaining agreement, collective agreement or recognition arrangement with any
labor or trade union, works council, European works council or other employee
representative body or union contract with respect to Intel Business Employees
and no such agreement is being negotiated by Intel with respect to the Intel
Business Employees. The consent, notice or opinion of any such employee
representative body with respect to the Intel Business Employees is not required
to consummate any of the transactions contemplated by this Agreement or any of
the other Transaction Documents.
     (c) Intel Business Employee List. Schedule 3.12(c) of the Intel ATA
Disclosure Letter (i) sets forth the Intel Business Employees as of the date
hereof and identifies the country (and state, for those in the United States) in
which each such Intel Business Employee is based and primarily performs his or
her duties and (ii) identifies certain Newco Allocated Positions which shall be
offered to certain employees of Intel in accordance with Section 4.11(b) of the
Master Agreement. Schedule 3.12(c) shall be updated solely to reflect the change
in employment status of any Intel Business Employee, the amendments permitted by
Section 4.11(b) of the Master Agreement and such other changes as may reasonably
be agreed upon by the Parties.
     (d) Nature of Representations and Warranties. The representations and
warranties contained in this Section 3.12 are the only representations and
warranties being made with respect to compliance with or liability under
Applicable Laws relating to the employment matters contemplated by this
Section 3.12.
     3.13 Financial Information.
     (a) Intel has delivered to Newco copies of the estimated unaudited
consolidated statement of net revenue and direct expenses of the Intel Business
for the year ended December 30, 2006 (the “Intel Financial Information Date”)
and the related estimated net book value of the fixed assets and inventories of
the Intel Business as of the Intel Financial Information Date (collectively, the
“Intel Financial Information”). The Intel Financial Information has been
prepared internally by Intel for management reporting purposes only and has not
been audited by any independent certified public accountants or auditors.
     (b) The Intel Financial Information has been derived from the books and
records of Intel and have not been separately audited. The Intel Financial
Information does not contain all adjustments necessary to comply with GAAP. The
Intel Financial Information does not reflect the assets, liabilities, revenues
and expenses that would have resulted if the Intel Business had operated as an
unaffiliated independent company;

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provided, however, that the Intel Financial Information includes estimations for
allocation of various revenues, costs and expenses on a reasonable basis.
     3.14 Absence of Certain Changes. Since the Intel Financial Information
Date, other than with respect to the transactions contemplated by the
Transaction Documents, the Intel Business has been conducted in the ordinary
course of business, and there has not been:
     (a) (i) any sale, assignment or transfer of any of the material Intel
Transferred Assets or any license of any of the Intel Transferred Intellectual
Property, except, in each case, in the ordinary course of business and the
transfer of Intel Transferred Assets to Intel Transferred Entities as
contemplated hereby, or (ii) any creation, assumption or sufferance of (whether
by action or omission) the existence of any Lien on any of the Intel Transferred
Assets, other than Permitted Liens;
     (b) any waiver, amendment, termination or cancellation of any material
Intel Transferred Contract or any relinquishment of any material rights
thereunder by Intel or its Subsidiary which is party thereto, or, to the
Knowledge of Intel, any other party, other than, in each such case, actions
taken with respect to any such Intel Transferred Contract in the ordinary course
of business that are not material to the Intel Business;
     (c) any material change by Intel or any Subsidiary of Intel in its
accounting principles, methods or practices relating to the Intel Business or in
the manner it keeps its accounting books and records relating to the Intel
Business, except (i) any such change required by a change in GAAP or (ii) any
change that results from the audit contemplated by Section 5.2(h) of the Master
Agreement;
     (d) any damage, destruction or other casualty loss that is material to the
Intel Transferred Assets taken as a whole;
     (e) (i) any failure to make an amount of capital expenditures described in
the Intel Business Capital Expenditures Plan that is material, in the aggregate,
to the Intel Business or (ii) any incurrence of any additional Intel Transferred
Liabilities for capital expenditures that are material, in the aggregate, to the
Intel Business, except for those described in the Intel Business Capital
Expenditures Plan;
     (f) any failure to maintain the Intel Transferred Assets as a whole, in all
material respects in at least as good condition as they were being maintained on
the Intel Financial Information Date, subject to normal wear and tear;
     (g) any acquisition, directly or indirectly, of all or substantially all of
the assets of any business of or equity interests in any Person or business,
whether by merger, consolidation or otherwise, that relates to the Intel
Business;
     (h) any creation, incurrence, assumption or guarantee, or modification of
the terms, of any Indebtedness with respect to the Intel Business, other than
the Contemplated Financing, except in the ordinary course of business;
     (i) any Intel Material Adverse Effect; or

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     (j) any agreement for Intel or any of its Subsidiaries to take any of the
actions specified in paragraphs (a) through (h) above.
     3.15 Environmental Matters.
     (a) Except as would not reasonably be expected to have a Intel Material
Adverse Effect: (i) Intel and each of its Subsidiaries, in each case with
respect to the Intel Transferred Assets or the Intel Business, and each Intel
Transferred Entity is in compliance with all applicable Environmental Laws;
(ii) Intel and each of its Subsidiaries, in each case with respect to the Intel
Transferred Assets or Intel Business, and each Intel Transferred Entity has
obtained, and is in material compliance with, all Environmental Permits;
(iii) neither Intel nor any of its Subsidiaries, in each case with respect to
the Intel Transferred Assets or the Intel Business nor any Intel Transferred
Entity is conducting or funding, or is required to conduct or fund, any Remedial
Action pursuant to any Environmental Law; (iv) to Intel’s Knowledge, no property
to which a Intel Transferred Entity or, in connection with the Intel Business,
Intel has, directly or indirectly, transported or arranged for the
transportation of any Hazardous Substances is listed on any list of sites
requiring investigation or cleanup promulgated by any relevant Governmental
Authority; (v) there are no claims relating to any Environmental Law pending or,
to the Knowledge of Intel, threatened in writing against Intel or any of its
Subsidiaries, in each case with respect to the Intel Transferred Assets or the
Intel Business, or any Intel Transferred Entity; and (vi) to Intel’s Knowledge,
there has been no environmental investigation, study, audit, test, review or
other analysis conducted within the past five years that documents conditions
giving rise to any material Environmental Liability, that relates to the Intel
Transferred Assets, the Leased Intel Real Property, the Intel Business, any
Intel Transferred Entity or any other property or facility now or previously
owned or leased by Intel in connection with the Intel Business, and that has not
been delivered to Newco within at least five days of the date hereof.
     (b) The representations and warranties contained in this Section 3.15 are
the only representations and warranties being made with respect to compliance
with or liability under Environmental Laws, including natural resources, related
to the Intel Business, the Intel Transferred Assets or Intel’s or its
Subsidiaries’ ownership or operation thereof.
     3.16 Product Warranties. A copy of Intel’s product warranties currently in
effect with respect to the Intel Products as set forth in the order
acknowledgement forms for the Intel Products (the “Intel Standard Form Product
Warranties”) is set forth on Schedule 3.16 of the Intel ATA Disclosure Letter.
Neither Intel nor any of its Subsidiaries has given any written product warranty
with respect to the Intel Products other than the Intel Standard Form Product
Warranties. The Intel Products, taken as a whole, comply in all material
respects with all such product warranties and all material specifications
applicable to the Intel Products. To the Knowledge of Intel, there are no
outstanding material claims with respect to product warranties relating to the
Intel Products. As of the Closing Date, the Intel Products constitute all of the
products produced or sold by Intel or any of its Subsidiaries exclusively
related to the Intel Business.

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     3.17 Intel Transferred Assets. The Intel Transferred Assets and the assets
made available to Newco or its Subsidiaries under, or to be used by Intel and
its Subsidiaries in the performance of, the Intel Ancillary Agreements will, as
of the Closing, constitute all of the material assets (other than any
Intellectual Property) necessary for the conduct of the Intel Business as it is
conducted by Intel and its Subsidiaries as of the Closing Date.
     3.18 Customers. Schedule 3.18 of the Intel ATA Disclosure Letter lists the
names of the 10 largest customers to whom the Intel Business has sold products
during the year ended December 30, 2006 (based on dollar amount of revenue
recognized in connection with the sale of such Intel Products during such year).
To Intel’s Knowledge, neither Intel nor any of its Subsidiaries has received any
written statement from any customer whose name appears on Schedule 3.18 of the
Intel ATA Disclosure Letter that such customer will not continue as a customer
of the Intel Business after the Closing.
     3.19 Insurance. Intel has delivered to Newco summaries of all material
insurance policies and fidelity bonds relating to the Intel Transferred Assets
and the Intel Business. There are no material Claims by Intel or any of its
Subsidiaries pending under any of such policies or bonds as to which coverage
has been questioned, denied or disputed by the underwriters of such policies or
bonds or in respect of which such underwriters have reserved their rights.
     3.20 Inventories. The estimated, unaudited book value of the Intel
Transferred Inventories set forth in the Intel Financial Information were
determined in a manner not materially inconsistent with GAAP. As of the end of
Intel’s first fiscal quarter of 2007, the estimated unaudited Intel Inventory
Value is as set forth on Schedule 3.20 to the Intel ATA Disclosure Letter. Such
estimated, unaudited book value of the Intel Transferred Inventories and the
Intel Inventory Value were prepared internally by Intel for management reporting
purposes only, have not been audited by any independent certified public
accountants or auditors and are further qualified by the limitations set forth
in Section 3.13(b). Since the Intel Financial Information Date, the levels of
Intel Transferred Inventory have been maintained in the ordinary course of
business. The Intel Transferred Inventories are owned free and clear of all
Liens other than Permitted Liens.
     3.21 Advisory Fees. There is no investment banker, broker, finder or other
intermediary or advisor that has been retained by or is authorized to act on
behalf of Intel, who will be entitled to any fee, commission or reimbursement of
expenses from any Person other than Intel upon consummation of the transactions
contemplated by this Agreement.
     3.22 Representations Regarding Intel Transferred Entities and Intel
Transferred Interests.
     (a) Organization. Each Intel Transferred Entity is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
(to the extent such concept is recognized in such jurisdiction) and has all
requisite power and authority required to carry on its business as now conducted
and to own and operate the Intel Business as now owned and operated by it. Each
Intel Transferred Entity is, or will be, as of the Closing Date, qualified to
conduct business and in good standing (to the extent such concept is recognized
in such jurisdiction) in each jurisdiction in which it

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conducts the Intel Business other than such jurisdictions where the failure to
be so qualified would not reasonably be expected to have a Intel Material
Adverse Effect. The Intel Transferred Entities and their respective
jurisdictions of organization are identified on
Schedule 3.22(a).
     (b) Capitalization.
          (i) As of the Closing, the authorized share capital of the Intel
Transferred Entities shall be as set forth in Schedule 3.22(b) of the Intel ATA
Disclosure Letter, and of such authorized share capital, only the Intel
Transferred Interests shall be issued and outstanding. As of the Closing, no
other shares of the Intel Transferred Entities shall have been authorized or
designated as a series or shall be issued and outstanding. As of the Closing,
all of the Intel Transferred Interests shall have been duly authorized, validly
issued, fully paid and non-assessable, shall have been issued in material
compliance with all Applicable Laws and shall have been issued in compliance
with all applicable preemptive rights created by statute, the charter or other
governing instruments of the Intel Transferred Entities and any agreement to
which such Intel Transferred Entities are bound or by which their properties or
assets are bound.
          (ii) As of the Closing, there shall not be outstanding (A) any
options, warrants or other rights to purchase from any Intel Transferred Entity
any capital stock or other securities of such Intel Transferred Entity, (B) any
securities, notes or other indebtedness convertible into or exchangeable for
shares of such capital stock or securities, (C) any other commitments or rights
of any kind for any Intel Transferred Entity to issue additional shares of
capital stock, options, warrants or other securities or (D) any equity
equivalent or other ownership interests in any Intel Transferred Entity or
similar rights.
          (iii) As of the Closing, Intel and its Subsidiaries shall be the sole
registered and beneficial owners of the Intel Transferred Interests and the
Intel Transferred Interests shall be free and clear of all Share Encumbrances.
Upon delivery of certificates evidencing certificated Intel Transferred
Interests to Newco or a Subsidiary of Newco together with any executed share
transfer deeds or instruments for the Intel Transferred Interests necessary to
transfer the Intel Transferred Interests under Applicable Law, and payment by
Newco of the amount due and payable to Intel pursuant to Section 2.6, Newco or a
Subsidiary of Newco will acquire good and marketable title to such Intel
Transferred Interests, free and clear of any Share Encumbrance.
     (c) Ownership. Schedule 3.22(c) of the Intel ATA Disclosure Letter sets
forth the identity of each of the holders of equity interests in the Intel
Transferred Entities and their respective ownership interests in the Intel
Transferred Entities. The Intel Transferred Entities do not have any
Subsidiaries and do not, directly or indirectly, own any equity investment or
other ownership interest in any Person. No Intel Transferred Entity is a
participant in any joint venture, partnership or similar arrangement.

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     (d) Indebtedness. No Intel Transferred Entity has any outstanding
Indebtedness.
     3.23 Investment Representations.
     (a) Investigation; Economic Risk. Intel acknowledges that it has had an
opportunity to discuss the business, affairs and current prospects of Newco with
Newco’s officers. Intel further acknowledges having had access to information
about Newco that it has requested. Intel acknowledges that it is able to fend
for itself in the transactions contemplated by this Agreement and has the
ability to bear the economic risks of its investment in Newco pursuant to this
Agreement. Intel is an “accredited investor,” as such term is defined in
Rule 501 of Regulation D promulgated under the Securities Act.
     (b) Purchase for Own Account. The Intel Newco Shares will be acquired for
the account of Intel or an Affiliate of Intel, not as a nominee or agent, and
not with a view to or in connection with the sale or distribution of any part
thereof. The Intel Option Shares will be acquired for the account of the holder
of the Intel Option, not as a nominee or agent, and not with a view to or in
connection with the sale or distribution of any part thereof.
     (c) Exempt from Registration; Restricted Securities. Intel understands that
the Intel Newco Shares and Intel Option Shares will not be registered under the
Securities Act, on the basis that the sale provided for in this Agreement is
exempt from registration under the Securities Act, and that the reliance of
Newco on such exemption is predicated in part on Intel’s representations set
forth in this Agreement. Intel understands that the Intel Newco Shares and Intel
Option Shares being issued hereunder are restricted securities within the
meaning of Rule 144 under the Securities Act; that the Intel Newco Shares and
Intel Option Shares are not registered and must be held indefinitely unless they
are subsequently registered or an exemption from such registration is available.
     3.24 Disclaimer of Warranties. EXCEPT WITH RESPECT TO THE WARRANTIES AND
REPRESENTATIONS SPECIFICALLY SET FORTH IN THIS ARTICLE III (WHICH MAY BE RELIED
UPON BY NEWCO), ALL OF THE TRANSFERRED ASSETS ARE BEING SOLD “AS IS, WHERE IS,”
AND NEITHER INTEL NOR ANY OF ITS SUBSIDIARIES MAKES ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, ORAL OR WRITTEN, WHETHER OF MERCHANTABILITY,
SUITABILITY, NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY AS
TO THE TRANSFERRED ASSETS OR ANY PART OR ITEM THEREOF, OR AS TO THE CONDITION,
DESIGN, OBSOLESCENCE, WORKING ORDER OR WORKMANSHIP THEREOF, OR THE ABSENCE OF
ANY DEFECTS THEREIN, WHETHER LATENT OR OTHERWISE.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NEWCO
     Newco hereby represents and warrants to Intel, as of the date of this
Agreement, as follows:

