Exhibit 10.1

[Execution Copy]

 

 

 

 

 

 

ASSET PURCHASE AGREEMENT

 

 

by and between

 

 

BROADCOM CORPORATION

 

 

as Seller

 

 

and

 

 

CYPRESS SEMICONDUCTOR CORPORATION

 

 

as Buyer

 

 

dated as of April 28, 2016

 

 

 

 

 

 

 

 

 

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TABLE OF CONTENTS

Page

 

1.

Definitions1

 

 

1.1

Defined Terms1

 

 

1.2

Additional Defined Terms13

 

 

1.3

Other Definitional and Interpretive Matters14

 

2.

Purchase and Sale of the IoT Business15

 

 

2.1

Purchase and Sale of Assets15

 

 

2.2

Excluded Assets16

 

 

2.3

Assumed Liabilities.18

 

 

2.4

Excluded Liabilities18

 

 

2.5

Further Assurances; Further Conveyances and Assumptions; Consent of Third
Parties20

 

 

2.6

Intellectual Property and Information22

 

 

2.7

Bulk Sales Law22

 

 

2.8

Taxes22

 

 

2.9

Buyer Designee; Transactions in China and India23

 

 

2.10

Purchase Price24

 

 

2.11

Purchase Price Adjustment24

 

3.

Representations and Warranties of Seller26

 

 

3.1

Organization and Qualification26

 

 

3.2

Subsidiaries26

 

 

3.3

Authorization; Binding Effect26

 

 

3.4

Non-Contravention; Consents27

 

 

3.5

Purchased Assets28

 

 

3.6

Governmental Permits28

 

 

3.7

Real Estate and Environmental29

 

 

3.8

Compliance With Laws30

 

 

3.9

Litigation31

 

 

3.10

Business Employees31

 

 

3.11

Contracts33

 

 

3.12

Revenues; Absence of Certain Changes35

 

 

3.13

Intellectual Property35

 

 

3.14

IoT Product Liability and Recalls39

 

 

3.15

IoT Product Warranty39

 

 

3.16

Inventory39

 

 

3.17

Customers and Suppliers39

 

 

3.18

Restrictions on the IoT Business40

 

 

3.19

Taxes40

 

 

3.20

Brokers41

 

 

3.21

No Other Representations or Warranties41

 

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4.

Representations and Warranties of Buyer41 

 

 

4.1

Organization and Qualification41

 

 

4.2

Authorization; Binding Effect41

 

 

4.3

Non-Contravention; Consents42

 

 

4.4

Brokers43

 

 

4.5

No Inducement or Reliance; Independent Assessment; Projections43

 

 

4.6

Financing43

 

 

4.7

Sufficiency of Funds44

 

 

4.8

No Other Representations or Warranties44

 

5.

Certain Covenants45

 

 

5.1

Access and Information45

 

 

5.2

Conduct of the IoT Business46

 

 

5.3

Tax Reporting and Allocation of Consideration48

 

 

5.4

Business Employees49

 

 

5.5

Collateral Agreements51

 

 

5.6

Leased Equipment52

 

 

5.7

Regulatory Compliance52

 

 

5.8

Contacts with Suppliers and Customers; Inventory53

 

 

5.9

Use of the Seller Name54

 

 

5.10

Non-Solicitation or Hiring of Transferred Employees55

 

 

5.11

No Negotiation or Solicitation55

 

 

5.12

Non-Competition56

 

 

5.13

Post-Closing Remittances57

 

 

5.14

Prorations and Adjustments57

 

 

5.15

Financing57

 

6.

Confidential Nature of Information61

 

 

6.1

Confidentiality Agreement61

 

 

6.2

Seller’s Proprietary Information61

 

 

6.3

Buyer’s Proprietary Information62

 

 

6.4

Confidential Nature of Agreements.63

 

7.

Closing63

 

 

7.1

Deliveries by Seller or the Subsidiaries63

 

 

7.2

Deliveries by Buyer or a Buyer Designee64

 

 

7.3

Closing Date64

 

 

7.4

Closing Effective Time and Contemporaneous Effectiveness65

 

8.

Conditions Precedent to Closing65

 

 

8.1

General Conditions65

 

 

8.2

Conditions Precedent to Buyer’s Obligations65

 

 

8.3

Conditions Precedent to Seller’s Obligations66

 

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9.

Indemnification66 

 

 

9.1

Survival of Representations and Warranties and Related Indemnification
Obligations66

 

 

9.2

General Agreement to Indemnify67

 

 

9.3

Third Party Claims69

 

 

9.4

Indemnification Claim Procedures Generally69

 

10.

Miscellaneous Provisions70

 

 

10.1

Notices70

 

 

10.2

Expenses71

 

 

10.3

Entire Agreement; Modification71

 

 

10.4

Assignment; Binding Effect; Severability71

 

 

10.5

Governing Law71

 

 

10.6

Consent to Jurisdiction71

 

 

10.7

Waiver of Jury Trial..72

 

 

10.8

Execution in Counterparts72

 

 

10.9

Public Announcement72

 

 

10.10

No Third Party Beneficiaries72

 

11.

Termination; Amendment and Waiver73

 

 

11.1

Termination73

 

 

11.2

Effect of Termination73

 

 

11.3

Amendment and Waiver74

 

 

 

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Schedules

 

Schedule 1.1(a)(i)Business Key Employees

Schedule 1.1(a)(ii)Senior Key Employees

Schedule 1.1(b)IoT Products

Schedule 1.1(c)Individuals with Knowledge

Schedule 2.1(f)Transferred Contracts

Schedule 2.1(g)Transferred In-Licenses

Schedule 2.1(h)Transferred Governmental Permits

Schedule 2.1(i)Transferred Registered Domain Names

Schedule 3.2Subsidiaries

Schedule 3.4(b)Required Consents

Schedule 3.7(a)Leased Premises; Assumed Leases

Schedule 3.7(c)Environmental Matters

Schedule 3.8Compliance with Laws

Schedule 3.9Litigation

Schedule 3.10(a)(i)Business Employees

Schedule 3.10(a)(ii)Unions and Works Councils

Schedule 3.10(b)Benefit Plans

Schedule 3.10(f)Severance, Retention and Change of Control Payment

Schedule 3.11(a)Material Contracts

Schedule 3.12(a)Statement of Revenues

Schedule 3.12(c)Prepaid Revenues

Schedule 3.13Intellectual Property

Schedule 3.14(b)IoT Product Liability

Schedule 3.14(c)IoT Product Recalls

Schedule 3.15IoT Product Warranty Terms

Schedule 3.17Customers and Suppliers

 

Exhibits

 

Exhibit AForm of Bill of Sale and Assignment and Assumption Agreement

Exhibit B Form of China Purchase Agreement

Exhibit C Form of India Purchase Agreement

Exhibit D Form of Intellectual Property Agreement

Exhibit EForm of Lease Assignment

Exhibit FForm of Sublease

Exhibit GForm of Transition Services Agreement

 

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ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of April 28, 2016 by
and between BROADCOM CORPORATION, a California corporation (“Seller” or
“Broadcom”), and CYPRESS SEMICONDUCTOR CORPORATION, a Delaware corporation
(“Buyer”).  Buyer and Seller are referred to herein individually as a “Party,”
and together as the “Parties”).

 

R E C I T A L S

 

A.WHEREAS, Seller and its Subsidiaries (as hereinafter defined) are, among other
things, engaged in the IoT Business (as hereinafter defined);

 

B.WHEREAS, the IoT Business is comprised of certain assets and liabilities that
are currently part of Seller and its Subsidiaries;

 

C.WHEREAS, Seller and its Subsidiaries desire to sell, transfer and assign to
Buyer or a Buyer Designee (as hereinafter defined), and Buyer or a Buyer
Designee desires to purchase and assume from Seller and its Subsidiaries, the
Purchased Assets (as hereinafter defined), and Buyer or a Buyer Designee 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;

 

D.WHEREAS, concurrently with the execution and delivery of this Agreement, the
employees of Seller listed on Schedule 1.1(a)(i) (the “Business Key Employees”)
and  Schedule 1.1(a)(ii)  (the “Senior Key Employees,” and together with the
Business Key Employees, the “Key Employees”) are executing and entering into
certain employment arrangements with Buyer or a Buyer Designee to become
effective upon the Closing (as hereinafter defined); and

 

E.WHEREAS, Seller and its Subsidiaries and Buyer or a Buyer Designee desire to
enter into one or more Bills of Sale and Assignment and Assumption Agreements,
the China Purchase Agreement, the India Purchase Agreement, the Intellectual
Property Agreement, each Lease Assignment (if any) or Sublease (if any) and the
Transition Services 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 hereby agree as
follows:

 

1.Definitions

 

Defined Terms

. 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, including any Subsidiary.  As used
herein, “control” (including the terms “controlling”, “controlled by” and “under
common control with”) means the possession,

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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.

 

“Assigned Intellectual Property” means the Intellectual Property and Information
that is being assigned to Buyer pursuant to the Intellectual Property Agreement,
which consists of the Assigned Software, the Assigned Technical Information and
the Assigned Trademarks (as each such term is defined in the Intellectual
Property Agreement).

 

“Assumed Leases” means the Leases identified on Schedule 3.7(a), if any, to be
assumed by Buyer or a Buyer Designee pursuant to a Lease Assignment as set forth
on Schedule 3.7(a), if applicable.

 

“Automatic Transfer Law” means any Law of a member state of the European Union
which implements Council Directive 2001/23/EC of 12 March 2001 on the
approximation of the laws of the Member States relating to the safeguarding of
employees’ rights in the event of transfers of undertakings, businesses or parts
of undertakings or businesses, and any other similar Law applicable in a
European country which provides for the automatic transfer by operation of Law
of the employment contract of an employee working in an undertaking, business or
part thereof upon the transfer of that undertaking, business or part thereof.

 

“Base Inventory Value” means $11.6 million, which represents a value of
Inventory of the IoT Business that is consistent with the value of Inventory of
the IoT Business reflected on the books and records of Seller for the six (6)
months preceding the date of this Agreement.

 

“Benefit Plan” means each Pension Plan, Welfare Plan and employment,
compensation, bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock option, stock appreciation right, stock
purchase, phantom stock or other equity compensation, performance, retirement,
thrift, savings, employee loan, stock bonus, excess benefit, supplemental
unemployment, paid time off, vacation, personal days, floating holidays,
perquisite, tuition reimbursement, outplacement, fringe benefit, sabbatical,
sick leave, change of control, retention, severance, termination, redundancy,
workers’ compensation, retirement, cafeteria, disability, death benefit,
hospitalization, medical, dental, life insurance, accident benefit, housing,
transport, welfare benefit or other plan, program, agreement or arrangement, in
each case maintained or contributed to, or required to be maintained or
contributed to, by Seller or its Subsidiaries or any ERISA Affiliate or with
respect to which Seller or its Subsidiaries or any ERISA Affiliate has any
liability.

 

“Bill of Sale and Assignment and Assumption Agreement” means each agreement in
substantially the form set forth in Exhibit A.

 

“Business Day” means a day that is not (i) a Saturday, a Sunday or a statutory
or civic holiday in the State of New York or California, (ii) a day on which
banking institutions are required by Law to be closed in the State of New York
or California, or (iii) a day on which the principal offices of Seller or Buyer
are closed or become closed prior to 2:00 p.m. local time.

 

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“Business Employees” means the Key Employees, the employees of Seller or its
Subsidiaries employed in the IoT Business, and any product, test or quality
engineers of Seller and its Subsidiaries set forth on Schedule 3.10(a)(i).

 

“Business Records” means the books, records, ledgers, tangible data, disks,
tapes, other media-storing data and files or other similar information, whether
in hardcopy or computer format and whether stored in network facilities or
otherwise, in each case to the extent primarily related to or primarily used in
the operation or conduct of the IoT Business or the Purchased Assets, including
any advertising, promotional and media materials, training materials, trade show
materials and videos, engineering information, design documents, models, manuals
and data, including databases for reference designs, product datasheets, sales
and purchase correspondence, including price lists, lists of present and former
customers, information concerning customer contacts, purchasing history and
invoices, technical characteristics and other information reasonably required
for ongoing customer relationships, lists of present and former suppliers or
vendors, mailing lists, warranty information, catalogs, sales promotion
literature, advertising materials, brochures, bids, records of operation,
accounting and financial records, personnel and employment records, standard
forms of documents, manuals of operations or business procedures, designs,
research materials and product testing reports, and any information relating to
any Tax imposed on any Purchased Assets or with respect to the IoT Business, but
excluding such items to the extent (i)  they are Excluded Assets or Excluded
Liabilities or (ii) any applicable Law prohibits the transfer of such
information. The Parties agree that “Business Records” also includes copies of
any other business records that have information related to the worldwide
design, engineering, manufacturing, use, marketing, sale and distribution of
Bluetooth, Wi-Fi or IEEE 802.15.4 connectivity solutions for the IoT, automobile
and embedded markets as carried on and conducted by the IoT Group of Seller,
including IoT Products, and that Buyer shall have the right to copy any such
business records to the extent practical.

