Exhibit 10.62
EXECUTION VERSION
 
 
ASSET PURCHASE AGREEMENT
by and between
APPLIED MICRO CIRCUITS CORPORATION,
as Seller
and
LSI CORPORATION,
as Buyer
Dated as of April 5, 2009
 
 

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TABLE OF CONTENTS

                              Page  
 
                1.   Definitions     1  
 
  1.1   Defined Terms     1  
 
  1.2   Additional Defined Terms     10  
 
  1.3   Other Definitional and Interpretive Matters     11  
 
                2.   Purchase and Sale of the Storage Business     12  
 
  2.1   Purchase and Sale of Assets     12  
 
  2.2   Excluded Assets     13  
 
  2.3   Purchase Price     14  
 
  2.4   Assumed Liabilities     15  
 
  2.5   Excluded Liabilities     15  
 
  2.6   Further Assurances; Further Conveyances and Assumptions     16  
 
  2.7   Taxes; Recording and Filing Fees     18  
 
  2.8   Bulk Sales Law     19  
 
  2.9   Inventory and Channel Inventory Adjustments     19  
 
                3.   Representations and Warranties of Seller     22  
 
  3.1   Organization and Qualification     22  
 
  3.2   Authorization     22  
 
  3.3   Binding Effect     22  
 
  3.4   Non-Contravention; Consents     23  
 
  3.5   Title to Property; Equipment; Sufficiency of Assets     23  
 
  3.6   Permits     24  
 
  3.7   Real Estate     24  
 
  3.8   Compliance With Laws; Litigation     25  
 
  3.9   Business Employees     25  
 
  3.10   Contracts     27  
 
  3.11   Environmental Matters     28  
 
  3.12   Revenues; Financial Information; Absence of Certain Changes     29  
 
  3.13   Intellectual Property     31  
 
  3.14   Taxes     33  
 
  3.15   Inventory; Channel Inventory     34  
 
  3.16   Customers and Suppliers     34  
 
  3.17   Orders and Commitments     35  
 
  3.18   Affiliated Transactions     35  
 
  3.19   Product Recalls     35  
 
  3.20   Product Warranties     35  
 
  3.21   Brokers     35  
 
  3.22   No Other Representations or Warranties     36  

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                              Page  
 
                4.   Representations and Warranties of Buyer     36  
 
  4.1   Organization and Qualification     36  
 
  4.2   Authorization     36  
 
  4.3   Binding Effect     36  
 
  4.4   No Violations     37  
 
  4.5   Brokers     37  
 
  4.6   Independent Assessment     37  
 
  4.7   No Other Representations or Warranties     37  
 
                5.   Certain Covenants     38  
 
  5.1   Access and Information     38  
 
  5.2   Conduct of the Storage Business     39  
 
  5.3   Tax Reporting and Allocation of Consideration     40  
 
  5.4   Business Employees     42  
 
  5.5   Leased Equipment     44  
 
  5.6   Reasonable Best Efforts     44  
 
  5.7   Contacts with Suppliers, Employees and Customers     45  
 
  5.8   Non-Solicitation or Hiring of Employees     45  
 
  5.9   Non-Competition     46  
 
  5.10   No Negotiation or Solicitation     47  
 
  5.11   Warranty Claims and Recalls; Rebates and Incentives     47  
 
                6.   Confidential Nature of Information     48  
 
  6.1   Confidentiality Agreement     48  
 
  6.2   Seller’s Confidential Information     49  
 
  6.3   Buyer’s Confidential Information     50  
 
  6.4   Confidential Nature of this Agreement and Collateral Agreements     51  
 
                7.   Closing     51  
 
  7.1   Deliveries by Seller     51  
 
  7.2   Deliveries by Buyer     52  
 
  7.3   Closing Date     52  
 
  7.4   Contemporaneous Effectiveness     52  
 
                8.   Conditions Precedent to Closing     52  
 
  8.1   General Conditions     52  
 
  8.2   Conditions Precedent to Buyer’s Obligations     53  
 
  8.3   Conditions Precedent to Seller’s Obligations     54  
 
                9.   Status of Agreement     55  
 
  9.1   Survival of Representations and Warranties     55  
 
  9.2   General Agreement to Indemnify     55  
 
  9.3   General Procedures for Indemnification     58  
 
                10.   Miscellaneous Provisions     59  
 
  10.1   Notices     59  
 
  10.2   Expenses     60  

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                              Page  
 
               
 
  10.3   Entire Agreement; Modification     60  
 
  10.4   Assignment; Binding Effect; Severability     60  
 
  10.5   Governing Law     61  
 
  10.6   Waiver of Jury Trial     61  
 
  10.7   Execution in Counterparts     61  
 
  10.8   Public Announcement     61  
 
  10.9   No Third-Party Beneficiaries     61  
 
                11.   Termination and Waiver     62  
 
  11.1   Termination     62  
 
  11.2   Effect of Termination     63  
 
  11.3   Waiver of Agreement     63  

SCHEDULES

     
Schedule A
  Formerly Contemplated Conduct
Schedule B
  Purchase Orders
Schedule 1.1
  Storage Products
Schedule 2.1(c)
  Fixtures and Supplies
Schedule 2.1(f)
  Transferred Contracts
Schedule 2.1(g)
  Transferred Licenses
Schedule 2.1(h)
  Transferred Governmental Permits
Schedule 2.2(d)
  Excluded Contracts
Schedule 2.2(f)
  Excluded Equipment
Schedule 2.2(i)
  Excluded Fixtures and Supplies
Schedule 2.9
  Closing Inventory Accounting Principles
Schedule 3.1
  Storage Business Locations and Names
Schedule 3.4(b)
  Seller Consents
Schedule 3.5(b)
  Leased and Owned Equipment
Schedule 3.5(d)
  Other Material Assets
Schedule 3.6
  Governmental Permits
Schedule 3.7(b)
  Real Estate
Schedule 3.8(a)
  Compliance with Laws
Schedule 3.8(b)
  Litigation
Schedule 3.9(a)
  Business Employees
Schedule 3.9(b)
  Employment Arrangements
Schedule 3.9(c)
  Termination of Employment
Schedule 3.9(d)
  Benefit Plans
Schedule 3.9(f)
  Severance Arrangements
Schedule 3.10(a)
  Material Contracts
Schedule 3.10(b)
  Contracts with Defaults
Schedule 3.10(c)
  Other Material Contracts
Schedule 3.11
  Environmental Matters
Schedule 3.12(a)
  Revenues
Schedule 3.12(b)
  Historical Financial Information
Schedule 3.12(c)
  Certain Events

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Schedule 3.13(b)
  Exceptions to Transferred Intellectual Property
Schedule 3.13(c)
  Certain Transferred Intellectual Property
Schedule 3.13(d)
  Claims to Intellectual Property
Schedule 3.13(e)
  Other Intellectual Property
Schedule 3.13(f)
  Trademarks
Schedule 3.13(i)
  Certain Licenses
Schedule 3.13(j)
  Intellectual Property Contracts
Schedule 3.13(k)
  Intellectual Property Allegations
Schedule 3.13(l)
  Potential Disputes
Schedule 3.13(m)
  Third Party Infringement
Schedule 3.13(n)
  Form of Proprietary Rights and Confidentiality Agreement
Schedule 3.15
  Inventory
Schedule 3.16
  Customers and Suppliers
Schedule 3.17
  Orders and Commitments
Schedule 3.18
  Affiliated Transactions
Schedule 3.19
  Product Recalls
Schedule 3.20
  Product Warranties
Schedule 5.2
  Exceptions to Sellers’ Conduct of the Storage Business
Schedule 5.5(a)
  Assumed Leased Equipment
Schedule 5.5(b)
  Purchased Leased Equipment
Schedule 5.5(c)
  Excluded Leased Equipment
Schedule 8.2(c)
  Required Consents
Schedule 8.2(d)
  Key Business Employees
 
   
EXHIBITS
   
 
   
Exhibit A
  Form of Assignment and Bill of Sale
Exhibit B
  Form of Assumption Agreement
Exhibit C
  Form of Intellectual Property Agreement
Exhibit D
  Form of Master Procurement Agreement
Exhibit E
  Form of Transition Services Agreement

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ASSET PURCHASE AGREEMENT
     THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of this 5th day
of April, 2009 by and between APPLIED MICRO CIRCUITS CORPORATION, a Delaware
corporation (“AMCC” and, together with the Selling Subsidiaries, “Sellers”) and
LSI CORPORATION, a Delaware corporation (“Buyer”).
RECITALS
     A. WHEREAS, Sellers are, among other things, engaged in the business of the
design, engineering, technical support, contracting with manufacturers,
marketing, sale and distribution of hardware host RAID adapters (“Hardware HRA”)
and directly associated software, including RAID stack, drivers, bios and
management utilities (as currently or formerly conducted and as currently or, to
the extent any Hardware HRA or directly associated software is documented in
materials included on Schedule A, formerly contemplated to be conducted by
Sellers, the “Storage Business”);
     B. WHEREAS, the Storage Business is composed of certain assets and
liabilities that are currently part of, owned by, or licensed to, Sellers or in
respect of which Sellers are currently obligated, as the case may be;
     C. WHEREAS, Sellers desire to sell, transfer and assign to Buyer, and Buyer
desires to purchase from Sellers the Purchased Assets (as hereinafter defined),
and Buyer is willing to assume, the Assumed Liabilities (as hereinafter
defined), in each case as more fully described and upon the terms and subject to
the conditions set forth herein; and
     D. WHEREAS, AMCC and/or one or more of the Selling Subsidiaries, as
applicable, and Buyer desire to enter into an Assignment and Bill of Sale, an
Assumption Agreement, the Intellectual Property Agreement, the Transition
Services Agreement and the Master Procurement Agreement (each as hereinafter
defined and collectively, the “Collateral Agreements”).
     NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
1. Definitions
     1.1 Defined Terms

 

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     For the purposes of this Agreement, the following words and phrases shall
have the following meanings:
     “Affiliate” of any Person means any Person that controls, is controlled by,
or is under common control with such Person. As used herein, the term “control”
(including the terms “controlling,” “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities or other interests, by contract or otherwise.
     “Assignment and Bill of Sale” means the assignment and bill of sale in
substantially the form attached hereto as Exhibit A.
     “Assumed Purchase Orders” means the purchase orders identified on
Schedule B and any other purchase orders added, with Buyer’s written consent, to
such Schedule prior to one (1) Business Day before the Closing Date; provided,
however, to the extent that any such purchase order has been fulfilled prior to
the Closing (i.e., product has been delivered and become part of any Seller’s
Inventory at, or any time prior to, Closing), then the purchase order shall not
be an “Assumed Purchase Order” (even if it is still included on Schedule B) and
all Liabilities with respect thereto shall be Excluded Liabilities.
     “Assumption Agreement” means the assumption agreement in substantially the
form attached hereto as Exhibit B.
     “Benefit Plan” means, in respect of any Business Employee, each Pension
Plan, Welfare Plan and employment, bonus, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock option, stock purchase, phantom
stock, performance, retirement, thrift, savings, stock bonus, excess benefit,
supplemental unemployment, paid time off, perquisite, fringe benefit, vacation,
sick leave, severance, disability, death benefit, hospitalization, medical,
dental, life insurance, welfare benefit or other plan, program or arrangement
(whether written or unwritten), in each case, maintained or contributed to, or
required to be maintained or contributed to, by Sellers or any of their ERISA
Affiliates for the benefit of any present or former directors, officers,
consultants or employees of the Storage Business.
     “Benefits Liabilities” means, with respect to any Benefit Plan, any and all
Liabilities (including any claims), whenever or however arising, including all
costs and expenses relating thereto, and including those debts, liabilities and
obligations arising under law, rule, regulation, permit, action or proceeding
before any court or regulatory agency or administrative agency, order or consent
decree or any award of any arbitrator of any kind, and those arising under
contract, commitment or undertaking.
     “Business Day” means a day that is not a Saturday, a Sunday or a statutory
or civic holiday in the States of New York or California or any other day on
which banking institutions are not required to be open in the States of New York
or California.

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     “Business Employees” means the employees of AMCC and its Subsidiaries
identified on Schedule 3.9(a).
     “Business Records” means all books, records (including software records),
reports, ledgers and files or other similar information (in any form or medium)
maintained by or on behalf of Sellers and primarily related to, or primarily
used or primarily held for use in, the operation or conduct of the Storage
Business, the Purchased Assets, the Assumed Liabilities and the Transferred
Employees, including product documentation, product specifications, purchasing
and sale records, invoices, credit records, price lists, customer lists, vendor
lists, mailing lists, warranty information, marketing requirement documents,
catalogs, sales promotion literature, advertising materials, brochures, records
of operation, standard forms of documents, manuals of operations or business
procedures, purchasing materials and records, manufacturing and quality control
records and procedures, research and development files and materials, data and
laboratory books, invention disclosures, media materials and plates, litigation
files, product (including any related software) release orders, research
materials and product testing reports.
     “CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. §§ 9601 et seq., as amended.
     “Channel Inventory” means Inventory (wherever located and including in
transit Inventory) that has been sold to distributors of the Storage Business,
including for which revenue has been recognized by AMCC in accordance with
AMCC’s revenue recognition policies.
     “Closing” means the closing of the transactions described in Article 7.
     “Closing Date” means the date of the Closing as determined pursuant to
Section 7.3.
     “Closing Channel Inventory Amount” means the value of the Channel Inventory
as of the Closing Date, as calculated in accordance with the Closing Inventory
Accounting Principles set forth on Schedule 2.9 and in a manner consistent with
the preparation of the historical information set forth in Schedule 3.15.
     “Closing Inventory Amount” means the value of the Inventory as of the
Closing Date, as calculated in accordance with the Closing Inventory Accounting
Principles set forth on Schedule 2.9 and in a manner consistent with the
preparation of the historical financial information set forth in
Schedule 3.12(b) and GAAP consistent with past practice.
     “COBRA” means Section 4980B of the Code and the regulations issued
thereunder.
     “Code” means the U.S. Internal Revenue Code of 1986, as amended.
     “Confidentiality Agreement” means the agreement between AMCC and Buyer
dated November 25, 2008.

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     “Confidential Information” means any non-public proprietary information,
written or oral, including the following, in each case to the extent containing
any non-public proprietary information: any business information, technical
information or data, however embodied, marketing plans, financial information
and strategic plans or any other non-public proprietary information.
     “Contracts” means all contracts, agreements, leases, subleases, supply
contracts, purchase orders, sales orders, instruments, commitments,
understandings or any other arrangements, whether oral or written including any
amendments, supplements or modifications thereto, to which AMCC or any Selling
Subsidiaries are parties (i) that are primarily related to, or primarily used or
primarily held for use in the operation or conduct of the Storage Business or
(ii) by which the Purchased Assets may be bound, including the Transferred
Contracts.
     “Encumbrance” means any lien (statutory or other), claim, charge, security
interest, mortgage, pledge, easement, encumbrance, charge or other security
interest or matter affecting title, preemptive right, existing or claimed right
of first refusal, right of first offer, right of consent, put right, default,
covenant or similar right or restriction or other adverse claim of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement or other similar restriction or right) affecting the Purchased Assets.
     “Environmental Law” means any Law that governs the existence of or provides
a remedy for release of Hazardous Substances, the protection of persons, natural
resources or the environment, including the management of Hazardous Substances,
or other activities involving Hazardous Substances including under CERCLA, the
Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Resource
Conservation and Recovery Act , 42 U.S.C. § 6901 et seq., the Clean Water Act,
33 U.S.C. Section § 1251 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq.,
the Toxic Substance Control Act, 15 U.S.C. § 2601 et seq., the Oil Pollution Act
of 1990, 33 U.S.C. § 2701 et seq., and the Occupational Safety and Health Act,
29 U.S.C. § 651 et seq., or any other similar Law, as any such Law has been
amended or supplemented, and the regulations promulgated pursuant thereto, in
each case as in effect on or prior to the Closing Date or, with respect to
representations and warranties made on the date hereof, Environmental Laws shall
mean those in effect on or prior to the date hereof and as of the Closing Date.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.
     “ERISA Affiliate” means any other Person under common control with either
of the Sellers within the meaning of Section 414(b), (c), (m) or (o) of the Code
and the regulations issued thereunder.
     “Excluded Contracts” means (i) those Contracts identified on
Schedule 2.2(d), (ii) the Premises Leases (other than any leases set forth on
Schedule 2.1(f)) and any other Contracts regarding real property, and (iii) any
Contracts that constitute General Purchase or Distribution Agreements.

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     “Excluded Intellectual Property” means any Intellectual Property not
assigned to Buyer pursuant to the Intellectual Property Agreement.
     “Excluded Inventory” means any PowerPC integrated circuits that have not
been shipped by any Seller to Beyonics Technology Limited against a purchase
order from Beyonics Technology Limited.
     “Excluded Records” means (i) any Tax, financial, accounting, personnel,
medical or human resources records, (ii) any “AMCC” or “Applied Micro Circuits
Corporation” marked sales and marketing or packaging materials, samples,
prototypes, or other similar Applied Micro Circuits Corporation identified sales
and marketing or packaging materials, (iii) any organizational documents, minute
books, including stockholder and board of director resolutions, stock ledgers
and stock records, and (iv) any books, records (including software records),
reports, ledgers and files or other similar information (in any form or medium)
to the extent (A) any applicable Law prohibits their transfer or (B) they are
primarily related to the Excluded Assets or Excluded Liabilities (provided that
Seller shall include in the Business Records a copy of any portions of such
materials (other than any personnel, medical or human resources records) which
primarily relate to the Purchased Assets or the Assumed Liabilities).
     “Excluded Taxes” means any Liability for any Taxes relating to the
Purchased Assets for any Pre-Closing Tax Period or the operation and conduct of
the Storage Business during any Pre-Closing Tax Period.
     “Excluded Vietnam Equipment” means any items that would otherwise
constitute Owned Equipment, that are located in Vietnam and that Buyer elects,
in a writing delivered to AMCC at least one (1) Business Day prior to the
Closing Date, not to be treated as Owned Equipment for purposes of this
Agreement.
     “Fixtures and Supplies” means any furniture, furnishings and other tangible
personal property owned or leased by AMCC or any Selling Subsidiary that are
primarily related to, or primarily used or primarily held for use in, the
operation or conduct of the Storage Business, including the furniture,
furnishings and other tangible personal property set forth on Schedule 2.1(c),
but excluding the furniture, furnishings and other tangible personal property
set forth on Schedule 2.2(i).
     “Forecasted Channel Inventory Amount” means $3,750,000.
     “Forecasted Inventory Amount” means $7,250,000, net of any reserves or
excess inventory, as calculated in accordance with the Closing Inventory
Accounting Principles set forth on Schedule 2.9 and in a manner consistent with
the preparation of the historical financial information set forth in
Schedule 3.12(b) and GAAP consistent with past practice.
     “GAAP” means U.S. generally accepted accounting principles.
     “General Purchase or Distribution Agreements” means supply contracts or
other agreements between AMCC or a Selling Subsidiary, on the one hand, and a
Third Party, on

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the other hand, pursuant to which AMCC or such Selling Subsidiary purchases or
sells products or services for any of AMCC’s or such Selling Subsidiary’s
business other than primarily for the Storage Business.
     “Governmental Body” means any legislative, executive or judicial unit of
any governmental entity (foreign, federal, state or local) or any department,
commission, board, agency, bureau, official or other regulatory, administrative
or judicial authority thereof.
     “Governmental Permits” means all governmental permits and licenses,
certificates of inspection, approvals or other authorizations held by AMCC or
any Selling Subsidiary that are primarily related to, or primarily used or
primarily held for use in, the operation or conduct of the Storage Business or
the Premises, including, without limitation, the Transferred Governmental
Permits.
     “Hazardous Substance” means any pollutants, contaminants, wastes, toxic
substances, radioactive materials, asbestos, asbestos-containing materials,
PCBs, hazardous substances, petroleum and petroleum products or any fraction
thereof or any other chemical, material or substance that is deemed a hazardous
substance by any Governmental Body.
     “Intellectual Property” means any Intellectual Property Rights.
     “Intellectual Property Agreement” means the agreement in substantially the
form attached hereto as Exhibit C.
     “Intellectual Property Rights” means all of the following and all statutory
and/or common law rights throughout the world in, arising out of, or associated
therewith (i) all patents and applications therefor and all reissues, divisions,
renewals, extensions, provisionals, continuations and continuations-in-part
thereof (“Patents”), (ii) all inventions (whether patentable or not), invention
disclosures and improvements, all trade secrets, proprietary information,
know-how and technology, (iii) all works of authorship, copyrights, mask works,
and copyright and mask work registrations and applications therefor, (iv) all
industrial designs and all registrations and applications therefor, (v) all
trade names, logos, trademarks and service marks; trademark and service mark
registrations and applications therefor (“Trademarks”), (vi) all databases and
data collections (including knowledge databases, customer lists and customer
databases), (vii) all rights in software, (viii) all rights to Uniform Resource
Locators, Web site addresses and domain names, and (ix) any similar,
corresponding or equivalent rights to any of the foregoing.
     “Inventory” means (i) all inventory, wherever located, including raw
materials, work in process, finished products, inventoriable supplies, samples,
packing and shipping materials, goods in transit, parts and non-capital spare
parts owned by or held for the benefit of Sellers primarily related to, or
primarily used or primarily held for use in, the operation or conduct of the
Storage Business, (ii) any and all rights of Sellers to the warranties received
from suppliers of such inventory and (iii) any and all rights of Sellers to any
related claims, credits and rights of recovery and setoff with respect to such
inventory, but in each case excluding any Excluded Inventory.