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     4.1 Existence and Good Standing. Newco has been duly organized and is
validly existing as a private company with limited liability (besloten
vennootschap met beperkte aansprakelijkheid) under Dutch law and has all
requisite power and authority required to carry on its business as now conducted
and to own and operate its businesses as now owned and operated by it. Newco has
heretofore delivered to Intel complete and correct copies of its articles of
association and governance rules as currently in effect. Each Subsidiary of
Newco has been duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all requisite power and
authority required to carry on its business as now conducted and to own and
operate its business as now owned and operated by it. Newco has heretofore
delivered to Intel complete and correct copies of the articles of incorporation
and bylaws or other organizational documents of each Subsidiary of Newco.
     4.2 Authorization and Enforceability. Newco has all requisite corporate
power and authority to execute and deliver this Agreement and each of the
Transaction Documents to which it is or will be a party and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by Newco of this
Agreement and each of the Transaction Documents to which it is a party and the
performance by Newco of its obligations contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action. This
Agreement has been, and when executed at the Closing the other Transaction
Documents to which Newco is a party will have been, duly and validly executed
and delivered by Newco, and assuming the due execution and delivery of this
Agreement and the other Transaction Documents to which it is a party by Intel
and each of the other parties thereto, this Agreement constitutes, and as of the
Closing each of the Transaction Documents to which Newco is a party will
constitute, the legal, valid and binding agreement of Newco, enforceable against
Newco in accordance with their respective terms, except to the extent (a) that
their enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors’ rights generally or to general principles of equity or
(b) indemnification provisions contained in the Shareholders’ Agreement may be
limited by applicable securities laws.
     4.3 Non-Contravention. The execution, delivery and performance by each of
Newco and its Subsidiaries of the other Transaction Documents to which it is a
party, and the consummation of the transactions contemplated hereby and thereby,
do not and will not contravene or conflict with the articles of association or
governance rules of Newco or the organizational documents of any of its
Subsidiaries.
     4.4 Capitalization. Immediately following the Closing, the capitalization
of Newco will consist of the following:
     (a) Ordinary Shares. A total of                      Ordinary Shares of
Newco will be authorized, of which                                 shares will
be issued and outstanding, of which                      Ordinary Shares will be
held by Intel                      and Ordinary Shares will be held by ST. Newco
will have sufficient authorized share capital with respect to its Ordinary
Shares upon a conversion of the Preferred Shares in accordance with the terms
and conditions of the Shareholders Agreement and sufficient authorized share
capital with respect to its Ordinary Shares for issuance under the Equity Plan
(of which no such shares shall be subject to outstanding options, and all of
which shares shall

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be available for future issuance). The Outstanding Ordinary Shares will have
been validly issued, will be fully paid upon transfer of the Intel Transferred
Assets and the ST Transferred Assets to Newco, and will have been issued in
accordance with the registration or qualification provisions of all applicable
securities laws, or pursuant to valid exemptions therefrom.
     (b) Preferred Shares. A total of                      Preferred Shares will
be authorized, of which                      Preferred Shares will be issued and
outstanding all of which will be held by FP. The Outstanding Preferred Shares
will have been validly issued, will be fully paid upon receipt of the Purchase
Price by Newco, and will have been issued in accordance with the registration or
qualification provisions of all applicable securities laws, or pursuant to valid
exemptions therefrom.
     (c) Options, Warrants, Reserved Shares. Except for (i) the conversion
privileges of the Preferred Shares; (ii) the rights to purchase new securities
set forth in the Shareholders’ Agreement and mandatory provisions of the laws of
The Netherlands; and (iii) the Intel Option, there are no options, warrants,
conversion privileges or other rights (or agreements for any such rights)
outstanding to purchase or otherwise obtain from Newco any of Newco ‘s
securities. There exists no Newco obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any of its equity securities or any
interest therein.
     4.5 Valid Issuance of Shares.
     (a) The Intel Newco Shares and the Intel Option, when issued, sold and
delivered in accordance with the terms of this Agreement, and the Intel Option
Shares, when issued, sold and delivered in accordance with the terms of the
Intel Option, will be duly and validly issued, fully paid upon receipt of the
Exercise Price (as defined in the Intel Option), and will be free of
restrictions on transfer other than restrictions on transfer under the Equity
Transaction Documents, the laws of The Netherlands and applicable securities
laws.
     (b) The outstanding shares of Newco are duly and validly issued and fully
paid upon receipt of the Purchase Price and the consummation of the Intel Asset
Transfer Agreement and the ST Asset Contribution Agreement, and such shares of
such capital stock, and all outstanding shares, options and other securities of
Newco have been issued in full compliance with exemptions from the registration
requirements of the Securities Act, and are exempt from registration or
qualification under the registration, permit or qualification requirements of
all applicable state securities laws and all other provisions of applicable
federal and state securities laws and applicable laws of The Netherlands,
including, without limitation, anti-fraud provisions.
     4.6 Exempt Offering. Based in part upon Intel’s representations in Section
3.23, the offer and sale of the Intel Newco Shares and Intel Option pursuant to
this Agreement and the Intel Option Shares pursuant to the Intel Option are
exempt from the registration requirements of Section 5 of the Securities Act by
virtue of Regulation D thereunder, from the qualification requirements of the
California Corporate Securities Law of 1968, by virtue of Section 25102(f)

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thereof, and from the registration or qualification requirements of any other
applicable foreign or state securities laws.
     4.7 Lack of Registration Rights and Voting Agreements. Except as set forth
in the Shareholders’ Agreement, Newco has not granted or agreed to grant any
registration rights to any Person. There is no agreement or restriction relating
to the voting of any shares of Newco other than as set forth in the
Shareholders’ Agreement.
     4.8 Reliance. In executing this Agreement and the Intel Ancillary
Agreements to which it is a party, Newco and its Subsidiaries are relying on the
investigations by ST and FP (or its Affiliates), and on the provisions set forth
herein and therein and not on any other statements, presentations,
representations, warranties or assurances of any kind made by Intel, its
representatives or any other Person. Newco acknowledges that (a) the
representations and warranties of Intel contained in Article III hereof
constitute the sole and exclusive representations and warranties of Intel to
Newco in connection with this Agreement and the transactions contemplated hereby
and (b) all other representations and warranties are specifically disclaimed and
may not be relied upon or serve as a basis for a claim against Intel. NEWCO
ACKNOWLEDGES THAT INTEL DISCLAIMS ALL WARRANTIES OTHER THAN THOSE EXPRESSLY
CONTAINED IN THIS AGREEMENT AS TO THE INTEL TRANSFERRED ASSETS, WHETHER EXPRESS
OR IMPLIED, ORAL OR WRITTEN, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR
WARRANTY FOR FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR THE REPRESENTATIONS
AND WARRANTIES CONTAINED EXPRESSLY IN THIS AGREEMENT, NEWCO IS ACQUIRING THE
INTEL TRANSFERRED ASSETS ON AN “AS IS, WHERE IS” BASIS.
ARTICLE V
COVENANTS
     5.1 Access to Information.
     (a) Newco shall permit Intel to retain copies of Intel Books and Records
for its internal use or for audit, tax or regulatory purposes or for any use
required by Applicable Law and shall maintain for six years after the Closing
Date all of the Intel Books and Records pertaining to the Intel Transferred
Entities, Intel Transferred Assets and the Intel Transferred Liabilities
relating to periods prior to the Closing. Newco shall provide Intel and its
representatives, during normal business hours and upon reasonable notice from
Intel, with reasonable access to such Intel Books and Records. If, at any time
after the sixth anniversary of the Closing Date, Newco proposes to dispose of
any of such books and records, Newco shall first offer to deliver the same to
Intel at the expense of Intel.
     (b) Each Party (the “Possessing Party”) will afford the other Party (the
“Receiving Party”), its counsel and its accountants, during normal business
hours, reasonable access to information in the Possessing Party’s possession or
control relating to the Intel Transferred Assets, the Intel Transferred
Liabilities, the Intel Transferred Entities and the Intel Business, and, to the
extent reasonably requested, at the Receiving Party’s expense, will provide
copies and extracts therefrom, all to the extent that such

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access may be reasonably required by the Receiving Party in connection with
(i) the preparation of Tax Returns, (ii) compliance with the requirements of any
Governmental Authority or (iii) to facilitate the resolution of claims made by a
third party against or incurred by Intel or Newco pertaining to the Intel
Transferred Assets, the Intel Transferred Liabilities, the Intel Transferred
Entities or the Intel Business; provided, however, that nothing in this
Section 5.1(b) shall be deemed to require any Party to disclose any information
that it is prohibited from disclosing under any non-disclosure agreement entered
into prior to the date of the Master Agreement or in the ordinary course of
business after the date of the Master Agreement.
     5.2 Compliance with Terms of Governmental Approvals and Consents. From and
after the Closing Date, Newco shall comply at its own expense with all
conditions and requirements imposed on Newco as set forth in (a) Newco Approvals
that are Governmental Approvals, to the extent necessary such that all such
Governmental Approvals will remain in full force and effect assuming, if
applicable, continued compliance with the terms thereof by Intel and (b) all
Newco Approvals of Persons other than Governmental Authorities, to the extent
necessary such that all such consents and approvals will remain effective and
enforceable against the Persons giving such consents and approvals, assuming, if
applicable, continued compliance with the terms thereof by Intel.
     5.3 Use of Marks. Notwithstanding any other provision, no interest in or
right to use the name “INTEL” or any derivation thereof or any other Trademarks,
service marks or tradenames of Intel, other than the Intel Transferred
Trademarks, (the “Intel Retained Marks”) is being transferred or otherwise
licensed to Newco pursuant to the transactions contemplated by this Agreement.
Newco agrees not to use any materials bearing Intel Retained Marks or sell,
transfer or ship any products bearing Intel Retained Marks (a) unless requested
to do so by Intel, (b) except to the extent displayed on the hardcopy
(non-electronic) form of such materials delivered to Newco at the Closing,
(c) except as required under Intel Transferred Contracts with customers or
(d) except on Intel Transferred Inventory, product instructions, labeling,
containers, data sheets, specifications and any similar materials directly
related to the Intel Transferred Inventory in existence as of the Closing Date
until, in all cases, the earliest of (i) the sale or disposition of such
Inventory or other materials, (ii) such time as Newco shall have qualified the
use of its logo, Trademark or tradenames with each such customer and
(iii) 180 days after the Closing Date or such other period as is permitted under
the Intel Transition Services Agreement or the Intel Intellectual Property
Agreement solely for the purposes set forth therein. Further, dies manufactured
by or for Newco using mask sets included in the Intel Transferred Assets may
bear Intel Retained Marks only to the extent that it is not commercially
reasonable to manufacture dies using such mask sets that do not bear such Intel
Retained Marks. The foregoing rights are subject to Intel’s standard Trademark
usage guidelines, a copy of which has been provided to Newco, to any applicable
provisions of the Intel Transition Services Agreement, and to any applicable
provisions of the Intel Intellectual Property Agreement, and Intel reserves the
right to practice quality control with regard to its marks and any products or
services marketed or sold thereunder. Newco shall comply with any reasonable
instructions of which it is notified by Intel relating to Intel’s exercising of
such quality control rights. Upon the expiration of the foregoing license, all
materials bearing any Intel Retained Mark in the possession or control of Newco
or its agents shall be promptly destroyed. Prior to any distribution of any
materials bearing Intel Retained Marks, Newco shall use commercially

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reasonable efforts to redact or modify such materials in order to minimize or
eliminate the use of the Intel Retained Marks.
     5.4 Cooperation in Third Party Litigation. Each Party shall provide such
assistance and cooperation as the other Party or its counsel may reasonably
request in connection with any claims, Proceedings or investigations relating to
the Intel Business or the Intel Transferred Assets, Intel Transferred
Liabilities, Intel Transferred Entities; provided, that the Party making such
request shall reimburse each such other Party for its reasonable and documented
out-of-pocket costs and expenses in providing such assistance; provided that
such assistance shall not unreasonably interfere with the business and
operations of any such other Party.
     5.5 Assignments
     (a) Intel will reasonably cooperate with Newco in transferring applications
and registrations for the Intel Transferred Copyrights, Intel Transferred
Trademarks and the Intel Transferred Patents to the extent that Intel has
applied for or obtained registrations therefor; provided, however, that
following the Closing, subject to Section 5.4, Intel shall not have or incur any
further obligations or expenses in connection therewith, and it shall be the
sole responsibility of Newco to pursue, protect or perfect any such rights as it
may see fit in its sole discretion.
     (b) Following the Closing, in the event that (i) Intel identifies Intel
Excluded Assets that have been erroneously identified for delivery or delivered
to Newco, Newco shall use commercially reasonable efforts to return such Intel
Excluded Assets to Intel at Intel’s expense or (ii) Newco identifies Intel
Transferred Assets that any Intel Transferor has failed to deliver to Newco or a
Subsidiary of Newco or a Intel Transferred Entity, such Intel Transferor shall
use commercially reasonable efforts to deliver such Intel Transferred Assets to
Newco or such Subsidiary of Newco at Intel’s expense.
     5.6 Reasonable Efforts. Each of Newco and Intel will cooperate and use its
commercially reasonable efforts to take, or cause to be taken, all appropriate
actions (and to make, or cause to be made, all filings and notifications
necessary, proper or advisable under Applicable Law) to consummate and make
effective the transactions contemplated by this Agreement and the Transaction
Documents, including its commercially reasonable efforts to obtain, as promptly
as practicable, all licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Authorities and parties to contracts,
as are necessary for the consummation of the transactions contemplated by this
Agreement and the Transaction Documents to which it is a party.
     5.7 Allocation of Non-Tax Operating Expenses. All utility charges, gas
charges, electric charges, water charges, water rents and sewer rents, if any,
shall be apportioned between Newco and Intel as of the Closing Date, computed on
the basis of the most recent meter charges or, in the case of annual charges, on
the basis of the established fiscal year. All Prepayments (including lease
expenses but excluding Taxes and Intel Prepayments) paid by Intel prior to the
Closing Date and all other operating expenses paid by Newco with respect to the
Intel Business shall be apportioned between Newco and Intel as of the Closing
Date computed on the basis of the applicable time period to which expenses
apply. Within 90 days after the Closing, each Party

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shall present a statement to the other Party setting forth the amount of
reimbursement to which each is entitled under this Section 5.7, together with
such supporting evidence as is reasonably necessary to calculate the proration
amount. Such amount shall be paid by the Party owing it to the other within
10 days after delivery of such statement.
     5.8 Tax Matters.
     (a) Tax Returns. Intel shall prepare or cause to be prepared all Tax
Returns with respect to the Intel Transferred Assets and the Intel Business for
the Pre-Closing Tax Period, other than the Tax Returns of the Intel Transferred
Entities for taxable periods that end following the Closing Date. Newco shall
prepare or cause to be prepared all Tax Returns with respect to the Intel
Transferred Assets and the Intel Business for the Post-Closing Tax Period and of
the Intel Transferred Entities for taxable periods ending after the Closing
Date. All Tax Returns with respect to the Intel Transferred Entities, Intel
Transferred Assets or Intel Business prepared by Newco for taxable periods that
include but do not end on the Closing Date (each such period, a “Straddle
Period”) shall be prepared in a manner consistent with prior Tax Returns filed
by the Intel Transferred Entities, except as otherwise required by Applicable
Law. To the extent Intel would be liable for all or any portion of the Taxes
shown on any Straddle Period Tax Return, such Tax Return shall be provided to
Intel no later than 30 days prior to the filing thereof, and any disputes
concerning the manner in which such Tax Returns are prepared shall be resolved
as provided in Section 5.8(h). Newco shall not amend or permit to be amended any
Tax Returns with respect to a Intel Transferred Entity to the extent such
amendment could increase the liability of Intel hereunder.
     (b) Responsibility for Payment of Taxes. Except as otherwise provided in
this Section 5.8:
     (i) Intel shall be liable for and shall indemnify, defend and hold Newco
harmless from and against (A) all Taxes arising from the Intel Transferred
Assets or the Intel Business with respect to the Pre-Closing Tax Period,
including all Taxes of the Intel Transferred Entities attributable to the
Pre-Closing Tax Period to the extent not paid prior to the Closing, (B) all
Taxes imposed on any Intel Transferred Entity as a result of being or having
been a member of an affiliated, consolidated, combined, unitary, fiscal unity or
similar group of which Intel or any of its Affiliates is or was a member, other
than Taxes arising from the income, assets or operations of Newco and its
Subsidiaries during the Post-Closing Tax Period, and (C) all Taxes imposed on
any Intel Transferred Entity as a result of being or having been party to any
tax sharing, tax indemnity or tax allocation agreement or any other express or
implied agreement to indemnify any other Person for Taxes that was entered into
prior to the Closing, other than Taxes arising from the income, assets or
operations of Newco and its Subsidiaries during the Post-Closing Tax Period;
provided, however, that Taxes arising on the Closing Date by reason of actions
taken by or at the request of Newco out of the ordinary course of business
following the Closing and without the consent of Intel shall be the
responsibility of Newco.