 

“Buyer Designee” means one or more Affiliates of Buyer identified to Seller in
accordance with Section 2.9 prior to the Closing Date.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. §§ 9601 et seq. as amended.

 

“China Purchase Agreement” means an agreement for the sale or transfer of
Purchased Assets in China to be entered separately between a Subsidiary of
Seller and a Buyer Designee and governed under the laws of China in
substantially the form set forth in Exhibit B.

 

“Closing Date Inventory Statement” means the statement that sets forth the value
of the Inventory of the IoT Business as of the Closing Date, prepared, or caused
to be prepared, by Seller in accordance with Section 2.11 hereof and, in the
event of a Buyer’s Objection, as adjusted by either the agreement of Buyer and
Seller, or by the Valuation Firm, acting pursuant to Section 2.11.

 

“Closing Date Inventory Value” means the sum of the Inventory of the IoT
Business as reflected on the books and records of Seller as of the Closing Date.

 

“Closing” means the closing of the transactions described in Article 7.

 

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“Code” means the U.S. Internal Revenue Code of 1986, as amended, and the
regulations thereunder.

 

“Confidentiality Agreement” means the Confidentiality Agreement between Seller
and Buyer dated February 1, 2016.

 

“Contract” means any legally binding oral or written contract, subcontract,
agreement or commitment, note, bond, mortgage, indenture, lease, license,
sublicense or other legally binding obligation, arrangement or understanding.

 

“Copyrights” means rights in works of authorship, including without limitation
copyrights, whether registered or unregistered and whether arising under the
laws of the United States or any other jurisdiction anywhere in the world,
including moral rights and mask work rights, and all registrations and
applications for registration with respect thereto.

 

“Debt Financing Source” means (a) any lender, lead arranger, bookrunner,
syndication agent or similar entity that has committed to provide or arrange or
otherwise entered into agreements in connection with the Financing, (b) any
Affiliate of the foregoing and (c) any directors, officers, employees, agents
and Representatives of any Persons referred to in clauses (a) and/or (b) of this
definition, in all such instances in connection with the Financing.

 

“Encumbrance” means any lien, encumbrance, claim, charge, security interest,
mortgage, pledge, easement, encroachment, building or use restriction, capital
lease, conditional sale or other title retention agreement, covenant, adverse
claims of ownership or use, or other similar restriction.

 

“Environmental Law” means any Law that regulates or governs (a) emissions,
discharges, releases, or threatened releases of Hazardous Substances,
(b) Hazardous Substance Activities, (c) the protection of persons, natural
resources or the environment, (d) the management of Hazardous Substances, or (e)
other activities involving Hazardous Substances including without limitation,
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.

 

“Environmental Liability” means any liability, obligation, judgment, penalty,
fine, cost or expense of any kind or nature arising in connection with or in any
way relating to Seller or any Affiliate or any of their predecessors, any
property (including the land, the improvements thereon) owned, leased or
operated by Seller or any Affiliate or any of their predecessors, the IoT
Business, or the Purchased Assets which (i) arises under or relates to any
Environmental Law or any Hazardous Substance Activity and (ii) relates to the
period on or prior to the Closing Date.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations thereunder.

 

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“ERISA Affiliate” means each Affiliate and any other Person that, together with
Seller or any of the Affiliates is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code or under Section 4001(b) of ERISA.

 

“Excluded Access and Mobility Products” means Seller’s Bluetooth, Wi-Fi or
combo/SOC connectivity solutions for (1) set top and over-the-top boxes,
wireless access points, routers, carrier gateways, digital television, cellular
telephones (including smart phones), tablets and personal computers, and (2)
smartwatches and other accessories that are designed by Apple Inc., Samsung
Electronics Co., Ltd., or their respective affiliates for cellular telephones
(including smartphones) and tablets, in each case including, without limitation,
products currently in production, products under design and development and
future products, but not including “Internet of things” bridges (an aggregation
point for “Internet of things” devices, including the functionality of a network
bridge, router or access point running an “Internet of things” application) that
connects to the Internet through another access point, router or carrier
gateway.

 

“Excluded Contracts” means any Third Party contracts or other agreements
(i) under which performance by Seller or an Affiliate has been completed and for
which there is no remaining warranty, maintenance, or support obligation,
(ii) that constitute a General Purchase Agreement, (iii) under which performance
by the counterparty has been completed and for which there is no remaining
payment obligation of such party, or (iv) not primarily related to the Purchased
Assets or Assumed Liabilities.

 

“Excluded Taxes” means any liability, obligation or commitment, whether or not
accrued, assessed or currently due and payable, with respect to (i) any Taxes of
Seller or its Affiliates (including any liability of Seller or its Affiliates
for the Taxes of any other Person (other than Buyer or its Affiliates) under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local
or foreign law)), as a transferee or successor, by contract or otherwise,
(ii) any Taxes relating to, pertaining to, or arising out of, the IoT Business
or the Purchased Assets for any Pre-Closing Tax Period, including all interest,
penalties or other amounts with respect thereto accruing in Post-Closing Tax
Periods, and (iii) any Taxes required by Law to be paid by Seller or any
Affiliate (or withheld from Seller by Buyer or a Buyer Designee and remitted to
the appropriate taxing Governmental Body) as a result of their sale of Purchased
Assets in any jurisdiction (including any mandatory withholding Taxes) other
than any Transfer Taxes to be paid by Buyer or a Buyer Designee under
Section 2.8(b).

 

“Fixtures and Supplies” means the fixtures, improvements, furniture,
furnishings, office and other supplies, vehicles, and other tangible personal
property owned by Seller or a Subsidiary and primarily related to or primarily
used in the operation or conduct of the IoT Business or the Purchased Assets
that are located at the portion of the real property which is leased pursuant to
the Assumed Leases or subleased pursuant to Subleases or as to which occupancy
rights are granted to Buyer or a Buyer Designee pursuant to the Transition
Services Agreement, including desks, tables, chairs, file cabinets, racks,
cubicles and other storage devices and office supplies and any additions,
improvements, replacements and alterations thereto between the date hereof and
the Closing Date and all warranties and guarantees, if any, express or implied
with respect to the foregoing, but excluding any Excluded Assets or Excluded
Liabilities.

 

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“GAAP” means U.S. generally accepted accounting principles.

 

“General Purchase Agreements” means any Third-Party contracts or other
agreements pursuant to which Seller or an Affiliate purchases products or
services from such Third-Party, including for any of Seller’s or an Affiliate’s
retained businesses, in each case that are not primarily related to or primarily
used in the operation or conduct of the IoT Business or the Purchased Assets.

 

“Governmental Body” means any legislative, executive or judicial unit of any
governmental entity (supranational, national, federal, provincial, state or
local or foreign) or any department, commission, board, agency, bureau, official
or other regulatory, administrative or judicial authority thereof.

 

“Hazardous Substance” means (i) any chemical, material, emission, waste, or
substance that has been designated by a Governmental Body to be hazardous,
toxic, dangerous, radioactive, a pollutant, or words of similar import, or
(ii) asbestos or PCBs.

 

“Hazardous Substance Activity” means the transportation, transfer, recycling,
storage, use, treatment, manufacture, removal, disposal, remediation, release,
exposure of others to, sale, labeling, certification, registration, or
distribution of any Hazardous Substance or any product or waste containing a
Hazardous Substance, including, without limitation, any required labeling,
payment of waste fees or charges (including so-called e-waste fees) and
compliance with any packaging, recycling, product take-back or product content
requirements, including without limitation, the European Union Directive
2012/19/EU on Waste Electrical and Electronic Equipment or WEEE Directive, the
European Union Regulation (EC) No. 1907/2006 of the European Parliament and of
the Council concerning the Registration, Evaluation, Authorization and
Restriction of Chemicals or REACH, the European Union Directive 2011/65/EU on
the Restriction on the Use of Certain Hazardous Substances (“RoHS2”), and
China’s Administrative Measures on the Control of Pollution Caused by Electronic
Information Products (“China RoHS2”), and all implementing Laws, all as amended
at any time.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the regulations thereunder.

 

“India Purchase Agreement” means an agreement for the sale or transfer of
Purchased Assets in India to be entered separately between a Subsidiary of
Seller and a Buyer Designee and governed under the laws of India in
substantially the form set forth in Exhibit C.

 

“Information” means documented and undocumented information (excluding Patents),
including any technical information, Trade Secrets and other confidential
information, data and drawings of whatever kind in whatever medium,
specifications, techniques, know-how, network configurations and architectures,
Software, APIs, subroutines, techniques, user interfaces, URLs works of
authorship, algorithms, formulae, protocols, schematics, compositions,
processes, designs, bills of material, sketches, photographs, graphs, drawings,
samples, non-patented inventions, discoveries, developments and ideas, build
instructions, Software code (in any form, including source code and executable
or object code), build scripts, test scripts, databases and data collections,
past and current manufacturing and distribution methods and processes, tooling
requirements,

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current and anticipated customer requirements, price lists, part lists, customer
lists, market studies, business plans, database technologies, systems,
structures, architectures, improvements, devices, concepts, methods and
information, RTL, GDSII files, whether embodied in Software or otherwise,
inventions (whether or not patentable), discoveries, improvements, and
technology, breadboards, netlists, maskworks, test methodologies, verilog files,
emulation and simulation reports, test vectors and hardware development tools,
and any and all instantiations of the foregoing in any form and embodied in any
media, however documented and whether or not embodied in any tangible form, and
any and all notes, analysis, compilations, studies, summaries, and other
material containing or based, in whole or in part, on any information included
in the foregoing, and including all tangible embodiments of any of the
foregoing.  “Information” does not include any semiconductor integrated circuit
design technology or manufacturing technology.

 

“Intellectual Property” means the intellectual property rights arising from or
associated with any of the following, whether protected, created or arising
under the laws of the United States or any other jurisdiction anywhere in the
world:  (a) Copyrights, (b) Trademarks, (c) Patents, (d) Trade Secrets, (e) mask
work rights and any applications for registration therefor, (f) rights in
databases and data collections (including knowledge databases, customer lists
and customer databases), whether registered or unregistered, and any
applications for registration therefor; (g) rights in URL and domain name
registrations, (h) rights in inventions (whether or not patentable) and
improvements thereto, and (i) any other proprietary, intellectual or industrial
property rights of any kind or nature now known or hereafter recognized in any
jurisdiction worldwide, including any rights in Information.

 

“Intellectual Property Agreement” means the agreement in substantially the form
set forth in Exhibit D.

 

“Inventory” means the inventory, wherever located, including raw materials, work
in process, recycled materials, demo and evaluation inventory, finished
products, inventoriable supplies, and non-capital spare parts owned by Seller or
a Subsidiary and primarily related to or primarily used in the operation or
conduct of the IoT Business or the Purchased Assets, and any rights of Seller or
a Subsidiary to the warranties received from suppliers and any related claims,
credits, rights of recovery and set-off with respect to such Inventory, but only
to the extent such rights are assignable.

 

“IoT Business” means the worldwide design, engineering, manufacturing, use,
marketing, sale and distribution of Bluetooth, Wi-Fi or IEEE 802.15.4
connectivity solutions for the IoT, automobile and embedded markets as carried
on and conducted by the IoT Group of Seller consisting of the IoT Products, but
excluding (a) the Excluded Access and Mobility Products, (b) any other
semiconductor devices and other products of Seller, including, without
limitation, location (GPS) and near field communication (NFC) products, that are
not IoT Products, and (c) any billing, order entry, fulfillment, accounting,
collections, finance, operations, engineering or other corporate centralized
functional organizations within, or controlled by, Seller or an Affiliate.

 

“IoT Products” means the products of the IoT Business as set forth on
Schedule 1.1(b), including, without limitation, products currently in production
and products under design and development.

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“IRS” means the U.S. Internal Revenue Service.

 

“knowledge of Seller” or “to Seller’s knowledge” means the actual knowledge of
the individuals specified on Schedule 1.1(c) after reasonable investigation.

 

“Law” means any supranational, national, federal, state, provincial or local
law, statute, ordinance, rule, regulation, code, order, judgment, injunction or
decree of any country.

 

“Lease” means the lease, sublease or license for the Leased Premises and for
which occupancy will be provided pursuant to a Lease Assignment or Sublease or
the Transition Services Agreement, as the case may be, together with all
amendments, modifications or supplements thereto.

 

“Lease Assignment” means an assignment agreement with respect to an Assumed
Lease, if any, in substantially the form set forth in Exhibit E.