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     “IRS” means the U.S. Internal Revenue Service.
     “knowledge of Sellers” or “to Sellers’ knowledge” or similar words or
phrases relating to awareness or knowledge of Sellers means the knowledge, after
reasonable inquiry, of Kambiz Hooshmand, Robert Gargus, Dr. Paramesh Gopi,
Cynthia Moreland, Ted Chan, Russ Johnson, Larry Jacobs, Bill Hake, Ron Mcleod,
Mike Major, Jimmy Lie, Chris Subega, Chris Therene, John Best and Michael Benz.
     “Law” means any national, federal, state, provincial or local law, statute,
ordinance, rule, regulation, code, order, judgment, injunction or decree of any
country, territory, domestic or foreign state, prefecture, province,
commonwealth, city, county, municipality, or of any Governmental Body.
     “Leased Equipment” means all equipment, computers, servers, machinery and
other tangible personal property (including any related spare parts, dies,
molds, tools and tooling) that is leased by Sellers and primarily related to, or
primarily used or primarily held for use in, the operation or conduct of the
Storage Business, including, without limitation, all such items set forth on
Schedule 3.5(b).
     “Liability” means any direct or indirect debt, liability or other
obligation of any kind or character, whether accrued or fixed, absolute or
contingent, determined or determinable, matured or unmatured, and whether due or
to become due, asserted or unasserted, or known or unknown.
     “Licensed Intellectual Property” means the Intellectual Property licensed
to Buyer pursuant to the Intellectual Property Agreement.
     “Licenses” means all licenses, agreements and other arrangements under
which Sellers have the right to use any Intellectual Property of a Third Party
to the extent primarily related to, or primarily used or primarily held for use
in the operation or conduct of the Storage Business, but not the Nonassignable
Licenses. Schedule 3.10(a) contains a true, complete and correct list, as of the
date hereof, of (a) all Licenses and (b) to Sellers’ knowledge, all other
licenses, agreements and other arrangements under which Sellers have the right
to use any Intellectual Property of a Third Party related to, used or held for
use in, or necessary for, the conduct of the Storage Business, but not the
Nonassignable Licenses.
     “Master Procurement Agreement” means the master procurement agreement in
substantially the form attached hereto as Exhibit D.
     “Material Adverse Effect” means any change, effect, event, circumstance,
occurrence or state of facts that is, or is reasonably likely to be, either
individually or when aggregated with all other changes, effects, events,
circumstances, occurrences or states of facts, materially adverse to (i) the
business, operations, assets, liabilities, condition (financial or other) or
results of operations of the Storage Business or (ii) AMCC’s or any Selling
Subsidiary’s ability to consummate the transactions contemplated by this
Agreement, in each case other

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than any change, effect, event, circumstance, occurrence or state of facts
resulting from (A) conditions in the United States or foreign economies or
securities markets in general, (B) conditions in the industry in which the
Storage Business operates in general and not specifically relating to the
Storage Business, (C) the announcement or pendency of the transactions
contemplated by this Agreement, (D) any failure in and of itself (as
distinguished from any change or effect giving rise or contributing to such
failure) to meet any projections, budgets, plans or forecasts for any products,
or (E) any generally applicable changes in GAAP or any Law.
     “Nonassignable Licenses” means (i) those licenses of Intellectual Property
used in the Storage Business under which AMCC or a Selling Subsidiary is the
licensee that are primarily related to other businesses of Sellers and not
primarily used or primarily held for use in the operation or conduct of the
Storage Business, (ii) broad-based company-wide cross licenses of any
Intellectual Property to which AMCC or a Selling Subsidiary is a party,
(iii) generally available software licensed under a “shrink-wrap,” “click-wrap”
or similar end-user license, in each case except to the extent set forth on
Schedule 2.1(g) as of the date hereof and, to the extent assignable, as set
forth on Schedule 2.1(g) as of the Closing, (iv) publicly available open source
software, except to the extent set forth on Schedule 2.1(g) as of the date
hereof and, to the extent assignable, as set forth on Schedule 2.1(g) as of the
Closing, and (v) any licenses primarily related to Excluded Assets or Excluded
Liabilities that are not material to the Storage Business.
     “Owned Equipment” means all (a) equipment (including test equipment),
computers, servers, machinery, test fixtures, validation fixtures and hardware,
(b) tangible embodiments in any media of the Assigned Software, Licensed
Software, Assigned Technical Information and Licensed Technical Information, and
(c) other tangible personal property (including any related spare parts, probe
cards, load boards, test sockets, dies, molds, tools, printed circuit board
masks, and tooling), in the case of each of clauses (a), (b) and (c) that is
owned by AMCC or a Subsidiary thereof and primarily related to, or primarily
used or primarily held for use in, the operation or conduct of the Storage
Business, including the items identified on Schedule 3.5(b)(i), but excluding
the items identified on Schedule 2.2(f) (such equipment, the “Excluded
Equipment”) and excluding any Excluded Vietnam Equipment. Owned Equipment
includes rights to the warranties received from the manufacturers and
distributors of such items and to any related claims, credits and rights of
recovery and setoff with respect to such items.
     “Pension Plan” means each “employee pension benefit plan” (within the
meaning of Section 3(2) of ERISA).
     “Permitted Encumbrances” means (i) liens for Taxes, assessments and other
governmental charges, liens of landlords, liens of carriers, warehousemen,
mechanics or materialmen incurred in the ordinary course of business and
consistent with past practice, in each case for sums not yet due and payable or
due but not delinquent or for sums being contested in good faith by appropriate
proceedings, (ii) liens incurred in the ordinary course of the Storage Business
in connection with workers’ compensation, unemployment insurance and other types
of social security or to secure statutory and other similar obligations, and
(iii)

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non-exclusive licenses granted by Sellers or an Affiliate thereof in connection
with sales of products in the ordinary course of business.
     “Person” means any individual, corporation, partnership, firm, association,
joint venture, joint stock company, trust, unincorporated organization or other
entity, or any Governmental Body.
     “Pre-Closing Tax Period” means, with respect to the Purchased Assets or the
Storage Business, any Tax period (or portion thereof) ending on or before the
Closing Date.
     “Premises” means the real property primarily related to, or primarily used
or primarily held for use in, the operation or conduct of the Storage Business.
     “Return” means any return, declaration, report, statement, and any other
document required to be filed in respect of any Tax.
     “Selling Subsidiaries” means 3ware, Inc., a California corporation, AMCC
Sales Corporation, a Delaware corporation, AMCC Enterprise Corporation, a
Delaware corporation, AMCC China, Inc., a Delaware corporation, Applied Micro
Circuits Corporation (AMCC) Vietnam, a company organized under the laws of
Vietnam, AMCC (UK) Limited, a company organized under the laws of the United
Kingdom, and AMCC Deutschland GmbH, a company organized under the laws of
Germany.
     “Storage Products” means all versions and releases of the products of the
Storage Business, including those identified on Schedule 1.1 and all other
Hardware HRA products and directly associated software, including RAID stack,
drivers, bios and management utilities (as currently or formerly conducted and
as currently or, to the extent any Hardware HRA or directly associated software
is documented in materials included on Schedule A, formerly under development by
the Storage Business.
     “Subsidiary” of any Person means any other Person in which an amount of
voting securities, or other voting ownership or voting partnership interests
sufficient to elect at least 50% of its board of directors or other governing
body (or, if there are no such voting interests, 50% or more of the equity
interests of such Person) is owned directly or indirectly by such first Person.
     “Taxes” means all taxes of any kind, and all charges, fees, customs,
levies, duties, imposts, required deposits or other assessments, including all
net income, capital gains, gross income, gross receipt, property, franchise,
sales, use, excise, withholding, payroll, employment, social security, workers’
compensation, unemployment, occupation, capital stock, ad valorem, value added,
transfer, gains, profits, net worth, asset, transaction, and other taxes, and
any interest, penalties or additions to tax with respect thereto, imposed upon
any Person by any taxing authority or other Governmental Body under applicable
Law.
     “Third Party” means any Person not an Affiliate of the other referenced
Person or Persons.

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     “Transferred Contracts” means (i) the Contracts identified on
Schedule 2.1(f), (ii) any customer orders for Storage Products to the extent
that they are not completely fulfilled prior to the Closing, (iii) Assumed
Purchase Orders, and (iv) any other Contracts that AMCC and Buyer mutually agree
in writing after the date hereof to treat as a Transferred Contract for purposes
of this Agreement.
     “Transferred Governmental Permits” means the Governmental Permits
identified on Schedule 2.1(h) as being transferred to Buyer.
     “Transferred Intellectual Property” means the Intellectual Property
assigned to Buyer pursuant to the Intellectual Property Agreement.
     “Transferred Licenses” means (i) Licenses identified on Schedule 2.1(g) and
(ii) Licenses which Buyer notifies AMCC at least one (1) Business Day prior to
the Closing Date are to be added to Schedule 2.1(g).
     “Transition Services Agreement” means the transition services agreement in
substantially the form attached hereto as Exhibit E.
     “Welfare Plan” means each “employee welfare benefit plan” (within the
meaning of Section 3(1) of ERISA).
     1.2 Additional Defined Terms
     For purposes of this Agreement, the following terms shall have the meanings
specified in the Sections indicated below or in the Intellectual Property
Agreement, in each case as indicated below:

      Term   Section
“AMCC”
  Preamble
“Agreement”
  Preamble
“Asset Acquisition Statement”
  Section 5.3(b)
“Assigned Software”
  Intellectual Property Agreement

“Assigned Technical Information”
  Intellectual Property Agreement
“Assumed Leased Equipment”
  Section 5.5(a)
“Assumed Liabilities”
  Section 2.4
“Bulk Sales Laws”
  Section 2.8
“Buyer”
  Preamble
“Buyer’s Returns”
  Section 5.3(c)
“Buyer Savings Plan”
  Section 5.4(f)
“Channel Inventory”
  Section 3.15(b)
“Closing Statement”
  Section 2.9(a)
“Collateral Agreements”
  Recital D
“Consideration”
  Section 2.3
“Competing Business”
  Section 5.9(a)

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      Term   Section
“Competing Transaction”
  Section 5.10
“Deductible”
  Section 9.2(e)
“Deficit Channel Inventory Amount”
  Section 2.9(e)
“Deficit Inventory Amount”
  Section 2.9(d)
“Excess Channel Inventory Amount”
  Section 2.9(e)
“Excluded Assets”
  Section 2.2
“Excluded Leased Equipment”
  Section 5.5(c)
“Excluded Liabilities”
  Section 2.5
“Expiration Date”
  Section 9.1
“Final Channel Inventory Amount”
  Section 2.9(e)
“Final Inventory Amount”
  Section 2.9(d)
“Hardware HRA”
  Recital A
“Indemnified Party”
  Section 9.2(a)
“Indemnifying Party”
  Section 9.3(a)
“Independent Expert”
  Section 2.9(c)
“Key Business Employees”
  Section 8.2(d)
“Legacy Patents”
  Intellectual Property Agreement
“Licensed Field”
  Intellectual Property Agreement
“Licensed Software”
  Intellectual Property Agreement
“Licensed Technical Information”
  Intellectual Property Agreement
“Losses”
  Section 9.2(a)
“Material Contracts”
  Section 3.10(a)
“Notice of Objection”
  Section 2.9(b)
“Patents”
  Section 1.1
“Premises Leases”
  Section 3.7(b)
“Purchase Price”
  Section 2.3
“Purchased Assets”
  Section 2.1
“Purchased Leased Equipment”
  Section 5.5(b)
“Required Consents”
  Section 8.2(c)
“Review Period”
  Section 2.9(b)
“Sellers”
  Preamble
“Seller Consents”
  Section 3.4(b)
“Seller’s Returns”
  Section 5.3(a)
“Storage Business”
  Recital A
“Third-Party Claim”
  Section 9.3(a)
“Trademarks”
  Section 1.1
“Transferred Employees”
  Section 5.4(a)
“Transfer Taxes”
  Section 2.7(a)
“WARN Act”
  Section 5.4(e)

     1.3 Other Definitional and Interpretive Matters
     Unless otherwise expressly provided, for purposes of this Agreement, the
following rules of interpretation shall apply:

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     (a) Calculation of Time Period. When calculating the period of time before
which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded. If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business Day.
     (b) Gender and Number. Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include
the plural and vice versa.
     (c) Headings. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references in this
Agreement to any “Section” are to the corresponding Section of this Agreement
unless otherwise specified.
     (d) Herein. The words such as “herein,” “hereinafter,” “hereof,” and
“hereunder” refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.
     (e) Including. The word “including” or any variation thereof means
“including, without limitation” and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it.
     (f) Schedules. The Schedules attached to this Agreement shall be construed
with and as an integral part of this Agreement to the same extent as if the same
had been set forth verbatim herein.
2. Purchase and Sale of the Storage Business
     2.1 Purchase and Sale of Assets
     Upon the terms and subject to the conditions of this Agreement, at the
Closing, AMCC shall, and shall cause the Selling Subsidiaries to sell, transfer,
assign, convey and deliver to Buyer, and Buyer shall purchase, acquire and
accept from Sellers, all right, title and interest of Sellers in, to and under
the Purchased Assets, free and clear of all Encumbrances other than Permitted
Encumbrances. For purposes of this Agreement, the term “Purchased Assets” means
(i) all the assets, properties and rights primarily related to, or primarily
used or primarily held for use in, the operation or conduct of, the Storage
Business, whether tangible or intangible, real, personal or mixed (except in
each case not any of the Excluded Assets and not any items primarily related to
Excluded Assets or Excluded Liabilities), and (ii) those assets, properties and
rights set forth or described in paragraphs (a) through (j) below (except in
each case for the Excluded Assets), whether or not any of such assets,
properties or rights have any value for accounting purposes or are carried or
reflected on or specifically referred to in AMCC’s financial statements:

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     (a) the Owned Equipment;
     (b) the Purchased Leased Equipment;
     (c) the Fixtures and Supplies;
     (d) the Inventory;
     (e) the Transferred Intellectual Property and other rights assigned to
Buyer pursuant to the Intellectual Property Agreement;
     (f) the Transferred Contracts;
     (g) the Transferred Licenses;
     (h) the Transferred Governmental Permits;
     (i) the Business Records; and
     (j) the goodwill of the Storage Business, other than the goodwill
associated with AMCC’s name.
     2.2 Excluded Assets
     Notwithstanding anything in Section 2.1 to the contrary, Sellers, on the
one hand, and Buyer, on the other hand, expressly acknowledge and agree that the
Purchased Assets shall not include, and Sellers are not selling, transferring,
assigning, conveying or delivering to Buyer, and Buyer is not purchasing,
acquiring or accepting from Sellers, any of the rights, properties or assets set
forth or described in paragraphs (a) through (s) below (the rights, properties
and assets expressly excluded by this Section 2.2 being referred to herein as
the “Excluded Assets”):
     (a) any cash, cash equivalents, bank deposits, investment accounts, bank
accounts, lockboxes, certificates of deposit, marketable securities, corporate
credit cards, corporate calling cards or similar items of Seller or any
Affiliate thereof;
     (b) any accounts receivable, notes receivable or similar items of Seller or
any Affiliate thereof, together with any unpaid interest or fees accrued thereon
or other amounts receivable with respect thereto, and any claim, remedy or right
related to any of the foregoing;
     (c) any claim, right or interest of Seller or any Affiliate thereof in or
to any refund, rebate, abatement or other recovery for Taxes, together with any
interest due thereon or penalty rebate arising therefrom, the basis of which
arises or accrues in any Pre-Closing Tax Period;
     (d) the Excluded Contracts;

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     (e) the Nonassignable Licenses;
     (f) the Excluded Equipment set forth on Schedule 2.2(f), the Excluded
Vietnam Equipment, if any, and the Excluded Leased Equipment;
     (g) the operations of the Storage Business located in Vietnam;
     (h) any Governmental Permits other than the Transferred Governmental
Permits;
     (i) any furniture, furnishings and other tangible personal property set
forth on Schedule 2.2(i);
     (j) any rights in any real property, other than as provided for in the
Transition Services Agreement or as included as a Transferred Contract;
     (k) all external telephone numbers of any Business Employee that is not a
Transferred Employee;
     (l) any insurance policies, binders and claims and rights thereunder and
the proceeds thereof;
     (m) except as specifically provided in Section 5.4, all of the assets of
the Benefit Plans;
     (n) any rights, claims, defenses or causes of action of Sellers or any
Affiliate thereof against Third Parties relating to the assets, properties,
business or operations of Sellers or any Affiliate thereof solely related to,
arising from or incurred in connection with conditions or events occurring prior
to the Closing;
     (o) any information management system of Sellers or any Affiliate thereof
that is not primarily related to, and not primarily used or primarily held for
use, in the operation or conduct of the Storage Business;
     (p) any integrated circuit masks;
     (q) any Excluded Records;
     (r) the Excluded Intellectual Property, including any right to, or use of,
the “AMCC” or “Applied Micro Circuits Corporation” trademarks; and
     (s) any securities or equity interests in any Person.
     2.3 Purchase Price

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     In consideration of the sale, transfer, assignment, conveyance and delivery
by Sellers of the Purchased Assets to Buyer, Buyer shall (i) pay to AMCC at the
Closing, an aggregate amount in cash equal to TWENTY MILLION DOLLARS
($20,000,000) (the “Purchase Price”) by wire transfer of immediately available
funds to an account designated by AMCC’s written instructions provided to Buyer
at least two (2) Business Days prior to Closing, and (ii) assume the Assumed
Liabilities (together with the Purchase Price, the “Consideration”). The
Purchase Price is subject to adjustment as set forth in Section 2.9 of this
Agreement.
     2.4 Assumed Liabilities
     Upon the terms and subject to the conditions of this Agreement, at the
Closing, Buyer shall accept, assume and agree to pay, perform or otherwise
discharge, in accordance with the respective terms and subject to the respective
conditions thereof, the Liabilities of Sellers pursuant to or under the Assumed
Liabilities. For purposes of this Agreement, the term “Assumed Liabilities”
means only the following Liabilities, whether or not any such Liability has a
value for accounting purposes or is carried or reflected on or specifically
referred to in AMCC’s financial statements (provided, however, that in no event
shall Assumed Liabilities include any Excluded Liabilities):
     (a) all Liabilities, solely to the extent related to, arising from or
incurred in connection with conditions or events occurring after the Closing
under, or arising under, or pursuant to, the Transferred Contracts, Transferred
Licenses and Transferred Governmental Permits;
     (b) solely with regard to conditions or events occurring after the Closing,
all Liabilities with respect to the Storage Business or the Purchased Assets, in
each case as conducted by Buyer (or for Buyer’s benefit pursuant to the
Transition Services Agreement in accordance with the terms and conditions set
forth therein);
     (c) all Liabilities with respect to the Transferred Employees’ employment
arising solely from or in connection with their employment by Buyer with respect
to periods subsequent to the Closing Date; and
     (d) all Liabilities associated with the packaging, shipment and delivery of
any Owned Equipment or Fixtures and Supplies from any Seller to Buyer or its
designees after the Closing, including any export taxes directly related to the
shipment or moving of any such items outside of the particular jurisdiction
where such items are located.
     2.5 Excluded Liabilities
     Notwithstanding anything in Section 2.4 to the contrary, Sellers, on the
one hand, and Buyer, on the other hand, hereby expressly acknowledge and agree
that the Assumed Liabilities shall not include, Sellers shall not assign to
Buyer pursuant to this Agreement, and Buyer shall not accept or assume or be
obligated to pay, perform or otherwise assume or discharge any Liabilities of
AMCC or any Selling Subsidiary or any Affiliate thereof, whether direct or
indirect, known or unknown, absolute, contingent or otherwise pursuant to or
under

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the Excluded Liabilities. For purposes of this Agreement, the term “Excluded
Liabilities” means (x) any or all Liabilities of AMCC or any Selling Subsidiary
or any Affiliates thereof that do not constitute Assumed Liabilities and (y) any
or all Liabilities set forth or described in paragraphs (a) through (g) below,
in each case whether or not any such Liability has a value for accounting
purposes or is carried or reflected on, or specifically referred to in, AMCC’s
financial statements:
     (a) any and all Liabilities related to, arising from, or incurred in
connection with any conditions or events occurring prior to the Closing pursuant
to the Transferred Contracts, Transferred Licenses and Transferred Governmental
Permits;
     (b) any and all Liabilities related to, arising from, or incurred in
connection with the Transferred Employees or the Purchased Assets with respect
to any conditions or events occurring prior to the Closing;
     (c) any and all Liabilities related to, arising from, or incurred in
connection with products shipped or services rendered or for which a receivable
was booked prior to the Closing or for any rebates, incentives, discounts or
special promotions for products shipped or services rendered prior to the
Closing;
     (d) any and all Liabilities related to, arising from, or incurred in
connection with, the Excluded Assets;
     (e) any and all Liabilities for Excluded Taxes;
     (f) any and all Liabilities with respect to excess or obsolete products
returns and stock rotations relating to sales or shipments of product prior to
the Closing; and
     (g) any and all Liabilities relating to, arising from, or incurred in
connection with (i) any Benefit Plan, including any employment, severance or
change of control agreement between a Business Employee and AMCC or any Selling
Subsidiary or any Affiliate thereof, or (ii) with respect to any Transferred
Employee, any wages, salaries, bonuses, commissions or other forms of
compensation or other Liabilities relating to the employment of such Transferred
Employee by AMCC or any Selling Subsidiary or any Affiliate thereof or
termination of any such employee by AMCC or any Selling Subsidiary or any
Affiliate thereof.
     2.6 Further Assurances; Further Conveyances and Assumptions
     (a) From time to time following the Closing, AMCC shall, or shall cause its
Subsidiaries (including the Selling Subsidiaries) to, make available to Buyer
such non-confidential data in personnel and medical records, and to the extent
legally permissible and subject to reasonable restrictions such confidential
data in personnel and medical records, of Transferred Employees as is reasonably
necessary for Buyer to transition such employees into Buyer’s records and
otherwise comply with its obligations under Section 5.4.