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     (ii) Newco shall be liable for and shall indemnify, defend and hold Intel
harmless from and against all Taxes arising from the Intel Transferred Assets or
the Intel Business with respect to the Post-Closing Tax Period, including all
Taxes of the Intel Transferred Entities attributable to the Post-Closing Tax
Period, except to the extent that such Taxes are Intel’s obligation under
Section 5.8(b)(i) or are subject to indemnification from Intel pursuant to
Section 6.2(a) (but subject to Section 6.2(g)) and except for any Taxes imposed
on Intel or its Affiliates by virtue of their ownership of equity in Newco.
     (iii) Taxes with respect to any of the Intel Transferred Entities for a
Straddle Period shall be calculated by means of a closing of the books and
records of such Intel Transferred Entity as of the close of the Closing Date, as
if such Straddle Period ended as of the close of the Closing Date; provided that
exemptions, allowances or deductions that are calculated on an annual basis
(including depreciation and amortization deductions computed as if the Closing
Date was the last day of the taxable period) shall be allocated between the
portion of the period ending on the Closing Date and the portion of the period
after such day in proportion to the number of days in each such period; and,
provided, further, that personal property, ad valorem and other similar Taxes
that are not based on income, revenue, expenses or any combination thereof
(“Property Taxes”) for a Straddle Period shall be allocated between the
Pre-Closing Tax Period and the Post-Closing Tax Period in proportion to the
number of days in each such period (except as provided in the immediately
succeeding sentence). Property Taxes with respect to the Intel Transferred
Assets other than those owned by the Intel Transferred Entities shall be
allocated similarly. Intel shall be liable for the amount of such Taxes that is
attributable to the Pre-Closing Tax Period (other than to the extent of any
increase in Property Taxes attributable to the transactions described herein),
and Newco shall be liable for the proportionate amount of such Taxes that is
attributable to the Post-Closing Tax Period (including any increase in Property
Taxes attributable to the transactions described herein).
     (iv) Within a reasonable period after the Closing, and from time to time
thereafter upon the receipt by a Party of a bill, assessment or other notice of
Tax due, Intel and Newco shall present a statement to the other setting forth
the amount of reimbursement to which each is entitled under this Section 5.8(b),
together with such supporting evidence as is reasonably necessary to calculate
the amount owed. The amount owed shall be paid by the Party owing it to the
other within 10 days after delivery of such statement or, if later, 3 days prior
to the time such Taxes are required to be paid to the appropriate Governmental
Authority. In the event that either Intel or Newco makes a payment for which it
is entitled to reimbursement under this Section 5.8(b), the other Party shall
pay such reimbursement promptly, but in no event later than 30 days after the
presentation of a statement setting forth the amount of reimbursement to which
the presenting Party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement. Any payment
required under this Section 5.8(b) and not made when due shall bear interest at
the rate of 10% per annum.

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     (c) Sales and Use Taxes. All Sales Taxes incurred by Intel or its
Affiliates in connection with the transfer of Intel Transferred Assets to a
Intel Transferred Entity (whether such Sales Taxes arise upon such transfer or
upon the transfer of the underlying Intel Transferred Interests to Newco or its
Subsidiaries) shall be borne by Intel or its Affiliates (but not the Intel
Transferred Entities) to the extent such Sales Taxes exceed the Sales Taxes that
would have been incurred if the underlying Intel Transferred Assets were
transferred directly by the historical owner thereof to Newco or a Subsidiary of
Newco (located in the same jurisdiction as such Intel Transferred Entity)
without the intervening transfer to such Intel Transferred Entity. All other
Sales Taxes incurred by the Parties or their Affiliates as a consequence of the
transfer of the Intel Transferred Assets (including the Intel Transferred
Interests) to Newco shall be determined as soon as practicable after the Closing
based on the allocation described in Section 5.9 and shall be borne 50% by Newco
and 50% by Intel; provided, however, that in no event shall Newco’s share of
such Sales Taxes exceed $5,000,000. Notwithstanding the foregoing, Newco or its
Subsidiaries shall pay 100% of all Sales Taxes to the extent the payment thereof
by Newco or such Subsidiaries gives rise to a right to claim a refund of or
credit against Taxes otherwise payable by Newco or its Subsidiaries under
Applicable Law (and such amount shall not count toward the $5,000,000 cap in the
preceding sentence). To the extent permitted by Applicable Law, Newco and Intel
shall cooperate and use commercially reasonable efforts to minimize such Sales
Taxes. To the extent a taxing authority provides notice to Intel or Newco of an
audit of Sales Taxes for which the other Party has any responsibility hereunder,
the Party receiving the notice shall promptly notify the other Party. The
Parties shall cooperate as reasonably requested to defend any audit with respect
to Sales Taxes described herein, and the Party responsible therefor shall pay
when due any additional Sales Taxes ultimately assessed (together with any
interest, penalties or additions to tax with respect thereto) in the ratios
described above. Intel shall control all Sales Tax audits where Intel or its
Affiliates bear 100% of the underlying Sales Tax, and Intel and Newco shall
jointly control all other Sales Tax audits (and share equally all related
professional fees, interest, penalties and additions to tax) pertaining to the
transfer of the Intel Transferred Assets to Newco. With respect to Sales Taxes
for which the Parties bear joint responsibility hereunder, neither Party shall
settle any proposed adjustment to such Sales Taxes without the other Party’s
prior written approval, not to be unreasonably withheld or delayed.
     (d) Cooperation. As to the Taxes for which Intel is liable hereunder or
that arise in a Straddle Period, the Parties hereto agree to furnish or cause to
be furnished to one another, upon request, as promptly as practicable, such
information and assistance relating to the Intel Transferred Assets, the Intel
Business and the Intel Transferred Entities as is reasonably necessary for the
filing of all Tax Returns, the preparation for any audit by any taxing
authority, and the prosecution or defense of any claim or Proceeding relating to
any Tax Return. The Parties hereto shall cooperate with each other in the
conduct of any audit or other Proceeding related to Taxes involving the Intel
Business.
     (e) Allocation of Intel Consideration among the Intel Transferred Assets.
The Intel Consideration (including the Intel Transferred Liabilities to the
extent treated as “amount realized” for United States federal income tax
purposes) shall be allocated

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among the Intel Transferred Assets and the Intel Transferred Interests in
accordance with Schedule 5.8(e) of the Intel ATA Disclosure Letter (as such
allocation shall be determined prior to Closing and attached hereto immediately
prior to the Closing). Such schedule shall be prepared in a manner consistent
with the Third Party Appraisal. Each of the Parties hereto agrees to report the
transactions contemplated hereby for state, federal and foreign Tax purposes in
accordance with such allocation of the Intel Consideration. Intel shall prepare
Schedule 5.8(e) of the Intel ATA Disclosure Letter subject to Newco’s approval,
which approval shall not be unreasonably withheld. Such schedule shall be
adjusted for any changes to the Intel Cash Consideration, in a manner consistent
with the Third Party Appraisal and otherwise as Intel determines in its
reasonable discretion.
     (f) Treatment of Indemnity Payments. The Parties shall treat all
indemnification payments made under this Agreement as an adjustment to the Intel
Cash Consideration for applicable Tax purposes.
     (g) Tax Dispute Resolution. If the Parties are unable to resolve any
disputes regarding the content of Tax Returns for which Intel has a right of
review pursuant to Section 5.8(a), the issue or issues shall be referred for
resolution to a partner at a “Big 4” accounting firm (or other nationally
recognized accounting firm) reasonably acceptable to the Parties, who shall be
requested to resolve open issues, on the basis of the position most likely to be
sustained if challenged in a court having initial jurisdiction over the matter
(which for federal income tax issues shall be deemed to be the United States Tax
Court). The decision of such accounting firm shall be final and binding on the
Parties, and the costs of such accounting firm shall be Newco costs. If such Tax
Returns become due (taking into account extensions of time to file, which Newco
shall seek as necessary to avoid the delinquent filing of its Tax Returns) they
shall be filed as determined by Newco and shall be amended and re-filed as
required by the outcome of the referral to the accounting firm as provided
herein.
     5.9 Accounts Receivable. Following the Closing, (a) if Intel or any of its
Subsidiaries receives any payment, refund or other amount that is a Intel
Transferred Asset or is otherwise properly due and owing to Newco in accordance
with the terms of this Agreement, Intel promptly shall remit, or shall cause to
be remitted, such amount to Newco and (b) if Newco or any of its Subsidiaries
receives any payment, refund or other amount that is a Intel Excluded Asset or
is otherwise properly due and owing to Intel or any of its Subsidiaries in
accordance with the terms of this Agreement, Newco promptly shall remit, or
shall cause to be remitted, such amount to Intel. Without limiting the
foregoing, Newco shall forward to Intel, immediately upon receipt thereof, any
payments of Pre-Closing Accounts Receivable of Intel or any of its Subsidiaries,
and Intel shall forward to Newco, immediately upon receipt thereof, any payments
of Post-Closing Accounts Receivable of Newco or any of its Subsidiaries unless
otherwise set forth in the Intel Transition Services Agreement. Following the
Closing, the Parties shall cooperate in promptly advising customers to direct to
the appropriate Party any future payments by such customers. In determining
whether a payment received by either Party is a payment of an Account Receivable
of Intel or Newco, the receiving Party may rely on any invoice or contract
number referred to on the payment or in correspondence accompanying such
payment. To the extent any payment, refund or other amount received by Intel or
Newco from a customer

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or other account debtor does not specify which outstanding invoice or receivable
it is in payment of, such payment shall be applied to the earliest invoice
outstanding with respect to indebtedness of such customer or other account
debtor, except for those invoices which are subject to a dispute to the extent
of such dispute. Following the Closing, Newco will provide such cooperation as
Intel shall reasonably request in connection with Intel’s collection of
outstanding Pre-Closing Accounts Receivable of Intel and its Subsidiaries.
     5.10 Accounts Payable. To the extent that Newco receives any invoices for
Pre-Closing Accounts Payable of Intel or any of its Subsidiaries or statements
evidencing amounts owed by Intel or any of its Subsidiaries to another Person,
Newco will promptly deliver such documents to Intel. To the extent that Intel
receives any invoices for Accounts Payable of Newco or any of its Subsidiaries
or statements evidencing amounts owed by Newco or any of its Subsidiaries to
another Person, Intel will promptly deliver such documents to Newco unless
otherwise set forth in the Intel Transition Services Agreement.
     5.11 Employees.
     (a) To the greatest extent permitted by Applicable Law, Newco shall provide
service credit for all periods of service by the Intel Transferred Employees
under Newco’s employee policies and plans except to the extent such service
credit would result in the duplication of benefit accrual for the same period of
service. Newco shall be responsible for all Liabilities, salaries, benefits and
similar employer obligations that arise after Closing under Newco’s compensation
and benefit plans and policies for all Intel Transferred Employees or pursuant
to Section 2.3(d). In particular, Newco shall be responsible for liabilities
with respect to the termination of any Intel Transferred Employees by Newco
after the Closing, including health care continuation coverage with respect to
plans established or maintained by Newco after the Closing to the extent that
the Intel Transferred Employees participate therein, and damages or settlements
arising out of any claims of wrongful, constructive or illegal termination or
dismissal by Newco following the Closing, and for complying with the
requirements of all Applicable Laws with respect to any such termination by
Newco after the Closing. Subject to Section 2.3(d), Intel shall be solely
responsible for any liabilities or obligations with respect to Intel Transferred
Employees under the Intel Employee Plans or the Intel Employee Agreements that
arise following the Closing.
     (b) Non- U.S. Intel Business Employees. With respect to Intel Business
Employees located outside the United States, each of Newco and Intel agrees to
comply with all covenants, agreements and obligations set forth in
Schedule 5.11(b) of the Intel ATA Disclosure Letter.
     (c) Funded Employee Plans. To the extent that Newco is required under
Applicable Law to assume Liabilities with respect to a Intel Funded Employee
Plan relating to service of Intel Transferred Employees prior to the Closing
Date, and unless such obligations are not otherwise satisfied at or prior to the
Closing Date among Intel, Newco and the relevant Intel Transferred Employees,
Intel shall, or shall cause the applicable Intel Subsidiary to, pay to Newco an
amount in cash or cash equivalents equal to such Liabilities as of the Closing
Date as determined in accordance with this Section

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5.11(c) (the “Intel Funded Employee Plan Amount”). Intel shall, or shall cause
the applicable Intel Subsidiary to, cause the Intel Funded Employee Plan Amount
to be transferred to Newco as soon as practicable following the Closing Date,
but in no event more than 15 days following the determination of the amount due
hereunder. The Intel Funded Employee Plan Amount shall be determined in
accordance with Applicable Law and the relevant provisions of the Intel Funded
Employee Plan. To the extent required by Applicable Law or by the Intel Funded
Employee Plan, Intel shall, or shall cause the applicable Intel Subsidiary to,
require the actuary of each Intel Funded Employee Plan (each, an “Intel
Actuary”) to determine, prior to the Closing Date, the Intel Funded Employee
Plan Amount for the relevant Intel Funded Employee Plan in accordance with FAS
158 on a projected benefit obligation basis based on actuarial assumptions no
less favorable than those used in the most recent actuarial report prepared for
the relevant Intel Funded Employee Plan. The actuarial calculations and
assumptions of the Intel Actuary may be reviewed for accuracy by an actuary
designated by Newco (the “Newco Actuary”). If the Intel Actuary and the Newco
Actuary cannot reach an agreement as to the proper determination for the Intel
Funded Employee Plan Amount with respect to a Intel Funded Employee Plan, Intel
and Newco shall refer such matter to an independent third-party actuary (which
actuary shall be mutually agreeable to Intel and Newco) (the “Third Actuary”)
for resolution. Promptly, but in no event later than 45 days after such
referral, the Third Actuary shall review the Intel Actuary’s calculation of the
relevant Intel Funded Employee Plan Amount and the Newco Actuary’s objection and
calculations with respect thereto, and shall provide each of Intel and Newco a
written statement of its decision as to the issues in dispute and the
determination of the Intel Funded Employee Plan Amount. Such determination shall
be final and binding for all purposes. The fees and expenses of the Intel
Actuary and the Newco Actuary shall be borne by Intel. The fees and expenses of
the Third Actuary shall be borne equally by Intel and Newco.
     (d) Consultation Obligations. Intel and Newco shall where and to the extent
required by Applicable Law or by an applicable collective bargaining, collective
agreement, recognition arrangement or other similar agreement or arrangement
inform and consult with employees, trade unions, works councils or other
employee representative bodies regarding the transactions contemplated by this
Agreement, including the offers of employment made pursuant to the Master
Agreement.
     (e) Non-Solicitation of Employees.
     (i) Subject to Applicable Law, for two years following the Closing, without
the prior written consent of Newco, Intel shall not, nor shall it permit any of
its Subsidiaries to, directly or indirectly, recruit or solicit any employee of
Newco or any of its Subsidiaries (collectively, for purposes of this Agreement,
the “Newco Restricted Employees”) to leave his or her employment with Newco or
such Subsidiary.
     (ii) Except as (A) may be otherwise provided herein, (B) otherwise agreed
by Intel and Newco, or (C) prohibited by Applicable Law, for two years following
the Closing Date, Newco shall not, nor shall it permit any of its Subsidiaries
to, directly or indirectly, recruit or solicit (x) any employee of Intel

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or any of its Subsidiaries other than those Intel Business Employees who become
employed by Newco in accordance with the terms of the Master Agreement, (y) any
Intel Business Employee who declines an offer of employment from or objects to
his or her transfer to Newco, or (z) any employee of IM Flash Technologies, LLC,
IM Flash Singapore, LLP, or any of their respective Subsidiaries, to leave his
or her employment with Intel, IM Flash Technologies, LLC, IM Flash Singapore,
LLP, or any such Subsidiary (collectively, for purposes of this Agreement, the
“Intel ATA Restricted Employees”).
     (iii) Neither the placement of employment advertisements or other general
solicitation for employees not specifically targeted to any Newco Restricted
Employee or Intel ATA Restricted Employee, as the case may be, by any means,
including through the use of hiring agencies or through employees of each Party
who are unaware of the prohibitions against the solicitation of the Newco
Restricted Employees or Intel ATA Restricted Employees, as the case may be,
shall be a recruitment or solicitation prohibited by this Section 5.11(e)
provided that any such hiring agencies and employees are not instructed by
persons who knew about the prohibition on the solicitation of such Restricted
Employees to solicit for hire such Restricted Employees. If a Party (or any
Subsidiary thereof) inadvertently violates the prohibition against the
solicitation of Restricted Employees, such Party shall (or it shall cause its
applicable Subsidiary to), as soon as it is aware it has committed a violation
of this section, notify the other Party who formerly employed such Restricted
Employee and either withdraw any offer to the solicited individual or ensure
that such person, if hired, is restricted from working on, consulting on, or
having any knowledge with respect to matters which are designated by written
notice by the Party that formerly employed such employee in its reasonable
discretion as competitively sensitive matters, in which event such inadvertent
action shall not be deemed to be a breach of this Section 5.11(e) so long as
there is no repetitive pattern of such actions.
     (f) Newco Employee Recruitment. For a period of six months following the
Closing Date, Newco agrees to notify Intel of any employment opportunities at
Newco within a reasonable period of time before the placement of employment
advertisements or other general solicitation, including the use of hiring
agencies, with respect to such employment opportunities.
     5.12 Protection of Privacy. The Customer Data of Intel has been collected
by Intel over the Internet under the conditions set forth in the Intel Privacy
Policy attached to Schedule 5.12 of the Intel ATA Disclosure Letter (the “Intel
Privacy Policy”) and is transferred to Newco subject to the obligations set
forth in the Intel Privacy Policy. Newco covenants and agrees that it will not
use such Customer Data in any manner that conflicts with the terms of the Intel
Privacy Policy.
     5.13 Export Compliance. From and after the Closing Date, Newco shall comply
at its own expense with all conditions and requirements imposed on Newco
required to comply with all applicable U.S. Export Administration Regulations
and such other similar regulations,