 

“Leased Equipment” means the vehicles, computers, servers, machinery and
equipment and other similar items leased by Seller or a Subsidiary and primarily
related to or primarily used in the operation or conduct of the IoT Business or
the Purchased Assets, but excluding any Excluded Assets or Excluded Liabilities.

 

“Leased Premises” means the real property, together with all rights, easements
and privileges appertaining or relating to such real property, and all
improvements located thereon, that is leased, subleased or licensed by Seller or
a Subsidiary from Third Parties and used by Seller or a Subsidiary in the
operation of the IoT Business.

 

“Licensed Intellectual Property” means the Intellectual Property and Information
that is being licensed to Buyer pursuant to the Intellectual Property Agreement,
which sets forth the Licensed Software, the Licensed Technical Information and
the Licensed Patents (as each such term is defined in the Intellectual Property
Agreement).

 

“Marketing Period” means the period of time of at least fifteen (15) consecutive
calendar days commencing not later than May 23, 2016; provided that the
Marketing Period shall end on any earlier date that is the date on which the
Financing is consummated.

 

“Nonassignable Licenses” means those licenses of Intellectual Property or
Information under which Seller or an Affiliate is the licensee that are (i) not
by their terms assignable (unless consent is obtained) or (ii) related to other
businesses of Seller or an Affiliate and not primarily related to or primarily
used in the operation or conduct of the IoT Business or the Purchased Assets,
including contracts or agreements for Standard Software, and corporate wide
information technology and design licenses used in Seller’s or an Affiliate’s
retained businesses and not primarily related to or primarily used in the
operation or conduct of the IoT Business or the Purchased Assets.

 

“Non‑U.S. Benefit Plan” means each Benefit Plan maintained or contributed to or
required to be maintained or contributed to, or covering employees, outside the
United States.

 

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“Open Source Materials” means the Software licensed under any license that
conforms to the Open Software Initiative’s definition of “open source”,
available online at http://www.opensource.org/osd.html.

 

“Patents” means patents or patent applications worldwide of any kind or nature
(including industrial designs and utility models that are subject to statutory
protection), and any renewals, reissues, reexaminations, extensions,
continuations, continuations-in-part, divisions and substitutions relating to
any of the patents and patent applications, as well as all related counterparts
to such patents and patent applications, wheresoever issued or pending anywhere
in the world.

 

“Pension Plan” means each “employee pension benefit plan” (within the meaning of
Section 3(2) of ERISA) or similar equivalent under applicable Laws other than
the United States.

 

“Permitted Encumbrances” means any (i) statutory lien for Taxes, assessments and
other governmental charges or liens of carriers, landlords, warehouseman,
mechanics and material men incurred in the ordinary course of business, in each
case for sums not yet due and payable or due but not delinquent, (ii) liens
incurred or deposits made in the ordinary course of the IoT Business in
connection with workers’ compensation, unemployment insurance and other types of
social security or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return of money bonds and similar obligations, (iii) non-exclusive licenses
granted by Seller or an Affiliate in connection with sales of products in the
ordinary course of business, (iv) any use or other building restriction for the
Premises that does not materially interfere with the use of the Premises,
(v) liens granted by Broadcom Limited in connection with its credit agreement
dated February 1, 2016 (the “Credit Agreement”), which liens shall be
automatically released upon the Closing, and (vi) any minor imperfection in
title and minor encroachments, if any, that, individually or in the aggregate,
are not material in amount, do not materially interfere with the conduct of the
IoT Business or with the use of the Purchased Assets and do not materially
affect the value of the Purchased Assets or the IoT Business.

 

“Person” means any individual, corporation, partnership, firm, association,
joint venture, joint stock company, trust, unincorporated organization or other
entity, or any government or regulatory, administrative or political subdivision
or agency, department or instrumentality thereof.

 

“Post-Closing Tax Period” means any Tax period beginning after the Closing Date,
and, in the case of any Straddle Period, the portion of such Straddle Period
beginning the day after the Closing Date.

 

“Pre-Closing Tax Period” means any Tax period ending on or before the Closing
Date and, in the case of any Straddle Period, the portion of such Straddle
Period ending on the Closing Date.

 

“Premises” means the (i) Leased Premises and (ii) the premises owned by Seller
or a Subsidiary that are used by the IoT Business.

 

“Principal Equipment” means the personal property of Seller or a Subsidiary
primarily related to or primarily used in the operation or conduct of the IoT
Business or the Purchased Assets, including, without limitation, all computers,
laptops, cell phone devices, smartphones, servers,

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printers, copiers, faxes, machinery, equipment (including any related
replacement or spare parts, components dies, molds, tools, and tooling), phone
or conferencing equipment, network equipment, data processing equipment and
peripheral equipment and other similar items, and any such items located at the
portion of the real property which is leased pursuant to the Assumed Leases or
subleased pursuant to a Sublease or as to which occupancy rights are granted to
Buyer or a Buyer Designee pursuant to the Transition Services Agreement, but not
(x) the Leased Equipment, or (y) any such items primarily related to Excluded
Assets or Excluded Liabilities.  Principal Equipment includes rights to the
warranties received from the manufacturers and distributors of such items and to
any related claims, credits, rights of recovery and set-off with respect to such
items, but only to the extent that such rights are assignable.

 

“Representatives” means, with respect to any Person, such Person’s directors,
officers, employees, Subsidiaries, Affiliates, investment bankers, attorneys and
other advisors or representatives.

 

“Return” means any return, declaration, report, claim for refund, or information
return or statement, and any other document filed or required to be filed in
respect of any Tax, including any schedule or attachment thereto or amendment
thereof.

 

“Seller Material Adverse Effect” means any fact, circumstance, change, condition
or effect that, individually or when taken together with all other such facts,
circumstances, changes, conditions or effects that exist at the date of
determination of the occurrence of a Seller Material Adverse Effect, has or is
reasonably likely to have a material adverse effect on the business, operations,
financial condition or results of operations of the IoT Business and the
Purchased Assets, taken as a whole, or Seller’s ability to perform its
obligations under this Agreement and the Collateral Agreements or consummate the
transactions contemplated hereby or thereby; provided, however, that no facts,
circumstances, changes, conditions or effects (by themselves or when aggregated
with any other facts, circumstances, changes, conditions or effects) resulting
from, relating to or arising out of the items enumerated in sub-clauses (i) to
(vi) below shall be deemed to be or constitute a Seller Material Adverse Effect,
and no facts, circumstances, changes, conditions or effects resulting from,
relating to or arising out of the following (by themselves or when aggregated
with any other facts, circumstances, changes or effects) shall be taken into
account when determining whether a Seller Material Adverse Effect has occurred
or may, would or could occur: (i) general economic, financial or political
conditions in the United States or any other jurisdiction in which the IoT
Business has substantial business or operations, and any changes therein
(including any changes arising out of acts of terrorism, war, weather conditions
or other force majeure events), to the extent that such conditions do not have a
materially disproportionate impact on the IoT Business, taken as a whole,
relative to other businesses similar to the IoT Business; (ii) conditions in the
industry that the IoT Business is in, and any industry-wide changes therein
(including any changes arising out of acts of terrorism, war, weather conditions
or other force majeure events), to the extent that such conditions do not have a
materially disproportionate impact on the IoT Business, taken as a whole,
relative to other businesses similar the IoT Business; (iii) conditions in the
financial markets, and any changes therein (including any changes arising out of
acts of terrorism, war, weather conditions or other force majeure events), to
the extent that such conditions do not have a materially disproportionate impact
on the IoT Business, taken as a whole, relative to other businesses similar to
the IoT Business; (iv) acts of terrorism or war to the extent that such acts do
not

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have a materially disproportionate impact on the IoT Business, taken as a whole,
relative to other businesses similar to the IoT Business; (v) the announcement
or pendency of this Agreement and the transactions contemplated hereby,
including negative reactions by customers of the IoT Business to the sale
announcement; or (vi) compliance by Seller or its Affiliates with the express
terms of this Agreement or the failure by Seller or its Affiliates to take any
action that is expressly prohibited by this Agreement.

 

“Software” means (a) computer programs, including software implementations of
algorithms, heuristics models and methodologies, whether in source code or
object code, (b) testing, validation, verification and quality assurance
materials, (c) databases, conversion, interpreters and compilations, including
any and all data and collections of data, whether machine readable or otherwise,
(d) descriptions, schematics, flow-charts and other work product used to design,
plan, organize and develop any of the foregoing, (e) software development
processes, practices, methods and policies recorded in permanent form, relating
to any of the foregoing, (f) operating systems, management code, firmware,
utilities, graphical user interfaces and software engines, and (g) performance
metrics, sightings, bug and feature lists, build, release and change control
manifests recorded in permanent form, relating to any of the foregoing and (h)
documentation, including user manuals, developer notes, comments and
annotations, web materials, and architectural and design specifications and
training materials, relating to any of the foregoing.

 

“Standard Software” means non-customized Software that is licensed solely in
executable or object code form pursuant to a nonexclusive, internal use software
license, and not incorporated into, or used directly in, the development,
manufacturing or distribution of, any of the IoT Products or services of the IoT
Business and is generally available to the public on standard, non-negotiated
terms.

 

“Straddle Period” means any Tax period that begins on or before and ends after
the Closing Date.

 

“Sublease” means each sublease with respect to a Lease identified in
Schedule 3.7(a) to be subleased in substantially the form set forth in
Exhibit F.

 

“Subsidiary” means, with respect to any Person, any entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at any
time directly or indirectly owned by such Person.

 

“Tax” means a tax of any kind, and all charges, fees, customs, levies, duties,
imposts, required deposits or other assessments, whether federal, state, local
or foreign, including all net income, capital gains, gross income, gross
receipt, property, franchise, sales, use, excise, registration, withholding,
payroll, employment, severance, social security, worker’s compensation,
unemployment, occupation, capital stock, ad valorem, value added, transfer,
gains, profits, net worth, asset, transaction, real property, personal property,
alternative, add-on minimum, escheat or estimated tax or other tax, including
any interest, penalties or additions to tax with respect thereto, whether
disputed or not, imposed upon any Person by any taxing or social security
authority or other Governmental Body under applicable Law.

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“Third Party” means any Person not an Affiliate of the other referenced Person
or Persons.

 

“Trademarks” means trademarks, trade names, corporate names, business names,
trade styles, service marks, service names, logos, slogans, 800 numbers, or
other source or business identifiers and general intangibles of like nature,
together with goodwill associated therewith, whether registered or unregistered
and whether arising under the laws of the United States or any state or
territory thereof or any other jurisdiction anywhere in the world, and
registrations and applications for registration with respect to any of the
foregoing.

 

“Trade Secrets” means information of any kind or nature, in whatever form and
whether or not embodied in a tangible medium, including customer lists,
concepts, ideas, methods, processes, know-how, methodologies, designs, plans,
schematics, bill of materials, drawings, formulae, technical data,
specifications, research and development information, technology and product
roadmaps, models, data bases, marketing materials and other proprietary or
confidential information, in each case to the extent any of the foregoing
derives economic value from not being generally known to other Persons who can
obtain economic value from its disclosure or use, excluding any Copyrights or
Patents that cover or protect any of the foregoing.

 

“Transferred Contracts” means any Third Party contract, agreement, lease,
sublease, supply contract, commitment, purchase order, sales order and
instrument primarily related to or primarily used in the operation or conduct of
the IoT Business or the Purchased Assets, including those identified on
Schedule 2.1(f) and the Transferred In-Licenses, but not the Excluded Contracts.

 

“Transferred Governmental Permits” means any governmental permit, license,
certificate of inspection, approval or other authorization issued to Seller or a
Subsidiary primarily related to or primarily used in the operation or conduct of
the IoT Business or operation, use or occupation of the Premises, in each case
as currently operated, conducted, used or occupied including those identified on
Schedule 2.1(h).

 

“Transferred In-Licenses” means any Third Party license, agreement and other
arrangement under which Seller or a Subsidiary has the right to use any
Intellectual Property or Information which are primarily related to or primarily
used in the operation of the IoT Business, including those identified on
Schedule 2.1(g), but not (i) the Nonassignable Licenses or (ii) any Excluded
Assets or Excluded Liabilities.

 

“Transition Services Agreement” means the agreement in substantially the form
set forth in Exhibit G.

 

“Value Added Tax” or “VAT” means any value added tax imposed on the supply of
goods and services under European Union Directive 2006/112/EC (or under any
rules, regulation, orders or instruments authorized by that Directive) and any
similar value added tax pursuant to the laws of any jurisdiction which is not a
member of the European Union (including Singapore GST, and GST imposed by other
non-European Union jurisdictions).

 

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“Welfare Plan” means each “employee welfare benefit plan” (within the meaning of
Section 3(1) of ERISA) or similar equivalent under applicable Laws of
jurisdictions other than the United States.