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     (b) From time to time following the Closing, Sellers and Buyer shall, and
shall cause their respective Subsidiaries to, execute, acknowledge and deliver
all such further conveyances, notices, assumptions, releases and acquittances
and such other instruments, and shall take such further actions, as may be
necessary or appropriate to fully and effectively transfer, assign and convey
unto Buyer and its respective successors or assigns, all of the properties,
rights, titles, interests, estates, remedies, powers and privileges intended by
the parties to be conveyed or licensed to Buyer under this Agreement and the
Collateral Agreements and for Buyer and its respective successors and assigns to
fully and effectively assume the Assumed Liabilities intended by the parties to
be assumed by Buyer under this Agreement, and to otherwise make effective the
transactions contemplated hereby and thereby and to confirm Buyer’s title to or
interest in the Purchased Assets, to put Buyer in actual possession and
operating control thereof and to assist Buyer in exercising all rights with
respect thereto, including (i) transferring back to the appropriate Seller any
asset or liability not contemplated by this Agreement to be a Purchased Asset or
an Assumed Liability, respectively, which asset or liability was transferred to
Buyer at the Closing, and (ii) transferring to Buyer any asset or liability
contemplated by this Agreement to be a Purchased Asset or an Assumed Liability,
respectively, which was not transferred to Buyer at the Closing.
     (c) Sellers hereby constitute and appoint Buyer and its successors and
assigns as their true and lawful attorneys in fact in connection with the
transactions contemplated by this Agreement, with full power of substitution, in
the name and stead of Sellers but on behalf of and for the benefit of Buyer and
its successors and assigns, to demand and receive any and all of the Purchased
Assets hereby conveyed, assigned, and transferred or intended so to be, and to
give receipt and releases for and in respect of the same and any part thereof,
and from time to time to institute and prosecute, in the name of Sellers or
otherwise, for the benefit of Buyer or its successors and assigns, proceedings
at law, in equity, or otherwise, which Buyer or its successors or assigns
reasonably deem proper in order to collect or reduce to possession or endorse
any of the Purchased Assets and to do all acts and things in relation to the
Purchased Assets which Buyer or its successors or assigns reasonably deem
desirable.
     (d) Without limiting Buyer’s rights or Sellers’ obligations under
Sections 5.6, 7.1(b) and 8.2(c), and notwithstanding anything else in this
Agreement to the contrary, this Agreement shall not constitute an agreement to
sell, convey, assign, sublease or transfer any Purchased Asset if any attempted
sale, conveyance, assignment, sublease or transfer of such Purchased Asset,
without the authorization, approval, consent or waiver of a Third Party would
constitute a breach or violation thereof or affect adversely the rights of
Buyer, AMCC or a Selling Subsidiary under such Purchased Asset (a “Nonassignable
Asset”) and any such Nonassignable Asset shall not be deemed to be sold,
conveyed, assigned, subleased or otherwise transferred to Buyer until such
authorization, approval, consent or waiver has been obtained. If and to the
extent requested in writing by Buyer following the Closing, AMCC shall use its
commercially reasonable efforts to obtain the consent of the other parties to
any such Nonassignable Asset or any claim, right or any benefit arising
thereunder for the assignment thereof to Buyer, and Buyer shall reasonably
cooperate with such efforts. In the event consents to the assignment of any
Nonassignable Assets cannot be obtained, such Nonassignable Assets shall be
held, as of and from the Closing Date, by AMCC or the

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applicable Selling Subsidiary in trust for Buyer and the covenants and
obligations thereunder shall be performed by Buyer in AMCC’s or the applicable
Selling Subsidiary’s name (to the extent permitted by the terms of the
Nonassignable Assets) and all benefits existing thereunder shall be for Buyer’s
account. AMCC shall take or cause to be taken at AMCC’s expense such actions in
its name or otherwise as Buyer may reasonably request so as to provide Buyer
with the benefits of any such Nonassignable Assets and to effect collection of
money or other consideration that becomes due and payable under such
Nonassignable Assets, and AMCC or the applicable Selling Subsidiary shall
promptly pay over to Buyer all money or other consideration received by it in
respect of all Nonassignable Assets. As of and from the Closing Date, AMCC, on
behalf of itself and any applicable Selling Subsidiaries, authorizes Buyer,
except to the extent prohibited by the terms of the Nonassignable Assets, at
AMCC’s expense, to perform all the obligations and/or receive all the benefits
of AMCC or any applicable Selling Subsidiaries under the Nonassignable Assets,
and appoints Buyer its attorney-in-fact to act in its name on its behalf or in
the name of any applicable Selling Subsidiaries and on any such Selling
Subsidiaries’ behalf with respect thereto.
     (e) If, within six (6) months after the Closing Date, Buyer has not taken
physical possession of all items of Owned Equipment and all items of Fixtures
and Supplies, AMCC shall provide Buyer with written notice of the existence of
such Owned Equipment and/or Fixtures and Supplies and Buyer shall take physical
possession of such Owned Equipment and/or Fixtures and Supplies within thirty
(30) days after Buyer’s receipt of such written notice. If Buyer has not taken
physical possession of such Owned Equipment and/or Fixtures and Supplies within
such thirty (30) day period, AMCC may dispose of such Owned Equipment and/or
Fixtures and Supplies.
     2.7 Taxes; Recording and Filing Fees
     (a) Notwithstanding any other provision of this Agreement to the contrary,
Buyer, on the one hand, and Sellers, on the other hand, shall share equally any
and all applicable sales, use, transfer or similar Taxes that may be imposed,
assessed or payable by reason of the operation or as a result of the
consummation of the transactions contemplated by this Agreement, including the
sales, transfers, leases, rentals, licenses, and assignments contemplated hereby
(collectively, “Transfer Taxes”). The parties shall use reasonable commercial
efforts to minimize Transfer Taxes, if any, including utilizing electronic-only
delivery methods to transfer all Intellectual Property Rights to the extent such
Intellectual Property Rights may be delivered electronically. The applicable
party shall accurately bill the other party for their share of any Transfer
Taxes due in a timely manner. Transfer Taxes shall not include Seller’s net
income and capital gains Taxes or franchise or other Taxes based on Seller’s net
income.
     (b) All applicable recording or filing fees that may be imposed, assessed
or payable by reason of the operation or as a result of the consummation of the
transactions contemplated by this Agreement or any of the Collateral Agreements
shall be paid by the party primarily responsible for the payment of any such
recording or filing fees according to Law.

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     2.8 Bulk Sales Law
     Buyer hereby waives compliance by Sellers with the requirements and
provisions of any “bulk sales,” “bulk-transfer” or any similar Laws of any
jurisdiction, including Article 6 of the California Uniform Commercial Code,
that may otherwise be applicable with respect to the sale of any or all of the
Purchased Assets to Buyer (collectively, “Bulk Sales Laws”).
     2.9 Inventory and Channel Inventory Adjustments
          (a) Not later than five (5) Business Days after the Closing Date, AMCC
will prepare and deliver to Buyer a certificate, signed by an officer of AMCC,
setting forth the Closing Inventory Amount (the “Closing Inventory Amount
Statement”). Not later than forty-five (45) days after the Closing Date, AMCC
will prepare and deliver to Buyer a certificate, signed by an officer of AMCC,
setting forth the Closing Channel Inventory Amount (the “Closing Channel
Inventory Amount Statement” and, together with the Closing Inventory Amount
Statement, the “Closing Statements”).
          (b) Upon receipt from AMCC of any Closing Statement, Buyer shall have
thirty (30) days to review such Closing Statement (such review period with
respect to such Closing Statement, the “Review Period”). During any Review
Period, AMCC (A) shall, at Buyer’s reasonable request, assist, and shall cause
its Subsidiaries and each of their respective representatives to assist Buyer
and its representatives in their review of such Closing Statement, (B) shall
provide Buyer and its representatives with any information reasonably requested
by them for the purposes of their review and (C) shall give Buyer and its
representatives reasonable access, during normal business hours and upon
reasonable notice, to the personnel, properties and Excluded Records for the
purposes of such review. If Buyer disagrees with AMCC’s computation of the
Closing Inventory Amount or the Closing Channel Inventory Amount, as the case
may be, Buyer may, on or prior to the last day of the applicable Review Period,
deliver a written notice to AMCC (such notice with respect to such applicable
amount, the “Notice of Objection”), which sets forth its specific objections to
AMCC’s calculation of the Closing Inventory Amount or the Closing Channel
Inventory Amount, as the case may be. Any Notice of Objection shall specify
those items or amounts with which Buyer disagrees, together with a reasonably
detailed written explanation of the reasons for disagreement with each such item
or amount, and shall set forth Buyer’s calculation of the Closing Inventory
Amount or the Closing Channel Inventory Amount, as the case may be, based on
such objections. To the extent not set forth in the applicable Notice of
Objection, Buyer shall be deemed to have agreed with AMCC’s calculation of all
other items and amounts contained in the applicable Closing Statement. Buyer and
AMCC acknowledge that the sole purpose of the determination of the Closing
Inventory Amount and the Closing Channel Inventory Amount is to (i) adjust the
Purchase Price so as to reflect the difference between the Closing Inventory
Amount and the Forecasted Inventory Amount and (ii) adjust the Purchase Price so
as to reflect the difference between the Closing Channel Inventory Amount and
the Forecasted Channel Inventory Amount, and that in each case such change is to
be measured using the Closing Inventory Accounting Principles.

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          (c) Unless Buyer delivers any Notice of Objection to AMCC within the
applicable Review Period, Buyer shall be deemed to have accepted AMCC’s
calculation of the Closing Inventory Amount or the Closing Channel Inventory
Amount, as the case may be, and the applicable Closing Statement shall be final,
conclusive and binding on all parties. If Buyer delivers any Notice of Objection
to AMCC within the applicable Review Period, then Buyer and AMCC shall, during
the thirty (30) days following such delivery or any mutually agreed extension
thereof, use their commercially reasonable efforts to reach agreement on the
disputed items and amounts in order to determine the Closing Inventory Amount or
the Closing Channel Inventory Amount, as the case may be. If, at the end of such
period or any mutually agreed extension thereof, Buyer and AMCC are unable to
resolve their disagreements, they shall jointly retain and refer their
disagreements to KPMG LLP (or, if such firm shall decline or is unable to act,
or has a material relationship with Buyer or AMCC or any of their respective
Affiliates, another nationally recognized independent accounting firm mutually
acceptable to Buyer and AMCC) (the “Independent Expert”). The parties shall
instruct the Independent Expert promptly to review this Section 2.9 and to
determine solely with respect to the disputed items and amounts so submitted
whether and to what extent, if any, the Closing Inventory Amount or the Closing
Channel Inventory Amount, as the case may be, set forth in the applicable
Closing Statement requires adjustment. The Independent Expert shall base its
determination solely on written submissions by Buyer and AMCC and not on an
independent review. Buyer and AMCC shall make available to the Independent
Expert all relevant books and records and other items reasonably requested by
the Independent Expert. As promptly as practicable but in no event later than
forty-five (45) days after its retention, the Independent Expert shall deliver
to Buyer and AMCC a report which sets forth its resolution of the disputed items
and amounts and its calculation of the Closing Inventory Amount or Closing
Channel Inventory Amount, as the case may be; provided that in no event shall
(i) the Closing Inventory Amount as determined by the Independent Expert be more
than AMCC’s calculation of the Closing Inventory Amount set forth in the Closing
Inventory Amount Statement nor less than Buyer’s calculation of the Closing
Inventory Amount set forth in the applicable Notice of Objection and (ii) the
Closing Channel Inventory Amount as determined by the Independent Expert be less
than AMCC’s calculation of the Closing Channel Inventory Amount as set forth in
the Closing Channel Inventory Amount Statement nor more than Buyer’s calculation
of the Closing Channel Inventory Amount set forth in the applicable Notice of
Objection. The decision of the Independent Expert shall be final, conclusive and
binding on the parties. The costs and expenses of the Independent Expert shall
be borne proportionally by AMCC and Buyer, on the basis, for each such party, of
the ratio of the collective difference between the amount submitted by such
party and the determination made by the Independent Expert to the collective
difference between the amounts submitted by each party.
          (d) For purposes of this Agreement, “Final Inventory Amount” means the
Closing Inventory Amount: (i) as shown in the Closing Inventory Amount Statement
delivered by AMCC to Buyer pursuant to Section 2.9(a), if no Notice of Objection
with respect thereto is timely delivered by Buyer to AMCC pursuant to
Section 2.9(b); or (ii) if a Notice of Objection is so delivered, (A) as agreed
by Buyer and AMCC pursuant to Section 2.9(c) or (B) in the absence of such
agreement, as shown in the Independent Expert’s calculation delivered pursuant
to Section 2.9(c). If the Final Inventory Amount is less than

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the Forecasted Inventory Amount, AMCC shall pay to Buyer, as an adjustment to
the Purchase Price, in the manner as provided in Section 2.9(f), an amount of
cash equal to the difference between the Final Inventory Amount and the
Forecasted Inventory Amount (the “Deficit Inventory Amount”). If the Final
Inventory Amount is greater than the Forecasted Inventory Amount, Buyer shall
pay to AMCC, as an adjustment to the Purchase Price, in the manner as provided
in Section 2.9(f), an amount of cash equal to the difference between the Final
Inventory Amount and the Forecasted Inventory Amount (the “Excess Inventory
Amount”).
          (e) For purposes of this Agreement, “Final Channel Inventory Amount”
means the Closing Channel Inventory Amount: (i) as shown in the Closing Channel
Inventory Amount Statement delivered by AMCC to Buyer pursuant to
Section 2.9(a), if no Notice of Objection with respect thereto is timely
delivered by Buyer to AMCC pursuant to Section 2.9(b); or (ii) if a Notice of
Objection is so delivered, (A) as agreed by Buyer and AMCC pursuant to
Section 2.9(c) or (B) in the absence of such agreement, as shown in the
Independent Expert’s calculation delivered pursuant to Section 2.9(c). If the
Final Channel Inventory Amount is less than the Forecasted Channel Inventory
Amount, Buyer shall pay to AMCC, as an adjustment to the Purchase Price, in the
manner as provided in Section 2.9(f), an amount of cash equal to seventy five
percent (75%) of the difference between the Final Channel Inventory Amount and
the Forecasted Channel Inventory Amount (the “Deficit Channel Inventory
Amount”). If the Final Channel Inventory Amount is greater than the Forecasted
Channel Inventory Amount, AMCC shall pay to Buyer, as an adjustment to the
Purchase Price, in the manner as provided in Section 2.9(f), an amount of cash
equal to seventy five percent (75%) of the difference between the Final Channel
Inventory Amount and the Forecasted Channel Inventory Amount (the “Excess
Channel Inventory Amount”).
          (f) Within three (3) Business Days after the Final Inventory Amount or
the Final Channel Inventory Amount, as the case may be, has been finally
determined pursuant to this Section 2.9, (i) if there is a Deficit Inventory
Amount or an Excess Channel Inventory Amount, as the case may be, AMCC shall pay
to Buyer an amount equal to the sum of such Deficit Inventory Amount or such
Excess Channel Inventory Amount, as the case may be, calculated as set forth
above and (ii) if there is an Excess Inventory Amount or a Deficit Channel
Inventory Amount, as the case may be, Buyer shall pay to AMCC an amount equal to
the sum of such Excess Inventory Amount or such Deficit Channel Inventory
Amount, as the case may be, calculated as set forth above. Any such payment
shall be made by wire transfer of immediately available funds to an account
designated in writing by the Buyer or the Seller, as the case may be, at least
one (1) Business Day prior to such transfer.

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3. Representations and Warranties of Seller
     Subject to the exceptions set forth in the Schedules delivered by AMCC to
Buyer concurrently with the execution of this Agreement (which disclosures shall
delineate the section or subsection to which they apply but shall also qualify
such other sections or subsections in this Article 3 to the extent that it is
reasonably apparent (without a specific cross-reference) on its face from a
reading of the disclosure items that such disclosure is applicable to such other
section or subsection), AMCC represents and warrants to Buyer that:
     3.1 Organization and Qualification
     Each of AMCC and each Selling Subsidiary is a corporation duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
organization. Each of AMCC and each Selling Subsidiary has all requisite
corporate power and authority to carry on the Storage Business as currently
conducted and to own or lease and operate the Purchased Assets owned or leased
by it. Each of AMCC and each Selling Subsidiary is duly qualified to do business
and is in good standing as a foreign corporation (in any jurisdiction that
recognizes such concept) in each jurisdiction where the ownership or operation
of the Purchased Assets or the operation or conduct of the Storage Business
requires such qualification, except where the failure to be so qualified or in
good standing individually or in the aggregate has not had and would not
reasonably be expected to have a Material Adverse Effect. Since March 31, 2008,
the office locations of AMCC and its Subsidiaries relating to the Storage
Business and the names used by them in the conduct of the Storage Business are
set forth in Schedule 3.1.
     The Selling Subsidiaries are the only Affiliates of AMCC that have title to
any asset reasonably expected to be a Purchased Asset or any obligation
reasonably expected to be an Assumed Liability.
     3.2 Authorization
     Each of AMCC and each Selling Subsidiary has all requisite corporate power
and authority to execute and deliver this Agreement and the Collateral
Agreements to which it is a party and to effect the transactions contemplated
hereby and, as applicable, thereby and the execution, delivery and performance
of this Agreement and the Collateral Agreements to which it is a party have been
duly authorized by all requisite corporate action.
     3.3 Binding Effect
     This Agreement has been duly executed and delivered by AMCC and this
Agreement is, and the Collateral Agreements, when duly executed and delivered by
AMCC and each Selling Subsidiary party thereto, as applicable, will be, valid
and legally binding obligations of such parties, enforceable against them in
accordance with their respective terms, except to the extent that enforcement of
the rights and remedies created hereby and thereby may be affected by
bankruptcy, reorganization, moratorium, insolvency and similar Laws of general
application affecting the rights and remedies of creditors and by general equity
principles.