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including any applicable export regulations of foreign jurisdictions, that are
imposed on the Intel Transferred Assets. Newco agrees that it will not export,
either directly or indirectly, any Intel Product or associated technology or
systems incorporating such Intel Product without first obtaining any required
license or other approval from the appropriate host Governmental Authority with
appropriate authority.
     5.14 Satisfaction of Intel Pre-Closing Product Obligations. After the
Closing, Newco agrees to satisfy any and all Intel Pre-Closing Product
Obligations. Unless otherwise agreed by the Parties in the Transaction
Documents, Newco shall, on a monthly basis, following the month in which the
transactions occur, or any other periodic basis as agreed by the Parties,
deliver to Intel a written statement of costs reasonably incurred by Newco in
satisfying any such Intel Pre-Closing Product Obligations, which statement shall
set forth all such Intel Pre-Closing Product Obligations satisfied by Newco
during such period. Promptly following receipt of such statement, Intel shall
reimburse Newco for all such costs.
     5.15 Additional Intel Financial Statements. For 12 months following the
Closing Date (or if later, the date of completion of the audit of the Intel
annual financial statements for the year in which the Closing Date occurs),
Intel shall, in good faith, use commercially reasonable efforts to assist Newco
with Newco’s preparation of such financial statements, for such periods prior to
the Closing Date as may be required for Newco to undertake a registered public
offering of debt securities or Ordinary Shares, as the case may be, it being
understood that in connection with any such registered offering Newco shall use
commercially reasonable efforts to obtain waivers from certain financial
statement requirements, provided that any failure by Newco to obtain any such
waiver shall not relieve Intel from its obligations under this Section 5.15.
Notwithstanding the foregoing, nothing herein shall obligate Intel to provide
any audited financial statement or information to Newco or to submit to an audit
by Newco’s auditors of any financial statement or information or books and
records of Intel.
     5.16 Settlement of Claims. Intel shall not settle, or make any binding
offer to settle, any material Claim or Proceeding relating to the Intel Business
unless such settlement would not encumber any assets of Newco, impose any
obligation or other Liability on Newco, impose any restriction that would apply
to Newco or the conduct of Newco’s business, or include any acknowledgment of
validity, enforceability, infringement, or Claim interpretation with regard to
any of the Intellectual Property relating to such Claim or Proceeding.
     5.17 Back-end Equipment.
     (a) From and after the Closing Date, Intel shall, and shall cause its
Subsidiaries to, retain physical possession of the D2 Equipment until the
earlier of (i) the date upon which such D2 Equipment is removed therefrom
pursuant to a Newco Removal Notice (as defined below) and (ii) 60 days after
completion of sorted wafer manufacturing for Newco using the D2 Equipment and
the receipt by Newco from Intel of written notice of such completion; provided,
however, that in the event that any Governmental Approval is required for the
removal of any of such D2 Equipment, Newco and Intel shall use their reasonable
commercial efforts to obtain such Governmental Approval as soon as practicable
after the Closing Date, and in the event that such Governmental Approvals are
not obtained within 45 days prior to the Removal

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Date set forth above, the Removal Date shall be extended to that date which is
45 days after all such Governmental Approvals have been obtained.
     (b) Newco shall use commercially reasonable efforts to make all
arrangements necessary to ensure that the D2 Equipment is removed from the
premises of Intel and its Subsidiaries as soon as reasonably practicable
following the completion of the applicable sorted wafer manufacturing set forth
in Section 5.17(a) and the receipt of notice thereof from Intel and in any event
prior to the Removal Date applicable thereto.
     (c) From and after the Closing Date until 15 days prior to each applicable
Removal Date, Newco may notify Intel in writing of Newco’s intention to remove
the D2 Equipment from the premises of Intel or its Subsidiaries. Each such
notice (a “Newco Removal Notice”) shall describe in reasonable detail the
arrangements for the removal and transportation of the D2 Equipment, including
(i) the dates on which Newco proposes to begin and complete the removal of the
D2 Equipment, (ii) the identity of any third party contractors that Newco
proposes to engage in connection therewith and (iii) a reasonable estimate of
the third party costs expected to be incurred by Newco in connection therewith.
     (d) All reasonable and documented third party costs of removing D2
Equipment from the premises of Intel or its Subsidiaries and transporting D2
Equipment to the premises of Newco or its Subsidiaries shall be borne by Intel.
Newco shall remove the D2 Equipment in its entirety from the premises of Intel
and its Subsidiaries prior to the Removal Date applicable thereto. The removal
of the D2 Equipment shall be effected during regular business hours in a manner
reasonably intended to minimize disruption and without causing damage to the
affected Intel facility. Intel shall have the right to approve in advance (which
approval shall not be unreasonably withheld or delayed) any third party
contractors that Newco proposes to engage to complete such removal or
transportation. In the event that any D2 Equipment is not removed from the
premises of Intel or its Subsidiaries prior to the Removal Date applicable
thereto, Intel may treat such D2 Equipment as abandoned property and may have
such D2 Equipment removed from the applicable Intel facility or may sell such D2
Equipment and remit the proceeds of such sale (net of all direct and indirect
costs of sale and expenses incurred by Intel and its Subsidiaries) to Newco.
     5.18 Master Agreement Covenants. Newco agrees to be bound by and shall be a
third party beneficiary of the following Sections of the Master Agreement:
Section 4.5 (Press Releases), Section 4.8 (Tax Matters), Section 4.9 (Operations
of the Intel Business Prior to the Closing), Section 4.10 (Operations of the ST
Business Prior to the Closing), Section 4.12 (Additions to and Modifications of
the Schedules), Section 4.14 (Notices of Certain Intel Events), Section 4.15
(Notices of Certain ST Events), Section 4.17 (Newco Tax Election), Section 4.19
(Cooperation with Financing), Section 4.21 (Hynix JV Matters), Section 4.22
(Facility Transfer Term Sheets), Section 4.25 (ST Litigation), Section 4.26
(Intel Litigation) and Section 4.28 (Further Assurances) of the Master Agreement
as though it were a party thereto.
     5.19 Further Assurances. Each Party agrees to execute and deliver, or cause
to be executed and delivered, such other documents, certificates, agreements and
other writings and to

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take, or cause to be taken, such other commercially reasonable actions as may be
necessary or desirable in order to consummate or implement expeditiously the
transactions contemplated by this Agreement.
     5.20 Outstanding Checks; Bank Accounts.
     (a) Intel shall cause all checks written but not cashed before the Closing
in respect of obligations of any Intel Transferred Entity to be paid.
     (b) Intel shall cause all bank accounts of the Intel Transferred Entities
to have zero balances on the Closing Date.
     5.21 Release of Liens. On the Closing Date, the Intel Transferors shall
deliver the Intel Transferred Assets to Newco and its Subsidiaries free and
clear of Liens, other than Permitted Liens, except as otherwise provided herein.
ARTICLE VI
INDEMNIFICATION
     6.1 General Survival. The representations and warranties of the Parties
contained in this Agreement and the covenants set forth in Section 4.9 of the
Master Agreement shall survive the Closing for a period of 12 months after the
Closing Date; provided, however that (a) representations and warranties set
forth in Section 3.10 (Tax Matters) shall survive until the expiration of the
statute of limitations for the collection of the Tax that is the subject of such
representation or warranty, (b) representations and warranties set forth in each
of Section 3.2 (Authorization and Enforceability), Section 3.12(a) (Pension
Plans), and Section 3.22(a) and (b) (Organization and Capitalization of the
Intel Transferred Entities) shall survive until the expiration of the applicable
statute of limitations, (c) representations and warranties set forth in
Section 3.15 (Environmental Matters) shall survive until the date that is
10 years following the Closing Date, and (d) any claim arising out of the
fraudulent misrepresentation of Intel contained in this Agreement or any other
Transaction Document shall survive until the expiration of the applicable
statute of limitations. In addition, any indemnity with respect to any Intel
Pre-Closing Environmental Liability described in Section 2.4(k) hereof shall
survive until the date that is 10 years following the Closing Date and shall
thereupon expire. Upon such expiration, unless written notice of a claim for
indemnification based on such representation, warranty, covenant or indemnity
specifying in reasonable detail the facts on which the claim is based shall have
been delivered to the Indemnitor prior to the expiration of such representation,
warranty, covenant, or indemnity, such representation, warranty, covenant or
indemnity shall be deemed to be of no further force or effect, as if never made,
and no action may be brought based on the same, whether for indemnification,
breach of contract, tort or under any other legal theory. All covenants and
agreements of the Parties otherwise set forth in this Agreement with respect to
Excluded Liabilities or actions of the Parties following the Closing shall
survive indefinitely to the extent necessary to give effect to their terms.
     6.2 Indemnification.
     (a) Indemnification Provisions for Newco. Subject to the provisions of
Section 6.1, from and after the Closing Date, the Newco Indemnitees shall be

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indemnified and held harmless by Intel from and against and in respect of any
and all Losses (as defined below) incurred by any Newco Indemnitee resulting
from:
     (i) any inaccuracy or breach of any of Intel’s representations or
warranties contained in this Agreement or in the certificates furnished to Newco
pursuant to Sections 5.2(a) and 5.3(a) of the Master Agreement (disregarding the
qualifications as to Intel Material Adverse Effect expressly set forth in such
certificates in accordance with Sections 5.2(a) and 5.3(a));
     (ii) any breach of any covenant or agreement made or to be performed by
Intel pursuant to this Agreement or any of the Sections of the Master Agreement
set forth in Section 5.18 of this Agreement;
     (iii) any failure of Intel to satisfy any Intel Excluded Liabilities; and
     (iv) any Taxes or expenses required to be paid by Intel under this
Agreement.
     (b) Indemnification Provisions for Intel. Subject to the provisions of
Section 6.1, from and after the Closing Date, the Intel Indemnitees shall be
indemnified and held harmless by Newco from and against and in respect of any
and all Losses (as defined below) incurred by any Intel Indemnitee, resulting
from:
     (i) any inaccuracy or breach of any of Newco’s representations or
warranties contained in this Agreement other than any such inaccuracy or breach
that results from any action that (A) Newco is required to take hereunder or
(B) Intel has approved under the Master Agreement;
     (ii) any breach of any covenant or agreement made or to be performed by
Newco pursuant to this Agreement;
     (iii) any failure of Newco to satisfy any Intel Transferred Liabilities,
other than the Intel Excluded Liabilities; and
     (iv) any Taxes or expenses required to be paid by Newco under this
Agreement.
     (c) For purposes of this Agreement, the term “Indemnitee” shall mean either
a Newco Indemnitee or a Intel Indemnitee, as the case may be, and the term
“Indemnitor” shall mean either Newco or Intel, as the case may be.
     (d) Notwithstanding the above, Losses shall not include expenses incurred
in connection with investigations unless a claim is made by a third party
against the Indemnitee.
     (e) No Newco Indemnitee shall be entitled to indemnification for any Losses
covered by Section 6.2(a)(i) until the aggregate amount of all such Losses of
the Newco Indemnitees shall exceed $15,000,000 (the “Intel ATA Basket”), at
which time all such

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Losses incurred in excess of the Intel ATA Basket shall be subject to
indemnification by the relevant Indemnitor hereunder. The Intel ATA Basket shall
not apply to Losses covered by Section 3.2 (Authorization and Enforceability),
Section 3.10 (Tax Matters), Section 3.12(a) (Pension Plans), Section 3.15
(Environmental Matters), Section 3.22(a) and (b) (Organization and
Capitalization of the Transferred Entities) or Sections 6.2(a)(ii)-(iv). No
Intel Indemnitee shall be entitled to indemnification for any Losses covered by
Section 6.2(b)(i) until the aggregate amount of all such losses of the Intel
Indemnitees shall exceed $15,000,000 (“Newco ATA Basket”), at which time all
such losses incurred in excess of the Newco ATA Basket shall be subject to
indemnification by the relevant Indemnitor hereunder. The Newco ATA Basket shall
not apply to Losses covered by Sections 6.2(b)(ii)-(iv).
     (f) The amount of any Losses otherwise recoverable under this Section 6.2
shall be reduced by (i) any amounts which the Indemnitees actually receive under
insurance policies, net of all reasonable and documented costs and expenses of
recovery, the Parties hereby acknowledging and agreeing that as soon as
practicable after becoming aware of such Losses and in any event prior to
payment of any amount of Losses otherwise recoverable under this Section 6.2,
the Indemnitee must first seek reimbursement for any and all Losses from any
applicable insurance coverage (and that any compensation provided under this
Agreement is not to be deemed insurance for any purpose), and (ii) any reduction
in Tax otherwise actually payable by the Indemnitees (or their Subsidiaries)
(net of related Tax and out of pocket costs incurred in connection with such
reduction) with respect to the taxable year of such Persons in which the payment
of such indemnity is due or a prior taxable year, including refunds of Taxes
(net of such Tax and other out-of-pocket costs) previously paid by such Persons
with respect to such taxable years to the extent the claim for refund may be
filed in such years.
     (g) Notwithstanding anything to the contrary in Section 6.2(a), Losses for
which Newco may claim indemnification under this Agreement shall not include
Taxes arising in Post-Closing Tax Periods, determined in the manner provided in
Section 5.8(b), except for (i) interest, penalties and additions to Tax accrued
with respect to Taxes arising in a Pre-Closing Tax Period, (ii) Losses arising
from a breach of the representation set forth in Section 3.10(d)(vi), and
(iii) Losses for Taxes that are allocated to Intel pursuant to Section 5.8.
     (h) For any additions or modifications to the schedules to the Intel ATA
Disclosure Letter made by Intel under Section 4.12(d) of the Master Agreement
(i) to correct inaccuracies of the Specified Intel Representations (including
those representations and warranties which are expressed with respect to a date
prior to the date of the Master Agreement) for facts, events or circumstances
occurring prior to or existing on and as of the date of the Master Agreement,
and, in the case of a representation or warranty made to the Knowledge of Intel,
of which Intel had Knowledge on such date), (ii) to reflect any facts, events or
circumstances which resulted from a breach of Section 4.9 of the Master
Agreement, or (iii) to update, correct or otherwise modify any of the
representations and warranties set forth in Section 3.2 (Authorization and
Enforceability), Section 3.4 (Non-contravention), Section 3.7 (Litigation),
Section 3.9 (Compliance with Applicable Laws), Section 3.10 (Tax Matters),
Section 3.11 (Intellectual Property),

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Section 3.13 (Financial Information), Section 3.14 (Absence of Certain Changes),
Section 3.17 (Intel Transferred Assets), Section 3.20 (Inventories),
Section 3.21 (Advisory Fees), Section 3.22 (Transferred Entities and Transferred
Interests), and Section 3.23 (Investment Representations), for any reason, then,
in each case, Newco shall be entitled to indemnification therefor pursuant to,
and subject to the limitations set forth in this Article VI, to the same extent
as if such additions and modifications had not been made.
     6.3 Manner of Indemnification.
     (a) Each indemnification claim shall be made only in accordance with this
Article VI.
     (b) If an Indemnitee wishes to make a claim for Losses under Article VI of
this Agreement, Indemnitee shall deliver a Notice of Claim to the applicable
Indemnitor promptly after becoming aware of the facts giving rise to such claim.
The Notice of Claim shall (i) specify in reasonable detail the nature of the
claim being made, and (ii) state the aggregate dollar amount of such claim.
     (c) Following receipt by an Indemnitor of a Notice of Claim, the Parties
shall promptly meet to agree on the rights of the respective Parties with
respect to each of such claims. If the Parties should so agree, a memorandum
setting forth such agreement shall be prepared and signed by both Parties and
amounts agreed upon shall be promptly paid. Any unresolved dispute between the
Parties shall be resolved in accordance with Section 7.10 and Section 7.11 and
the other applicable provisions of this Agreement.
     6.4 Third-Party Claims. If Newco becomes aware of a claim of a third party
(including for all purposes of this Section 6.4, any Governmental Authority)
that Newco believes, in good faith, may result in a claim by it or any other
Newco Indemnitee against Intel, Newco shall notify Intel of such claim as
promptly as practicable; provided, that any failure to so notify Intel shall not
relieve Intel of its obligations hereunder, except to the extent such failure
shall have materially adversely prejudiced Intel. Intel shall have the right,
but not the duty, to assume and conduct the defense of such claim at its
expense; provided, however, that Intel may not assume control of the defense of
a suit or proceeding involving criminal liability. Intel shall conduct such
defense in a commercially reasonable manner, and shall be authorized to settle
any such claim without the consent of Newco, provided, however, that: (a) Intel
shall not be authorized to encumber any assets of Newco or agree to any
restriction that would apply to Newco or the conduct of Newco’s business;
(b) Intel shall have paid or caused to be paid any amounts arising out of such
settlement; (c) a condition to any such settlement shall be a complete release
of Newco and any other Newco Indemnitee against whom such claim has been made
with respect to such third party claim; and (d) Intel shall not be authorized to
settle any claim that would reasonably be expected to have a material effect on
a Tax liability of Newco that is not subject to indemnification by Intel
hereunder without Newco’s consent, which consent shall not be unreasonably
withheld or delayed. With respect to any claim for which Intel assumes the
defense of Newco, Newco shall be entitled to participate in (but not control)
the defense of such third party claim, with its own counsel and at its own
expense, and Newco shall take such action as Intel shall reasonably request to
assist Intel in the defense of any such third party claim, provided that Intel
shall reimburse Newco for any reasonable out-of-pocket expenses incurred in