 

Additional Defined Terms

.  For purposes of this Agreement, the following terms shall have the meanings
specified in the Sections indicated below:

 

Term

Section

 

“Agreement”

Preamble

“Allocation”

Section 5.3(b)

“Anticorruption Laws”

Section 3.8(b)

“Antitrust Division”

Section 5.7(b)

“Asset Level Allocation Statement”

Section 5.3(b)

“Assigned Registered IP”

Section 3.13(a)

“Assigned Trademarks”

Section 3.13(a)

“Assumed Liabilities”

Section 2.3

“Broadcom”

Preamble

“Bulk Sales Laws”

Section 2.7

“Buyer”

Preamble

“Buyer Indemnified Party”

Section 9.2(b)

“Buyer Proprietary Information”

Section 6.3(a)

“Buyer Savings Plan”

Section 5.4(g)

“Buyer’s Objection”

Section 2.11(b)

“Cap Amount”

Section 9.2(f)

“China Purchased Assets”

Section 2.9(b)

“Closing Date”

Section 2.9(b)

“Closing Effective Time”

Section 7.3

“COBRA”

Section 5.4(h)

“Collateral Agreements”

Recital E

“Commitment Letter”

Section 4.6

“Excluded Assets”

Section 2.2

“Excluded Leased Equipment”

Section 5.6

“Excluded Liabilities”

Section 2.4

“Expiration Date”

Section 9.1

“FTC”

Section 5.7(b)

“Indemnified Party”

Section 9.2(a)

“Indemnifying Party”

Section 9.3(a)

“India Purchased Assets”

Section 2.9(b)

“IoT Intellectual Property”

Section 3.13(b)(ii)

“IoT Trade Secrets”

Section 3.13(j)

“Losses”

Section 9.2(a)

“Material Contracts”

Section 3.11(a)

“Nonassignable Assets”

Section 2.5(c)

“Party”

Preamble

“Property Taxes”

Section 2.8(d)

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Term

Section

 

“Purchase Price” 

Section 2.10

“Purchase Price Adjustment Amount”

Section 2.11(e)

“Purchased Assets”

Section 2.1

“Purchased Leased Equipment”

Section 5.6

“Reasonable Efforts”

Section 5.9(a)(v)

“Required Consents”

Section 3.4(b)

“Seller”

Preamble

“Seller Indemnified Party”

Section 9.2(c)

“Seller Name”

Section 5.9(a)(i)

“Seller Proprietary Information”

Section 6.2(a)

“Termination Date”

Section 11.1(e)

“Third Party Claim”

Section 9.3(a)

“Threshold Amount”

Section 9.2(f)

“Transfer Taxes”

Section 2.8(b)

“Transferred Employee”

Section 5.4(b)

“Updated Employee List”

Section 5.4(a)

“Valuation Firm”

Section 2.11(c)

“WARN Act”

Section 5.4(h)

“Warranty Cap”

Section 2.3(b)

 

Other Definitional and Interpretive Matters

.  Unless otherwise expressly provided, for purposes of this Agreement, the
following rules of interpretation shall apply:

 

(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 starting 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.

 

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(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)Currency.  All currency references included herein shall refer to United
States dollars.

 

(g)Reasonable Commercial Efforts.  Reasonable commercial efforts means that the
obligated Party is required to make a diligent, reasonable and good faith effort
to accomplish the applicable objective.  Such obligation, however, does not
require an expenditure of funds or the incurrence of a liability on the part of
the obligated Party unless the other Party agrees to refund the obligated Party
for such expenditure or assume such liability, nor does it require that the
obligated Party act in a manner that would be contrary to normal commercial
practices in order to accomplish the objective.  The fact that the objective is
or is not actually accomplished is not, by itself, an indication that the
obligated Party did or did not in fact utilize its reasonable commercial efforts
in attempting to accomplish the objective. For the avoidance of doubt, this
Section 1.3(g) shall not affect, modify or alter the obligations of the Parties
with respect to matters relating to the use of reasonable best efforts in
respect of the Financing, including the Parties’ obligations pursuant to Section
5.15.

 

(h)Schedules and Exhibits.  The Schedules and Exhibits 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.  Any matter
disclosed by either Party on any one Schedule with respect to any
representation, warranty or covenant of such Party shall be deemed disclosed for
purposes of all other representations, warranties or covenants of such Party to
the extent that it is reasonably apparent from such disclosure that it also
relates to such other representations, warranties or covenants.

 

2.Purchase and Sale of the IoT Business

 

Purchase and Sale of Assets

. Upon the terms and subject to the conditions of this Agreement, on the Closing
Date, Seller shall, or shall cause one or more of its Subsidiaries, as
appropriate, to, irrevocably grant, sell, transfer, assign, convey and deliver
to Buyer or one or more Buyer Designees, and Buyer or one or more Buyer
Designees shall irrevocably purchase, acquire and accept from Seller or the
applicable Subsidiary, all of the right, title and interest in, to and under the
Purchased Assets that Seller or the applicable Subsidiary owns, leases,
licenses, possesses or uses and has the right to transfer as the same shall
exist on the Closing Date, wherever located, free and clear of Encumbrances,
except for Permitted Encumbrances.  For purposes of this Agreement, “Purchased
Assets” means all the assets, properties and rights primarily related to or
primarily used in the operation or conduct of the IoT Business or the Purchased
Assets, by Seller or the applicable Subsidiary, whether tangible or intangible,
real, personal or mixed, as set forth or described in paragraphs (a) through (n)
below , 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 Seller’s or the applicable Subsidiary’s books or financial statements:

 

(a)the Business Records;

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(b)the Principal Equipment and Purchased Leased Equipment;

 

(c)the Fixtures and Supplies;

 

(d)the Inventory;

 

(e)the Assigned Intellectual Property, including all rights to sue for or assert
claims against and seek remedies for past, present and future infringements of
any of the Assigned Intellectual Property and rights of priority and protection
of interests therein and to retain any and all damages, settlement amounts and
other amounts therefrom against any Person on or after the Closing Date;

 

(f)the Transferred Contracts;

 

(g)the Transferred In-Licenses;

 

(h)the Transferred Governmental Permits (but only to the extent that such
Transferred Governmental Permits are assignable or transferable to Buyer);

 

(i)the transferred registered domain names listed on Schedule 2.1(i);

 

(j)any Assumed Leases and any deposits related thereto;

 

(k)all prepaid expenses for leased and rented equipment;

 

(l)all Third Party prepaid royalties and maintenance and support for Transferred
In-Licenses;

 

(m)all guarantees, warranties, indemnities and similar rights in favor of Seller
or a Subsidiary related to any item listed in (a) through (l) above; and

 

(n)all rights to the claims, causes of action (including the right to sue,
assert claims and seek remedies), rights of recovery (including the right to
retain any damages, settlements and other amounts), and rights of set-off, made
or asserted against any Person on or after the Closing Date relating to any item
listed above, whether arising out of actions or conditions occurring prior to,
on, or after the Closing Date.

 

Excluded Assets

. Notwithstanding the provisions of Section 2.1, it is hereby expressly
acknowledged and agreed that the Purchased Assets shall not include, and neither
Seller nor any Affiliate is granting, selling, transferring, assigning,
conveying or delivering to Buyer or a Buyer Designee, and neither Buyer nor any
Buyer Designee is purchasing, acquiring or accepting from Seller or any
Affiliate, any of the rights, properties or assets set forth or described in
paragraphs (a) through (k) below (the rights, properties and assets expressly
excluded by this Section 2.2 or otherwise excluded by the terms of Section 2.1
from the Purchased Assets being referred to herein as the “Excluded Assets”):

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(a)any of Seller’s or its Affiliate’s receivables, cash, cash equivalents, bank
deposits or similar cash items (other than deposits related to any Assumed
Leases) or employee receivables;

 

(b)any manufacturing libraries, Intellectual Property or Information of Seller
or any Affiliate other than the Assigned Intellectual Property or the Licensed
Intellectual Property;

 

(c)any (i) confidential personnel records pertaining to any Business Employee to
the extent applicable Law prohibits the transfer of such information, or
(ii) other books and records that Seller or any Affiliate of Seller is required
by Law to retain; provided, however, that Buyer shall have the right to obtain,
to the extent permitted by Law and subject to reasonable restrictions, and
Seller shall deliver to Buyer, copies of any portions of such retained
confidential personnel records and other books and records that relate to the
IoT Business, the Purchased Assets, the Assumed Liabilities or the Transferred
Employees; and (iii) any information management system of Seller or any
Affiliate of Seller other than those primarily related to or primarily used in
the operation or conduct of the IoT Business or the Purchased Assets whether or
not contained within computer hardware included as a Purchased Asset pursuant to
Section 2.1(b);

 

(d)any claim, right or interest of Seller or any Affiliate of Seller in or to
any refund, rebate, abatement or other recovery for Excluded Taxes, together
with any interest due thereon or penalty rebate arising therefrom, less any
costs incurred by Buyer or any Buyer Designee to obtain such refund, rebate,
abatement or other recovery, as applicable;

 

(e)subject to Section 5.9, any rights to, or the use of, the “Broadcom” or
“Broadcom Corporation” trademarks;

 

(f)the Excluded Contracts, the Nonassignable Licenses and the Excluded Leased
Equipment;

 

(g)any insurance policies or rights of proceeds thereof;

 

(h)except as specified in Section 2.1 or in the Intellectual Property Agreement,
any of Seller’s or any Affiliate’s rights, claims or causes of action against
Third Parties relating to the assets, properties or operations of the IoT
Business arising out of transactions occurring prior to, and including, the
Closing Date;

 

(i)except as specifically provided in the applicable Bill of Sale and Assignment
and Assumption Agreement or Purchase Agreement for any particular jurisdiction,
any of the assets of the Benefits Plans;

 

(j)except as specifically provided in any Lease Assignment or Sublease, any
interest in real property; and

 

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(k)except as specified in Section 2.1 or in the Intellectual Property Agreement,
all other assets, properties, interests and rights of Seller or any Affiliate
that are not primarily related to or primarily used in the operation or conduct
of the IoT Business or the Purchased Assets. 

 

2.3Assumed Liabilities. On the Closing Date, Buyer or one or more Buyer Designee
shall execute and deliver to Seller each Bill of Sale and Assignment and
Assumption Agreement and one or more Lease Assignments (if any) or Subleases (if
any) pursuant to which Buyer or any such Buyer Designee 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 Assumed
Liabilities.  For purposes of this Agreement, “Assumed Liabilities” means the
liabilities and obligations set forth or described in paragraphs (a) through (c)
below, whether or not any such liability or obligation has a value for
accounting purposes or is carried or reflected on or specifically referred to in
either Seller’s or a Subsidiary’s books or financial statements:

 

(a)the liabilities and obligations arising out of facts and circumstances
occurring after the Closing Date under any Assumed Leases and the Transferred
Contracts, Transferred In-Licenses and Transferred Governmental Permits that are
not Excluded Liabilities;

 

(b)with respect to the IoT Business, any product warranty obligations arising
from sales of the IoT Products in the ordinary course of business on, before and
after the Closing Date; provided, however, that with regard to the period prior
to the Closing Date, solely to the extent that any such product warranty
obligations do not exceed $150,000 (the “Warranty Cap”) in the aggregate (it
being understood that any aggregate product warranty obligations arising from
pre-Closing sales of IoT Products in an amount greater than the foregoing amount
shall be Excluded Liabilities hereunder); and

 

(c)subject to Section 2.4(h),  the obligations and liabilities with respect to
the Transferred Employees, the IoT Business or the Purchased Assets arising
from, or in connection with, the operation or conduct of the IoT Business or the
ownership of the Purchased Assets by Buyer or a Buyer Designee after the Closing
Date, including, without limitation, any liability or obligation related to
service by a Transferred Employee after the Closing Date from Non-U.S. Benefit
Plans that are governmentally administered or mandated by applicable Law.