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     3.4 Non-Contravention; Consents
     (a) Assuming that all Seller Consents have been obtained, the execution,
delivery and performance of this Agreement and the Collateral Agreements by AMCC
and each Selling Subsidiary party thereto, and the consummation of the
transactions contemplated hereby and thereby do not and will not: (i) result in
a breach or violation of any provision of such party’s certificate of
incorporation or by-laws, (ii) violate in any material respect or result in a
material breach of or constitute an occurrence of a material default under any
provision of, result in the acceleration or cancellation of any material
obligation under, or give rise to a right by any party to terminate or amend in
any material respect any material obligation under, any mortgage, deed of trust,
conveyance to secure debt, note, loan, indenture, lien, lease, agreement,
instrument, order, judgment, decree or other arrangement or commitment to which
AMCC or any Selling Subsidiary is a party or by which it is bound or which
relates to the Storage Business or the Purchased Assets or result in the
creation of any Encumbrance (other than a Permitted Encumbrance) upon any of the
Purchased Assets other than as a result of this Agreement or the Collateral
Agreements or (iii) violate in any material respect any Law of any Governmental
Body having jurisdiction over Sellers or the Purchased Assets.
     (b) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Person is required to be obtained by AMCC or any
Selling Subsidiary in connection with the execution and delivery of this
Agreement or the Collateral Agreements to which it is a party or for the sale of
the Purchased Assets and the consummation of the transactions contemplated
hereby and thereby, except for consents or approvals of Third Parties that are
required to transfer or assign to Buyer any Purchased Assets or assign the
benefits of or delegate performance with regard thereto or for AMCC or any
Selling Subsidiary to perform its obligations under this Agreement or the
Collateral Agreements to which it is a party as identified on Schedule 3.4(b)
(the “Seller Consents”).
     3.5 Title to Property; Equipment; Sufficiency of Assets
     (a) Sellers have and at the Closing will have good and valid title to, or a
valid and binding leasehold interest in, all of the real and personal Purchased
Assets free and clear of any Encumbrance (other than a Permitted Encumbrance).
This Section 3.5(a) does not apply to Intellectual Property Rights assigned or
licensed to Buyer pursuant to the Intellectual Property Agreement.
     (b) Schedule 3.5(b) contains a list of all Owned Equipment (including
location) and Leased Equipment (including location) that is true, correct and
complete in all material respects. Schedule 3.5(b) also contains a true, correct
and complete list of leases pursuant to which such Leased Equipment is leased by
Sellers. Sellers have previously provided to Buyer true, correct and complete
copies (including all amendments and modifications to date) of each such lease.
The Owned Equipment and the Leased Equipment constitute all (i) equipment
(including test equipment), computers, servers, machinery, test fixtures,
validation fixtures and hardware, (ii) tangible embodiments in any media of the
Assigned Software and

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Assigned Technical Information, and (iii) other tangible personal property
(including any related spare parts, probe cards, load boards, test sockets,
dies, molds, tools, and tooling), in the case of each of clauses (i), (ii) and
(iii) primarily related to, or primarily used or primarily held for use in, the
operation or conduct of the Storage Business.
     (c) Each material item of Owned Equipment and Leased Equipment is in good
operating condition, reasonable wear and tear excepted, is suitable for the uses
for which it is intended or used, but is otherwise being transferred on a “where
is” and, as to condition, “as is” basis.
     (d) The Purchased Assets to be acquired or licensed under this Agreement
and the Collateral Agreements (including the services to be provided pursuant to
the Transition Services Agreement and the rights to be acquired under this
Agreement and the Collateral Agreements), the Intellectual Property Rights to be
assigned or licensed pursuant to the Intellectual Property Agreement, the
Excluded Contracts, the Nonassignable Licenses, the Benefit Plans and the
Business Employees (i) include all assets, personnel and rights primarily
related to, or primarily used or primarily held for use by Sellers in, the
Storage Business, and (ii) except for those Contracts set forth on
Schedule 3.10(c) and those assets set forth on Schedule 3.5(d), are sufficient
for the conduct of the Storage Business immediately following the Closing by
Buyer in substantially the same manner as currently or formerly (except for
which Seller has no further obligations to support products) conducted by
Sellers. In the event this Section 3.5(d) is breached in any immaterial manner
because Sellers have in good faith failed to identify and transfer any
immaterial assets or properties or provide any immaterial services primarily
related to, or primarily used or primarily held for use in the Storage Business,
such breach shall be deemed cured if AMCC or any Selling Subsidiary, as
applicable, promptly transfers such assets or properties or provides such
services to Buyer at no additional cost to Buyer.
     3.6 Permits
     Except as set forth on Schedule 3.6, there are no material Governmental
Permits necessary for or used by Sellers to operate the Storage Business as
currently conducted. Either AMCC or its Subsidiaries own, hold or possess in
their own name, all material Governmental Permits that are required by currently
effective Laws and necessary to own or lease, operate and use the Purchased
Assets and to use or occupy the Premises and to operate the Storage Business,
all of which are valid and in full force and effect. Sellers are not in
violation of or in default under any such Governmental Permits in any material
respect. As of the date of this Agreement, no proceeding is pending or, to
Sellers’ knowledge, threatened to revoke or limit any such Governmental Permit.
To Sellers’ knowledge, there is no Governmental Permit which will be required to
be obtained by or transferred to Buyer in connection with the operation of the
Storage Business or ownership and use of the Purchased Assets and which will be
unavailable or may not be obtained or transferred, and none of the Transferred
Governmental Permits contains any prohibition, restriction, condition or
limitation materially adversely affecting the current or contemplated operation
of the Storage Business.

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     3.7 Real Estate
     (a) Sellers do not own any real property, and have never owned any real
property, necessary for, primarily related to, or primarily used or primarily
held for use in connection with the operation and conduct of the Storage
Business.
     (b) Schedule 3.7(b) contains a true, correct and complete list, as of the
date hereof, of the Premises. Sellers have provided Buyer with a true, correct
and complete copy of all real property leases for the Premises (the “Premises
Leases”). Except as identified on Schedule 3.7(b), all Premises Leases are in
full force and effect and no Seller has violated, and, to Sellers’ knowledge,
the landlord has not violated or waived, any of the material terms or conditions
of any Premises Lease and all the material covenants to be performed by Sellers
and, to Sellers’ knowledge, the landlord under the Premises Leases have been
performed in all material respects.
     (c) The use of the Premises, as presently used by the Storage Business,
does not violate in any material respect any local zoning or similar land use
Laws or governmental regulations. Sellers are not in material violation of or in
noncompliance in any material respect with any covenant, condition, restriction,
order or easement affecting any Premises. There is no condemnation or, to the
knowledge of Sellers, threatened condemnation affecting the Premises.
     (d) The use of the Premises and improvements thereon by Sellers comply with
all applicable Laws, and Sellers have obtained all approvals, licenses, permits
and consents, which remain in full force and effect, of Governmental Bodies
required for the leasing of the Premises and for the operation and conduct of
the Storage Business therein, except for any noncompliance with applicable laws
or failure to obtain or maintain any required approvals, licenses, permits and
consents that, individually or in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect.
     3.8 Compliance With Laws; Litigation
     (a) Except as set forth on Schedule 3.8(a), with respect to the Storage
Business conducted by Sellers and the Purchased Assets, Sellers are in
compliance in all material respects with all applicable Laws.
     (b) Except as set forth on Schedule 3.8(b), (i) no material judgment,
order, writ, injunction or decree of any Governmental Body that is related to
the Storage Business or the Purchased Assets is in effect and (ii) there is no
material action, suit, proceeding, arbitration or governmental investigation
pending or, to Sellers’ knowledge, threatened against AMCC or any Selling
Subsidiary (A) relating to the Storage Business or the Purchased Assets or
(B) that would hinder or delay its ability to consummate the transactions
contemplated by this Agreement or any Collateral Agreement.

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     3.9 Business Employees
     (a) Schedule 3.9(a) contains a true, correct and complete list of all
employees of AMCC and its Subsidiaries primarily engaged in the operation or
conduct of the Storage Business and those employees of AMCC and its Subsidiaries
engaged in the physical design and other support services that provide services
primarily to the Storage Business, in each case, as of the date specified on
such list, showing for each Business Employee, the name, current position held,
service commencement date (with respect to the Storage Business as conducted by
AMCC or its Subsidiaries), salary or wages and aggregate annual compensation for
AMCC’s last fiscal year and as of the date of this Agreement. None of the
Business Employees is covered by any union, collective bargaining agreement or
other similar labor agreement.
     (b) Except as set forth on Schedule 3.9(b), the employment of each Business
Employee is terminable by AMCC or the applicable Subsidiary of AMCC at will, and
no Business Employee is entitled to receive severance pay or other benefits from
AMCC or the applicable Subsidiary of AMCC following the termination of such
Business Employee’s employment.
     (c) Except as set forth on Schedule 3.9(c), to Sellers’ knowledge, (i) no
Business Employee has any present intention to terminate his employment, except
as contemplated by this Agreement and (ii) no Business Employee is a party to or
is bound by any confidentiality agreement, noncompetition agreement or other
Contract (with any Person) that may reasonably be expected to have an adverse
effect on the performance by such employee of any of his duties or
responsibilities as an employee of the Storage Business.
     (d) Except as set forth in Schedule 3.9(d), with respect to the Business
Employees, neither AMCC nor any Selling Subsidiary nor any of their ERISA
Affiliates currently maintains, contributes to or has any material Liability
under any Benefit Plan. With respect to each of the Benefit Plans identified on
Schedule 3.9(d), Sellers have made available to Buyer true, correct and complete
copies of the most recent summary plan or other written description thereof.
Each Benefit Plan listed on Schedule 3.9(d) has been operated in material
compliance with all applicable Laws, including ERISA. Each Benefit Plan which is
a Pension Plan and which is intended to be qualified under Section 401(a) of the
Code, has received a favorable determination letter from the Internal Revenue
Service with respect to “TRA” (as defined in Section 1 of Rev. Proc. 93-39), and
Sellers are not aware of any circumstances likely to result in revocation of any
such favorable determination letter. Except as disclosed on Schedule 3.9(d),
neither AMCC nor any Selling Subsidiary nor any of their ERISA Affiliates
currently maintains, contributes to or has any material Liability under any
Benefit Plan, has any obligations for retiree health or life benefits under any
Benefit Plan or has ever represented, promised or contracted (whether in oral or
written form) to any employee(s) that such employee(s) would be provided with
retiree health or life benefits.
     (e) With respect to the Business Employees, there is not presently pending
or existing, and to Sellers’ knowledge there is not threatened, (i) any strike,
slowdown, picketing, or work stoppage or (ii) any application for certification
of a collective bargaining agent.

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     (f) Except as set forth in Schedule 3.9(f), the execution and delivery of
this Agreement and the Collateral Agreements by Sellers, the performance by
Sellers of their obligations hereunder and thereunder and the consummation by
Sellers of the transactions contemplated hereby and thereby will not (either
alone or upon the occurrence of any additional or subsequent events) constitute
an event under any Benefit Plan or employment contract that will or may result
in any payment, acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with respect
to any Business Employee.
     3.10 Contracts
     (a) Sellers have delivered or made available to Buyer a true, correct and
complete copy of each Contract and License (the “Material Contracts”).
Schedule 3.10(a) contains a true, correct and complete list, as of the date
hereof, of the following Material Contracts:
          (i) employment or consulting agreements, contracts or commitments with
an employee or individual consultant or salesperson or consulting or sales
agreement, contract or commitment with a firm or other organization, in each
case other than offer letters that do not contain severance or change of control
provisions;
          (ii) fidelity or surety bonds or completion bonds;
          (iii) leases of personal property having a value individually in
excess of $25,000;
          (iv) agreements of indemnification or guaranty (other than in the
ordinary course of business in connection with the sale of Sellers’ products);
          (v) agreements, contracts or commitments containing any covenant or
license limiting the freedom of Sellers or any of their Subsidiaries to engage
in the Storage Business or to compete with any person in the Storage Business;
          (vi) any License, other than non-exclusive “shrink-wrap,” “click-wrap”
and similar end user licenses with an aggregate license fee of less than $2,500;
          (vii) any licenses granting exclusive rights to any Intellectual
Property primarily related to, primarily used or primarily held for use in, the
operation or conduct of the Storage Business;
          (viii) any agreement, contracts, commitments or licenses with respect
to any Transferred Intellectual Property;
          (ix) agreements, contracts or commitments relating to capital
expenditures and involving future payments in excess of $50,000;

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          (x) agreements, contracts or commitments relating to the disposition
or acquisition of assets outside the ordinary course of business;
          (xi) mortgages, indentures, loans or credit agreements, security
agreements or other agreements or instruments relating to the borrowing of money
or extension of credit, including guaranties referred to in clause (iv) hereof;
          (xii) purchase orders or contracts for the purchase of raw materials
involving $50,000 or more, other than purchase orders or contracts for
integrated circuits from IBM;
          (xiii) construction contracts;
          (xiv) distribution, joint marketing or development agreements; or
          (xv) other agreements, contracts or commitments that involve $50,000
or more or are not cancelable without penalty upon thirty (30) days notice.
     (b) Each Material Contract is valid, binding and enforceable against each
Seller party thereto and, to Sellers’ knowledge, the other parties thereto in
accordance with its terms and is in full force and effect. Except as identified
on Schedule 3.10(b), each Seller party thereto has complied in all material
respects and has not received any notice that it is in default under or in
breach of or is otherwise delinquent in performance under any Material Contract
to which it is a party or by which it is bound, and, to Sellers’ knowledge, each
of the other parties thereto has performed all obligations required to be
performed by it under, and is not in default under, any Material Contract and no
event has occurred that, with notice or lapse of time, or both, would constitute
such a default, except for breaches, failures of performance or defaults that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect.
     (c) Schedule 3.10(c) sets forth certain contracts and licenses (other than
Benefit Plans) which may be material to the Storage Business and/or would be
required to be included on Schedule 3.10(a) but for the fact that they are not
primarily related to, or primarily used or primarily held for use in the
operation or conduct of the Storage Business or contracts and licenses by which
the Purchased Assets may be bound.
     3.11 Environmental Matters
     Except a set forth in Schedule 3.11 and with respect to the Storage
Business:
     (a) None of the Premises is subject to any on-going investigation by, order
from or agreement with any Person relating to (i) any Environmental Law, or
(ii) any remedial action arising from the release or threatened release of a
Hazardous Substance into the environment;
     (b) Neither AMCC nor any Selling Subsidiary is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging or
addressing a

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material violation of, or material Liability under, any Environmental Law in
respect of the operation and conduct of the Storage Business or in respect of
the Premises;
     (c) Sellers have filed all notices required to be filed under any
Environmental Law indicating past or present treatment, storage or disposal of a
Hazardous Substance or reporting a spill or release of a Hazardous Substance
into the environment, except where failures to file any such notices,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect;
     (d) Sellers have not received any written notice to the effect that it is
or may be liable to any Person as a result of the release or threatened release
of a Hazardous Substance in connection with the Storage Business, except for any
such notices relating to matters that, individually or in the aggregate, have
not had and would not reasonably be expected to have a Material Adverse Effect;
and
     (e) There are no Hazardous Substances (other than those contained in office
and janitorial products maintained in compliance with Environmental Laws) in,
on, under or about the Premises (including the soil, groundwater and
improvements at such locations).
     3.12 Revenues; Financial Information; Absence of Certain Changes
     (a) Schedule 3.12(a) sets forth a statement of revenues for the Storage
Business for each of the fiscal years ended March 31, 2008, 2007 and 2006 and
for the quarterly periods ending on June 30, September 30 and December 31, 2008
and March 31, 2009. The statement of revenues is derived from and has been
prepared in accordance with GAAP and the books and records of AMCC (which are
accurate and complete in all material respects) on a consistent basis throughout
the periods covered thereby, presents fairly in all material respects the
revenues of the Storage Business for such periods and are true, correct and
complete in all material respects.
     (b) Schedule 3.12(b) sets forth certain historical financial information
(including profit and loss, accounts receivable and Inventory statements) for
the Storage Business for each of the fiscal years ended March 31, 2008 and 2007
and for the quarterly periods ending on June 30, September 30 and December 31,
2008. The historical financial information relating to the Storage Business set
forth on Schedule 3.12(b) was prepared in good faith by AMCC’s management and is
based upon reasonable assumptions. Sellers are not aware of any fact or set of
circumstances that would lead them to believe that such historical financial
information is incorrect or misleading in any material respect. Promptly after
AMCC prepares and finalizes its financial statements for the fiscal year and
quarterly period ending March 31, 2009, AMCC will prepare and deliver to Buyer
certain historical financial information (including profit and loss, accounts
receivable and Inventory statements) for the Storage Business for the quarterly
period ending on March 31, 2009, which will be prepared in good faith by AMCC’s
management and will be based upon reasonable assumptions.

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     (c) Except as set forth in Schedule 3.12(c), since December 31, 2008 to the
date hereof, the Storage Business has been conducted in the ordinary course
consistent with past practices and there has not been with respect to the
Storage Business:
          (i) any event, occurrence, development or state of circumstances or
facts which, individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect;
          (ii) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the Storage Business or any Purchased Asset
which, individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect;
          (iv) any relinquishment by Sellers of any contract or other right, in
either case, material to the Storage Business;
          (v) any material change in any method of accounting or accounting
practice by AMCC or any of its Subsidiaries with respect to the Storage
Business;
          (vi) any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize the Business Employees, or any lockouts, strikes, slowdowns, work
stoppages or threats thereof by or with respect to Business Employees;
          (viii) any amendment or change to the organizational or governing
documents of AMCC or any Selling Subsidiary that restricts, limits or impairs
such party’s ability to consummate the transactions contemplated hereby;
          (ix) any waiver or release of any material right or claim of or in
favor of Sellers principally related to the Storage Business, including any
compromise or settlement of any claim, litigation or other cause of action
principally related to the Storage Business brought by Sellers against any Third
Party;
          (x) any commencement or notice or, to the knowledge of Sellers, any
threat of the commencement of any lawsuit or proceeding against or investigation
of either AMCC or any Selling Subsidiary or their business or affairs in each
case which could reasonably be expected to affect the Storage Business or the
Purchased Assets;
          (xi) any notice of any claim of ownership by a Third Party of the
Transferred Intellectual Property or the Licensed Intellectual Property, or any
allegations that Sellers’ operation of the Storage Business or use or
exploitation of any of the Purchased Assets is infringing on or has infringed
upon any Third Party’s Intellectual Property Rights, in each case excluding any
notice or claim that would not reasonably be expected to impair or limit in any
material respect the use or ownership of such Transferred Intellectual Property
or the Licensed Intellectual Property or the conduct of the Storage Business in
the manner in which it currently is being conducted;

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          (xii) any loss of any material distributor or supplier relationship
with AMCC or any Selling Subsidiary that is primarily related to the Storage
Business or any material adverse change in such relationship;
          (xiii) any injunction issued or other applicable Laws prohibiting
Sellers from selling any products in any jurisdiction;
          (xiv) any loss of any customer of the Storage Business which generated
sales in excess of one hundred thousand dollars ($100,000) during the twelve
(12) months prior to the date of this Agreement, or any notice by any such
customer or distributor of its intention to terminate or materially change the
terms of or the volume of purchases of products from Sellers;
          (xv) any shipments or sales of quantities of products of the Storage
Business to customers, including distributors, other than in the ordinary
course; or
          (xvii) any agreement by Sellers or their Subsidiaries to do any of the
foregoing.
     (d) No Seller has received or booked any prepaid revenues applicable to the
Storage Business applicable to performance due after the Closing Date.
     3.13 Intellectual Property
     (a) The schedules and appendices to the Intellectual Property Agreement
contain a true, correct and complete listing of all Transferred Intellectual
Property that is registered or the subject of a registration application with
the United States Patent and Trademark Office, United States Copyright Office or
foreign equivalent thereof.
     (b) Except as listed in Schedule 3.13(b), the Transferred Intellectual
Property constitutes all the Intellectual Property (other than Patents) owned by
Sellers and primarily related to the Storage Business.
     (c) Sellers exclusively own and have a valid right to assign to Buyer all
right, title and interest in and to the Transferred Intellectual Property.
Sellers either own or have a valid right in or to the Licensed Intellectual
Property to grant to Buyer the Licenses in the Intellectual Property Agreement.
Following the Closing, all Transferred Intellectual Property will be fully
transferable, alienable or licensable by Buyer without restriction and without
payment of any kind to any Third Party (subject to non-exclusive licenses
granted pursuant to standard Contracts, representative copies of which have been
provided to Buyer, entered into in the ordinary course of the operation of the
Storage Business). Except as set forth in Schedule 3.13(c), no licenses or
consents are required from, or payments required to, any Third Party to permit
Buyer to fully exploit the Transferred Intellectual Property and to exercise the
rights granted to it with respect to the Licensed Intellectual Property.
     (d) Except as set forth in Schedule 3.13(d), to Sellers’ knowledge, there
are no claims or demands of any Third Party pertaining to the Transferred
Intellectual Property or the

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Licensed Intellectual Property, with respect to the operation of the Storage
Business by Sellers. No proceedings have been instituted, or are pending, or, to
Sellers’ knowledge, are threatened which challenge the rights of Sellers in
respect of the Transferred Intellectual Property or Licensed Intellectual
Property. To Sellers’ knowledge, the Licensed Intellectual Property constitutes
all of the Intellectual Property (other than commercially available software and
publicly available open source software) owned by third parties and required
(i) to conduct the Storage Business as of the date hereof and (ii) to make, have
made, use, lease, import, offer to sell, or sell the Storage Products that are
commercially available as of the date hereof.
     (e) The Storage Products constitute all of the products made, sold,
designed, under development or otherwise constituting part of the Storage
Business (other than discontinued products for which there is no continuing
support obligation or Liability). Except as set forth in Schedule 3.13(e), the
Transferred Intellectual Property and the Licensed Intellectual Property
together constitute all of the Intellectual Property owned by Sellers and
required (i) to conduct the Storage Business as of the date hereof and (ii) to
make, have made, use, lease, import, offer to sell, or sell the Storage Products
that are commercially available as of the date hereof.
     (f) Schedule 3.13(f) lists (i) all United States and international
registered Trademarks, applications to register Trademarks, including
intent-to-use applications, and (ii) United States mask work registrations and
applications to register mask works, which are owned by Sellers and which are
primarily related to the Storage Business, including the jurisdictions in which
each such Intellectual Property Right has been issued or registered or in which
any application for such issuance and registration has been filed.
     (g) To the extent that any Transferred Intellectual Property or any portion
thereof was originally owned or created by or for any Third Party, including any
predecessor of Sellers or previous owner of the Storage Business: (i) such Third
Parties have not retained and do not have any rights or licenses with respect to
the Transferred Intellectual Property; and (ii) to Sellers’ knowledge, no basis
exists for such Third Party to challenge or object to this Agreement.
     (h) Sellers have the full and unencumbered right to assign and transfer to
Buyer all of their rights in and under the Transferred Licenses without
incurring, or causing Buyer to incur, any obligation to any Third Party,
including any royalty obligations, other than those obligations that Sellers
would have had had such transfer not taken place.
     (i) Except as set forth in Schedule 3.13(i), Sellers have not transferred
ownership of, or granted any license (whether exclusive or non-exclusive) of or
right to use, or authorized the retention of any rights to use, any Transferred
Intellectual Property to any other Person (other than non-exclusive licenses
granted pursuant to standard Contracts, representative copies of which have
provided to Buyer, entered into in the ordinary course of the operation of the
Storage Business).
     (j) Other than the Contracts set forth on Schedule 3.13(j), there are no
contracts, licenses or agreements to which either AMCC or any of its
Subsidiaries is a Party with respect to any Transferred Intellectual Property.