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taking any such requested action. If Intel does not assume the defense of any
third party claim in accordance with the provisions hereof, Newco may defend
such third party claim in a commercially reasonable manner and may settle such
third party claim after giving written notice of the terms thereof to Intel, and
such legal expenses shall be indemnifiable Losses hereunder to the extent that
Newco is determined to be entitled to indemnification hereunder for such third
party claim.
     6.5 Exclusive Remedy and Waiver and Release of Certain Claims.
     (a) Notwithstanding any other provision of this Agreement to the contrary,
the provisions of this Article VI shall be the sole and exclusive remedy for
monetary damages of the Indemnitees from and after the Closing Date for any
Losses arising under this Agreement or relating to the transactions contemplated
by this Agreement, including claims of breach of any representation or warranty
in this Agreement or any covenant set forth in Section 4.9 of the Master
Agreement; provided, however, that the foregoing clause of this sentence shall
not be deemed a waiver by any Party of any right to specific performance or
injunctive relief but shall be deemed a waiver of any rights of rescission.
Notwithstanding any other provision of this Agreement, (i) the maximum aggregate
liability of Intel to Newco Indemnitees pursuant to this Article VI or otherwise
under this Agreement, Applicable law or otherwise (other than Uncapped Intel
Losses) shall be limited to $86,400,000 (the “Intel ATA Cap”); and (ii) the
maximum aggregate liability of Newco to the Intel Indemnitees for Losses
pursuant to this Article VI or otherwise under this Agreement (other than with
respect to Losses pursuant to a breach of Section 4.2 (Authorization and
Enforceability) and Section 4.6 (Capitalization) and Losses pursuant to
Section 6.2(b)(iii)), Applicable Law or otherwise shall be limited to the Intel
ATA Cap. Nothing in this Agreement limits or otherwise affects in any way the
rights and remedies of either Party with respect to causes of action arising
under the Intel Intellectual Property Agreement, the Intel Facility Transfer
Agreements and the Intel Transition Services Agreement, or any rights and
remedies of Intel or Newco vis-à-vis any Person other than Intel or Newco or
their respective Affiliates with respect to any infringement or misappropriation
of any Intellectual Property of Intel or Newco, as the case may be (including
any right of Intel or Newco to seek equitable or injunctive relief in connection
therewith), all of which rights and remedies are expressly reserved.
Notwithstanding the foregoing, the existence of this Section 6.5 and the rights
and restrictions set forth in this Article VI do not limit any other potential
remedies of the Indemnitees with respect to fraud by any Party.
     (b) Except with respect to the specific remedies identified in
Section 6.5(a) above, the Parties hereby waive and release any and all claims,
causes of action, and rights as against one another for the transactions
contemplated by this Agreement, including the assets and liabilities that are
allocated herein, based upon statute or common law. This waiver and release
specifically includes, without in any way limiting the scope of the foregoing
waiver and release, any claims the Parties may have against one another based
upon the Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. Section 9601 et seq. or any other Applicable Law under which the
Parties or their Affiliates would otherwise have any cause of action against one
another.

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     6.6 Subrogation. If the Indemnitor makes any payment under this Article VI
in respect of any Losses, the Indemnitor shall be subrogated, to the extent of
such payment, to the rights of the Indemnitee against any insurer or third party
with respect to such Losses; provided, however, that the Indemnitor shall not
have any rights of subrogation with respect to the other Party hereto or any of
its Affiliates or any of its or its Affiliates’ officers, directors, agents or
employees.
     6.7 Damages. Notwithstanding anything to the contrary elsewhere in this
Agreement or any other Transaction Document, no Party (or its Affiliates) shall,
in any event, be liable to the other Party (or its Affiliates) for any
consequential damages, including, but not limited to, loss of revenue or income,
cost of capital, or loss of business reputation or opportunity relating to the
breach or alleged breach of this Agreement. Each Party agrees that it will not
seek punitive damages as to any matter under, relating to or arising out of the
transactions contemplated by this Agreement or the other Transaction Documents.
     6.8 Environmental Indemnification Procedures.
     (a) Intel and Newco agree that the Indemnitor shall have the sole right to
disclose, report, further investigate, negotiate, perform and settle any Intel
Facility Environmental Liability or conduct any Remedial Action in connection
therewith for which such Indemnitor may have liability hereunder, and the
Indemnitee will provide the Indemnitor access and any other rights, as
necessary, to the Owned Intel Real Property, the Leased Intel Real Property, or
any other real property under the Indemnitee’s control for purposes of
investigating and performing any such Remedial Action. Such terms of access
shall provide for reasonable protections to the Indemnitee’s operations to
minimize disruption and protect its employees. Nonetheless, if at any time
following the Closing Date, the Indemnitor has not taken action to disclose,
report, further investigate, negotiate, perform and settle any Intel Facility
Environmental Liability or conduct any Remedial Action in connection therewith
for which such Indemnitor may have liability hereunder, to the reasonable
satisfaction of the Indemnitee, then the Indemnitee will have the right, after
first providing written notice to the Indemnitor and a reasonable period for the
Indemnitor to respond (at a minimum 30 days) and subject to the rights of the
Indemnitor set forth in Section 6.8(c) below, to disclose, report, further
investigate, negotiate, perform and settle any Intel Facility Environmental
Liability or conduct any Remedial Action in connection therewith, provided that
the Indemnitor’s duty to indemnify under Section 6.1 of the Agreement for Intel
Facility Environmental Liabilities shall not apply to the extent that the
Indemnitee’s actions fail to comply with paragraph (b), below. Without limiting
the generality of the foregoing, in connection with any action taken pursuant to
the third sentence of this Section 6.8(a) the Indemnitee will, subject to the
rights of the Indemnitor pursuant to the terms of Section 6.8(c) below, have the
right to: report the results of any testing to the appropriate Governmental
Authorities if required by an applicable Environmental Law; enter the property
into a voluntary remediation or similar program; take whatever steps are
necessary to obtain a NFA Letter from the appropriate Governmental Authorities
or, in the event such Governmental Authorities do not provide a NFA Letter in
comparable situations or in the event they refuse to do so, comply with any
obligations of any Applicable Law, including any Environmental Law, in effect at
the time; and respond to any claim by any third party

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with respect to any Intel Facility Environmental Liability, provided that the
Indemnitor’s duty to indemnify under Section 6.1 of the Agreement for Intel
Facility Environmental Liabilities shall not apply to the extent that the
Indemnitee’s actions fail to comply with paragraph (b), below.
     (b) The Parties agree that any Remedial Action undertaken by Intel or Newco
to obtain any NFA Letter (to the extent permitted by the Governmental Authority
issuing such NFA Letter) or comply with any Applicable Law, including any
Environmental Law, in effect at the time: shall employ a reasonably
cost-effective method under the circumstances, based on the use of the property
for industrial (as opposed to residential or commercial) purposes, shall not
exceed the least stringent requirement imposed by any clearly applicable
Environmental Laws in effect at the time, including as applicable, within the
context of obtaining a NFA Letter or complying with Applicable Law, shall make
reasonable use of institutional and engineering controls reasonably acceptable
to both Newco and Intel, such as deed restrictions, signs, fencing, buffers, and
controls, to the extent permitted by Governmental Authorities, provided that
such institutional and engineering controls shall not (i) unreasonably restrict
or limit the industrial activities currently being performed and those which
Intel or Newco expects to perform on any Owned Intel Real Property or any Leased
Intel Real Property or associated services shared in any fashion between Intel
and Newco, or (ii) fail to address a material risk of off-site migration of any
Hazardous Substances, and shall take advantage of applicable risk assessment
principles, where practicable, set forth in applicable Environmental Laws in
effect at the time.
     (c) After the Closing, on any Remedial Action that either Party undertakes
pursuant to the third sentence of Section 6.8(a), the acting Party shall:
     (i) cooperate with the other Party as much as possible, including, but not
limited to, keeping the other Party reasonably informed related to the progress
of such matters (including, providing the other Party with copies of material
plans, reports and external correspondence), permitting the other Party to be
present at the property during, and providing Intel reasonable advance notice
prior to, the execution of any significant Remedial Actions (including testing),
and ensuring that the other Party is provided reasonable advance notice of any
scheduled voice or in-person conferences with regulators or other third parties;
     (ii) ensure that such conferences are held on dates, and at places and
times, mutually convenient to the other Party, that the other Party is provided
all relevant information relating to such conferences, as and when generated or
received by the acting Party (but in all events reasonably far in advance of any
conference to permit the other Party’s informed participation therein), and that
Intel and its agents are afforded a reasonable opportunity to participate
therein. The Parties shall use reasonable efforts, including by making their
respective agents available on a mutually convenient basis, to work together on
the strategy and conduct of such conferences; and

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     (iii) ensure that the other Party is given the opportunity to obtain
duplicate soil, groundwater and other samples if such samples are taken in
connection with any Remedial Action (including testing).
ARTICLE VII
MISCELLANEOUS
     7.1 Notices. All notices and other communications pursuant to this
Agreement shall be in writing and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by U.S.
registered or certified mail (return receipt requested), postage prepaid, to the
Parties at the addresses set forth below or to such other address as the Party
to whom notice is to be given may have furnished to the other Party in writing
in accordance herewith. Any such notice or communication shall be deemed to have
been delivered and received (a) in the case of personal delivery, on the date of
such delivery, (b) in the case of telecopier, on the date sent if confirmation
of receipt is received and such notice is also promptly mailed by registered or
certified mail (return receipt requested), (c) in the case of a
nationally-recognized overnight courier in circumstances under which such
courier guarantees next Business Day delivery, on the next Business Day after
the date when sent and (d) in the case of mailing, on the fifth Business Day
following that on which the piece of mail containing such communication is
posted to the address provided herein or to such other address as the Person to
whom notice is given may have previously furnished to the others in writing in
the manner set forth above. Any Party hereto may give any notice, request,
demand, claim or other communication hereunder using any other means (including
ordinary mail or electronic mail), but no such notice, request, demand, claim or
other communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Notices to
Parties pursuant to this Agreement shall be given:
if to Intel, to:

Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95054
Attention: Treasurer
Telephone: (408) 765-8080
Fax: (408) 765-6038
with a copy to:
Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95054
Attention: General Counsel
Telephone: (408) 765-8080
Fax: (408) 653-8050

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and a copy to (which shall not constitute notice to Intel):
Gibson, Dunn & Crutcher LLP
1881 Page Mill Rd.
Palo Alto, CA 94304
Attention: Russell C. Hansen
Telephone: (650) 849-5300
Fax: (650) 849-5333
if to Newco, to:
[Newco]
                                                            
                                                            
                                                            
Attention:
Telephone: (                    )                                          
Fax: (                    )                                          
with a copy to (which shall not constitute notice to Newco):
ST Microelectronics N.V.
Chemin du Champ-des-Filles, 39
1228 Plan-les-Ouates
Geneva, Switzerland
Attention: Pierre Ollivier, Group Vice President and General Counsel
Telephone: 41 22 929 58 76
Fax: 41 22 929 59 06
with copies to (which shall not constitute notice to Newco or ST)
ST Microelectronics N.V.
1310 Electronics Drive
Mail Station
Carollton, TX 75006
Attention: Steven K. Rose, Vice President, Secretary and General Counsel
Telephone: (972) 466-6412
Fax: (972) 466-7044
Shearman & Sterling LLP
525 Market Street
San Francisco, CA 94105
Attention: John D. Wilson
Telephone: (415) 616-1100
Facsimile: (415) 616-1199

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with copies to (which shall not constitute notice to Newco)
Francisco Partners
2882 Sand Hill Road
Suite 289
Menlo Park, CA 94025
Attention: David ibnAle
Telephone: (650) 233-2900
Fax: (650) 233-2999
Francisco Partners
40 Berkeley Square
London W1J 5AL
United Kingdom
Attention: Phokion Potamianos
Telephone: 44 0 207 907 8600
Fax: 44 0 207 907 8650
with a copy to (which shall not constitute notice to Newco or FP)
Davis Polk & Wardwell
1600 El Camino Real
Menlo Park, CA 94025
Attention: William M. Kelly
                  Martin A. Wellington
Telephone: (650) 752-2000
Facsimile: (650) 752-2112
     7.2 Amendments; Waivers.
     (a) Any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by all Parties, or in the case of a waiver, by the Party against whom
the waiver is to be effective.
     (b) No waiver by a Party of any default, misrepresentation or breach of a
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation or breach of a
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent occurrence. No failure or delay by a Party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided under Applicable Law.

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     7.3 Expenses. Except as set forth in Section 5.8(c) hereof and Section 7.3
of the Master Agreement, all costs and expenses incurred in connection with this
Agreement and the other Transaction Documents and in closing and carrying out
the transactions contemplated hereby and thereby shall be paid by the Party
incurring such cost or expense.
     7.4 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective successors, heirs, personal
representatives and permitted assigns. No Party hereto may transfer or assign
either this Agreement or any of its rights, interests or obligations hereunder,
whether directly or indirectly, by operation of law, merger or otherwise,
without the prior written approval of each other Party; provided, however, that
Newco may assign, delegate or transfer in whole or in part its rights and
interests under this Agreement and the Transaction Documents to any of its
lenders for collateral assignment purposes. No such transfer or assignment shall
relieve the transferring or assigning Party of its obligations hereunder if such
transferee or assignee does not perform such obligations.
     7.5 Governing Law. This Agreement shall be construed in accordance with and
this Agreement and any disputes or controversies related hereto shall be
governed by the internal laws of the State of New York without giving effect to
the conflicts of laws principles thereof that would apply the laws of any other
jurisdiction.
     7.6 Counterparts; Effectiveness. This Agreement may be signed in any number
of counterparts and the signatures delivered by telecopy, each of which shall be
an original, with the same effect as if the signatures were upon the same
instrument and delivered in person. This Agreement shall become effective when
each Party hereto shall have received a counterpart hereof signed by the other
Parties.
     7.7 Entire Agreement. This Agreement (including the schedules and exhibits
referred to herein, which are hereby incorporated by reference), the other
Transaction Documents and the Confidentiality Agreement constitute the entire
agreement between the Parties with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings and negotiations,
both written and oral, express or implied, between and among the Parties with
respect to the subject matter of this Agreement. No representation, warranty,
promise, inducement or statement of intention has been made by either Party that
is not embodied in this Agreement or such other documents, and neither Party
shall be bound by, or be liable for, any alleged representation, warranty,
promise, inducement or statement of intention not embodied herein or therein.
     7.8 Captions. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
     7.9 Severability. If any provision of this Agreement, or the application
thereof to any Person, place or circumstance, shall be held by a court of
competent jurisdiction to be invalid, unenforceable or void, the remainder of
this Agreement and such provisions as applied to other Persons, places and
circumstances shall remain in full force and effect only if, after excluding the
portion deemed to be unenforceable, the remaining terms shall provide for the
consummation of the transactions contemplated hereby in substantially the same
manner as originally set forth at the later of the date this Agreement was
executed or last amended.