 

Excluded Liabilities

. Neither Buyer nor any Buyer Designee shall assume or be obligated to pay,
perform or otherwise assume or discharge any liabilities or obligations of
Seller or any of its Affiliates, whether direct or indirect, known or unknown,
absolute or contingent, except for the Assumed Liabilities (all of such
liabilities and obligations not so assumed being referred to herein as the
“Excluded Liabilities”). For the avoidance of doubt, the Parties agree that the
Excluded Liabilities include, but are not limited to, any and all liabilities or
obligations set forth or described in paragraphs (a) through (k) below, whether
or not any such liability or obligation has a value for accounting purpose or is
carried or reflected on or specifically referred to in Seller’s or the
applicable Affiliate’s books or financial statements:

 

(a)any Excluded Taxes;

 

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(b)any Environmental Liabilities;  

 

(c)any liability or obligation arising out of or related to any Excluded Asset;

 

(d)any trade payable (except to the extent it is related to Purchased Assets
delivered by Third Party suppliers to Buyer or a Buyer Designee on or after the
Closing Date and incurred in the ordinary course of the IoT Business consistent
with past practice);

 

(e)any indebtedness for borrowed money or guarantees thereof of Seller and its
Affiliates or intercompany obligations of Seller or any Affiliate;

 

(f)any liability or obligation relating to or arising (whether before, on or
after the Closing Date) out of (i) the employment and any termination of such
employment by Seller or any Affiliate of any employee or former employee of
Seller or an Affiliate on or prior to the Closing Date, (ii) any employee’s or
former employee’s or his/her dependents’ rights or obligations under any fringe
benefit of employment with Seller or an Affiliate, including any Benefit Plan of
Seller or an Affiliate of Seller, (iii) the unpaid vacation, personal days and
floating holidays accrued by Transferred Employees and (iv) and any retention
payments granted or awarded by Seller or an Affiliate prior to the Closing to be
paid (if earned) to the Transferred Employees following the Closing (including
without limitation Seller’s transition incentive program pursuant to which any
Key Employees or other Business Employees are participants);

 

(g)any liability and obligation which arises out of or relates to any breach,
default or violation by Seller or its Affiliates of any Lease, Transferred
Contract, Transferred In-License or Transferred Governmental Permit occurring on
or prior to the Closing Date or which arises out of violation of applicable Law,
in each case by Seller or its Affiliates;

 

(h)any liability or obligation in connection with, or relating to, any actions,
suits, claims or proceedings against Seller or any Affiliate which arise out of,
accrue, or relate to (i) the operation or conduct of the IoT Business or (ii)
the ownership of the Purchased Assets in each case on or before the Closing
Date;

 

(i)any benefit liability or obligation relating to or arising in connection with
Section 4980B of the Code (COBRA) or otherwise by operation of applicable Law to
provide continuation of health care coverage to employees or former employees of
Seller or an Affiliate or their dependents arising from a qualifying event
occurring on or before the Closing Date;

 

(j)any liability or obligation arising from or relating to any Benefit Plan; and

 

(k)any liability or obligation arising from the sale of IoT Products prior to
the Closing by Seller or an Affiliate that exceed the Warranty Cap.

 

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2.5Further Assurances; Further Conveyances and Assumptions; Consent of Third
Parties 

 

(a)From time to time following the Closing to the extent permitted by applicable
Law and subject to reasonable restrictions, Seller shall, or shall cause its
Affiliates to, make available to Buyer or a Buyer Designee such confidential
data and information in personnel records of Transferred Employees as is
reasonably necessary for Buyer to integrate such employees into Buyer’s or a
Buyer Designee’s workforce and comply with its obligations under Section 5.4.

 

(b)From time to time following the Closing, Seller and Buyer shall, and shall
cause their respective Affiliates to, execute, acknowledge and deliver all such
further conveyances, notices, assumptions, releases, acquittances and other
instruments, and shall take such further actions, as may be necessary or
appropriate to transfer fully to, and vest in, Buyer and the Buyer Designees and
each of their respective successors or assigns, all of the properties, rights,
titles, interests, estates, remedies, powers and privileges intended to be
conveyed to Buyer or a Buyer Designee under this Agreement and the Collateral
Agreements and to assure fully to Seller and its Subsidiaries and each of their
respective successors and assigns, the assumption of the liabilities and
obligations intended to be assumed by Buyer or a Buyer Designee under this
Agreement and the Collateral Agreements, and to otherwise make effective the
transactions contemplated hereby and thereby (including (i) transferring back to
Seller or a Subsidiary any asset or liability not contemplated by this Agreement
to be a Purchased Asset or an Assumed Liability, respectively, if and to the
extent that any such asset or liability was erroneously or inadvertently
transferred to Buyer or a Buyer Designee at the Closing, and (ii) transferring
to Buyer or a Buyer Designee any asset or liability contemplated by this
Agreement to be a Purchased Asset or an Assumed Liability, respectively, which
was erroneously or inadvertently not transferred to Buyer or a Buyer Designee at
the Closing).

 

(c)Nothing in this Agreement nor the consummation of the transactions
contemplated hereby shall be construed as an attempt or agreement to transfer or
assign any Purchased Asset, including any Assumed Lease, Transferred Contract,
Transferred In-License, Transferred Governmental Permit, certificate, approval,
authorization or other right, or enter into any Sublease which by its terms or
by Law is nonassignable or cannot be entered into without the consent of a Third
Party or a Governmental Body or is cancelable by a Third Party in the event of
an  assignment (“Nonassignable Assets”) unless and until (i) such consents shall
have been obtained or (ii) Buyer or a Buyer Designee notifies Seller that any
such Purchased Asset should be transferred or assigned or Sublease entered into
hereunder notwithstanding the absence of a requisite Third Party consent or
Governmental Body consent or the right of a Third Party to cancel such
Nonassignable Asset in the event of a transfer or assignment hereunder, in which
event such Purchased Asset shall not be a Nonassignable Asset for purposes of
this Agreement and shall instead be transferred and assigned or be entered into
(in the case of any Sublease) hereunder notwithstanding the absence of such
Third Party consent or Governmental Body consent or any right of a Third Party
to cancel such Purchased Asset.  Prior to the Closing, Seller shall use all
reasonable commercial efforts to obtain such consents and deliver any required
notices under all Nonassignable Assets, and Buyer shall, and shall cause its
Affiliates to, cooperate with Seller to obtain such consents promptly.  To the
extent permitted by applicable Law, in the event any requisite consent cannot be
or is not for any reason obtained prior to the Closing, from and after the
Closing, Seller and Buyer shall, and shall cause

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their respective Affiliates to, use reasonable commercial efforts to develop a
mutually agreeable arrangement (including by way of amendment or addition of
services to the Transition Services Agreement) under which (i) Buyer or a Buyer
Designee would obtain the benefits and assume the obligations under such
Nonassignable Assets in accordance with this Agreement, including by
sub-contracting, sub-licensing, or sub-leasing to Buyer or a Buyer Designee,
(ii) such Nonassignable Assets would be held, as of and from the Closing Date,
by Seller or the applicable Subsidiary in trust for Buyer or a Buyer Designee
and the covenants and obligations thereunder would be performed by Buyer or a
Buyer Designee in Seller’s or such Subsidiary’s name and all benefits and
obligations existing thereunder would be for Buyer’s or the applicable Buyer
Designee’s account, and/or (iii) in the case of any Lease Assignment or Sublease
that is a Nonassignable Asset, Seller or the applicable Subsidiary will provide,
and Buyer or a Buyer Designee would obtain through the Transition Services
Agreement (and subject to the provisions and limitations set forth therein), the
benefits and assume the obligations under any such Lease Assignment or Sublease
in accordance with this Agreement.  From and after the Closing Seller shall, and
shall cause its Affiliates to, also take or cause to be taken at Buyer’s or a
Buyer Designee’s expense such actions in its name or otherwise as Buyer may
reasonably request so as to provide Buyer or the applicable Buyer Designee with
the benefits of the Nonassignable Assets and to effect collection of money or
other consideration that becomes due and payable under the Nonassignable Assets,
and Seller or the applicable Subsidiary shall promptly pay over to Buyer or the
applicable Buyer Designee all money or other consideration received by it in
respect to all Nonassignable Assets.  If after the Closing Date a Sublease
becomes capable of being entered into or any other Nonassignable Asset becomes
assignable (either because consent for the assignment or execution thereof is
obtained or otherwise), Seller shall promptly notify Buyer and cooperate to
procure the execution of such Sublease or to assign or transfer such previously
Nonassignable Asset to Buyer or the applicable Buyer Designee. 

 

(d)Buyer and Seller shall, and shall cause their respective Affiliates to, use
their respective reasonable commercial efforts to obtain, or to cause to be
obtained, any consent, substitution, approval, or amendment required to transfer
all rights and obligations under any and all Assumed Leases, Transferred
Contracts, Transferred In-Licenses, Transferred Governmental Permits,
certificates, approvals, authorizations or other rights or obligations or
liabilities that constitute Purchased Assets or Assumed Liabilities or that are
required to perform the obligations under the Collateral Agreements.  

 

(e)From and after the Closing Date, Seller on behalf of itself and its
Affiliates authorizes Buyer, to the extent permitted by applicable Law and the
terms of the Nonassignable Assets, at Buyer’s expense, to perform all the
obligations and receive all the benefits of Seller or its Affiliates under the
Nonassignable Assets and appoints Buyer its attorney-in-fact to act in its name
on its behalf or in the name of the applicable Affiliate of Seller and on such
Affiliate’s behalf with respect thereto.

 

(f)Notwithstanding anything in this Agreement to the contrary, unless and until
any consent or approval with respect to any Nonassignable Asset is obtained,
such Nonassignable Asset shall not constitute a Purchased Asset and any
associated liability shall not constitute an Assumed Liability for any purpose
under this Agreement.

 

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(g)As reasonably requested by Buyer, Seller will identify the licenses included
in the Nonassignable Assets and shall cooperate with and assist Buyer, at
Buyer’s reasonable request and expense, to obtain licenses or arrangements to
replace the licenses, services and assets provided with respect to any
Nonassignable Asset.  

 

Intellectual Property and Information

. Unless expressly set forth in this Agreement, the Intellectual Property
Agreement or in any Collateral Agreement, no title, right or license of any kind
is granted to Buyer pursuant to this Agreement with respect to the Intellectual
Property or Information of Seller or any Affiliate of Seller, either directly or
indirectly, by implication, by estoppel or otherwise.

 

Bulk Sales Law

. Buyer hereby waives compliance by Seller and any Subsidiary with the
requirements and provisions of any “bulk-transfer” Laws of any jurisdiction
(collectively, the “Bulk Sales Laws”), including Article 6 of the California
Uniform Commercial Code, in each case that may otherwise be applicable with
respect to the sale of any or all of the Purchased Assets to Buyer or a Buyer
Designee.

 

Taxes

 

 

(a)All payments made by Buyer or any Buyer Designee at Closing to Seller or any
of its Subsidiaries under or pursuant to this Agreement shall be made free and
clear of and without any deduction for or on account of withholding Taxes;
provided, for the avoidance of doubt, withholding Taxes subsequently determined
to be payable by a taxing authority shall constitute Excluded Taxes and shall be
subject to indemnification under Article 9.

 

(b)The payment for any sales, use, transfer, conveyance, stamp, registration,
documentary, filing, recording, or similar fees or Taxes (“Transfer Taxes”)
incurred in connection with the transfer of the Purchased Assets and the
assumption of the Assumed Liabilities to and by, respectively, Buyer and Buyer
Designees pursuant to this Agreement shall be borne fifty percent (50%) by Buyer
or Buyer Designees and fifty percent (50%) by Seller or its Subsidiaries when
due.  Each Party shall use reasonable efforts and cooperate in good faith to
exempt the sale and transfer of the Purchased Assets from any such Transfer
Taxes.  The Buyer (or the Buyer Designees) and Seller (or its Subsidiaries)
shall cooperate in the preparation and filing of all necessary Returns or other
documents with respect to all such Transfer Taxes.  The payment shall be made by
the Party prescribed by applicable Law as primarily liable for the payment, and
the Parties shall provide reimbursement for any Transfer Tax described in this
Section 2.8(b) that is paid by the other parties as may be necessary such that
the Buyer (or Buyer Designees), on the one hand, and Seller (or its
Subsidiaries), on the other each pay fifty percent (50%) of such Transfer Taxes.

 

(c)Notwithstanding anything to the contrary in this Agreement, any Taxes that
are Value Added Taxes (including GST and service tax), imposed on assets sold
and recoverable by Buyer or Buyer Designee shall be borne solely by Buyer or
Buyer Designees but only to the extent that a duly issued invoice has been
provided by Seller or a Subsidiary.  Any other Value Added Taxes imposed on
assets sold shall be borne fifty percent (50%) by Buyer or Buyer Designees and
fifty percent (50%) by Seller or its Subsidiaries when due. In the case and to
the extent of value added and similar Taxes incurred in connection with the
transactions contemplated

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hereby that are recoverable by Buyer or a Buyer Designee, such Taxes shall be
invoiced by Seller or its Subsidiaries to Buyer or Buyer Designee, as
applicable, paid by Buyer or Buyer Designee to Seller or its Subsidiaries, as
applicable, and remitted by Seller or its Subsidiaries, as applicable, to the
relevant Governmental Body in accordance with applicable Law, and Buyer or Buyer
Designee shall be entitled to such recovery.  The Party prescribed by Law as
primarily liable for the payment of such Value Added Taxes shall prepare all
necessary documents (including all Returns) with respect to all such amounts in
a timely manner. The applicable Party shall file such Returns and pay such Taxes
and shall provide evidence satisfactory to the other Party that such Returns
have been filed and Taxes have been paid, subject to such Party’s right to
reimbursement from the other Party pursuant to this Section 2.8(c) Buyer and
Seller shall cooperate to minimize the amount of Transfer Taxes as defined under
Section 2.8(b) and the Taxes described in this Section 2.8(c). 