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     (k) To Sellers’ knowledge, neither (x) the operation of the Storage
Business, including the making, using, selling, licensing and distribution of
the Storage Products, by any Seller, nor (y) the Licensed Intellectual Property
or the Transferred Intellectual Property (i) infringes or misappropriates any
Intellectual Property Rights of any Person; (ii) violates the rights of any
Person; or (iii) constitutes unfair competition or trade practices under the
laws of any jurisdiction in which Seller or the Selling Subsidiary conducts the
Storage Business. Except as set forth in Schedule 3.13(k), to Sellers’
knowledge, neither AMCC nor any Selling Subsidiary has received notice from any
Person claiming that the Storage Business, the Transferred Intellectual Property
or Licensed Intellectual Property infringes or misappropriates the Intellectual
Property Rights of any Person or constitutes unfair competition or trade
practices under the laws of any jurisdiction.
     (l) Except as set forth in Schedule 3.13(l), there are no Contracts or
Licenses between AMCC or any Selling Subsidiary and any Third Party with respect
to the Transferred Intellectual Property or the Licensed Intellectual Property,
under which there is any dispute or, to Sellers’ knowledge, any threatened
dispute regarding the scope of such agreement or performance under such
agreement.
     (m) Except as set forth in Schedule 3.13(m), to Sellers’ knowledge, no
Person is infringing or misappropriating the Transferred Intellectual Property.
     (n) Sellers have reasonably protected their rights in Confidential
Information and trade secrets associated with or related to the Transferred
Intellectual Property. Sellers have and enforce a policy requiring each employee
and consultant of Sellers to execute a proprietary rights and confidentiality
agreement substantially in the form set forth in Schedule 3.13(n), and all
current and former employees and consultants of Sellers who have created or
modified any of the Transferred Intellectual Property or Licensed Intellectual
Property have executed such an agreement assigning all of such employees’ and
consultants’ rights in and to the Transferred Intellectual Property and the
Licensed Intellectual Property to Sellers, as applicable.
     (o) AMCC has provided Buyer with access to its master bug database with
respect to the Storage Products, and no information was expunged regarding the
Storage Products prior to providing such access (other than routine revisions
and deletions of information and data performed in the ordinary course of
business).
     3.14 Taxes
     (a) There are no liens for Taxes upon any of the Purchased Assets other
than Permitted Encumbrances and no action, proceeding or, to Sellers’ knowledge,
investigation has been instituted against AMCC or any Affiliate thereof that
would give rise to any such lien other than Permitted Encumbrances.
     (b) (i) Each of AMCC and each Selling Subsidiary has duly and timely filed
all Returns that it was required to file; (ii) all such Returns were correct and
complete in all material respects; (iii) all Taxes required to be shown as due
on any Return have been paid,

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and (iv) all other Taxes that have become due and payable have been paid. To
Sellers’ knowledge, there is no actual or contingent liability for Taxes that
would reasonably be expected to become a liability of Buyer by reason of the
transactions described herein. No Governmental Body has claimed that the
Purchased Assets or the Storage Business are subject to Tax in a jurisdiction in
which the required Returns have not been filed by Sellers or an Affiliate
thereof. No material issues have been raised in writing in any audits,
examinations or disputes pertaining to Taxes arising from the Purchased Assets
or the Storage Business.
     (c) None of the Purchased Assets is an asset or property that is or will be
required to be treated as (i) described in Section 168(f)(8) of the U.S.
Internal Revenue Code of 1954 and in effect immediately before the enactment of
the Tax Reform Act of 1986, or (ii) tax-exempt use property within the meaning
of Section 168(h)(1) of the Code.
     3.15 Inventory; Channel Inventory
     (a) Except as set forth on Schedule 3.15, all Inventory (i) consists of
items of a quantity and quality historically usable or saleable in the ordinary
course of business, except for obsolete items that have been written down to
estimated net realizable value in accordance with generally accepted accounting
principles, consistently applied, (ii) except for Channel Inventory, is located
at the Premises or at the facilities of one or more of Sellers or is with
Beyonics Technology Limited and (iii) has not been consigned or pledged as
collateral to any Person. With the exception of below-standard quality Inventory
that have been written down to their estimated net realizable value in
accordance with GAAP, the Inventory is in good and proper physical condition,
free from defects in materials and workmanship. Since March 31, 2008, Sellers
have sold and continued to replenish Inventory in a normal and customary manner
consistent with past practice. Schedule 3.15 sets forth (i) for the period
beginning January 8, 2008 and ending March 9, 2009, the weekly sell-in, sell-out
and Channel Inventory revenue and units shipped of Storage Products and (ii) as
of December 31, 2008, the Inventory that is finished goods inventory and its
location as of the date specified therein. As of the Closing Date, the Inventory
located at Beyonics Technology Limited will include a normalized level (i.e.,
approximately four weeks) of PowerPC integrated circuits.
     (b) Since March 31, 2008, Channel Inventory has been sold by Sellers in
transactions arising in the ordinary course of business, and has been accounted
for in accordance with GAAP, consistently applied.
     (c) The Channel Inventory revenue set forth on Schedule 3.15 was calculated
in a manner consistent with the Closing Inventory Accounting Principles set
forth on Schedule 2.9.
     3.16 Customers and Suppliers
     Schedule 3.16 contains a list setting forth (a) the 10 largest customers of
the Storage Business, by dollar amount, during the periods set forth therein,
and (b) the 10 largest suppliers of the Storage Business, by dollar amount,
during the periods set forth therein. The Storage Business does not have any
credit or vendor financing attributable to it for any of

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these 10 largest customers or for any other customer. All purchases and sale
orders and other commitments for purchases and sales made by Sellers in
connection with the Storage Business since March 31, 2008 have been made in the
ordinary course of business consistent with past practices, and no consideration
has been provided to any suppliers or customers or any of their respective
representatives other than payments to such suppliers for the payment of the
invoiced price of supplies purchased or goods sold in the ordinary course of
business. No customer or supplier of the Storage Business listed on
Schedule 3.16 has, since March 31, 2008 to the date hereof, cancelled or
terminated, or provided written notice of an intention to cancel or terminate,
any Contract with either AMCC or any Selling Subsidiary.
     3.17 Orders and Commitments
     All outstanding Contracts for the purchase of supplies and materials for
the Storage Business were made in the ordinary course of business. Except as set
forth on Schedule 3.17, all accepted and unfulfilled purchase orders for the
sale of products to Third Parties entered into for the account of the Storage
Business were received and have been acknowledged by Sellers in the ordinary
course of business, consistent with past practice, and such acknowledgement was
made by delivery of a standard form acknowledgement that has been previously
provided to Buyer, with no material additions, deletions or other modifications
to such form.
     3.18 Affiliated Transactions
     Schedule 3.18 sets forth a true, complete and correct list of all written
and binding oral agreements that constitute Contracts between AMCC or any
Selling Subsidiary, on the one hand, and such party’s Affiliates, on the other
hand, relating to the Storage Business, the Purchased Assets or Assumed
Liabilities other than in respect of the provision by such Seller or its
Affiliates of normal corporate overhead services to the Storage Business, all of
which will terminate as of the Closing Date except as provided in the Transition
Services Agreement.
     3.19 Product Recalls
     Except as set forth on Schedule 3.19, since March 31, 2008, there has been
no pending, or to Sellers’ knowledge, threatened recall or investigation of any
Storage Product sold by Sellers.
     3.20 Product Warranties
     Schedule 3.20 includes copies of the standard terms and conditions of sale
for the Storage Business (containing applicable guaranty, warranty and indemnity
provisions). Except as set forth on Schedule 3.20, Storage Products have been
sold by Sellers in all material respects in accordance with the standard terms
and conditions of sale.

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     3.21 Brokers
     Except for Oppenheimer & Co. Inc. (for services provided on behalf of
AMCC), as to which AMCC shall have full responsibility and to whom Buyer shall
not have any liability, no broker, investment banker, financial advisor or other
Person is entitled to any broker’s, finder’s, financial advisor’s or other
similar fee or commission in connection with the transactions contemplated by
this Agreement or any Collateral Agreement based on arrangements made by or on
behalf of AMCC or any of its Subsidiaries.
     3.22 No Other Representations or Warranties
     Except for the representations and warranties contained in this Section 3,
none of Sellers or any of their respective Affiliates or any other Person makes
any representations or warranties, and Sellers hereby disclaim any other
representations or warranties, whether made by Sellers or any Affiliate thereof,
or any of their respective officers, directors, employees, agents or
representatives, with respect to the execution and delivery of this Agreement or
any Collateral Agreement or the transactions contemplated hereby or thereby.
4. Representations and Warranties of Buyer
     Buyer represents and warrants to Sellers that:
     4.1 Organization and Qualification
     Buyer is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware, and has all requisite
corporate power and authority to carry on its business as currently conducted
and to own or lease and operate its properties. Buyer is duly qualified to do
business and is in good standing as a foreign corporation (in any jurisdiction
that recognizes such concept) in each jurisdiction where the ownership or
operation of its assets or the operation or conduct of its business requires
such qualification, except where the failure to be so qualified or in good
standing, individually or in the aggregate, has not had and would not reasonably
be expected to have a material adverse effect on the ability of Buyer to perform
its obligations under this Agreement and the Collateral Agreements.
     4.2 Authorization
     Buyer has all requisite corporate power and authority to execute and
deliver this Agreement and the Collateral Agreements and to effect the
transactions contemplated hereby and thereby and the execution, delivery and
performance of this Agreement and the Collateral Agreements have been duly
authorized by all requisite corporate action.
     4.3 Binding Effect
     This Agreement has been duly executed and delivered by Buyer and this
Agreement is, and the Collateral Agreements when duly executed and delivered by
Buyer will be, valid and legally binding obligations of Buyer, enforceable
against it in accordance with their respective terms, except to the extent that
enforcement of the rights and remedies created hereby and

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thereby may be affected by bankruptcy, reorganization, moratorium, insolvency
and similar Laws of general application affecting the rights and remedies of
creditors and by general equity principles.
     4.4 No Violations
     (a) The execution, delivery and performance of this Agreement and the
Collateral Agreements by Buyer and the consummation of the transactions
contemplated hereby and thereby do not and will not: (i) result in a breach or
violation of any provision of Buyer’s certificate of incorporation or by-laws,
(ii) violate in any material respect or result in a material breach of or
constitute an occurrence of a material default under any provision of, result in
the acceleration or cancellation of any material obligation under, or give rise
to a right by any party to terminate or amend in any material respect any
material obligation under, any mortgage, deed of trust, conveyance to secure
debt, note, loan, indenture, lien, lease, agreement, instrument, order,
judgment, decree or other arrangement or commitment to which Buyer is a party or
by which it or its assets or properties are bound, or (iii) violate in any
material respect any Law of any Governmental Body having jurisdiction over Buyer
or any of its properties.
     (b) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Person is required to be obtained by Buyer in
connection with the execution and delivery of this Agreement and the Collateral
Agreements or the consummation of the transactions contemplated hereby or
thereby by Buyer, except for any such consents, approvals, orders,
authorizations, registrations, declarations or filings the failure of which to
be obtained or made, individually or in the aggregate, have not had and would
not reasonably be expected to have a material adverse effect on the ability of
Buyer to perform its obligations under this Agreement and the Collateral
Agreements.
     4.5 Brokers
     No broker, investment banker, financial advisor or other Person is entitled
to any broker’s, finder’s, financial advisor’s or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Buyer or any Affiliate of Buyer.
     4.6 Independent Assessment
     Buyer acknowledges that, except as explicitly set forth in this Agreement,
neither AMCC nor any Affiliate thereof has made any warranty, express or
implied, as to the future financial prospects of the Storage Business or its
profitability for Buyer, or with respect to any forecasts, projections or
Storage Business plans prepared by or on behalf of Sellers and delivered to
Buyer in connection with the Storage Business and the negotiation and the
execution of this Agreement.

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     4.7 No Other Representations or Warranties
     Except for the representations and warranties contained in this Section 4,
none of Buyer, any Affiliate of Buyer or any other Person makes any
representations or warranties, and Buyer hereby disclaims any other
representations or warranties, whether made by Buyer or any Affiliate of Buyer,
or any of their respective officers, directors, employees, agents or
representatives, with respect to the execution and delivery of this Agreement or
any Collateral Agreement or the transactions contemplated hereby or thereby.
5. Certain Covenants
     5.1 Access and Information
     (a) Sellers shall, and shall cause their respective Subsidiaries to, give
to Buyer and its officers, employees, accountants, counsel and other
representatives reasonable access during Sellers’ normal business hours
throughout the period prior to the Closing to all of Sellers’ properties, books,
contracts, commitments, reports of examination and records directly relating to
the Storage Business, the Purchased Assets or the Assumed Liabilities, except
for (i) all or any portions of personnel records that AMCC reasonably believes
are precluded by applicable Law from disclosing (provided that the disclosure of
any personnel records or portions thereof shall be subject to any limitations
that AMCC believes are reasonably required to preserve any Third Party
confidentiality obligations) and (ii) medical records. Sellers shall assist
Buyer in making such investigation and shall cause their counsel, engineers,
consultants, employees and other representatives to be reasonably available to
Buyer for such purposes.
     (b) After the Closing, Sellers, on the one hand, and Buyer, on the other
hand, shall provide, and shall cause their respective Subsidiaries to provide,
to each other and to their respective officers, employees, counsel and other
representatives, upon request (subject to applicable Laws and any limitations
that are reasonably required to preserve any applicable attorney-client
privilege or any Third Party confidentiality obligation in which case Sellers
and Buyer, as the case may be, will use reasonable commercial efforts to develop
an alternative means to provide any such information that is subject to such
limitations), reasonable access for inspection and copying of all Business
Records (other than (i) all or any portions of personnel records that AMCC
reasonably believes are precluded by applicable Law from disclosing and
(ii) medical records), Governmental Permits, Licenses, Contracts and any other
information (other than (i) all or any portions of personnel records that AMCC
reasonably believes are precluded by applicable Law from disclosing and
(ii) medical records) existing as of the Closing Date and relating to the
Storage Business, the Purchased Assets or the Assumed Liabilities, and shall
make their respective personnel reasonably available for interviews, depositions
and testimony in any legal matter concerning transactions contemplated by this
Agreement, the operations or activities relating to the Storage Business, the
Purchased Assets or the Assumed Liabilities, and as otherwise may be necessary
or desirable to enable the party requesting such assistance to: (i) comply with
any reporting, filing or other requirements imposed by any Governmental Body;
(ii) assert or defend any claims or allegations in any litigation or arbitration
or in any administrative or legal proceeding other than claims or allegations
that one party to this Agreement has asserted

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against the other; or (iii) subject to clause (ii) above, perform its
obligations under this Agreement. The party requesting such information or
assistance shall reimburse the other party for all reasonable and necessary
out-of-pocket costs and expenses incurred by such party in providing such
information and in rendering such assistance. The access to files, books and
records contemplated by this Section 5.1(b) shall be during normal business
hours and upon reasonable prior notice and shall be subject to such reasonable
limitations as the party having custody or control thereof may impose to
preserve the confidentiality of information contained therein.
     (c) Subject to the restrictions and limitations contained herein and in the
Collateral Agreements, including with respect to confidentiality and
non-competition, from and after the Closing, each Seller may retain copies of
and use any portions of the Business Records which primarily relate to the
Excluded Assets or the Excluded Liabilities.
     5.2 Conduct of the Storage Business
     From and after the execution and delivery of this Agreement and until the
earlier of the Closing and the termination of this Agreement in accordance with
its terms, except as otherwise contemplated by this Agreement or identified on
Schedule 5.2 or as Buyer shall otherwise consent to in writing, Sellers, with
respect to the Purchased Assets, the Assumed Liabilities and the Storage
Business:
     (a) will carry on the Storage Business in the ordinary course consistent
with past practice and, to the extent consistent therewith, use reasonable best
efforts to keep intact the Storage Business, keep available the services of the
Business Employees and preserve the relationships of the Storage Business with
customers, suppliers, licensors, licensees, distributors and others that have a
business relationship with the Storage Business;
     (b) will not permit, other than sales of Inventory in the ordinary course
of business consistent with past practice in arm’s-length Third Party
transactions, any of the Purchased Assets (real or personal, tangible or
intangible) to be sold, licensed, leased, abandoned, transferred or otherwise
disposed or subjected to any Encumbrance;
     (c) except as set forth in Schedule 5.2(c), shall not license any Assigned
Technical Information or Assigned Software to any Third Party except for
non-exclusive, object code only, end-user licenses granted to customers in the
ordinary course of business consistent with past practice;
     (d) will not acquire any asset that will be a Purchased Asset except in the
ordinary course of business consistent with past practice;
     (e) will not terminate or materially extend or materially modify any
Transferred Contract (or enter into any new agreement of such type) and will
continue performance of, in the ordinary course of business consistent with past
practice, their obligations under all Transferred Contracts and other
obligations to be included as part of the Purchased Assets and Assumed
Liabilities;

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     (f) will not incur or assume any Liabilities, obligations or indebtedness
for borrowed money, in each case that would (i) constitute an Assumed Liability,
or (ii) otherwise encumber or adversely affect the Purchased Assets (other than
Permitted Encumbrances);
     (g) will not pay any bonus or make any cash incentive payment or similar
payment to, or increase the amount of the wages, salary, commissions, benefits,
equity compensation or other compensation or remuneration payable to, or
accelerate any benefits available to, any of the Business Employees other than
in the ordinary course of business consistent with past practice as applicable
to all Seller employees or in accordance with existing Benefit Plans; provided
that, in either case, Sellers shall not, and shall cause their respective
Affiliates not to, increase any Business Employee’s base salary;
     (h) will not adopt or amend any Benefit Plan in a manner primarily
affecting Business Employees, except as required by Law, or enter into or amend
any employment agreement with such Business Employees;
     (i) will not sell Inventory outside of the ordinary course of business
consistent with past practice, including (i) acceleration of any sales to
increase, or that have the effect of increasing Inventory sold to distributors
of the Storage Business, (ii) offering discounts, rebates or special promotions
that have the effect of accelerating sales to customers, or (iii) sales to
customers outside of the authorized distribution channel of the Storage
Business;
     (j) will replenish Inventory in a normal and customary manner consistent
with past practice and will not permit levels of Inventory to fall below
reasonably expected requirements of the Storage Business consistent with past
practice;
     (k) will comply with all Laws applicable to the Storage Business and all
Governmental Permits that are part of the Purchased Assets and the Assumed
Liabilities; and
     (l) will not enter into any agreement or commitment with respect to, or
agree or commit to do, any of the foregoing.
     5.3 Tax Reporting and Allocation of Consideration
     (a) Subject to Section 5.3(d) below, each of AMCC and each Selling
Subsidiary shall be responsible for the preparation and filing of all Returns of
such party (including Returns required to be filed after the Closing Date) to
the extent such Returns include or relate to (i) the use or ownership of the
Purchased Assets by it, or (ii) during any Pre-Closing Tax Period through the
Closing, the conduct of the Storage Business (“Seller’s Returns”). Seller’s
Returns shall be true, complete and correct and prepared in accordance with
applicable Law in all material respects. One or more of Sellers, as applicable,
will be responsible for and make all payments of Taxes shown to be due on
Seller’s Returns to the extent such Taxes relate to the Purchased Assets or to
the conduct of the Storage Business during any Pre-Closing Tax Period.