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     7.10 Dispute Resolution.
     (a) With the exception of disputes involving intellectual property
ownership and infringement issues, and disputes governed by Section 2.7,
Section 2.8, Section 2.9 or Section 5.8(g) hereof, any dispute arising under
this Agreement shall be finally resolved by arbitration. The Parties waive their
right to any form of appeal to a court on any questions of law arising out of
the arbitration award. Any dispute or claim between the Parties which is beyond
the scope of this Section shall be submitted to the exclusive jurisdiction of
the courts of the State of New York and the Federal courts of the United States
of America located in the State of New York. The Parties hereby consent to and
grant any such court jurisdiction over such Parties and over the subject matter
of such dispute and agree that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 7.1 or in
such other manner as may be permitted by Applicable Law, shall be valid and
sufficient service thereof.
     (b) Mediation. Prior to arbitration, however, the Party making the original
claim shall provide the other Party with a written description of the dispute or
claim and the senior executives of the Parties shall meet in an attempt to
resolve such dispute or claim. If the disagreements cannot be resolved by the
senior management after 90 days from the date any Party made a written demand
for resolution, a binding arbitration shall be held.
     (c) Arbitration Rules. The rules of the arbitration shall be agreed upon by
the Parties prior to the arbitration and shall be based upon the nature of the
disagreement. To the extent that the Parties cannot agree on the rules of the
arbitration after 30 days from the date any party makes a written demand for
resolution, then, subject to Section 7.10(d), the Rules of Arbitration of the
ICC in effect as of the Closing Date shall apply.
     (d) Mandatory Rules. As a minimum set of rules in the arbitration the
Parties agree as follows:
     (i) The arbitration shall be held by one arbitrator appointed by mutual
agreement of the Parties. If the Parties cannot agree on a single arbitrator
within 15 days from the date written demand for arbitration has been received by
the other Party, each Party shall identify one independent individual. The
individuals appointed by the Parties shall then meet to appoint a single
arbitrator. If an arbitrator still cannot be agreed upon within an additional
15 day period, he or she shall be appointed by the ICC.
     (ii) The place of arbitration shall be New York, New York. Hearings and
meetings shall be held in New York or at such other place as the Parties may
agree.
     (iii) The English language shall be used in the proceedings. Documents and
written testimonies may be submitted in any language provided that the Party
submitting such documents and testimonies shall provide, at its own expense, a
translation of the same in the English language.

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     (iv) The arbitrator shall specify the basis for the award, the basis for
the damages award and a breakdown of the damages awarded, and the basis of any
other remedy authorized under this section. The award shall be considered as a
final and binding resolution of the dispute or claim.
     (v) The Parties agree to maintain the confidentiality of the arbitral
proceedings, the existence of the same and the status of the hearings. In
addition, the Parties undertake to maintain the confidentiality of any document
exchanged in, produced in, or created by the Parties for the arbitration
proceedings as well as the confidentiality of the award. Notwithstanding the
foregoing, if the disclosure of the arbitral proceedings, or of any of the
documents exchanged in, produced in or created for the arbitration proceedings
or if the disclosure of the award is required by applicable law, rule or
regulation or is compelled by a court or governmental agency, authority or body:
(A) the Parties shall use the legitimate and legal means available to minimize
the scope of their disclosure to third parties; and (B) the Party compelled to
make the disclosure shall inform the other Party and the arbitrator at least 20
Business Days in advance of the disclosure (or if 20 Business Days’ notice is
not practicable because the Party is required to make the disclosure less than
20 Business Days after becoming aware of the event or occurrence giving rise to
such disclosure requirement, then notice to the other Party and the arbitrator
shall be provided as soon as practicable after such event or occurrence).
     (vi) The duty of the Parties to arbitrate any dispute or claim within the
scope of this Section shall survive the expiration or termination of this
Agreement for any reason. The Parties specifically agree that any action must be
brought, if at all, within two years from discovery of the cause of action.
     (vii) The discretion of the arbitrator to fashion remedies shall be no
broader than the legal and equitable remedies available to a court (unless the
parties expressly agree otherwise prior to the start of arbitration). In no
event, however, shall the arbitrator award a remedy which enjoins a Party or its
customers to stop manufacturing, using, marketing, selling, offering for sale,
or importing such Party’s products. In addition, notwithstanding anything herein
to the contrary, in no event, shall the arbitrator award a remedy which enjoins
a Party to license to the other Party any of its intellectual property rights of
whatever nature. The arbitrator will have no authority to award damages in
excess of compensatory damages and each Party expressly waives and foregoes any
right to punitive, exemplary or similar damages, except as such damages may be
required by statute. In no event shall the amount of damages awarded to the
prevailing Party exceed or otherwise be inconsistent with any of the applicable
limitations on damages set forth in this Agreement, including Sections 6.2 and
6.5.
     (viii) The arbitrator may not order any conservatory or interim relief
measures of any kind. In any event, however, either Party may apply for
conservatory or interim relief measures to the courts of the State of New York
or

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the Federal courts of the United States of America located in the State of New
York which shall have exclusive jurisdiction to grant such injunctive relief.
     (ix) The Parties shall agree upon what, if any, disclosure to the other
parties to the arbitration shall be permitted. If the Parties can not agree on
the form of disclosure within 30 days after the appointment of the arbitrator,
then the Parties agree that in addition to the Rules of Arbitration of the ICC,
the arbitrators shall apply the IBA Rules of Evidence. In case of conflict
between Rules of Arbitration of the ICC and the IBA Rules of evidence, the Rules
of Arbitration of the ICC shall prevail. Notwithstanding anything herein to the
contrary, in no event shall anything verbally or in writing used strictly for
settlement purposes between the Parties be permitted by the arbitration to be
used as evidence for either Party’s case.
     (x) The Parties shall equally bear the costs of the arbitration. Each Party
shall bear the fees and expenses of its appointed experts and shall bear its own
legal expenses. For the purpose of this clause, the term “costs of arbitration”
includes only: (A) the fees and expenses of the arbitrator; (B) in the case of
an arbitration governed by the ICC Rules, the ICC administrative expenses fixed
by the Court of Arbitration of the ICC; and (C) the fees and expenses of any
experts appointed by the arbitrator.
     7.11 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (b) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (c) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (d) EACH
SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.11.
     7.12 Third Party Beneficiaries. Notwithstanding any other provision in this
Agreement to the contrary, neither ST nor FP shall be deemed to be a third party
beneficiary under this Agreement for any purpose. No provision of this Agreement
shall create any third party beneficiary rights in any other Person, including
any employee or former employee of Intel or ST or any of their respective
Affiliates (including any beneficiary or dependent thereof).
     7.13 Specific Performance. The Parties hereby acknowledge and agree that
the failure of any Party to perform its agreements and covenants hereunder,
including its failure to take all actions as are necessary on its part to the
consummation of the transactions contemplated herein,

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may cause irreparable injury to the other Party, for which damages, even if
available, may not be an adequate remedy. Accordingly, each Party hereby
consents to the issuance of injunctive relief by any court of competent
jurisdiction to compel performance of such Party’s obligations and to the
granting by any court of the remedy of specific performance of its obligations
hereunder.
     7.14 No Presumption Against Drafting Party. Intel and Newco acknowledge
that Intel and each of the other shareholders of Newco have been represented by
counsel in connection with the negotiation and execution of this Agreement and
the other Transaction Documents. Accordingly, any rule of law or any legal
decision that would require interpretation of any claimed ambiguities in this
Agreement against the drafting party has no application and is expressly waived.
[Remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, the Parties hereto have caused this Intel Asset
Transfer Agreement to be duly executed and delivered as of the date set forth
above.

                  INTEL CORPORATION    
 
           
 
  By:        
 
     
 
   
 
  Name:        
 
     
 
   
 
  Title:        
 
     
 
   
 
  Date:        
 
     
 
   
 
                [NEWCO]    
 
           
 
  By:        
 
     
 
   
 
  Name:        
 
     
 
   
 
  Title:        
 
     
 
   
 
  Date:        
 
     
 
   

[Signature Page to Intel Asset Transfer Agreement]

 

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      APPENDIX A    

INTEL ASSET TRANSFER AGREEMENT
DEFINITIONS
     “Accounts Payable” means all accounts payable owing by a Person for raw
materials or supplies received by or services rendered to such Party or any of
its Subsidiaries.
     “Accounts Receivable” means all accounts receivable, notes receivable and
other current rights to payment of a Person, together with any unpaid interest
or fees accrued thereon or other amounts due with respect thereto, and any
claim, remedy or other right related to any of the foregoing.
     “Actual Intel Capital Expenditures” shall have the meaning set forth in
Section 2.9 of the Intel Asset Transfer Agreement.
     “Affiliate”, with respect to any Person, means any other Person directly or
indirectly controlling, controlled by or under common control with, such Person.
For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling”, “controlled by” or “under common control
with”), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
     “Applicable Law” means, with respect to any Person, any federal, state,
local or foreign statute, law, ordinance, rule, administrative interpretation,
regulation, order, writ, injunction, directive, judgment, decree or other
requirement of any Governmental Authority applicable to such Person or any of
its Affiliates or any of their respective properties, assets, officers,
directors, employees, consultants or agents.
     “Articles of Association” means the Articles of Association of Newco, in
substantially the form attached to Schedule 2.4 of both of the Master Agreement
Disclosure Letters, as amended from time to time.
     “Business Day” means each day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York or Geneva, Switzerland are
authorized or required by law to close.
     “Cash and Cash Equivalents” means all cash on hand and cash equivalents of
a Person (whether or not related to the applicable Business), including currency
and coins, negotiable checks, bank accounts, marketable securities, commercial
paper, certificates of deposit, treasury bills, surety bonds and money market
funds.
     “Claims” means all rights to causes of action, claims, demands, rights and
privileges against third parties, whether liquidated or unliquidated, fixed or
contingent, choate or inchoate.
APPENDIX A

 

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     “Closing” shall have the meaning set forth in Section 2.5 of the Master
Agreement.
     “Closing Date” means the date of the Closing, as further described in
Section 2.5 of the Master Agreement.
     “Confidentiality Agreement” means that certain Confidentiality Agreement
among Intel, ST and FP dated as of May 22, 2007.
     “Contemplated Financing” means either of: (i) the debt financing pursuant
to the Commitment Letter; or (ii) substitute debt financing on substantially
equivalent economic terms that is adequate to provide working capital
requirements and funds for other general corporate purposes of Newco and its
Subsidiaries following the Closing.
     “Contract” means each contract, agreement, option, lease, license,
cross-license, sale and purchase order, commitment and other instrument of any
kind, whether written or oral.
     “Copyrights” means copyrights and mask work rights (whether or not
registered) and registrations and applications therefor, worldwide.
     “Customer Data” means the data related to customers of a Party’s Business
which is included in such Party’s Transferred Assets.
     “D2 Equipment” means the machinery, laboratory and other equipment, tools
and other tangible personal property set forth under the heading “D2” in
Schedule 2.1(a) to the Intel ATA Disclosure Letter.
     “Effective Time” means, unless otherwise agreed by the Parties, 12:01 a.m.
GMT on the Closing Date.
     “Environmental Laws” means any Applicable Laws of any Governmental
Authority in effect as of the Closing Date, unless otherwise noted, relating to
pollution, protection or remediation of the environment, the use, storage,
treatment, generation, manufacture, distribution, transportation, processing,
handling, Release, disposal of or exposure to Hazardous Substances or, as such
relate to Hazardous Substances, public and occupational health and safety.
     “Environmental Liability” means any Liability or Loss, including the cost
of any Remedial Action, arising in connection with (i) the use, generation,
storage, treatment, manufacture, distribution, transportation, processing,
handling, disposal or Release of any Hazardous Substances, (ii) the violation of
or liability under any Environmental Laws or any Governmental Approval relating
to any Hazardous Substances or (iii) any third party claim, litigation or
proceeding relating to any Hazardous Substance or Environmental Laws.
     “Environmental Permits” means all permits, licenses or other authorizations
of any Governmental Authority required pursuant to applicable Environmental Law.
     “Equity Plan” means an equity compensation plan for Newco, with terms
reasonably satisfactory to Newco, Intel, ST, and FP, pursuant to which no more
than 6% of the outstanding share capital of Newco at the Closing Date shall be
reserved for issuance.

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     “Equity Transaction Documents” means the Share Purchase Agreement, the
Shareholders’ Agreement, the Articles of Association and the Internal Rules.
     “Final Payment Date” has the meaning set forth in Section 2.8 of the Intel
Asset Transfer Agreement.
     “FP” means Redwood Blocker S.a.r.l., a limited liability company organized
under the laws of The Grand-Duchy of Luxembourg.
     “GAAP” means generally accepted accounting principles in the United States
of America, applied on a consistent basis, as in effect as of the date hereof.
     “Governmental Approval” means an authorization, consent, approval, permit
or license issued by, or a registration or filing with, or notice to, or waiver
from, any Governmental Authority.
     “Governmental Authority” means any United States or non-United States
federal, territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
     “Hazardous Substance” shall mean any hazardous substance within the meaning
of Section 101(14) of the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. § 9601(14), and any chemical,
substance, material, agent or waste defined or regulated as toxic, hazardous,
extremely hazardous or radioactive, or as a pollutant or contaminant, under any
applicable Environmental Law, including petroleum, petroleum derivatives,
petroleum by-products or other hydrocarbons, asbestos or asbestos-containing
material and polychlorinated biphenyls.
     “Indebtedness” means any (i) indebtedness for borrowed money,
(ii) indebtedness evidenced by any bond, debenture, note, mortgage, indenture or
other debt instrument or debt security, or (iii) guarantees with respect to any
indebtedness or obligation of a type described in clauses (i) through (ii) above
of any other Person.
     “Indemnitee” shall (i) for purposes of the Intel Asset Transfer Agreement,
have the meaning set forth in Section 6.2(c) of the Intel Asset Transfer
Agreement, and (ii) for purposes of the ST Asset Contribution Agreement, have
the meaning set forth in Section 6.2(c) of the ST Asset Contribution Agreement.
     “Indemnitor” shall (i) for purposes of the Intel Asset Transfer Agreement,
have the meaning set forth in Section 6.2(c) of the Intel Asset Transfer
Agreement, and (ii) for purposes of the ST Asset Contribution Agreement, have
the meaning set forth in Section 6.2(c) of the ST Asset Contribution Agreement.
     “Independent Accountants” shall have the meaning set forth in
Section 2.7(c) of the Intel Asset Transfer Agreement.

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     “Intel Actuary” shall have the meaning set forth in Section 5.11(c) of the
Intel Asset Transfer Agreement.
     “Intel Ancillary Agreements” means the Intel Assignment and Assumption
Agreement, Intel Bills of Sale, Intel Intellectual Property Agreement, Intel
Transition Services Agreements, Intel Facility Transfer Agreements, Intel Joint
Development Agreement, Intel Supply Agreement, Intel Assumption of Excluded
Liabilities, Intel Copyright Assignment, Intel Patent Assignment and Intel
Trademark Assignment.
     “Intel Approvals” means the required consents, waivers and approvals of
Intel set forth on Schedule 3.3 of the Intel ATA Disclosure Letter and
Schedule 3.1(c) of the Intel Master Agreement Disclosure Letter.
     “Intel Assignment and Assumption Agreement” means, collectively, the
Assignment and Assumption Agreements to be entered into by Newco or its
Affiliates, on one hand, and Intel or its Affiliates, on the other hand, as of
the Closing Date, in substantially the form attached as Exhibit A to the Intel
Asset Transfer Agreement.
     “Intel Assumption of Excluded Liabilities” shall have the meaning set forth
in Section 2.4 of the Intel Asset Transfer Agreement.
     “Intel ATA Disclosure Letter” means the disclosure letter, as agreed to
between the Parties as of the date of the Master Agreement (with such amendments
or new schedules as may be subsequently made pursuant to Section 4.12 of the
Master Agreement), containing the Schedules required by the provisions of such
agreement.
     “Intel ATA Restricted Employees” shall have the meaning set forth in
Section 5.11(e)(ii) of the Intel Asset Transfer Agreement.
     “Intel Bill of Sale” means any bill of sale or other similar document
reasonably requested by any Party and reasonably necessary to transfer any Intel
Transferred Asset in accordance with applicable law to be executed by one or
more Intel Transferors in favor of Newco or a Subsidiary of Newco as of the
Closing Date, each in substantially the form attached as Exhibit B to the Intel
Asset Transfer Agreement.
     “Intel Books and Records” means all of the books of account, general and
financial records, invoices, shipping records, customer records, supplier lists,
correspondence and other documents, records and files of Intel and its
Subsidiaries whether in hard copy or computer format which relate exclusively to
the Intel Business and are necessary for the conduct of such Intel Business
after the Closing (excluding all personnel records or any employee information
for Intel Business Employees who are not Intel Transferred Employees employed by
an Intel Transferred Entity as of the Closing Date).
     “Intel Business” means the sale, manufacture, design and or development of
NOR Flash Memory Products, Phase Change Memory technology (subject to
Schedule 2.2(o) to the Intel ATA Disclosure Letter), and Stacked Memory
Products.