 

(d)All real property Taxes, personal property Taxes and similar ad valorem
obligations (“Property Taxes”) levied with respect to the Purchased Assets for a
Straddle Period shall be apportioned between Seller and Buyer based on the
number of days of such Straddle Period, and Seller shall be liable for the
proportionate amount of Property Taxes that is attributable to the Pre-Closing
Tax Period within such Straddle Period, and Buyer shall be liable for the
proportionate amount of Property Taxes that is attributable to the Post-Closing
Tax Period within such Straddle Period.  Any refund, rebate, abatement or other
recovery of Property Taxes attributable to the Pre-Closing Tax Period shall be
for the account of Seller, and any refund, rebate, abatement or other recovery
of  Property Taxes attributable to the Post-Closing Tax Period shall be for the
account of Buyer.  Upon receipt of any bill (or any refund, rebate, abatement,
or other recovery) for such Property Taxes, Buyer or Seller, as applicable,
shall present a statement to the other setting forth the amount of reimbursement
to which each is entitled under this Section 2.8(d) together with such
supporting evidence as is reasonably necessary to calculate the proration
amount.  The proration amount shall be paid by the Party owing it to the other
within thirty (30) days after delivery of such statement.  In the event that
Buyer or Seller makes any payment for which it is entitled to reimbursement
under this Section 2.8(d), the applicable Party shall make such reimbursement
promptly but in no event later than thirty (30) days after the presentation of a
statement setting forth the amount of reimbursement to which the presenting
Party is entitled along with such supporting evidence as is reasonably necessary
to calculate the amount of reimbursement.

 

(e)Following the Closing, Buyer and Seller shall cooperate as reasonably
requested for the purpose of enabling the requesting Party to (i) make any
election relating to Taxes, (ii) prepare Returns with respect to the IoT
Business or the Purchased Assets or (iii) to prepare for and defend audits or
other Tax-related examinations by a Governmental Body with respect to the IoT
Business and the Purchased Assets.  Such cooperation shall be at the expense of
the requesting Party; provided that any cost or expense related to any Excluded
Taxes shall be at the expense of Seller.

 

2.9Buyer Designee; Transactions in China and India

 

(a)The Parties agree that Buyer may assign the right to purchase certain of the
Purchased Assets to one or more Buyer Designees or that one or more Buyer
Designees may enter into a Collateral Agreement.  Notwithstanding any such
assignment or execution of a Collateral Agreement by a Buyer Designee, Buyer
shall remain liable for, and any such assignment

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or execution shall not relieve Buyer of, its obligations hereunder or
thereunder.  Any reference to Buyer in this Agreement shall to the extent
applicable also be deemed a reference to the applicable Buyer Designee, except
where in context of this Agreement such use would not be appropriate. 

 

(b)The transactions relating to the purchase and sale of the Purchased Assets
located in China (the “China Purchased Assets”) and India (the “India Purchased
Assets”) will be concluded under a separate China Purchase Agreement and India
Purchase Agreement between the applicable Subsidiary of Seller and the
applicable Buyer Designee.  All considerations with regard to the China
Purchased Assets and the India Purchased Assets will be paid in China and India
as a domestic transaction.  No consideration in relation to the purchase and
sale of the of the China Purchased Assets and the India Purchased Assets will be
paid by the Buyer to Seller outside of China and India, as applicable.

 

Purchase Price

.  In consideration of the grant, sale, transfer, assignment, conveyance and
delivery by Seller and the Subsidiaries of the Purchased Assets to Buyer or a
Buyer Designee, Buyer and/or a Buyer Designee(s) shall (i) pay to Seller or the
applicable Subsidiary at the Closing an aggregate amount equal to FIVE HUNDRED
AND FIFTY MILLION DOLLARS ($550,000,000) (the “Purchase Price”) in cash by wire
transfer of immediately available funds to an account designated by Seller’s
written instructions to Buyer at least three (3) Business Days prior to the
Closing Date, and (ii) assume the Assumed Liabilities pursuant hereto; provided,
however, that the Parties agree that the portion of the Purchase Price allocated
to the China Purchased Assets and the India Purchased Assets to be transferred
pursuant to the China Purchase Agreement and the India Purchase Agreement shall
be in an amount set forth in the China Purchase Agreement and the India Purchase
Agreement, as applicable.

 

2.11Purchase Price Adjustment

 

(a)As soon as practicable but in no event more than ninety (90) days following
the Closing, Seller shall prepare, or cause to be prepared, and deliver to Buyer
the Closing Date Inventory Statement, which shall be prepared in accordance with
Seller’s past accounting methods, policies, practices and procedures.  Upon
completion of the Closing Date Inventory Statement, Seller shall derive the
Closing Date Inventory Value from the Closing Date Inventory Statement, and
deliver such calculation and the Closing Date Inventory Statement to Buyer,
which shall be accompanied by a certificate of Seller’s business controller (or
other person serving in a similar capacity).

 

(b)Buyer and Buyer’s accountants shall complete their review of the Closing Date
Inventory Statement and Seller’s calculation of the Closing Date Inventory Value
within ninety (90) days after delivery thereof by Seller.  In the event that
Buyer determines that the Closing Date Inventory Statement contains any
inaccuracy or has not been prepared on the basis set forth in Section 2.11(a),
Buyer shall, on or before the last day of such 90-day period, so inform Seller
in writing (the “Buyer’s Objection”), setting forth a specific description of
the basis of Buyer’s determination and the adjustments to the Closing Date
Inventory Statement and the corresponding adjustments to the Closing Date
Inventory Value that Buyer believes should be made.  If no Buyer’s Objection is
received by Seller on or before the last day of such 90-day period, then the
Closing Date Inventory Value set forth on the Closing Date Inventory Statement
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Seller shall be final.  Seller shall have ninety (90) days from its receipt of
Buyer’s Objection to review and respond to Buyer’s Objection, which shall be
accompanied by a certificate of Seller’s business controller (or other person
serving in a similar capacity) (the “Seller’s Objection”) and set forth a
specific description of the basis of Seller’s determination and the adjustments
to the Buyer’s Objection and the corresponding adjustments to the Closing Date
Inventory Value that Seller believes should be made.  If no Seller’s Objection
is received by Buyer on or before the last day of such 90-day period, then the
Closing Date Inventory Value set forth on the Buyer’s Objection delivered by
Buyer shall be final. 

 

(c)If Seller timely delivers a Seller’s Objection and Seller and Buyer are
unable to resolve all of their disagreements with respect to the proposed
adjustments set forth in Buyer’s Objection within ninety (90) days following the
receipt by Buyer of Seller’s Objection, either Seller or Buyer may refer any
remaining disagreements to a nationally recognized accounting firm mutually
acceptable to Buyer and Seller (the “Valuation Firm”) which, acting as experts
and not as arbitrators, shall determine, on the basis set forth in and in
accordance with Section 2.11(a), and only with respect to the remaining
differences so submitted, whether and to what extent, if any, the Closing Date
Inventory Statement and the Closing Date Inventory Value require
adjustment.  Buyer and Seller shall instruct the Valuation Firm to deliver its
written determination to Buyer and Seller no later than ninety (90) days after
the remaining differences underlying the Buyer’s Objection are referred to the
Valuation Firm.  The Valuation Firm’s determination shall be conclusive and
binding upon Buyer and Seller and their Affiliates.  The fees and disbursements
of the Valuation Firm shall be borne equally by Buyer and Seller.  Buyer and
Seller shall make readily available to the Valuation Firm all relevant books and
records relating to the Closing Date Inventory Statement, Buyer’s Objection and
Seller’s Objection and all other items reasonably requested by the Valuation
Firm in connection therewith.

 

(d)Buyer shall provide to Seller and its accountants reasonable access to the
books and records of the IoT Business and to any other information, and to any
employees during regular business hours and on reasonable advance notice, to the
extent necessary for Seller to prepare the Closing Date Inventory Statement, to
respond to Buyer’s Objection and to prepare materials for presentation to the
Valuation Firm in connection with Section 2.11(c).  Buyer and its accountants
shall have full access to all information used by Seller in preparing the
Closing Date Inventory Statement.

 

(e)If the Closing Date Inventory Value as finally determined pursuant to
Section 2.11(a) through 2.11(c) differs from the Base Inventory Value by more
than five percent (5%), then the Purchase Price shall be adjusted as set forth
in the following sentence by (i) the Base Inventory Value minus (ii) the Closing
Date Inventory Value, expressed as a positive, if positive, or as a negative, if
negative, to the extent, and only to the extent, such amount differs from the
Base Inventory Value by more than five percent (5%) (such difference in excess
of five percent (5%) the “Purchase Price Adjustment Amount”).  If the Purchase
Price Adjustment Amount is a negative number, then the Purchase Price shall be
increased by the Purchase Price Adjustment Amount and Buyer shall promptly (and
in any event within seven (7) Business Days) after the final determination
thereof pay to Seller the Purchase Price Adjustment Amount in U.S. Dollars by
wire transfer of immediately available funds to an account designated by
Seller.  If the Purchase Price Adjustment Amount is a positive number, then the
Purchase Price shall be decreased by the Purchase Price

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Adjustment Amount and Seller shall promptly (and in any event within seven (7)
Business Days) after the final determination thereof pay to Buyer the Purchase
Price Adjustment Amount in U.S. Dollars by wire transfer of immediately
available funds to an account designated by Buyer. 

 

Representations and Warranties of Seller

. Except as set forth in the Schedules attached hereto and delivered by Seller
to Buyer prior to the execution of this Agreement, Seller represents and
warrants to Buyer that:

 

Organization and Qualification

. Seller is a corporation duly organized, validly existing and in good standing
under the Laws of the State of California and has all requisite corporate power
and authority to carry on the IoT Business as currently conducted by it and to
own or lease and operate the Purchased Assets and conduct the IoT
Business.  Seller 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 IoT 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 could not reasonably be expected to have a Seller
Material Adverse Effect.

 

Subsidiaries

. Schedule 3.2 sets forth a list of each Affiliate of Seller that has title to
any Purchased Asset or any Assumed Liability, together with its jurisdiction of
organization.  Each such Affiliate is a Subsidiary of Seller.  Each Subsidiary
set forth in Schedule 3.2 is duly organized and validly existing and in good
standing (in any jurisdiction that recognizes such concept) under the Laws of
its jurisdiction of organization and has all requisite corporate or similar
power and authority to own, lease and operate the Purchased Assets owned by it
and to carry on its portion of the IoT Business as presently conducted by
it.  Each Subsidiary of Seller set forth on Schedule 3.2 is duly qualified to do
business and is in good standing as a foreign corporation or other entity (in
any jurisdiction that recognizes such concept) in each jurisdiction where the
ownership or operation of its properties and assets or the operation or conduct
of the IoT Business requires such qualification, except for failures to be so
duly organized, validly existing, qualified or in good standing that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Seller Material Adverse Effect.  The Subsidiaries listed on
Schedule 3.2 are the only Affiliates of Seller that have title to any Purchased
Asset or any obligation that is an Assumed Liability.

 

3.3Authorization; Binding Effect

 

(a)Seller has all requisite corporate power and authority to execute, deliver
and perform this Agreement and the Collateral Agreements to which it will be a
party and to consummate the transactions contemplated hereby and thereby, and
the execution, delivery and performance of this Agreement and the Collateral
Agreements to which it will be a party has been duly authorized by all requisite
corporate action.

 

(b)Each Subsidiary that will be a party to a Collateral Agreement has all
requisite corporate power and authority to execute, deliver and perform the
Collateral Agreements to which it will be a party and to consummate the
transactions contemplated thereby, and the execution,

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delivery and performance of the Collateral Agreements to which it will be a
party has been duly authorized by all requisite corporate action. 

 

(c)This Agreement has been duly executed and delivered by Seller and this
Agreement is, and the Collateral Agreements to which Seller and any Subsidiary
will be a party when duly executed and delivered by Seller or such Subsidiary
will be, valid and legally binding obligations of Seller or such Subsidiary,
enforceable against Seller or such Subsidiary, as applicable, 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.

 

3.4Non-Contravention; Consents

 

(a)Assuming that all Required Consents (as defined in Section 3.4(b)) have been
obtained, the execution, delivery and performance of this Agreement by Seller
and the Collateral Agreements by Seller or any Subsidiary that is a 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, or conflict with,
any provision of Seller’s or a Subsidiary’s charter, by-laws or similar
organizational document, (ii) violate or result in a breach of or constitute an
occurrence of default under any provision of, result in the acceleration or
cancellation of any obligation under, or give rise to a right by any party to
terminate or amend its obligations under, any Contract to which Seller or a
Subsidiary is a party or by which it is bound and which relates to the IoT
Business or the Purchased Assets or (iii) violate any applicable Law of any
Governmental Body having jurisdiction over Seller, a Subsidiary, the IoT
Business or the Purchased Assets, other than in the case of clauses (ii) and
(iii), any such violations, breaches, defaults, accelerations or cancellations
of obligations or rights that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Seller Material Adverse Effect.