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     (b) Sellers and Buyer recognize their mutual obligations pursuant to
Section 1060 of the Code to timely file IRS Form 8594 (the “Asset Acquisition
Statement”) with their respective federal income tax returns. Accordingly,
Sellers and Buyer shall, no later than ninety (90) days after the Closing Date,
attempt in good faith to (i) enter into a Purchase Price allocation agreement
providing for the allocation of the Purchase Price (as may be adjusted pursuant
to Section 2.9 hereof) among the Purchased Assets consistent with the provisions
of Section 1060 of the Code and the Treasury Regulations thereunder, and
(ii) cooperate in the preparation of the Asset Acquisition Statement in
accordance with clause (i) for timely filing with their respective federal
income tax returns. If Sellers and Buyer shall have agreed on a Purchase Price
allocation and an Asset Acquisition Statement, then Sellers and Buyer shall file
the Asset Acquisition Statement in the form so agreed and neither Sellers nor
Buyer shall take a Tax position which is inconsistent with such Purchase Price
allocation. In the event that the Purchase Price is adjusted pursuant to
Section 2.9 following the determination of the Asset Acquisition Statement,
Sellers and Buyer shall reasonably agree to a revised Asset Acquisition
Statement as soon as reasonably practicable following the determination of the
Final Inventory Amount and the Final Channel Inventory Amount, and in the event
that any additional assets are transferred to Buyer pursuant to Section 2.6 or
otherwise following the determination of the Asset Acquisition Statement,
Sellers and Buyer shall reasonably agree to a revised Asset Acquisition
Statement as soon as reasonably practicable following such transfer.
     (c) Buyer shall be responsible for the preparation and filing of all
Returns it is required to file with respect to Buyer’s ownership or use of the
Purchased Assets or to the conduct of the Storage Business attributable to
taxable periods (or portions thereof) commencing after the Closing (“Buyer’s
Returns”). Buyer’s Returns shall be true, complete and correct and prepared in
accordance with applicable Law in all material respects. Buyer will be
responsible for and make all payments of Taxes shown to be due on Buyer’s
Returns to the extent they relate to the Purchased Assets or the conduct of the
Storage Business during any periods (or portions thereof) commencing after the
Closing.
     (d) In the case of any real or personal property Taxes (or other similar
Taxes) attributable to the Purchased Assets for which Returns cover a taxable
period commencing on or before the Closing Date and ending thereafter, to the
extent not filed prior to the Closing, Buyer shall prepare such Returns and make
all payments required with respect to any such Return; provided, however,
Sellers will promptly reimburse Buyer upon receipt of a copy of the filed Return
to the extent any payment made by Buyer relates to a Pre-Closing Tax Period,
which amount shall be determined and prorated on a per diem basis.
     (e) To the extent relevant to the Purchased Assets, each party shall
(i) provide the other with such assistance as may reasonably be required in
connection with the preparation of any Return and the conduct of any audit or
other examination by any taxing authority or in connection with judicial or
administrative proceedings relating to any liability for Taxes, and (ii) retain
and provide the other with all records or other information that may be relevant
to the preparation of any Returns, or the conduct of any audit or examination,
or other proceeding relating to Taxes. Sellers shall retain all documents,
including prior years’ Returns, supporting work schedules and other records or
information with respect to all sales,

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use and employment Returns and, absent the receipt by Sellers of the relevant
sales tax certificates, shall not destroy or otherwise dispose of any such
records for six (6) years after Closing without the prior written consent of
Buyer.
     (f) One or more of Sellers, as applicable, shall prepare and furnish to
Transferred Employees Forms W-2 which shall reflect all wages and compensation
paid to Transferred Employees for that portion of the calendar year in which the
Closing Date occurs during which the Transferred Employees were employed by such
party. Each of Sellers, on the one hand, and Buyer, on the other hand, agree to
treat Buyer as a successor employer with respect to the Transferred Employees
for FICA and FUTA tax purposes.
     5.4 Business Employees
     (a) Prior to the Closing Date, (i) Buyer shall make offers of employment,
contingent upon the Closing, to the Key Business Employees and (ii) Buyer shall
use reasonable best efforts to make offers of employment, contingent upon the
Closing, to at least fifty (50) additional Business Employees, subject to
Buyer’s interview process. Business Employees who accept Buyer’s offer of
employment, as of the effective date of their employment with Buyer, are
referred to as “Transferred Employees”. Employment with Buyer of Transferred
Employees shall be effective as of the day following the close of business on
the Closing Date, except that the employment of Transferred Employees receiving
short-term disability benefits or on approved leave of absence on the Closing
Date will become effective as of the date after the Closing Date they present
themselves for work with the Buyer. It is understood and agreed that any
employment offered by Buyer will be on an “at will” basis (unless Buyer in its
sole discretion determines otherwise).
     (b) Prior to the Closing Date, AMCC and each Selling Subsidiary agree to
use reasonable best efforts to cooperate with Buyer in Buyer’s recruitment of
the Business Employees, including allowing and facilitating interviews and
providing access to personnel files of the Business Employees. In addition,
Buyer, on the one hand, and Sellers, on the other hand, agree to coordinate and
prepare joint materials in announcing this transaction to the Business
Employees.
     (c) Except as expressly set forth in this Section 5.4, from and after the
Closing Date, Sellers shall assume or retain, as the case may be, perform all
obligations with respect to and be solely responsible for all Liabilities
arising under, resulting from or relating to the Benefit Plans whether incurred
before, on or after the Closing Date. In addition, Sellers shall terminate,
waive and release their rights under any covenants regarding non-competition,
and conflicting obligations with respect to the Licensed Field with the Business
Employees who become Transferred Employees. Except as expressly set forth in
Section 5.4(f), no assets of any Benefit Plan shall be transferred to Buyer or
any Affiliate of Buyer. Sellers shall, and shall cause each of their Affiliates
to, comply with any and all Liabilities or other obligations under the Benefits
Plans to all Business Employees, including Transferred Employees, whether
resulting from, arising out of, or relating to, events or circumstances
occurring prior to or after the Closing, in accordance with the terms of such
Benefits Plans.

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     (d) Following the Closing Date, Buyer shall provide Transferred Employees,
until at least December 31, 2009, with at least 91% (i.e., reflecting AMCC’s
announced company-wide pay reduction) of the same base salary as they received
from AMCC or a Selling Subsidiary, as applicable, on the date hereof and as
shown on Schedule 3.9(a). To the extent permissible by applicable Law, tax
qualification requirements and plan terms, for any Transferred Employee enrolled
in a PPO plan sponsored by AMCC or a Selling Subsidiary both as of the date
hereof and as of the Closing Date, Buyer shall recognize for purposes of
satisfying any deductibles, co-pays and out-of-pocket maximums during the
current plan year, any payments made by such Transferred Employee towards
deductibles, co-pays or out-of-pocket maximums in any such PPO health plan of
Seller or its Subsidiaries in the current plan year provided that such
Transferred Employee enrolls in an applicable PPO plan sponsored by Buyer.
Nothing in this Section 5.4(d) shall be construed to (A) entitle any Transferred
Employee to continue his or her employment with Buyer or its Affiliates or, in
the event that they are no longer employed by Buyer, to continue their salary
and benefits with Buyer or (B) prevent Buyer from making any changes in its
business, salary practices or benefits that affect Transferred Employees, in the
case of clause (B), so long as the Transferred Employees are not
disproportionately targeted with respect to any such changes.
     (e) Buyer agrees that its and its Subsidiaries’ health and welfare plans
shall waive any pre-existing condition exclusion (to the extent such exclusion
was waived under applicable health and welfare plans offered to the Transferred
Employees by Sellers) and any proof of insurability (other than with respect to
any life insurance plans). Sellers shall remain responsible for any benefits
payable under a Benefit Plan with respect to claims incurred by Business
Employees prior to the Closing Date.
     (f) Sellers shall be solely responsible for (i) the payment of all wages
and other remuneration due to Transferred Employees with respect to their
services as employees through the close of business on the Closing Date,
including pro rata bonus payments (if any) pursuant to Sellers’ incentive bonus
plan or any other incentive compensation program and vacation time accrued and
earned through the Closing Date; (ii) the payment of any termination or
severance payments owed to any Business Employee (including any Transferred
Employee) pursuant to any Benefit Plan or any applicable law; and (iii) the
provision of health plan continuation coverage in accordance with the
requirements of COBRA to any Business Employee (including any Transferred
Employee) and/or any beneficiary thereof who is entitled to elect such coverage
on account of a “qualifying event” (as defined under COBRA) occurring on or
prior to the Closing Date.
     (g) Sellers, on the one hand, and Buyer, on the other hand, intend that the
transactions contemplated by this Agreement shall not constitute a severance of
employment of any Transferred Employee prior to or upon the consummation of the
transactions contemplated hereby and that such employees will have continuous
and uninterrupted employment immediately before and immediately after the
Closing Date. The parties agree to cooperate in good faith to determine whether
any notification may be required under the Worker Adjustment and Retraining
Notification Act (the “WARN Act”) as a result of the transactions contemplated
by this Agreement. Sellers will be responsible for providing any notification
that may be required under the WARN Act with respect to any of their employees.

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Buyer will be responsible for providing any notification that may be required
under the WARN Act with respect to any Transferred Employees terminated after
the Closing Date.
     (h) As soon as practicable following the Closing Date, Buyer shall cause
one or more defined contribution savings plans intended to qualify under
sections 401(a) and 401(k) of the Code (the “Buyer Savings Plan”) to provide for
the receipt of Transferred Employees’ lump sum cash distributions, in the form
of an eligible rollover distribution, which include outstanding participant
loans (if applicable), from AMCC’s 401(k) Plan, provided such rollovers are made
at the election of the Transferred Employees and in accordance with the terms of
the Buyer Savings Plan.
     (i) The provisions of this Section 5.4 are solely for the benefit of the
respective parties to this Agreement and no provision of this Agreement shall
confer upon any Transferred Employee, or legal representative or beneficiary
thereof, any rights or remedies.
     5.5 Leased Equipment
     (a) The Leased Equipment set forth on Schedule 5.5(a) will transfer to
Buyer as of the Closing Date by Buyer assuming the leases for such equipment in
which case such lease agreement shall be deemed a Transferred Contract hereunder
(the “Assumed Leased Equipment”).
     (b) The Leased Equipment set forth on Schedule 5.5(b) will be acquired by
Buyer as of the Closing Date by Buyer paying for the costs of purchasing such
equipment to the applicable Third Party pursuant to the leases (the “Purchased
Leased Equipment”).
     (c) The Leased Equipment set forth on Schedule 5.5(c) will remain the
obligation of, and in the possession of, Sellers as of the Closing Date (the
“Excluded Leased Equipment”).
     5.6 Reasonable Best Efforts
     (a) Without limiting either party’s other obligations hereunder, upon the
terms and subject to the conditions set forth in this Agreement, each of the
parties agrees to use its reasonable best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate with
the other party hereto in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement and the Collateral Agreements,
including using reasonable best efforts to accomplish the following: (i) the
taking of all acts necessary to cause the conditions to Closing to be satisfied
as promptly as practicable, (ii) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Bodies and the
making of all necessary registrations and filings (including filings with
Governmental Bodies, if any) and the taking of all steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by any
Governmental Body, (iii) the obtaining of all necessary consents, approvals or
waivers from Third Parties, (iv) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative,

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challenging this Agreement, any Collateral Agreement or the consummation of the
transactions contemplated hereby or thereby, including seeking to have any stay
or temporary restraining order entered by any court or other Governmental Body
vacated or reversed, and (v) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement and the Collateral Agreements.
     (b) Nothing set forth in this Agreement, any Collateral Agreement, or in
any schedule, certificate, instrument, agreement or other document delivered by
Buyer in connection with the transactions contemplated hereby, shall be deemed
to require Buyer or any of its Affiliates to agree to any divestiture (including
through a licensing arrangement or otherwise), by itself or through any of its
Affiliates, of all or any portion of the Purchased Assets, the Storage Business,
or any other businesses, operations, assets or properties of Buyer or any of its
Affiliates, or any limitation, restriction or other imposition on the ability of
Buyer or any of its Affiliates to conduct the Storage Business or any of their
other businesses, or to own the Purchased Assets or any of their other assets
and properties, in each case from and after the Closing.
     5.7 Contacts with Suppliers, Employees and Customers
     From the date hereof until the Closing, Sellers shall cooperate with Buyer,
at Buyer’s request, in contacting any suppliers to, or customers of, the Storage
Business or any Business Employees in connection with or pertaining to the
subject matter of this Agreement. Sellers agree to give Buyer prompt notice if
any customer or supplier of the Storage Business listed on Schedule 3.16
provides to AMCC or any of its Subsidiaries written notice of cancellation or
termination of, or an intention to cancel or terminate, any Contract with either
AMCC or any Selling Subsidiary.
     5.8 Non-Solicitation or Hiring of Employees
     Neither AMCC nor any of its Subsidiaries or any of their respective
representatives will at any time (i) prior to two years from the Closing Date,
directly or indirectly, solicit the employment of any Transferred Employee or
induce or encourage, or assist others to induce or encourage, any Business
Employee to decline an employment arrangement with Buyer, (ii) prior to eighteen
months from the Closing Date, directly or indirectly, hire any Transferred
Employee, or continue to employ or employ a Business Employee, in each case, who
refuses Buyer’s offer of employment and does not become a Transferred Employee,
in each case, without Buyer’s prior written consent. For purposes of this
Section 5.8, the term “solicit the employment” shall not be deemed to include
generalized searches for employees through media advertisements, employment
firms or otherwise that are not focused on any Transferred Employee. This
restriction shall not apply to any Transferred Employee whose employment with
Buyer is involuntarily terminated by Buyer after the Closing. Sellers shall use
reasonable best efforts to communicate the restrictions imposed by this
Section 5.8 to all Persons who would reasonably be expected to engage in such
solicitations or make such offers of employment and instruct such Persons to
comply with such restrictions.

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     5.9 Non-Competition
     (a) Sellers agree that, as part of the consideration for the payment of the
Purchase Price, for the period of two (2) years immediately following the
Closing Date, no Sellers nor any of their respective Subsidiaries will, directly
or indirectly, for its own benefit or as agent of another, carry on or own,
manage or operate, perform, participate in, control the management or operation
of, or allow its name to be used as a brand in or for, or have any ownership
interest in, any Competing Business (i) in the County of Santa Clara,
California, (ii) in the State of California, (iii) in the County of Washington,
Oregon, (iv) in the State of Oregon, (v) in the United States of America or
(vii) anywhere else in the world. “Competing Business” shall mean any business
(or, if applicable, the portion thereof) which competes with the Storage
Business. For the avoidance of doubt, as used in this Agreement, the terms
“Storage Business” and “Competing Business” do not include the business of AMCC
or its Subsidiaries (other than 3ware, Inc.) pertaining to integrated circuit
products directed to or used in storage applications, including the delivery of
evaluation boards or reference boards to customers or potential customers of
AMCC or its Subsidiaries (other than 3ware, Inc.) aimed at developing business
for their semiconductor product business and in order to permit such customers
or potential customers to evaluate or design products that employ the integrated
circuit products; provided that (i) the aggregate number of evaluation boards
delivered to any such customer or potential customer shall not exceed 500 in any
given calendar year, (ii) the aggregate number of reference boards delivered to
any such customer or potential customer shall not exceed 500 in any given
calendar year, (iii) the aggregate number of evaluation boards delivered to all
such customers and potential customers shall not exceed 2,500 in any given
calendar year, and (iv) the aggregate number of reference boards delivered to
all such customers and potential customers shall not exceed 2,500 in any given
calendar year.
     (b) Nothing contained in this Section 5.9 shall (i) limit AMCC or its
Subsidiaries (other than 3ware, Inc.) (A) from acquiring (including through a
merger) or investing in any business, development arrangement or joint venture
in which a Competing Business constitutes, represents or is responsible for not
more than 25% of the revenues or earnings of such business, development
arrangement or joint venture or (B) from, directly or indirectly, holding or
making investments in securities of any business so long as Seller’s direct or
indirect holdings do not exceed 5% of the outstanding equity securities thereof,
or (ii) apply to any Person who acquires, directly or indirectly, the equity
securities of, or control of, Sellers or to the activities of any Person merging
with or into Sellers as conducted prior to such merger by any Person merging
with or into Sellers.
     (c) AMCC and each Selling Subsidiary recognizes and agrees that compliance
with the covenant contained in this Section 5.9 is necessary to protect Buyer,
and that a breach by it of any of the covenants set forth in this Section 5.9
could cause irreparable harm to Buyer, that Buyer’s remedies at law in the event
of such breach would be inadequate, and that, accordingly, in the event of such
breach, a restraining order or injunction or both may be issued against it
without the requirement that Buyer post a bond, in addition to any other rights
and remedies which are available to Buyer. If this Section 5.9 is more
restrictive than permitted by the Laws of any jurisdiction in which Buyer seeks
enforcement hereof, this Section 5.9 shall be limited to the extent required to
permit enforcement under such Laws. In

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particular, the Parties intend that the covenants contained in the preceding
portions of this Section 5.9 shall be construed as a series of separate
covenants, one for each location specified. Except for geographic coverage, each
such separate covenant shall be deemed identical in terms. If, in any judicial
proceeding, a court shall refuse to enforce any of the separate covenants deemed
included in this Section 5.9, then such unenforceable covenant shall be deemed
eliminated from these provisions for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants to be enforced. If
any court of competent jurisdiction shall determine the foregoing covenant to be
unenforceable with respect to the term or the scope of the subject matter or
geography covered thereby, then such covenant shall nevertheless be enforceable
by such court against the other party upon such shorter term or within such
lesser scope as may be determined by such court to be reasonable and
enforceable.
     5.10 No Negotiation or Solicitation
     Prior to the Closing Date, Sellers and their respective Subsidiaries will
not (and each such party will cause its employees, officers, directors,
representatives and agents, but not any directors in their capacities as such,
not to) (a) solicit, initiate, consider, entertain or encourage the submission
of any proposal or offer from any Third Party relating to a Competing
Transaction or (b) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Third Party to do or seek any
of the foregoing with respect to a Competing Transaction. “Competing
Transaction” means the direct or indirect acquisition of the Storage Business or
(except to the extent not restricted by Section 5.2) any portion of the
Purchased Assets, except for any such acquisition for or involving all or
substantially all of the voting stock, assets or business of AMCC and its
Subsidiaries, taken as a whole. Sellers will notify Buyer promptly if any Third
Party makes any proposal, offer, inquiry or contact with respect to any
Competing Transaction (including the terms thereof and the identity of such
Third Party subject to any existing applicable confidentiality agreement) within
two Business Days after receipt of any such offer or proposal.
     5.11 Warranty Claims and Recalls; Rebates and Incentives; Channel Inventory
     (a) Buyer shall process and approve product warranty claims, product
recalls and stock rotations, in a manner not inconsistent with Sellers’ terms
and conditions as in effect on the date hereof, and perform warranty and recall
work required after the Closing for products sold or consigned by the Storage
Business on or prior to the Closing Date. Buyer shall first use any recycled
material included in the Purchased Assets and maintain a supply of, and first
use, recycled material for this purpose in an effort to mitigate costs and
expenses. AMCC shall reimburse Buyer for (i) all reasonable costs and expenses
actually incurred by Buyer during the three (3) year period commencing on the
Closing Date for product warranty claims made against, or recalls effected by,
Sellers prior to the Closing Date, (ii) for all reasonable costs and expenses
incurred by Buyer during such three (3) year period in respect of product
warranty claims, product recalls and warranty and recall work, and (iii) for all
reasonable costs and expenses incurred by Buyer during the sixty-seven (67) day
period following the

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Closing Date in respect of stock rotations, in the case of each of clauses (i),
(ii) and (iii) with respect to products sold or consigned by the Storage
Business on or prior to the Closing Date; it being understood and agreed that,
with respect to any products that have warranty periods that terminate before
the end of such three year period, AMCC will not have any such obligations
beyond the applicable warranty period for such products. Buyer shall submit a
quarterly request to AMCC for reimbursement of such warranty and recall costs
and expenses, together with documentation evidencing the same, and AMCC shall
pay the amount due to Buyer as promptly as reasonably practicable, but in no
event later than thirty (30) days after receipt of Buyer’s request.
     (b) Buyer shall process any rebates, incentives, discounts or other special
promotions with respect to products shipped or services rendered by the Storage
Business prior to the Closing in a manner not inconsistent with Sellers’ terms
and conditions as in effect on the date hereof. AMCC shall reimburse Buyer for
all reasonable costs and expenses actually incurred by Buyer in connection with
any such rebates, incentives, discounts or other special promotions. Buyer shall
submit a quarterly request to AMCC for reimbursement of such costs and expenses,
together with documentation evidencing the same, and AMCC shall pay the amount
due to Buyer as promptly as reasonably practicable, but in no event later than
thirty (30) days after receipt of Buyer’s request.
     (c) Sellers agree to use reasonable best efforts to cause the level of
Channel Inventory in the aggregate as of the Closing to be at or below the level
of Channel Inventory in the aggregate as of March 31, 2009.
     5.12 Third Party Confidentiality Agreements
     To the extent not done prior to the date hereof, within two business days
after the date hereof, AMCC shall request that all parties who received any
Confidential Information of or relating to the Storage Business pursuant to a
confidentiality agreement with AMCC or any Subsidiary of AMCC entered into in
connection with a potential business combination or other similar transaction in
each case concerning the sale of all or substantially all of the assets of the
Storage Business either return or destroy such Confidential Information in
accordance with the provisions of the applicable confidentiality agreement.
6. Confidential Nature of Information
     6.1 Confidentiality Agreement
     Buyer, on the one hand, and Sellers, on the other hand, agree that the
Confidentiality Agreement shall continue to apply to (a) all documents,
materials and other information that it shall have obtained regarding the other
party or its Affiliates during the course of the negotiations leading to the
consummation of the transactions contemplated hereby (whether obtained before or
after the date of this Agreement), any investigations made in connection
therewith and the preparation of this Agreement and related documents, and
(b) all analyses, reports, compilations, evaluations and other materials
prepared by Buyer or its counsel, accountants or financial advisors that contain
or otherwise reflect or are based upon, in whole