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     “Intel Business Capital Expenditures Plan” means the plan set forth on
Schedule 3.14(e) of the Intel ATA Disclosure Letter setting forth (i) the actual
capital expenditures of Intel with respect to the Intel Business for its first
fiscal quarter of 2007; and (ii) the budgeted capital expenditures of Intel with
respect to the Intel Business for the second, third and fourth fiscal quarters
of 2007.
     “Intel Business Employees” means the employees who are identified on
Schedule 3.12(c) of the Intel ATA Disclosure Letter.
     “Intel Cash Independent Accountants” has the meaning set forth in
Section 2.8 of the Intel Asset Transfer Agreement.
     “Intel Consideration” shall have the meaning set forth in Section 2.6(c) of
the Intel Asset Transfer Agreement.
     “Intel Contractual Consents” shall have the meaning set forth in Section
3.8(b) of the Intel Asset Transfer Agreement.
     “Intel Copyright Assignment” means any agreement for the assignment of
Intel Transferred Copyrights by an Intel Transferor to Newco or a Subsidiary of
Newco, dated as of the Closing Date, in the form agreed among Intel, ST and FP.
     “Intel Employee Agreement” means each management, employment, severance,
consulting, relocation, repatriation, expatriation or other agreement or
Contract between Intel or any of its Subsidiaries and any Intel Business
Employee directly relating to such Intel Business Employee’s terms or conditions
of employment.
     “Intel Employee Plan” means any plan, program, policy, practice, agreement
or other arrangement providing for compensation, severance, termination pay,
vacation pay, paid time off, pension benefits, retirement benefits, deferred
compensation, variable compensation, bonuses, performance awards, stock or
stock-related awards, fringe benefits (including health, dental, vision, life,
disability, sabbatical, accidental death and dismemberment benefits), or other
employee benefits or remuneration of any kind, whether written, unwritten or
otherwise, funded or unfunded, including each “employee benefit plan,” within
the meaning of Section 3(3) of ERISA, excluding any Intel Employee Agreement,
which is or has been maintained or contributed to by Intel or its Affiliates for
the benefit of any Intel Business Employee.
     “Intel Equipment” means (i) the machinery, laboratory and other equipment,
tools and other tangible personal property set forth on Schedule 2.1(a) of the
Intel ATA Disclosure Letter and (ii) each item of machinery, laboratory and
other equipment, tools and other tangible personal property with a gross book
value of less than $10,000 that is exclusively related to the Intel Business and
located at the Intel Transferred Facilities.
     “Intel Excluded Assets” shall have the meaning set forth in Section 2.2 of
the Intel Asset Transfer Agreement.
     “Intel Excluded Claims” means all Claims to the extent that such claims
relate to: (i) any Intel Excluded Assets; or (ii) events or breaches occurring
on or prior to the Closing Date that

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relate to the Intel Transferred Assets, provided that Claims for infringements
of any Intel Transferred Patents, Intel Transferred Copyrights or Intel
Transferred Trade Secrets occurring on or prior to the Closing Date shall not be
Intel Excluded Claims.
     “Intel Excluded Liabilities” shall have the meaning set forth in
Section 2.4 of the Intel Asset Transfer Agreement.
     “Intel Facility Environmental Liability” shall mean all Intel Pre-Closing
Environmental Liabilities relating to the condition of the soil, soil gas,
surface water (including sediments) or groundwater, with respect to the
existence of any Hazardous Substances therein, at, on, or under the Owned Intel
Real Property or the Leased Intel Real Property.
     “Intel Facility Transfer Agreements” means the Intel Facility Transfer
Agreements to be entered into by and between Intel and Newco on the Closing
Date, based on the terms and conditions set forth in the Intel Facility Transfer
Term Sheets.
     “Intel Financial Information” shall have the meaning set forth in Section
3.13(a) of the Intel Asset Transfer Agreement.
     “Intel Financial Information Date” shall have the meaning set forth in
Section 3.13(a) of the Intel Asset Transfer Agreement.
     “Intel Funded Employee Plan” means any Intel Employee Plan that is funded
other than through book reserves or insurance and that is not subject to the
laws of the United States.
     “Intel Funded Employee Plan Amount” shall have the meaning set forth in
Section 5.11(c) of the Intel Asset Transfer Agreement.
     “Intel Indemnitees” means Intel and its Affiliates, officers, directors,
stockholders, representatives and agents.
     “Intel Intellectual Property Agreement” means the Intellectual Property
Agreement to be entered into by and between Intel and Newco on the Closing Date,
in substantially the form attached to Schedule 2.1 of the Intel Master Agreement
Disclosure Letter.
     “Intel Inventory Value” means, as of any date of determination, the gross
book value of the Intel Transferred Inventory as of such date (less (x) reserves
and (y) any amount in respect of depreciation allocated to the Intel Transferred
Inventory) as determined as of such date (1) from the books and records of Intel
maintained in the ordinary course of business and (2) in accordance with GAAP,
applied in a manner consistent with the Intel Financial Information (as it may
be adjusted by Intel in its sole discretion to reflect any changes consistent
with the audited financial statements of the Intel Business to be delivered
under this Agreement at and for the year ended December 31, 2006). Intel
Inventory Value shall be determined without giving effect to the transactions
contemplated by this Agreement. For purposes of this definition, the amount of
reserves deducted under clause (x) above shall be determined as of such date
(1) from the books and records of Intel maintained in the ordinary course of
business and (2) in accordance with GAAP, applied in a manner consistent with
the Intel Financial Information (as adjusted above). The Intel Inventory Value
at the end of the first fiscal quarter of Intel and the Intel

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Inventory Value at the Closing Date shall be determined on a consistent basis in
all respects. Notwithstanding the foregoing, no amount shall be included in the
Intel Inventory Value with respect to:
(i) inventories of any Intel Product which, as of such date, is obsolete; or
(ii) any units in inventory of any Intel Product which as of such date (A) are
not first quality, (B) are not free from defects or (C) do not meet all
applicable customer specifications.
     “Intel Joint Development Agreement” means the Joint Development Agreement
by and between Intel and Newco to be entered into on the Closing Date, in
substantially the form attached to the Schedule 2.1 of the Intel Master
Agreement Disclosure Letter.
     “Intel Leases” means all leases or other occupancy agreements pursuant to
which Intel or its Subsidiaries lease or occupy the Leased Intel Real Property.
     “Intel Material Adverse Effect” means any event, change or circumstance
that, individually or in the aggregate with all other such events, changes or
circumstances, (i) results in a material adverse effect on, or material adverse
change in, the Intel Transferred Assets, taken as a whole, or (ii) any event,
change or circumstance that is materially adverse to the ability of Intel to
perform its obligations under any Transaction Document to which it is or will be
a party or to consummate the transactions contemplated thereby, other than, in
the case of clause (i) above, such changes, effects or circumstances reasonably
attributable to: (A) economic, capital market or political conditions generally
in the United States or foreign economies in any locations where the Intel
Business has material operations or sales, provided the changes, effects or
circumstances do not have a materially disproportionate effect (relative to
other industry participants) on the Intel Business, (B) conditions generally
affecting the industry in which the Intel Business operates, provided that the
changes, effects or circumstances do not have a materially disproportionate
effect (relative to other industry participants) on the Intel Business; (C) the
announcement or pendency of the transactions contemplated by the Transaction
Documents; (D) outbreak of hostilities or war, acts of terrorism or acts of God;
or (E) compliance with Intel’s obligations or the satisfaction of the conditions
to the closing of the transactions contemplated by the Transaction Documents.
     “Intel Newco Shares” shall have the meaning set forth in Section 2.6(a) of
the Intel Asset Transfer Agreement.
     “Intel Notice of Disagreement” shall have the meaning set forth in Section
2.7(b) of the Intel Asset Transfer Agreement.
     “Intel Option” means that certain Option to Purchase Ordinary Shares to be
entered into between Newco and Intel or one or more of Intel’s Affiliate(s), in
substantially the form attached to Schedule 4.16(d) of the Intel Master
Agreement Disclosure Letter.
     “Intel Option Shares” shall have the meaning set forth in Section 2.6(a) of
the Intel Asset Transfer Agreement.

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     “Intel Patent Assignment” means any agreement for the assignment of Intel
Transferred Patents by an Intel Transferor to Newco or a Subsidiary of Newco,
dated as of the Closing Date, in the form agreed among Intel, ST and FP.
     “Intel Post-Closing Environmental Liability” shall mean any Environmental
Liability, including a worsening of existing conditions, to the extent arising
out of or relating to (i) Newco’s acts occurring after the Closing Date,
(ii) Newco’s inaction occurring one year or later after the Closing Date, or
(iii) Newco’s inaction occurring within one year after the Closing Date if Newco
knew about the existing condition and its inaction worsened the existing
condition; and in connection with a Newco Business or the Intel Business, the
Owned Intel Real Property, the Leased Intel Real Property, the Intel Transferred
Assets or the Intel Transferred Entities or the ownership or operation of a
Newco Business or the Intel Business, the Owned Intel Real Property, the Leased
Intel Real Property or the Intel Transferred Assets, the Intel Transferred
Entities by, or the disposal or treatment of Hazardous Substances generated by,
Newco or an Affiliate of Newco (including an Intel Transferred Entity) after the
Closing Date.
     “Intel Post-Closing Product Obligations” means (i) all obligations arising
in respect of product support or maintenance obligations related to Intel
Products sold or licensed on or after the Closing and required to be performed
after the Closing, which obligations arise under any Intel Transferred Contract,
and any Liabilities which may arise in connection with the performance of, or
failure to perform, those obligations and (ii) Liabilities relating to any
product liability, warranty, refund or similar claims or returns, adjustments,
allowances, repairs made with respect to Intel Products sold after the Closing
Date, including those sold by Intel on behalf of Newco after the Closing
pursuant to the Intel Transition Services Agreements.
     “Intel Pre-Closing Environmental Liability” shall mean any Environmental
Liability which (i) relates to the ownership or operation of the Intel Business
(as now or previously conducted), the Owned Intel Real Property, the Leased
Intel Real Property, the Intel Transferred Assets, the Intel Transferred
Entities, the Intel Shared Facilities or any other real property or facility
owned, leased, operated or used in connection with the Intel Business (as now or
previously conducted) or for the disposal or treatment of Hazardous Substances
generated in connection with the Intel Business, the Owned Intel Real Property,
the Leased Intel Real Property, the Intel Transferred Assets, or the Intel
Transferred Entities, (ii) arises out of or relates to acts occurring or
conditions existing on or prior to the Closing Date, but only to the extent that
the Environmental Liability arising out of or relating to acts occurring or
conditions existing on or prior to the Closing Date can be identified from
(A) the Intel Environmental Reports so long as such reports are issued not later
than one year subsequent to the Closing or (B) documents or data generated prior
to the Closing and in the possession of Intel prior to the Closing, and (iii) is
identified in the foregoing documents and/or data with sufficient specificity so
as to clearly identify the scope of the Environmental Liability that is
attributable to the Intel Business, the Owned Intel Real Property, the Leased
Intel Real Property, the Intel Transferred Assets, or the Intel Transferred
Entities. Notwithstanding the foregoing, Intel Pre-Closing Environmental
Liability shall not include any Intel Post-Closing Environmental Liability.
     “Intel Pre-Closing Product Obligations” means (i) all obligations arising
in respect of product support or maintenance obligations related to Intel
Products sold or licensed prior to the Closing and required to be performed
after Closing, which obligations arise under any Intel

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Transferred Contract, and any Liabilities which may arise in connection with the
performance of, or failure to perform, those obligations and (ii) Liabilities
relating to any product liability, warranty, refund or similar claims or
returns, adjustments, allowances, repairs, or commercial accommodations or
arrangements in respect of Epidemic Failures made with respect to Intel Products
sold on or before the Closing Date.
     “Intel Preliminary Closing Statement” has the meaning set forth in
Section 2.8 of the Intel Asset Transfer Agreement.
     “Intel Prepayments” means all Prepayments of Intel or any of its
Subsidiaries (a) associated with the Intel Transferred Contracts and (b) set
forth on Schedule 2.1(f) to the Intel ATA Disclosure Letter.
     “Intel Privacy Policy” shall have the meaning set forth in Section 5.12 of
the Intel Asset Transfer Agreement.
     “Intel Products” means all NOR Flash Memory Products and all Stacked Memory
Products, manufactured, sold, or under development by Intel as of the Effective
Date including those listed on Schedule 1.1(c) of the Intel ATA Disclosure
Letter.
     “Intel Retained Marks” shall have the meaning set forth in Section 5.3 of
the Intel Asset Transfer Agreement.
     “Intel Standard Form Product Warranties” shall have the meaning set forth
in Section 3.16 of the Intel Asset Transfer Agreement.
     “Intel Supply Agreement” means the Supply Agreement identified on
Schedule 2.1 of both of the Master Agreement Disclosure Letters to be entered
into by and between Intel and Newco on the Closing Date, in substantially the
form attached to such schedule.
     “Intel Tax Agreement” shall have the meaning set forth in Section 3.10(e)
of the Intel Asset Transfer Agreement.
     “Intel Trademark Assignment” means any agreement for the assignment of
Intel Transferred Trademarks by an ST Transferor to Newco or a Subsidiary of
Newco, dated as of the Closing Date, in the form agreed among Intel, ST and FP.
     “Intel Transferors” shall have the meaning set forth in the Recitals of the
Intel Asset Transfer Agreement.
     “Intel Transferors” shall have the meaning set forth in the Recitals of the
Intel Asset Transfer Agreement.
     “Intel Transferred Assets” shall have the meaning set forth in Section 2.1
of the Intel Asset Transfer Agreement.

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     “Intel Transferred Claims” means all Claims to the extent such Claims
relate to the Intel Transferred Assets or the Intel Transferred Liabilities,
other than the Intel Excluded Claims. For avoidance of doubt, Intel Transferred
Claims shall include claims for infringement of any Intel Transferred Patent,
Intel Transferred Copyright or Intel Transferred Trade Secret occurring on or
prior to the Closing Date.
     “Intel Transferred Contracts” means all unexpired contracts set forth on
Schedule 2.1(e) of the Intel ATA Disclosure Letter, together with the Intel
Transferred Purchase Orders, the Intel Transferred Sales Orders and the Intel
Leases.
     “Intel Transferred Copyrights” means the Copyrights identified on Schedule
2.1(i) of the Intel ATA Disclosure Letter.
     “Intel Transferred Employee Payment Liabilities” means any and all payment
obligations of Intel and its Affiliates (i) relating to the service of Intel
Transferred Employees prior to the Effective Time, (ii) that are assumed by
Newco by operation of Applicable Law at the Effective Time, (iii) that are
unfunded or for which accruals are made on the employing company’s balance sheet
(or which would be required to be made on a balance sheet prepared in accordance
with GAAP, consistently applied), and (iv) that are not otherwise paid out or
satisfied to the Intel Transferred Employees prior to or at the Effective Time,
including retirement benefits, termination indemnities, unemployment, accrued
vacation and paid-time off benefits, Christmas bonuses, thirteenth-month
bonuses, vacation premium bonuses and any other non-incentive cash bonuses
(other than salary), jubilee and long-service payments; provided, however, that
Intel Transferred Employee Payment Liabilities shall not include (x) any
contingent Liabilities on the part of Newco that arise solely as a result of
providing service recognition under Section 5.11(a) of the Intel Asset Transfer
Agreement, (y) any unearned incentive bonuses or variable pay and (z) the
regular payroll of the Intel Transferred Entities as of the Effective Time.
     “Intel Transferred Employees” means the Intel Business Employees who accept
an offer of employment from Newco and who begin their employment with Newco at
the Closing (or, to the extent permitted by Applicable Law with respect to
inactive employees on short-term, medical or other leave of absence, at the time
such employee returns to active status) or such other date as the parties may
reasonably agree.
     “Intel Transferred Entities” means the entities set forth on
Schedule 1.1(a) of the Intel ATA Disclosure Letter.
     “Intel Transferred Entity Books and Records” means the minute books, stock
records, Tax Returns and other records related to Taxes, if any, in each case of
each of the Intel Transferred Entities
     “Intel Transferred Intellectual Property” means, collectively, the Intel
Transferred Copyrights, Intel Transferred Patents, Intel Transferred Trademarks
and Intel Transferred Trade Secrets.
     “Intel Transferred Interests” means 100% of the outstanding equity, voting
and profit interests in the Intel Transferred Entities.