 

(b)No consent, approval, order or authorization of, or registration, declaration
or filing with, any Person is required to be obtained by Seller or an Affiliate
in connection with the execution, delivery and performance of this Agreement and
the Collateral Agreements to which Seller or a Subsidiary will be a party or for
the consummation of the transactions contemplated hereby or thereby by Seller or
a Subsidiary, except for (i) any filings required to be made under the HSR Act
and any applicable filings required under foreign antitrust Laws, and
(ii) consents or approvals of Governmental Bodies or other Third Parties that
are required to transfer or assign to Buyer or a Buyer Designee any Purchased
Assets or assign the benefits of or delegate performance with regard thereto in
any material respect, each of which are set forth in Schedule 3.4(b) (items
(i) and (ii) being referred to herein as the “Required Consents”) and (iii) such
other 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 could not reasonably be expected to have a Seller
Material Adverse Effect.

 

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3.5Purchased Assets  

 

(a)Seller or a Subsidiary has and at the Closing will have good and valid title
to, or a valid and binding leasehold interest or license in, all real and
personal tangible Purchased Assets, free and clear of any Encumbrance except for
Permitted Encumbrances. At the Closing, Seller or a Subsidiary will transfer to
Buyer or a Buyer Designee good and valid title to, or, if Seller or a Subsidiary
has a leasehold interest or license, a valid and binding leasehold interest or
license in, all real and personal tangible Purchased Assets, free and clear of
any Encumbrance except for Permitted Encumbrances (but, for the avoidance of
doubt, excluding immediately following the receipt of the Purchase Price at the
Closing for purposes of this sentence from the definition of “Permitted
Encumbrances” clause (v) thereof).  At or prior to Closing, Seller and its
Affiliates shall have taken all such actions as are necessary to cause all
security interests in the IoT Business or any of the Purchased Assets existing
pursuant to the Credit Agreement to have been automatically released pursuant to
Section 9.15 thereof.

 

(b)Each material item of Principal Equipment and Purchased Leased Equipment is
in good operating condition and repair, subject to normal wear and tear,
suitable for the purposes for which it is currently being used, but is otherwise
being transferred on a “where is” and, as to condition, “as is” basis.

 

(c)Except for (i) the goods and services provided under the Transition Services
Agreement to the extent not otherwise included in the definition of “Purchased
Assets,” (ii) the Excluded Assets, (iii) portfolio-wide Patent cross-licenses,
and (iv) any billing, order entry, fulfillment, accounting, collections,
finance, operations, engineering or other corporate centralized functional
organizations within, or controlled by, Seller or an Affiliate, the Purchased
Assets and the Transferred Employees and the other rights acquired or licensed
under this Agreement and the Collateral Agreements (including the goods and
services to be provided pursuant to the Transition Services Agreement)
constitute all tangible and intangible property, assets, personnel and rights of
Seller or an Affiliate that are primarily related to or primarily used in the
operation or conduct of the IoT Business.  In the event this Section 3.5(c) is
unintentionally breached because Seller or a Subsidiary has in good faith failed
to identify and transfer any asset or property or provide any service primarily
related to or primarily used in the operation or conduct of the IoT Business or
the Purchased Assets, such breach shall be deemed cured if Seller or the
applicable Subsidiary promptly, but in no event, later than thirty (30) days
following such failure to identify and transfer, transfers such properties or
assets or provides such services to Buyer or a Buyer Designee at no additional
cost to Buyer or a Buyer Designee.

 

Governmental Permits

. Except as set forth on Schedule 2.1(h), there are no material governmental
permits held or used by Seller or a Subsidiary to operate or conduct the IoT
Business as now being operated or conducted, to own the Purchased Assets, or to
use or occupy the Premises. Schedule 2.1(h) contains a description of each
Transferred Governmental Permit.  The Transferred Governmental Permits set forth
on Schedule 2.1(h) are valid and in full force and effect and no proceeding is
recorded, pending or, to Seller’s knowledge, threatened seeking the suspension,
modification, limitation or revocation of any such governmental permit. Neither
Seller nor any Subsidiary is in violation of or default under any governmental
permit which, individually or in the aggregate, has had or would reasonably be
expected to have a Seller Material Adverse Effect.

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3.7Real Estate and Environmental

 

(a)Schedule 3.7(a) contains a complete and accurate list of the Premises and the
Leases.  Buyer has been provided with a complete and correct copy of each
Lease.  Except as set forth in Schedule 3.7(a), each Lease is in full force and
effect and neither Seller nor any Subsidiary has violated, and, to Seller’s
knowledge, the landlord has not violated or waived, any of the material terms or
conditions of any Lease and all the material covenants to be performed by Seller
or a Subsidiary, and to Seller’s knowledge, the landlord under each Lease prior
to the date hereof have been performed in all material respects.  Seller or its
Affiliates currently occupy all of the Premises that will be included under any
Assumed Leases or Subleases for the operation of the IoT Business.  To Seller’s
knowledge, neither Seller nor any Affiliate is required to expend more than
$25,000 in connection with any restoration or surrender obligation for the
Premises that are subject to an Assumed Lease.

 

(b)The Premises are in condition suitable for the conduct of the IoT Business as
currently conducted and the use of any Premises, as presently used by the IoT
Business, does not violate any local zoning or similar land use Laws or
governmental regulations which violation, individually or in the aggregate, has
had or could reasonably be expected to materially adversely affect the occupancy
of such Premises or the operations of the IoT Business therein.  Neither Seller
nor any Subsidiary is in violation of or in noncompliance with any covenant,
condition, restriction, order or easement affecting any Premises except where
such violation or noncompliance, individually or in the aggregate, has had or
could reasonably be expected to have a materially adverse effect on the
occupancy of such Premises or the operations of the IoT Business therein.  There
is no pending or, to Seller’s knowledge, threatened condemnation or similar
proceeding affecting any Premises.

 

(c)Except as set forth in Schedule 3.7(c), in respect of the IoT Business and
the Premises:

 

(i)the operations of the IoT Business, the IoT Products and the use of the
Premises by Seller and its Subsidiaries comply, and, to Seller’s knowledge, have
complied in all material respects with all applicable Environmental Laws, RoHS2
and China RoHS2;

 

(ii)Seller and each Subsidiary has obtained all environmental, health and safety
governmental permits required by or related to any Environmental Law and
necessary for its operations, and all such governmental permits are in good
standing, and Seller and each Subsidiary is in compliance with all terms and
conditions of such permits except where the failure to obtain, maintain in good
standing or be in compliance with, such permits, individually or in the
aggregate, would not reasonably be expected to result in material liability to
Seller or any Subsidiary;

 

(iii)none of Seller, any Subsidiary or any of the Premises or the operations of
the IoT Business, are subject to any on-going or, to Seller’s knowledge, have
been subject to any previous investigation by, order from or agreement with any
Person respecting (A)

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any Environmental Law, or (B) any remedial action arising from the release or
threatened release of a Hazardous Substance into the environment; 

 

(iv)neither Seller nor any Subsidiary is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging or
addressing a violation of or liability under any Environmental Law;

 

(v)Seller or each applicable Subsidiary has filed all material 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;

 

(vi)neither Seller nor any Subsidiary has received any written notice, or to
Seller’s knowledge, other claim 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; and

 

(vii)there have been no releases or threatened releases of any Hazardous
Substances caused by Seller or any Subsidiary, into, on or under any of the
Premises or, to Seller’s knowledge, other real property owned, leased or
occupied by the IoT Business, or, to Seller’s knowledge, any other Person, in
any case in such a way as to create any liability (including the costs of
investigation and remediation) under any applicable Environmental Law.

 

3.8Compliance With Laws

 

(a)Except as set forth on Schedule 3.8, with respect to the Purchased Assets and
the IoT Business, Seller and each Affiliate is in compliance in all material
respects with all applicable Laws and all decrees, orders, judgments, writs,
injunctions, permits and licenses of or from Governmental Bodies by which the
IoT Business or the Purchased Assets are bound or affected.

 

(b)Without limiting the generality of the foregoing, with respect to the
Purchased Assets and the IoT Business, neither Seller nor any of its Affiliates,
nor, to Seller’s knowledge, any agent, director, officer, employee or other
Person associated with or acting on behalf of Seller or its Affiliates, has,
directly or indirectly, taken, authorized or promised to take any action which
would cause it to be in violation of the Foreign Corrupt Practices Act of 1977,
as amended, or any rules or regulations thereunder, or any similar
anti-corruption or anti-bribery laws applicable to Seller or any of its
Affiliates with respect to the Purchased Assets and the IoT Business (in each
case, as in effect at the time of such action) (collectively, the
“Anticorruption Laws”); used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity,
made any unlawful payment to any foreign or domestic government official or
employee or to any foreign or domestic political party or campaign from
corporate funds, or violated any money laundering laws, or similar legislation
in applicable jurisdictions or made any bribe, rebate, payoff, influence
payment, kickback or other similar unlawful payment to any person, except for
instances of noncompliance or possible noncompliance that, individually or in
the aggregate, have not been and would not reasonably be expected to be material
to the IoT Business or the Purchased Assets.  With respect to the Purchased
Assets and the IoT Business, neither Seller nor any

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of its Affiliates has received any written notice alleging any violation or
alleged violation of Anticorruption Laws, discovered a violation as a result of
an internal investigation or made a voluntary or directed disclosure to any
government authority, and, to Seller’s knowledge, there are not facts that would
reasonably be expected to lead to such notice. 

 

(c)With respect to the Purchased Assets and the IoT Business, Seller and each
Affiliate is in compliance in all material respects with all applicable U.S. and
Foreign Export Control and Sanctions Laws.  Without limiting the foregoing, as
of the date hereof, there are to Seller’s knowledge, no threatened claims or
investigations by any Governmental Body of potential violations against Seller
or any of its Affiliates with respect to export activity or licenses with
respect to the IoT Business or the Purchased Assets.

 

Litigation

. Except as set forth on Schedule 3.9, there is no action, suit, consent decree,
proceeding, arbitration or governmental investigation pending or, to Seller’s
knowledge, threatened by, against or involving Seller or any Affiliate, the IoT
Business or the Purchased Assets, (i) which seeks to restrain or enjoin the
consummation of the transactions contemplated hereby or (ii) that could
reasonably be expected to be material to the IoT Business or the Purchased
Assets.  To Seller’s knowledge, there is no basis for any such action, suit,
decree, proceeding, arbitration or investigation not disclosed on Schedule 3.9
that could reasonably be expected to be material to the IoT Business or the
Purchased Assets.

 

3.10Business Employees

 

(a)(i)Schedule 3.10(a)(i) contains a complete and accurate list of all the
Business Employees as of April 26, 2016, showing for each Business Employee
(unless prohibited by Law), the (A) name, (B) title, (C) location, (D) date of
hire or service commencement date, (E) current annual base salary or base wage,
(F) immigration status, if any, (G) classification status of U.S. employees
under the Fair Labor Standards Act or applicable state or local Law (exempt or
non-exempt), (H) leave of absence status, if any (including, but not limited to,
short- or long-term disability, military leave, maternity leave, family leave,
and/or other administrative leave), and (I) general eligibility for current
annual incentive/bonus or commission opportunity.  

 

(ii)Except as set forth on Schedule 3.10(a)(ii), (A) no Business Employee is
covered by any union, collective bargaining agreement or other similar labor
agreement (including any agreement with any works council, trade union or other
similar labor-relations entity); (B) to Seller’s knowledge, there are no pending
union, works council, employee representative or similar labor organizing
activities or arrangements; and (C) in the three years prior to the date hereof,
there has been no 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.  

 

(iii)No unfair labor practice, labor dispute or labor charge or complaint is
pending or, to Seller’s knowledge, threatened with respect to any Business
Employee.

 

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(b)Except as set forth in Schedule 3.10(b), neither Seller nor any Subsidiary
currently maintains, contributes to or has any liability under any Benefit Plan
in respect of any Business Employee.  With respect to each of the Benefit Plans
identified on Schedule 3.10(b), Seller has made available to Buyer true and
complete copies of the most recent plan or summary or other written description
describing all material terms thereof. 

 

(c)Each Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has received a favorable determination letter, or has pending or has
time remaining in which to file an application for such determination, from the
IRS, and, to Seller’s knowledge, no fact exists indicating that any such
determination letter should be revoked or not issued or reissued.  