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or in part, any of the provided information; provided, however, that the
Confidentiality Agreement shall terminate as of the Closing and shall be of no
further force and effect thereafter with respect to information of Sellers or an
Affiliate of Sellers the ownership of which is transferred to Buyer.
     6.2 Seller’s Confidential Information
     (a) Except as provided in Section 6.2(b), after the Closing and for a
period of five (5) years following the Closing Date, Buyer agrees that it will
keep confidential all of AMCC’s and its Affiliates’ Confidential Information
that is received from, or made available by, AMCC or is otherwise exposed to
Buyer in the course of the transactions contemplated hereby, including, for
purposes of this Section 6.2, information about the Storage Business’s business
plans and strategies, marketing ideas and concepts, especially with respect to
unannounced products and services, present and future product plans, pricing,
volume estimates, financial data, product enhancement information, business
plans, marketing plans, sales strategies, customer information (including
customers’ applications and environments), market testing information,
development plans, specifications, customer requirements, configurations,
designs, plans, drawings, apparatus, sketches, software, hardware, data,
prototypes, connecting requirements or other technical and business information,
except for such Confidential Information as is conveyed to Buyer as part of the
Purchased Assets.
     (b) Notwithstanding the foregoing, such Confidential Information shall not
be deemed confidential and Buyer shall have no obligation with respect to any
such Confidential Information that:
          (i) at the time of disclosure was already known to Buyer other than as
a result of this transaction, free of restriction as evidenced by documentation
in Buyer’s possession;
          (ii) is or becomes publicly known through publication, inspection of a
product, or otherwise, and through no negligence or other wrongful act of Buyer;
          (iii) is received by Buyer from a Third Party without similar
restriction and without breach of any agreement;
          (iv) to the extent it is independently developed by Buyer; or
          (v) is, subject to Section 6.2(c), required to be disclosed under
applicable Law or judicial process.
     (c) If Buyer (or any of its Affiliates) is requested or required (by oral
question, interrogatory, request for information or documents, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, Buyer will promptly notify AMCC of such request or requirement and
will cooperate with AMCC such that AMCC may seek an appropriate protective order
or other appropriate remedy. If, in the absence of a protective order or the
receipt of a waiver hereunder, Buyer (or any of its Affiliates) is in the
reasonable

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judgment of Buyer’s counsel (internal or external) required to disclose the
Confidential Information or else stand liable for contempt or suffer other
censure or significant penalty, Buyer (or its Affiliate) may disclose only so
much of the Confidential Information to the party compelling disclosure as is
required by Law. Buyer will exercise its (and will cause its Affiliates to
exercise their) reasonable commercial efforts to obtain a protective order or
other reliable assurance that confidential treatment will be accorded to such
Confidential Information.
     6.3 Buyer’s Confidential Information
     (a) Except as provided in Section 6.3(b) and except as necessary to perform
its obligations under the Collateral Agreements, after the Closing Date and for
a period of five (5) years thereafter, AMCC and each Selling Subsidiary agrees
that it will keep confidential all of Buyer’s and its Affiliates’ Confidential
Information that is conveyed to Buyer as part of the Purchased Assets or is
assigned as part of the Assumed Liabilities or is otherwise exposed to it in the
course of the transactions contemplated hereby, including, for purposes of this
Section 6.3, information about the Storage Business’s business plans and
strategies, marketing ideas and concepts, especially with respect to unannounced
products and services, present and future product plans, pricing, volume
estimates, financial data, product enhancement information, business plans,
marketing plans, sales strategies, customer information (including customers’
applications and environments), market testing information, development plans,
specifications, customer requirements, configurations, designs, plans, drawings,
apparatus, sketches, software, hardware, data, prototypes, connecting
requirements or other technical and business information.
     (b) Notwithstanding the foregoing, such Confidential Information shall not
be deemed confidential and Sellers shall have no obligation with respect to any
such Confidential Information that, following the Closing:
          (i) is or becomes publicly known through publication, inspection of a
product, or otherwise, and through no negligence or other wrongful act of
Sellers; or
          (ii) is received by Sellers from a Third Party without similar
restriction and without breach of any agreement; or
          (iii) is, subject to Section 6.3(c), required to be disclosed under
applicable Law or judicial process.
     (c) If either AMCC or any Selling Subsidiary (or any of their respective
Affiliates) is requested or required (by oral question, interrogatory, request
for information or documents, subpoena, civil investigative demand or similar
process) to disclose any such Confidential Information, such party will promptly
notify Buyer of such request or requirement and will cooperate with Buyer such
that Buyer may seek an appropriate protective order or other appropriate remedy.
If, in the absence of a protective order or the receipt of a waiver hereunder,
such party (or any of its Affiliates) is in the reasonable judgment of such
party’s counsel (internal or external) required to disclose the Confidential
Information or else stand

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liable for contempt or suffer other censure or significant penalty, such party
(or its Affiliate) may disclose only so much of the Confidential Information to
the party compelling disclosure as is required by Law. Sellers will exercise
their (and will cause their Affiliates to exercise their) reasonable commercial
efforts to obtain a protective order or other reliable assurance that
confidential treatment will be accorded to such Confidential Information.
     6.4 Confidential Nature of this Agreement and Collateral Agreements
     Except to the extent that disclosure thereof is required under accounting
rules, stock exchange or market rules, or federal securities or labor relations
Laws disclosure obligations, each of Sellers and Buyer agree that the terms and
conditions of this Agreement and the Collateral Agreements, and all schedules,
attachments and amendments hereto and thereto shall be considered Confidential
Information protected under this Article 6. Notwithstanding anything in this
Article 6 to the contrary, (a) in the event that any such Confidential
Information is also subject to a limitation on disclosure or use contained in
another written agreement between Buyer and AMCC or any Selling Subsidiary or
any of their respective Affiliates that is more restrictive than the limitation
contained in this Article 6, then the limitation in such agreement shall
supersede this Article 6, and (b) the restrictions on confidentiality set forth
in any Collateral Agreement shall supersede this Article 6 for the information
subject thereto. Notwithstanding the foregoing, either party may disclose these
agreements to its advisors and consultants, to its lenders and in connection
with any merger, sale or similar transaction provided that any such party agrees
to the same confidentiality obligations applicable to the providing party.
7. Closing
     At the Closing, the following transactions shall take place:
     7.1 Deliveries by Seller
     At the Closing, AMCC shall deliver, or cause to be delivered, to Buyer the
following:
     (a) each of the Collateral Agreements, dated as of the Closing Date, duly
executed by AMCC and each Selling Subsidiary party thereto;
     (b) all consents, waivers or approvals theretofore obtained by Sellers with
respect to the sale of the Purchased Assets, the assignment of the Assumed
Liabilities or the consummation of the transactions contemplated by this
Agreement or any of the Collateral Agreements;
     (c) a certificate of the Secretary or Assistant Secretary of AMCC and each
Selling Subsidiary dated as of the Closing Date, in customary form and substance
as to organizational documents, approvals and authorized signatories; and
     (d) all such other bills of sale, assignments and other instruments of
assignment, transfer or conveyance, dated as of the Closing Date, as Buyer may
reasonably request or as

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may be otherwise necessary to evidence and effect the sale, transfer,
assignment, conveyance and delivery of the Purchased Assets to Buyer pursuant to
this Agreement or any Collateral Agreement, and to put Buyer in actual
possession or control of the Purchased Assets.
     7.2 Deliveries by Buyer
     At the Closing, Buyer shall deliver to Sellers the following:
     (a) the Purchase Price as provided in Section 2.3;
     (b) each of the Collateral Agreements, dated as of the Closing Date, duly
executed by Buyer;
     (c) a certificate of the Secretary or Assistant Secretary of Buyer, dated
as of the Closing Date, in customary form and substance as to organizational
documents, approvals and authorized signatories; and
     (d) all such other documents and instruments of assumption, dated as of the
Closing Date, as Seller may reasonably request or as may be otherwise necessary
to evidence and effect the assumption by Buyer of the Assumed Liabilities
pursuant to this Agreement.
     7.3 Closing Date
     The Closing shall take place at the offices of Buyer, 1621 Barber Lane,
Milpitas, CA 95035 at 10:00 a.m. local time within three (3) Business Days
following the date on which the last of the conditions specified in Article 8 to
be satisfied or waived has been satisfied or waived (excluding conditions that,
by their terms, are not expected to be satisfied until the Closing Date, but
subject to the satisfaction or waiver of such conditions), or at such other
place or time or on such other date as Sellers and Buyer may agree upon in
writing (such date and time being referred to herein as the “Closing Date”).
     7.4 Contemporaneous Effectiveness
     All acts and deliveries prescribed by this Article 7, regardless of
chronological sequence, will be deemed to occur contemporaneously and
simultaneously on the occurrence of the last act or delivery, and none of such
acts or deliveries will be effective until the last of the same has occurred.
8. Conditions Precedent to Closing
     8.1 General Conditions
     The respective obligations of Buyer, on the one hand, and Sellers, on the
other hand, to effect the Closing of the transactions contemplated hereby are
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions:

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     (a) No Injunctions; Legal Proceedings. No Law or order of any court or
administrative agency shall be in effect that enjoins, restrains, conditions or
prohibits consummation of this Agreement or the Collateral Agreements. No legal
action shall have been instituted and remain pending by any Governmental Body at
what would otherwise be the Closing Date, which prohibits or restricts or would
(if successful) prohibit or restrict the consummation of this Agreement or the
Collateral Agreements.
     (b) No Legal Prohibition. No statute, rule, regulation or order shall have
been enacted, entered, enforced or deemed applicable to the transactions
contemplated by this Agreement or any of the Collateral Agreements that makes
illegal (i) the consummation of the transactions contemplated by this Agreement
or any of the Collateral Agreements, (ii) the ownership by Buyer of the
Purchased Assets, or (iii) the operation and conduct by Buyer of the Storage
Business.
     8.2 Conditions Precedent to Buyer’s Obligations
     The obligations of Buyer to effect the Closing of the transactions
contemplated hereby are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, any of which may be waived in writing by
Buyer:
     (a) Representations and Warranties of Seller. The representations and
warranties of AMCC contained in this Agreement or in any schedule, certificate
or document delivered pursuant to the provisions hereof or in connection with
the transactions contemplated hereby (i) that are qualified as to materiality,
or material adverse effect or any similar standard shall be true and correct in
all respects (without regard to any qualifications therein as to materiality, or
material adverse effect or any similar standard) both when made and at and as of
the Closing Date, as though such representations and warranties were made at and
as of the Closing Date, except to the extent that such representations and
warranties are made as of a specified date, in which case such representations
and warranties shall be true and correct as of the specified date, and (ii) that
are not qualified as to materiality, or material adverse effect or any similar
standard shall be true and correct in all material respects both when made and
at and as of the Closing Date, as though such representations and warranties
were made at and as of the Closing Date, except to the extent that such
representations and warranties are made as of a specified date, in which case
such representations and warranties shall be true and correct in all material
respects as of the specified date.
     (b) Performance by Sellers. AMCC shall have delivered or caused to be
delivered all of the documents required under Section 7.1 and shall have
otherwise performed in all material respects all obligations and agreements and
complied in all material respects with all covenants required by this Agreement
to be performed or complied with by it prior to or at the Closing, including
duly executing and delivering the Collateral Agreements.
     (c) Required Consents. Sellers shall have obtained the consents and waivers
set forth in Schedule 8.2(c) (the “Required Consents”).

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     (d) Key Business Employees; Other Business Employees. (i) All of the
Business Employees set forth on Schedule 8.2(d) (the “Key Business Employees”)
shall have (A) accepted (and not withdrawn or rescinded such acceptance) and
entered into “at-will” employment arrangements with Buyer, in each case
effective as of the Closing, upon terms and conditions reasonably satisfactory
to Buyer and completed I-9 forms and attachments or other proof reasonably
acceptable to Buyer of the right to work in the United States, if applicable,
and subject to and in compliance with Buyer’s standard human resources policies
and procedures, and (B) entered into Buyer’s customary form of confidentiality
and proprietary rights agreement (i.e., the same form signed by substantially
all employees of Buyer hired by Buyer since January 1, 2009), and (ii) at least
ninety percent (90%) of the Business Employees (not taking into account the Key
Business Employees) who are offered employment by Buyer shall have (A) accepted
(and not withdrawn or rescinded such acceptance) with Buyer, in each case
effective as of the Closing, upon terms and conditions reasonably satisfactory
to Buyer and completed I-9 forms and attachments or other proof reasonably
acceptable to Buyer of the right to work in the United States, if applicable,
and subject to and in compliance with Buyer’s standard human resources policies
and procedures, and (B) entered into Buyer’s customary form of confidentiality
and proprietary rights agreement (i.e., the same form signed by substantially
all employees of Buyer hired by Buyer since January 1, 2009).
     (e) Material Adverse Effect. From the date hereof, there shall not have
occurred any Material Adverse Effect.
     (f) Certificate. Buyer shall have received a certificate of an appropriate
officer of AMCC, dated as of the Closing Date, certifying to the best of his or
her knowledge the fulfillment of the conditions set forth in Sections 8.2(a) and
(b). The delivery of the certificate pursuant to this Section 8.2(f) shall be
deemed to be the re-making by Sellers of the representations and warranties of
Sellers set forth in this Agreement at and as of the Closing.
     8.3 Conditions Precedent to Seller’s Obligations
     The obligations of AMCC and each Selling Subsidiary to effect the Closing
of the transactions contemplated hereby are subject to the fulfillment, prior to
or at the Closing, of each of the following conditions, any of which may be
waived in writing by AMCC:
     (a) Representations and Warranties of Buyer. The representations and
warranties of Buyer contained in this Agreement or in any certificate or
document delivered pursuant to the provisions hereof or in connection with the
transactions contemplated hereby or thereby (i) that are qualified as to
materiality, or material adverse effect or any similar standard shall be true
and correct in all respects (without regard to any qualifications therein as to
materiality, or material adverse effect or any similar standard) both when made
and at and as of the Closing Date, as though such representations and warranties
were made at and as of the Closing Date, except to the extent that such
representations and warranties are made as of a specified date, in which case
such representations and warranties shall be true and correct as of the
specified date, and (ii) that are not qualified as to materiality, or material
adverse effect or any similar standard shall be true and correct in all material
respects both when made and at

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and as of the Closing Date, as though such representations and warranties were
made at and as of the Closing Date, except to the extent that such
representations and warranties are made as of a specified date, in which case
such representations and warranties shall be true and correct in all material
respects as of the specified date.
     (b) Performance by Buyer. Buyer shall have delivered all of the documents
required under Section 7.2 and shall have otherwise performed in all material
respects all obligations and agreements and complied in all material respects
with all covenants required by this Agreement to be performed or complied with
by it or any of its Subsidiaries prior to or at the Closing, including duly
executing and delivering the Collateral Agreements.
     (c) Certificate. AMCC shall have received a certificate of an appropriate
officer of Buyer, dated as of the Closing Date, certifying to the best of his or
her knowledge the fulfillment of the conditions set forth in Sections 8.3(a) and
(b). The delivery of the certificate pursuant to this Section 8.3(c) shall be
deemed to be the re-making by Buyer of the representations and warranties of
Buyer set forth in this Agreement at and as of the Closing.
9. Status of Agreement
     The rights and obligations of Buyer and Sellers under this Agreement shall
be subject to the following terms and conditions:
     9.1 Survival of Representations and Warranties
     The representations and warranties of Buyer and Sellers set forth in this
Agreement, or in any schedule, certificate, instrument, agreement or other
document executed or delivered by Sellers pursuant to the provisions hereof or
in connection with the transactions contemplated hereby, shall survive the
Closing and shall terminate at the close of business on the date that is
eighteen (18) months after the Closing Date; provided, however, that
notwithstanding the foregoing, (i) the representations and warranties of Sellers
set forth in Section 3.1 (Organization and Qualification), Section 3.2
(Authorization), Section 3.3 (Binding Effect) and 3.5(a) (Title to Property)
shall survive the Closing indefinitely and without limitation as to time and
(ii) the representations and warranties of Sellers set forth in Section 3.11
(Environmental Matters), Section 3.9 (d) (ERISA), and Section 3.14 (Taxes) shall
survive the Closing until the expiration of the applicable statute of
limitations with respect thereto; and provided, further, that if (A) an action
at law or in equity is commenced or (B) a claim by Buyer for indemnification
pursuant to this Agreement is made in good faith, in either case, prior to the
expiration of the applicable survival period of such representation and
warranty, then such representation and warranty shall survive until such claim
is finally resolved (the date of such expiration or resolution being the
“Expiration Date”). Neither Sellers, on the one hand, nor Buyer, on the other
hand, shall have any liability whatsoever with respect to any claim or action
with respect to any such representations or warranties after the applicable
Expiration Date.

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     9.2 General Agreement to Indemnify
     (a) Subject to the limitations set forth in this Article 9, from and after
the Closing Date, AMCC and Buyer shall indemnify and hold harmless the other and
Subsidiaries thereof, and each of their directors, officers and employees (each
an “Indemnified Party”) from and against any and all claims, actions, suits,
proceedings, liabilities, obligations, losses, damages, disbursements, amounts
paid in settlement, penalties, fines, interest, costs and expenses (including
reasonable attorney’s fees, court costs and other out-of-pocket expenses
incurred in investigating, preparing, settling or defending the foregoing)
(collectively, “Losses”) incurred or suffered by any Indemnified Party arising
out of, resulting from, or relating to: (i) any failure of any representation or
warranty of the Indemnifying Party to have been true and correct when made or
deemed made as of the Closing Date, or at such different date or period
specified for such representation or warranty; or (ii) the breach by such party
of any covenant or agreement of such party set forth in this Agreement.
     (b) Subject to the limitations set forth in this Article 9, from and after
the Closing Date, AMCC further agrees to indemnify and hold harmless any
Indemnified Party of Buyer from and against any Losses incurred or suffered by
such Indemnified Party of Buyer arising out of, resulting from, or relating to:
(i) any of the Excluded Liabilities; (ii) the operation and conduct of the
Storage Business prior to the Closing; (iii) Sellers’ failure to comply with
applicable Bulk Sales Laws notwithstanding the waiver in Section 2.8, (iv) any
claims with respect to, or arising out of, any Business Employee in connection
with any Benefit Plan or such Business Employee’s employment or termination
thereof with AMCC or any of its Subsidiaries and any Liabilities that are
obligations of Seller or any of its Subsidiaries under Section 5.4; and (v) any
and all Benefits Liabilities arising under, resulting from or relating to the
Benefit Plans or Sellers’ termination of the Business Employees whether incurred
before, on or after the Closing Date.
     (c) Subject to the limitations set forth in this Article 9, from and after
the Closing Date, Buyer further agrees to indemnify and hold harmless any
Indemnified Party of Sellers from and against any Losses incurred or suffered by
such Indemnified Party of Seller arising out of, resulting from, or relating to:
(i) any of the Assumed Liabilities; (ii) any Liability of Buyer with respect to
the Storage Business or the Purchased Assets, solely with regard to conditions
or events occurring after the Closing, in each case as conducted or used by
Buyer after the Closing; and (iii) any Liabilities of Buyer with respect to, or
arising out of, the employment by Buyer or the termination of employment by
Buyer of any Transferred Employee after the Closing.
     (d) Amounts payable in respect of the parties’ indemnification obligations
shall be treated as an adjustment to the Purchase Price to the extent allowable
under applicable Law. Buyer, on the one hand, and Sellers, on the other hand,
agree to use their reasonable best efforts to cooperate in the preparation of a
supplemental Asset Acquisition Statement as required by Section 5.3 and Treasury
Reg. § 1.1060-1(e)(1)(ii)(B) as a result of any adjustment to the Purchase Price
pursuant to the preceding sentence. Whether or not the Indemnifying Party
chooses to defend or prosecute any Third-Party Claim, both parties hereto shall
cooperate in the defense or prosecution thereof and shall furnish such records,
information and testimony, and attend such conferences, discovery proceedings,
hearings,

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trials and appeals, as may be reasonably requested in connection therewith or as
provided in Section 5.1.
     (e) An Indemnifying Party’s liability for all claims made under
Section 9.2(a)(i) shall be subject to the following additional limitations:
(i) an Indemnifying Party shall have no liability for such claims until the
aggregate amount of the Losses incurred shall exceed $200,000 (the
“Deductible”), in which case the Indemnifying Party shall be, subject to the
terms and conditions of this Article 9, liable for all Losses starting from the
first dollar exceeding such Deductible, and (ii) an Indemnifying Party’s
aggregate liability for all such claims shall not exceed $5,000,000.
Notwithstanding the above provisions of this Section 9.2(e), the limitations
provided in this Section 9.2(e) shall not apply to (i) any claim for fraud or
intentional misrepresentation, or (ii) any claim for breach of any agreement or
covenant contained herein.
     (f) The indemnification provided in this Article 9 shall be the sole and
exclusive remedy after the Closing Date for damages available to the parties to
this Agreement for breach of any of the representations, warranties, covenants
or agreements contained herein; provided, however, this exclusive remedy for
damages does not preclude a party from (i) bringing an action for specific
performance or other equitable remedy for a breach of a covenant or agreement
under this Agreement, or (ii) pursuing remedies under applicable Law for fraud
or intentional misrepresentation.
     (g) Notwithstanding anything contained in this Agreement to the contrary,
no party shall be liable to the other party for any indirect, special, punitive,
exemplary or consequential loss or damage (including any loss of revenue or
profit) arising out of this Agreement; provided, however, that the foregoing
shall not be construed (i) to preclude recovery by the Indemnified Party in
respect of Third Party Claims and (ii) shall not apply to any remedies under
applicable Law for fraud or intentional misrepresentation.
     (h) The amount of the Indemnifying Party’s liability under this Agreement
shall be reduced by any applicable insurance proceeds (reduced by the present
value of any incremental costs of any increase in premiums related to such
receipt of proceeds) actually received by, and Tax savings (net of all Tax costs
and other effects that would result from any such Tax savings, including the
positive and negative effects on any Tax attributes of Buyer), that actually
reduce the overall impact of the Losses upon, the Indemnified Party. To the
extent that any amounts are recovered from insurance proceeds by an Indemnified
Party following the payment of any Losses that would have reduced the amount of
the Indemnifying Party’s liability pursuant to the immediately preceding
sentence, such recovered amounts shall be promptly delivered to the Indemnifying
Party. In computing the amount of any such Tax savings, the Indemnified Party
shall be deemed to recognize all other items of income, gain, loss, deduction or
credit before recognizing any item arising from the receipt of any indemnity
payment hereunder or the incurrence of any payment of any indemnified Loss.
Notwithstanding this Section 9.2(h), in no event shall any Indemnified Party be
required to take any action, or forebear from exercising any right, with respect
to its Taxes or the filing of its Returns. The indemnification obligations of
each party hereto under this Article 9 shall inure to the benefit of each
Indemnified Party of the other party hereto on the same terms as are applicable
to such other party.