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     “Intel Transferred Inventory” means all raw materials, work-in-process,
finished goods, supplies, packaging materials and other inventories owned by
Intel or its Subsidiaries relating exclusively to the Intel Business, whether in
the possession of Intel, a Subsidiary of Intel or a third party (including
consigned inventory and inventory held by subcontractors); provided, however,
that in no event shall Intel Transferred Inventory include any raw materials
(including RAM), work-in-process, supplies, packaging materials or other
inventories (other than finished goods inventories) located at Intel’s D2 and
IFO facilities.
     “Intel Transferred Liabilities” shall have the meaning set forth in Section
2.3 of the Intel Asset Transfer Agreement.
     “Intel Transferred Patents” means those Patents identified on
Schedule 2.1(h) of the Intel ATA Disclosure Letter.
     “Intel Transferred Permits” means those Permits identified on
Schedule 2.1(l) of the Intel ATA Disclosure Letter.
     “Intel Transferred Purchase Orders” means each purchase order or portion
thereof issued by Intel or a Subsidiary of Intel to the extent relating to the
Intel Business.
     “Intel Transferred Sales Orders” means all pending and unfulfilled sales
orders or portions thereof for Intel Products.
     “Intel Transferred Systems” means factory support systems (for example,
shop floor control applications governing work stream models, SPC charts, APC
configuration), data, manufacturing station controllers linked to process
equipment tools, and transferable elements of systems and software, in each case
exclusively related to the Intel Business, provided under the Intel Transition
Services Agreement which may be released to Newco in connection with the
termination of such agreement.
     “Intel Transferred Trade Secrets” means any Trade Secrets owned by Intel or
any of its Subsidiaries as of the Closing Date (including any such Trade Secrets
that consist of technical documentation of the nature of the files and other
documentation identified on Schedule 2.1(h) to the Intel ATA Disclosure Letter)
that are used exclusively in the Intel Business and not materially embodied or
used in or with any other current product or service of Intel or any of its
Subsidiaries.
     “Intel Transferred Trademarks” means those Trademarks identified on
Schedule 2.1(k) of the Intel ATA Disclosure Letter.
     “Intel Transition Services Agreement” means the Intel Transition Services
Agreement identified on Schedule 2.1 of both of the Master Agreement Disclosure
Letters to be entered into

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by and between Intel and Newco on the Closing Date, in substantially the form
attached to such schedule.
     “Intellectual Property” means intellectual property rights arising from or
in respect of the following, whether protected, created or arising under the
laws of the United States or any other jurisdiction: Copyrights, Trade Secrets,
Patents and Trademarks.
     “Internal Rules” means the internal rules (“reglement”) of Newco, in
substantially the form attached to Schedule 2.4 to both of the Master Agreement
Disclosure Letters, as amended from time to time.
     “Knowledge” means, with respect to any Person, the actual knowledge of such
Person. Notwithstanding the foregoing, with respect to any Person that is a
corporation, limited liability company, partnership or other business entity,
actual knowledge shall be deemed to mean the actual knowledge of all directors
and officers of any such Person; provided, however, that (i) with respect to
Intel, “Knowledge” shall be deemed to be solely the actual knowledge of the
individuals identified in Section A of Schedule 1.1(b) of the Intel ATA
Disclosure Letter, after obtaining from the individuals identified in Section B
of Schedule 1.1(b) of the Intel ATA Disclosure Letter a certification as to
their actual knowledge of each matter with respect to which Intel makes any
representation or warranty as to its Knowledge under any Transaction Document,
(ii) with respect to ST, “Knowledge” shall be deemed to be solely the actual
knowledge of the individuals identified on Schedule 1.1(b) of the ST ACA
Disclosure Letter, after obtaining from the individuals identified on
Schedule 1.1(b) of the ST ACA Disclosure Letter a certification as to their
actual knowledge of each matter with respect to which ST makes any
representation or warranty as to its Knowledge under any Transaction Document,
and (iii) with respect to FP, “Knowledge” shall be deemed to be solely the
actual knowledge of David ibnAle, Phokion Potamianos, and Keith Toh.
     “Leased Intel Real Property” means the Intel Real Property listed in
Schedule 3.6(b) of the Intel ATA Disclosure Letter.
     “Liability” means, with respect to any Person, any liability or obligation
of such Person of any kind, character or description, whether known or unknown,
absolute or contingent, asserted or unasserted, accrued or unaccrued, liquidated
or unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, absolute, contingent, executory, determined, determinable or
otherwise and whether or not the same is required to be accrued on the financial
statements of such Person.
     “Lien” means, with respect to any asset, any lien, mortgage, pledge,
hypothecation, right of others, claim, security interest, encumbrance, lease,
sublease, license, interest, option, charge or other restriction or limitation
of any nature whatsoever in respect of such asset, including any Share
Encumbrance; provided, however, that any license of Intellectual Property shall
not be considered a Lien on such Intellectual Property.
     “Losses” means any and all deficiencies, judgments, settlements, demands,
claims, suits, actions or causes of action, assessments, liabilities, losses,
damages (excluding indirect, incidental or consequential damages), interest,
fines, penalties, costs and expenses (including

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reasonable legal, accounting and other costs and expenses) incurred in
connection with investigating, defending, settling or satisfying any and all
demands, claims, actions, causes of action, suits, proceedings, assessments,
judgments or appeals, and in seeking indemnification therefor.
     “Managing Director” means any member of Newco’s Management Board.
     “Master Agreement” means that certain Master Agreement by and among Intel,
ST, FP, and FP Holdco dated May 22, 2007.
     “Minimum Committed Intel Inventory Value” means 91% of the Intel Inventory
Value as of the end of Intel’s first fiscal quarter of 2007.
     “Multiemployer Plan” means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA that is a “multiemployer plan,” as defined in
Section 3(37) of ERISA.
     “Newco Actuary” shall have the meaning set forth in Section 5.11(c) of the
Intel Asset Transfer Agreement.
     “Newco Allocated Positions” means those positions with Newco for which a
Intel Business Employee or a ST Business Employee is not allocated on
Schedule 3.12(c) to the Intel ATA Disclosure Letter or Schedule 3.12(c) to the
ST ACA Disclosure Letter.
     “Newco Approvals” means any Governmental Approval which Intel, ST and FP
reasonably agree Newco must obtain in order to consummate the transactions
contemplated by the Transaction Documents.
     “Newco Indemnitees” means Newco and its Affiliates, officers, directors,
shareholders, representatives and agents.
     “Newco Restricted Employees” shall have the meaning set forth in Section
5.11(e)(i) of the Intel Asset Transfer Agreement.
     “NFA Letter” shall mean a letter from an appropriate Governmental Authority
stating that no further action is required to address any Intel Facility
Environmental Liability or ST Facility Environmental Liability, as applicable.
     “Notice of Claim” means a written notice by an Indemnitee to an Indemnitor
of a claim for Losses.
     “Ordinary Shares” means ordinary shares of Newco, par value [ ] eurocent
per share.
     “Outstanding” means, as of any date of determination, all Shares that have
been issued on or prior to such date, other than Shares held, repurchased or
otherwise reacquired by Newco on or prior to such date.
     “Owned Intel Real Property” means the Intel Real Property listed in
Schedule 3.6(a) of the Intel ATA Disclosure Letter.

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     “Patents” means patents and applications worldwide, including continuation,
divisional, continuation in part, reexamination, or reissue patent applications
and patents issuing thereon.
     “Permits” means all permits, licenses, franchises, approvals, certificates,
consents, waivers, concessions, exemptions, orders, registrations, notices or
other authorizations of any Governmental Authority necessary for a Party or its
Subsidiaries to own, lease and operate such Party’s Transferred Assets and to
carry on such Party’s Business as currently conducted.
     “Permitted Liens” means (i) Liens for Taxes or governmental assessments,
charges or claims the payment of which is not yet due or which are both
(A) being contested in good faith, and (B) described in reasonable detail on a
Schedule to the applicable Transaction Document, (ii) statutory Liens of
landlords and statutory Liens of carriers, warehousemen, mechanics or
materialmen incurred in the ordinary course of business which are either for
sums not yet due or are immaterial in amount, (iii) zoning, entitlement, and
other land use laws, and (iv) easements and other imperfections of title or
encumbrances, in each case, that do not materially detract from the value of the
relevant Transferred Asset or materially interfere with any present or intended
use of such Transferred Asset.
     “Person” means an individual, corporation, partnership, association,
limited liability company, trust, estate or other similar business entity or
organization, including a Governmental Authority and any syndicate or group that
would be deemed to be a person under Section 13(d)(3) of the Exchange Act.
     “Planned Intel Capital Expenditures” shall have the meaning set forth in
Section 2.9 of the Intel Asset Transfer Agreement.
     “Post-Closing Tax Period” means any Tax period (or portion thereof)
beginning after the Closing Date.
     “Pre-Closing Accounts Payable” means all Accounts Payable accruing or
arising prior to the Closing Date.
     “Pre-Closing Accounts Receivable” means all Accounts Receivable accruing or
arising prior to the Closing Date.
     “Pre-Closing Tax Period” means any Tax period (or portion thereof) ending
on or before the Closing Date.
     “Preferred Shares” means convertible preferred shares of Newco, par value [
] eurocent per share.
     “Preliminary Intel Inventory Statement” has the meaning provided in Section
2.7(a) of the Intel Asset Transfer Agreement.
     “Prepayments” means all prepaid items and deposits paid by a Party or any
of its Subsidiaries to the extent relating to such Party’s Business, and any
claim, remedy or other right related to any of the foregoing.

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     “Proceeding” means any action, suit, claim, charge, hearing, arbitration,
audit, or proceeding (public or private).
     “Property Taxes” shall have the meaning set forth in Section 5.8(b)(iii) of
the Intel Asset Transfer Agreement.
     “Purchase Price” shall have the meaning set forth in Section 2.2 of the
Share Purchase Agreement.
     “Receiving Party” shall (i) for purposes of the Intel Asset Transfer
Agreement, have the meaning set forth in Section 5.1(b) of the Intel Asset
Transfer Agreement, (ii) for purposes of the ST Asset Contribution Agreement,
have the meaning set forth in Section 5.1(b) of the ST Asset Contribution
Agreement and (iii) for purposes of the Intel Intellectual Property Agreement
and the ST Intellectual Property Agreement, with respect to Confidential
Information of a Party, mean another Party that is not a Licensing Affiliate of
such Party and that receives (or receives access to) such Confidential
Information pursuant to or in connection with the Intel Intellectual Property
Agreement or the ST Intellectual Agreement.
     “Remedial Action” means investigation, evaluation, risk assessment,
monitoring, response, removal, clean-up, remediation, corrective action or other
terms of similar import and any related closure, post-closure, operations and
maintenance or engineering control activities.
     “Restricted Employee” means any ST Restricted Employee, any Newco
Restricted Employee or any Intel Restricted Employee.
     “Sales Taxes” means any excise, value added, registration, stamp,
recording, documentary, conveyancing, transfer, sales, use and any other similar
Taxes arising out of the transfer of the applicable Transferred Assets.
     “Share Encumbrances” means Liens, claims, options, rights of other parties,
voting trusts, proxies, shareholder or similar agreements, encumbrances or other
restrictions (other than restrictions imposed by applicable securities laws).
     “Share Purchase Agreement” means the Share Purchase Agreement to be entered
into by FP and Newco as of the Closing Date, in substantially the form attached
to Schedule 2.3 to the Intel Master Agreement Disclosure Letter and to
Schedule 2.3 to the ST Master Agreement Disclosure Schedule.
     “Shareholders’ Agreement” means the Shareholders’ Agreement by and among
Intel (as used in this definition, “Intel” has the meaning ascribed to such term
in the Shareholders’ Agreement), ST (as used in this definition, “ST” has the
meaning ascribed to such term in the Shareholders’ Agreement), FP (as used in
this definition, “FP” has the meaning ascribed to such term in the Shareholders’
Agreement), FP Holdco and Newco to be entered into on the Closing Date,
substantially in the form attached to Schedule 2.4 to both of the Master
Agreement Disclosure Letters.
     “Specified Intel Representations” means any representation or warranty made
by Intel in Sections 3.1 through 3.24 (other than Section 3.17) of the Intel
Asset Transfer Agreement or

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Sections 3.1(a) through 3.1(g) of the Master Agreement (other than Section 3.17
of the Intel Asset Transfer Agreement).
     “ST” means STMicroelectronics N.V., a limited liability company organized
under the laws of The Netherlands, with corporate seat in Amsterdam, The
Netherlands.
     “ST Approvals” means the required consents, waivers and approvals of ST set
forth on Schedule 3.3 of the ST ACA Disclosure Letter and Schedule 3.2(c) of the
ST Master Agreement Disclosure Letter.
     “ST Asset Contribution Agreement” means that certain Asset Contribution
Agreement to be entered into by ST and Newco as of the Closing Date, in
substantially the form attached to Schedule 2.4 to the ST Master Agreement
Disclosure Letter.
     “ST Transferred Assets” shall have the meaning set forth in Section 2.1 of
the ST Asset Contribution Agreement.
     “Straddle Period” shall have the meaning set forth in Section 5.8(a) of the
Intel Asset Transfer Agreement.
     “Subsidiary” means, with respect to any Person, (i) any corporation,
limited liability company or other similar entity as to which more than 50% of
the outstanding capital stock or other securities having voting rights or power
is owned or controlled, directly or indirectly, by such Person and/or by one or
more of such Person’s direct or indirect subsidiaries and (ii) any Person with a
partnership, joint venture or other similar relationship between such Persons
and any other Person, provided, however, that with respect to Intel, Silicon
Philippines, Inc., a corporation organized and existing under Philippines law
(“SPI”), shall be deemed to be a Subsidiary of Intel for purposes of the
Transaction Documents and for convenience only, and such inclusion of SPI within
this definition shall not imply that such entity is a subsidiary or affiliate of
Intel for any purpose independent of the Transaction Documents.
     “Taxes” means (i) all foreign, federal, state, local and other net income,
gross income, gross receipts, sales, use, ad valorem, value added, intangible,
unitary, capital gain, transfer, franchise, profits, license, lease, service,
service use, withholding, backup withholding, payroll, employment, estimated,
excise, severance, stamp, occupation, premium, property, prohibited
transactions, windfall or excess profits, value added tax, goods and services
tax, social service tax, import tax, export tax, or other taxes of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts with respect thereto, (ii) any Liability for payment of
amounts described in clause (i) whether as a result of transferee Liability, of
being a member of an affiliated, consolidated, combined or unitary group for any
period, or otherwise through operation of law, and (iii) any Liability for the
payment of amounts described in clause (i) or (ii) as a result of any tax
sharing, tax indemnity or tax allocation agreement or any other express or
implied agreement to indemnify any other Person for Taxes; and the term “Tax”
means any one of the foregoing Taxes.
     “Tax Returns” means all returns, declarations, reports, statements,
information statements, forms or other documents filed or required to be filed
with respect to any Tax.

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     “Third Actuary” shall have the meaning set forth in Section 5.11(c) of the
Intel Asset Transfer Agreement and the ST Asset Contribution.
     “Third Party Appraisal Firm” shall have the meaning set forth in
Section 4.13 of the Master Agreement.
     “Trademarks” means trademarks and registrations and applications therefor.
     “Trade Secrets” means confidential know how, inventions, discoveries,
concepts, ideas, methods, processes, designs, formulae, technical data, source
code, drawings, specifications (including logic specifications), data bases,
data sheets, customer lists, Customer Data and other confidential information
that constitute trade secrets under applicable law, in each case excluding any
rights in respect of any of the foregoing that comprise Copyrights, mask work
rights or Patents.
     “Transaction Documents” means the Master Agreement, the Intel Asset
Transfer Agreement, the ST Asset Contribution Agreement, the Share Purchase
Agreement, the Intel Ancillary Agreements, the ST Ancillary Agreements, the
Shareholders’ Agreement, the Confidentiality Agreement, and all of the documents
contemplated by any such agreement or entered into by any of the Parties thereto
or their Subsidiaries in connections with the transactions contemplated by such
agreements.
     “Uncapped Intel Losses” means Losses (i) pursuant to a breach of any of
Sections 3.2 (Authorization and Enforceability), 3.10 (Tax Matters), 3.12(a)
(Pension Plans), 3.15 (Environmental Matters), and 3.22(a) (Organization) and
3.22 (b) (Capitalization), (ii) pursuant to Section 6.2(a)(iii), (iii) resulting
from a breach of any covenant other than those set forth in Section 4.9 of the
Master Agreement and (iv) resulting from a willful breach of any covenant set
forth in Section 4.9 of the Master Agreement).

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