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     (i) The rights to indemnification under this Section 9.2 shall not be
subject to set-off for any claim by the Indemnifying Party against any
Indemnified Party, whether or not arising from the same event giving rise to
such Indemnified Party’s claim for indemnification.
     9.3 General Procedures for Indemnification
     (a) The Indemnified Party seeking indemnification under this Agreement
shall promptly notify in writing the party against whom indemnification is
sought (the “Indemnifying Party”) of the assertion of any claim, or the
commencement of any action, suit or proceeding by any Third Party, in respect of
which indemnity may be sought hereunder and shall give the Indemnifying Party
such information with respect thereto as the Indemnifying Party may reasonably
request, but failure to give such notice shall not relieve the Indemnifying
Party of any liability hereunder (unless and to the extent that the Indemnifying
Party has suffered prejudice by such failure). The Indemnifying Party shall have
the right, but not the obligation, exercisable by written notice to the
Indemnified Party within thirty (30) days of receipt of notice from the
Indemnified Party of the commencement of or assertion of any claim, action, suit
or proceeding by a Third Party in respect of which indemnity may be sought
hereunder (a “Third-Party Claim”), to assume the defense and control the
settlement of such Third-Party Claim (with counsel reasonably acceptable to the
Indemnified Party) that (i) involves (and continues to involve) solely money
damages, or (ii) involves (and continues to involve) claims for both money
damages and equitable relief against the Indemnified Party that cannot be
severed, where the claims for money damages are the primary claims asserted by
the Third Party and the claims for equitable relief are incidental to the claims
for money damages and, such equitable relief, if reasonably expected to be
awarded, would not be reasonably expected to be material to Buyer; provided,
however, that the Indemnifying Party shall not impair the defense of the
Indemnified Party with respect to any claims for equitable relief against the
Indemnified Party. Failure by the Indemnifying Party to so notify the
Indemnified Party shall be deemed a waiver by the Indemnifying Party of its
right to assume the defense of such Third-Party Claim.
     (b) The Indemnifying Party or the Indemnified Party, as the case may be,
shall have the right to participate in (but not control), at its own expense,
the defense of any Third-Party Claim that the other is defending, as provided in
this Agreement.
     (c) The Indemnifying Party, if it has assumed the defense of any
Third-Party Claim as provided in this Agreement, shall not consent or agree to a
compromise or settlement of, or the entry of any judgment arising from, any such
Third-Party Claim without the Indemnified Party’s prior written consent (which
consent shall not be unreasonably withheld subject to the next sentence) unless
such settlement or judgment relates solely to monetary damages. The Indemnifying
Party shall not, without the Indemnified Party’s prior written consent, enter
into any compromise or settlement that (i) commits the Indemnified Party to
take, or to forbear to take, any action, or (ii) does not provide for a complete
written release by such Third Party of the Indemnified Party. The Indemnified
Party shall have the sole and exclusive right to settle any Third-Party Claim,
on such terms and conditions as it deems

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reasonably appropriate, to the extent such Third-Party Claim seeks equitable or
other non-monetary relief against the Indemnified Party, and shall have the
right to settle any Third-Party Claim involving money damages for which the
Indemnifying Party has not assumed the defense pursuant to this Section 9.3 with
the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed.
     (d) In the event an Indemnified Party shall claim a right to payment
pursuant to this Agreement, such Indemnified Party shall send written notice of
such claim to the Indemnifying Party; but failure to give such notice shall not
relieve the Indemnifying Party of any liability hereunder (unless and to the
extent that the Indemnifying Party has suffered prejudice by such failure). Such
notice shall specify the basis for such claim, the amount thereof, if known, and
the method of computation thereof, all with reasonable particularity and shall
contain a reference to the provisions of this Agreement in respect of which such
a claim shall have been incurred. Such notice shall be given promptly after the
Indemnified Party becomes aware of the basis for each such a claim. The
Indemnifying Party shall, within thirty (30) days after receipt of such notice
of an indemnified Loss, and subject to the limitations set forth in Section 9.2,
(i) pay or cause to be paid to the Indemnified Party the amount of such Loss
specified in such notice which the Indemnifying Party does not contest, or
(ii) notify the Indemnified Party if it wishes to contest the existence or
amount of part or all of such a Loss by stating the basis upon which it contests
the existence or amount thereof.
10. Miscellaneous Provisions
     10.1 Notices
     All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given and received (i) on the third Business
Day from mailing, if mailed by certified or registered mail, return receipt
requested, (ii) on the next Business Day from mailing, if sent by Federal
Express or other nationally recognized express carrier, fee prepaid, (iii) upon
confirmation of receipt if sent via facsimile, or (iv) on the day of delivery if
delivered personally, in each case, addressed as follows or to such other
address or addresses of which the respective party shall have notified the
other.

     
If to AMCC or any
Selling Subsidiary, to:
 
Applied Micro Circuits Corporation
Attn: General Counsel
215 Moffett Park Drive
Sunnyvale, CA 94089
Facsimile: (408) 542-8355
 
   
With a copy to:
  Jones Day
Attn: Daniel R. Mitz
     Richard Meamber
1755 Embarcadero Road
Palo Alto, CA 94303
Facsimile: (650) 739-3900

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If to Buyer, to:
  LSI Corporation
Attn: Chief Financial Officer
1621 Barber Lane
Milpitas, CA 95035
Facsimile: (408) 433-4706
 
   
With a copy to:
  LSI Corporation
Attn: Vice President — Law
110 American Parkway NE
Allentown, PA 18109
Facsimile: (610) 712-1450

     10.2 Expenses
     Except as otherwise provided in this Agreement, each party to this
Agreement will bear all the fees, costs and expenses that are incurred by it in
connection with the transactions contemplated hereby, whether or not such
transactions are consummated.
     10.3 Entire Agreement; Modification
     The agreement of the parties, which consists of this Agreement, the
Collateral Agreements, the Schedules and Exhibits hereto and thereto sets forth
the entire agreement and understanding between the parties and supersedes any
prior agreement or understanding, written or oral, relating to the subject
matter of this Agreement. No amendment, supplement, modification or waiver of
this Agreement shall be binding unless executed in writing by the party to be
bound thereby, and, with respect to any waiver of rights under this Agreement,
in accordance with Section 11.3.
     10.4 Assignment; Binding Effect; Severability
     This Agreement may not be assigned by any party hereto without the other
party’s written consent; provided, however, that Buyer may assign its right to
acquire the Purchased Assets and obligation to assume the Assumed Liabilities to
one or more of its Affiliates, and this Agreement to a purchaser or acquirer of
all or substantially all of the business or assets of Buyer, whether by merger,
reorganization, consolidation, amalgamation, sale of stock or assets, provided
in each case that such assignment will not materially delay the Closing of the
transactions contemplated hereby and provided further that any such assignment
will not relieve Buyer of any of its obligations hereunder. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the
successors, legal representatives and permitted assigns of each party hereto.
The provisions of this Agreement are severable, and in the event that any one or
more provisions are deemed illegal or unenforceable the remaining provisions
shall remain in full force and effect unless the deletion of such provision
shall cause this Agreement to become materially adverse to either party, in
which event the parties shall use reasonable best efforts to arrive at an
accommodation that best preserves for the parties the benefits and obligations
of the offending provision.

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     10.5 Governing Law
     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK IRRESPECTIVE OF THE CHOICE OF
LAWS PRINCIPLES OF THE STATE OF NEW YORK, AS TO ALL MATTERS, INCLUDING MATTERS
OF VALIDITY, CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE AND REMEDIES.
     10.6 Waiver of Jury Trial
     Each party hereby waives, and agrees to cause each of its Subsidiaries to
waive, to the fullest extent permitted by applicable Law, any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of, under or in connection with this Agreement. Each party certifies that no
representative 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.
     10.7 Execution in Counterparts
     This Agreement may be executed and delivered in any number of counterparts,
including delivery by facsimile transmission or electronic copies in Adobe PDF
or similar picture format, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
     10.8 Public Announcement
     Prior to the signing of this Agreement, AMCC and Buyer shall each prepare a
mutually agreeable release announcing the transaction contemplated hereby.
Except for such press releases, neither Sellers nor Buyer shall, without the
approval of the other, make any press release or other public announcement
concerning the existence of this Agreement or the terms of the transactions
contemplated by this Agreement, except as and to the extent that any such party
shall be so obligated by Law, in which case the other party shall be advised and
the parties shall use their reasonable best efforts to cause a mutually
agreeable release or announcement to be issued; provided, however, that the
foregoing shall not apply to communications or disclosures necessary to comply
with accounting rules, stock exchange or market rules or federal securities or
labor relations Law disclosure obligations.
     10.9 No Third-Party Beneficiaries
     Nothing in this Agreement, express or implied, is intended to or shall
(a) confer on any Person other than the parties hereto and their respective
successors or assigns any rights (including Third-Party beneficiary rights),
remedies, obligations or liabilities under or by reason of this Agreement
(except for Indemnified Parties as provided in Article 9), or (b) constitute the
parties hereto as partners or as participants in a joint venture. This Agreement
shall not provide Third Parties with any remedy, claim, liability,
reimbursement, cause of

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action or other right in excess of those existing without reference to the terms
of this Agreement (except for Indemnified Parties as provided in Article 9).
Nothing in this Agreement shall be construed as giving to any Business Employee,
or any other individual, any right or entitlement under any benefit plan, policy
or procedure maintained by Seller or Buyer. No Third Party shall have any rights
under Section 502, 503 or 504 of ERISA or any regulations thereunder because of
this Agreement that would not otherwise exist without reference to this
Agreement. No Third Party shall have any right, independent of any right that
exist irrespective of this Agreement, under or granted by this Agreement, to
bring any suit at law or equity for any matter governed by or subject to the
provisions of this Agreement (except for Indemnified Parties as provided in
Article 9).
11. Termination and Waiver
     11.1 Termination
     This Agreement may be terminated at any time prior to the Closing by:
     (a) Mutual Consent. The mutual written consent of Buyer and AMCC;
     (b) Failure of Buyer Condition. Buyer upon written notice to AMCC if any of
the conditions to the Closing set forth in Section 8.2 shall have become
incapable of fulfillment and shall not have been waived in writing by Buyer;
provided, however, that, with respect to a condition relating to the failure of
a representation or warranty of Seller to be true and correct or the failure to
perform all of the covenants and agreements in this Agreement, such condition
shall be deemed incapable of being fulfilled in the event that AMCC has had an
opportunity to cure for a period of twenty (20) days after written notice of
breach; and provided, further, that no cure period shall be required for a
breach which by its nature cannot be cured;
     (c) Failure of Seller Condition. Sellers upon written notice to Buyer if
any of the conditions to the Closing set forth in Section 8.3 shall have become
incapable of fulfillment and shall not have been waived in writing by Seller;
provided, however, that, with respect to a condition relating to the failure of
a representation or warranty of Buyer to be true and correct or the failure to
perform all of the covenants and agreements in this Agreement, such condition
shall be deemed incapable of being fulfilled in the event that Buyer has had an
opportunity to cure for a period of twenty (20) days after written notice of
breach; and provided, further, that no cure period shall be required for a
breach which by its nature cannot be cured;
     (d) Court or Administrative Order. Buyer, on one hand, or Sellers, on the
other hand, if there shall be in effect a final, non-appealable order of a court
or government administrative agency of competent jurisdiction prohibiting the
consummation of the transactions contemplated hereby; or
     (e) Delay. Buyer, on the one hand, or Sellers, on the other hand, if the
Closing shall not have occurred by May 15, 2009;

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provided, however, that the party seeking termination pursuant to clause (b),
(c) or (e) is not then in breach in any material respect of any of its
representations, warranties, covenants or agreements contained in this
Agreement.
     11.2 Effect of Termination
     In the event of the termination of this Agreement pursuant to Section 11.1,
this Agreement shall become void and have no further force or effect without any
liability on the part of any party hereto or its directors, officers or
stockholders, except for the obligations of the parties hereto under Article 6,
Section 10.2, Section 10.8 and this Section 11.2; provided, however, that
notwithstanding anything in this Agreement to the contrary, neither Sellers nor
Buyer shall be relieved or released from any liabilities or damages arising out
of its willful and material breach of any of any covenant or agreement set forth
in this Agreement prior to such termination.
     11.3 Waiver of Agreement
     Any term or condition hereof may be waived at any time prior to the Closing
by the party hereto which is entitled to the benefits thereof by action taken by
its Board of Directors or its duly authorized officer or employee; provided,
however, that such action shall be evidenced by a written instrument duly
executed on behalf of such party by its duly authorized officer or employee. The
failure of either party to enforce at any time any provision of this Agreement
shall not be construed to be a waiver of such provision nor shall it in any way
affect the validity of this Agreement or the right of such party thereafter to
enforce each and every such provision. No waiver of any breach of this Agreement
shall be held to constitute a waiver of any other or subsequent breach.
[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, each party has caused this Agreement to be duly
executed on its behalf by its duly authorized officer as of the date first
written above.

            APPLIED MICRO CIRCUITS CORPORATION
      By:   /s/ Kambiz Hooshmand       Name:   Kambiz Hooshmand       Title:  
President and CEO       LSI CORPORATION
      By:   /s/ Robert A. Brown       Name:   Robert A. Brown       Title:  
Vice President - Treasurer    

 

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AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
AND ASSIGNMENT
     THIS AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT AND ASSIGNMENT (this
“Amendment”) is made as of this 20th day of April, 2009 by and between APPLIED
MICRO CIRCUITS CORPORATION, a Delaware corporation (“AMCC”), and LSI
CORPORATION, a Delaware corporation (“Buyer”). Capitalized terms used but not
defined herein shall have the meanings given to them in the Purchase Agreement
(as defined below).
RECITALS
     A. WHEREAS, on April 5, 2009, AMCC and Buyer entered into that certain
Asset Purchase Agreement (the “Purchase Agreement”);
     B. WHEREAS, AMCC has determined that none of AMCC’s subsidiaries organized
under the laws of the United Kingdom or Germany own any Purchased Assets and
none of the Purchased Assets are located in the United Kingdom or Germany;
     C. WHEREAS, AMCC and Buyer desire to amend the Purchase Agreement to remove
AMCC’s subsidiaries organized under the laws of the United Kingdom or Germany as
being potential sellers of Purchased Assets for purposes of the Purchase
Agreement and to clarify that no tangible assets in such locations are being
transferred to Buyer under the Purchase Agreement;
     D. WHEREAS, AMCC and Buyer desire to amend the Purchase Agreement further
as set forth below; and
     E. WHEREAS, pursuant to Section 10.4 of the Agreement, Buyer wishes to
assign its right to acquire certain Purchased Assets to one of its Affiliates.
     NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
     1. Each reference, whether direct or indirect, in the Purchase Agreement to
the Purchase Agreement (including, without limitation, references to “this
Agreement”) shall mean and be a reference to the Purchase Agreement, as amended
by this Amendment.

 

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2. The definition of “Selling Subsidiaries” in Section 1.1 of the Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
““Selling Subsidiaries” means 3ware, Inc., a California corporation, AMCC Sales
Corporation, a Delaware corporation, AMCC Enterprise Corporation, a Delaware
corporation, AMCC China, Inc., a Delaware corporation, and Applied Micro
Circuits Corporation (AMCC) Vietnam, a company organized under the laws of
Vietnam.”
     3. Clause (g) of Section 2.2 of the Purchase Agreement is hereby deleted in
its entirety and replaced with the following:
“(g) the operations of the Storage Business located in Vietnam, the United
Kingdom or Germany, and any tangible assets located in the United Kingdom or
Germany;”
     4. Buyer hereby notifies Sellers, and Sellers hereby acknowledge and agree,
that LSI is hereby assigning its right to acquire the Inventory located in
Singapore, including any Inventory located at Expediter’s International in
Singapore, and its obligation to assume the Assumed Liabilities, if any,
associated therewith, to LSI Logic Singapore Pte. Ltd. Buyer and Sellers hereby
agree that for all purposes of the Purchase Agreement and the Collateral
Agreements with respect to such Inventory, Buyer shall be deemed to include, to
the extent applicable, LSI Logic Singapore Pte. Ltd.
     5. Each party hereto hereby represents to the other party hereto that, to
the extent applicable, (i) all action on the part of such representing party,
its officers, directors and securityholders necessary for the authorization,
execution, delivery and performance of all obligations under this Amendment has
been taken, (ii) this Amendment constitutes a valid and legally binding
obligation of such representing party, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally, and subject as
to enforceability to general principles of equity, and (iii) the execution,
delivery and performance of this Amendment will not result in any violation of,
be in conflict with, or constitute a default under, with or without the passage
of time or the giving of notice, any provision of such representing party’s
charter documents or bylaws, in each case as amended through the date hereof.
     6. Except as expressly modified by this Amendment, the Purchase Agreement
shall remain in full force and effect in accordance with its terms. To the
extent that there are any inconsistencies or ambiguities between this Amendment
and the Purchase Agreement, the terms of this Amendment shall supersede the
Purchase Agreement.
     7. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK IRRESPECTIVE OF THE CHOICE OF
LAWS PRINCIPLES OF THE STATE OF NEW YORK, AS TO ALL MATTERS, INCLUDING MATTERS
OF VALIDITY, CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE AND REMEDIES.

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     8. This Amendment may be executed and delivered in any number of
counterparts, including delivery by facsimile transmission or electronic copies
in Adobe PDF or similar picture format, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, each party has caused this Amendment No. 1 to Asset
Purchase Agreement and Assignment to be duly executed on its behalf by its duly
authorized officer as of the date first written above.

            APPLIED MICRO CIRCUITS CORPORATION
      By:   /s/ Kambiz Hooshmand       Name:   Kambiz Hooshmand       Title:  
President and CEO       LSI CORPORATION
      By:   /s/ Robert A. Brown       Name:   Robert A. Brown       Title:  
Vice President - Treasurer    

By its signature below, LSI Logic Singapore Pte. Ltd.
hereby acknowledges and agrees to the assignment
set forth in Section 4 above:

          LSI LOGIC SINGAPORE PTE. LTD.
      By:   /s/ Bryon Look       Name:   Bryon Look       Title:   Director