 

(d)No Benefit Plan is maintained or contributed to that constitutes, and neither
Seller, any Subsidiary or any ERISA Affiliate sponsors or maintains and has not
previously sponsored, maintained, contributed to, incurred an obligation to
contribute to, or is or was required to contribute to, in each case, with
respect to any Business Employee: (i) any “multiemployer plan” as defined in
Section 3(37) or 4011(a)(3) of ERISA, (ii) any pension plan subject to Title IV
of ERISA, Part 3 of Title I of ERISA or Section 412 of the Code, (iii) any
“multiple employer plan” as defined in ERISA or the Code, or (iv) any “multiple
employer welfare arrangement” as defined under Section 3(40)(A) of ERISA
(without regard to Section 514(b)(6)(B) of ERISA).

 

(e)Each Benefit Plan, including a Benefit Plan that covers any Business Employee
outside of the United States or is otherwise not subject to ERISA or the Code
has been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all applicable Laws (including without
limitation any special provisions relating to the tax status of contributions
to, earnings of or distributions from such Benefit Plans where each such Benefit
Plan was intended to have such tax status).  None of Seller, nor any Subsidiary
nor any ERISA Affiliate is a party to any agreement, contract or arrangement
that would result, separately or in the aggregate, in the payment of, nor is
Seller, any Subsidiary or any ERISA Affiliate otherwise required or obligated to
make a payment that would constitute, nonqualified deferred compensation (as
defined in Section 409A(d)(1) of the Code) with respect to any Business
Employee.

 

(f)Except as provided in Schedule 3.10(f), neither the execution nor delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
result in any severance, retention or change of control payment becoming due to
any Business Employee.

 

(g)With respect to the IoT Business, there is not presently pending or existing,
and to Seller’s knowledge there is not threatened, (i) any strike, slowdown,
picketing, or work stoppage, (ii) any application for certification of a
collective bargaining agent, (iii) any material controversies or material
disputes pending, or to Seller’s knowledge, threatened between Seller or any
Subsidiary and any of its employees, or (iv) any material claims, material
litigation or material disputes by a works council or other employee
representative body, or an applicable Government Body.

 

(h)Neither Seller nor any of its Subsidiaries has engaged in any unfair labor
practices within the meaning of the National Labor Relations Act and similar
state, local or foreign agency.

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(i)The Business Employees are authorized and have appropriate documentation to
work in the jurisdiction in which they are working.  

 

(j)Schedule 3.10(a)(i) sets forth the immigration status for all U.S.-based
Business Employees who are not U.S. citizens or permanent residents and lists
any Business Employee based outside of the United States that are not citizens
or permanent residents of the jurisdiction in which they perform services.  No
Business Employee is working on assignment or secondment for Seller or one if
its Affiliates while employed by Seller or a different Affiliate located in a
different country (for such purposes, the People’s Republic of China, Hong Kong,
Taiwan and Macau will be considered as separate countries).

 

(k)Each Business Employee is employed on terms materially the same as the form
employment contract which Seller has made available to Buyer and which the
Seller has indicated is used by the Seller or its Affiliates in the location in
which the Business Employee is working.  Seller and its Subsidiaries are in
material compliance with all employment contracts that any one of them has with
any Business Employee.

 

3.11Contracts

 

(a)Schedule 3.11(a) contains a complete and accurate list of the Transferred
Contracts and Transferred In-Licenses (collectively, the “Material Contracts”),
including:

 

(i)that involve or could reasonably be expected to involve payments by or to
Seller or a Subsidiary either of more than $250,000 per year or more than
$500,000 in the aggregate over the full term thereof;

 

(ii)with any one of the top twenty (20) largest direct customers or OEMs of IoT
Products, as measured by sales during the twelve (12) month period ending as of
March 31, 2016, including purchase agreements, maintenance and service
agreements and warranty agreements;

 

(iii)with any one of the top twenty (20) largest suppliers of any raw material
or components incorporated into IoT Products, as measured by cost during the
twelve (12) month period ending as of March 31, 2016;

 

(iv)that contain any provision or covenant prohibiting or limiting the ability
of Seller or a Subsidiary to (A) engage in any activity (including geographical
restrictions), (B) to compete in any line of business, directly or indirectly,
with any Person;

 

(v)that is any Contract pursuant to which Seller or any of its Subsidiaries is
bound to, or has committed to provide or license any product or service to any
third party (including any reseller or distributor of products) on an exclusive
basis or to acquire or license any product or service on an exclusive basis from
a third party (excluding customization of products or services for or by a party
in the ordinary course of business);

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(vi)that provide for “most favored nation” terms, including such terms for
pricing;

 

(vii)that create or obligate Seller or a Subsidiary to participate in any joint
venture or similar arrangement;

 

(viii)that contain maintenance, warranty, support or similar obligations, other
than as set forth on the standard terms and conditions of sale included in
Schedule 3.15;

 

(ix)for any distributor, original equipment manufacturer, reseller, value added
reseller, sales, agency or manufacturer’s representative relationships that is
material to the IoT Business or the Purchased Assets;

 

(x)that provides for the escrow of source code;

 

(xi)any Contract providing for the development of any Assigned Intellectual
Property, independently or jointly, by or for Seller or any of its Subsidiaries
(other than Contracts entered into in the ordinary course of business with (1)
employees, or (2) consultants or independent contractors, who in each case are
bound by agreements assigning any such Assigned Intellectual Property to Seller
or its Subsidiaries);

 

(xii)that is with any Governmental Body, university or research organization;

 

(xiii)that is a continuing Contract with a commitment for the future purchase by
Seller or its Subsidiaries of materials, supplies, equipment or services in
excess of $100,000 per year or more than $250,000 in the aggregate over the full
term thereof;

 

(xiv)that is an advertising agreement or arrangement, in any such case that
involves or could reasonably be expected to involve payments by Seller or any of
its Subsidiaries of more than $100,000 per year;

 

(xv)that is a Contract obligating Seller or any of its Subsidiaries to purchase
or otherwise obtain any product or service exclusively from a single party or
sell any product or service exclusively to a single party; and

 

(xvi)that constitute any other agreement, commitment, arrangement or plan not
made in the ordinary course of business that is material to the IoT Business.  

 

(b)Each Material Contract is valid, binding and enforceable against Seller or
the applicable Subsidiary and, to Seller’s knowledge, the other parties thereto
in accordance with its terms and is in full force and effect.  Neither Seller
nor any Subsidiary is in default under or in breach of or is otherwise
delinquent in performance under any Material Contract (and neither Seller nor
any Subsidiary has received any notice alleging any such default, breach or
delinquency).  To

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Seller’s 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 could not reasonably be expected to be material to
the IoT Business or the Purchased Assets. Seller or a Subsidiary has made
available to Buyer true and complete copies of all Material Contracts. 

 

3.12Revenues; Absence of Certain Changes

 

(a)Schedule 3.12(a) sets forth a true and correct statement of revenues for the
IoT Business for each of the fiscal years ended November 1, 2015 and November 2,
2014 and for the interim year-to-date period in 2016 up to March 31, 2016.  The
statement of revenues is derived from and has been prepared in accordance with
the books and records of Seller and the Subsidiaries (which are accurate and
complete in all material respects) on a consistent basis throughout the periods
covered thereby consistent with GAAP (except for the omission of footnotes and
normal year-end adjustments and any potential adjustments relating to the taxes
and tax adjustments) and Seller’s standard accounting policies and procedures
and (ii) presents fairly the revenues of the IoT Business for such periods.

 

(b)The revenue of the IoT Business reflected on Schedule 3.12(a) has been
recognized in accordance with GAAP. The historical information relating to the
IoT Business set forth on Schedule 3.12(a) was prepared in good faith by
Seller.  Seller has no knowledge of any fact or set of circumstances that would
lead it to believe that such historical financial information is incorrect or
misleading in any material respect.

 

(c)Except as set forth in Schedule 3.12(c), Seller has not received or booked
any prepaid revenues for the IoT Business applicable to performance due after
the Closing Date.

 

3.13Intellectual Property

 

(a)Seller or one of its Subsidiaries, each of which is incorporated or otherwise
organized and located in the United States, owns exclusively all legal right,
title and interest in and to the Assigned Intellectual Property, free and clear
of all Encumbrances other than Permitted Encumbrances.  Seller or one of its
Subsidiaries owns or has a valid right to grant the licenses to the Licensed
Intellectual Property that it is licensing to Buyer pursuant to the Intellectual
Property Agreement.  Seller and its Affiliates have not received any notice or
claim challenging Seller’s or any of its Subsidiaries’ ownership of any Assigned
Intellectual Property or suggesting that any other Person has any claim of legal
or beneficial ownership or exclusive rights with respect thereto, nor to
Seller’s knowledge is there a reasonable basis for any claim that Seller or its
Subsidiaries, as applicable, does not so own any of such Assigned Intellectual
Property.  Schedule A of Appendix F to the Intellectual Property Agreement
contains a complete and accurate list of all registered Trademarks and pending
applications for registration of Trademarks that are primarily related to or
primarily used in the operation or conduct of the IoT Business or the Purchased
Assets, including the distribution and sale of the IoT Products (the “Assigned
Trademarks” or “Assigned Registered IP”), and there are no registered Copyrights
and pending applications for registration of

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Copyrights owned by Seller or its Affiliates that are primarily related to or
primarily used in the operation or conduct of the IoT Business or the Purchased
Assets.  To Seller’s knowledge, there are no Patents primarily related to the
IoT Business that are not also used in Seller’s retained businesses. Seller has
in its possession and will provide to Buyer at or prior to Closing complete and
accurate copies of all applications, material correspondence with Governmental
Bodies or registration organizations, and other material documents related to
each such item of Assigned Registered IP.  Schedule 3.13(a) sets forth a
complete and accurate listing of the jurisdiction in which each item of Assigned
Registered IP has been registered or filed, the applicable registration or
serial number or similar identifier and applicable issuance, registration or
grant date, and all actions, filings and payment obligations due to be made to
any Governmental Body within one hundred and eighty (180) days following the
date hereof with respect to each item of Assigned Registered IP.   Other than
communications with Governmental Bodies or registration organizations regarding
prosecution of the Assigned Registered IP, neither Seller nor any of its
Affiliates has received any notice or claim challenging the validity or
enforceability of any of the Assigned Registered IP or indicating an intention
on the part of any Person to bring a claim that any of the Assigned Registered
IP is invalid or unenforceable, nor to Seller’s knowledge is there a reasonable
basis for any claim that any of the Assigned Registered IP is either invalid or
unenforceable.  All Assigned Registered IP has been registered or obtained in
accordance with all applicable legal requirements, and Seller has timely paid
all filing, examination, issuance, post registration and maintenance fees and
annuities associated with or required with respect thereto.  None of the
Assigned Registered IP has been or is now involved in any interference, reissue,
reexamination, opposition, cancellation or similar proceeding and, to Seller’s
knowledge, no such action is or has been threatened.  Neither Seller nor any of
its Affiliates has taken any action or failed to take any action that would
result in the abandonment, cancellation, forfeiture, relinquishment,
invalidation or unenforceability of any Assigned Registered IP. 

 

(b)Except as set forth in Schedule 3.13(b),

 

(i)to Seller’s knowledge, the operation of the IoT Business by Seller and its
Subsidiaries, and the use, sale, import, export, and manufacture of IoT Products
by Seller and its Subsidiaries, have not and do not infringe, misappropriate or
otherwise violate, any Intellectual Property rights of any Third Party;  

 

(ii)there is no suit, or proceeding pending against or, to Seller’s knowledge,
threatened against, or a written or, to Seller’s knowledge, oral claim, nor is
there any settlement agreement or stipulation in litigation affecting, the IoT
Business or the IoT Products, including any such suit, proceeding, claim,
agreement, or stipulation (x) based upon, or challenging or seeking to deny or
restrict, the rights of Seller or any of its Affiliates in any of the Assigned
Intellectual Property or the Licensed Intellectual Property (collectively, the
“IoT Intellectual Property”), (y) alleging that the use of the IoT Intellectual
Property or any services provided, processes used, or products manufactured,
used, imported, offered for sale or sold with respect to the IoT Business
conflict with, misappropriate, infringe or otherwise violate any Intellectual
Property rights of any Third Party, or (z) alleging that Seller or any of its
Affiliates infringed, misappropriated, or otherwise violated any Intellectual
Property rights of any Third Party in connection with the operation of the IoT
Business; and

 

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(iii) (A) there exist no restrictions on the disclosure, use, license or
transfer of the IoT Intellectual Property (other than the restrictions imposed
in the Intellectual Property Agreement or by applicable Law); and (B) the
consummation of the transactions contemplated by this Agreement will not alter,
impair or extinguish any of the IoT Intellectual Property. 

(c)At the Closing, Seller or one of its Subsidiaries will assign to Buyer the
Assigned Intellectual Property and will license to Buyer the Licensed
Intellectual Property, in each case in accordance with the Intellectual Property
Agreement.  

 

(d)None of the Assigned Intellectual Property has been adjudged invalid or
unenforceable in whole or part and, to Seller’s knowledge, all Assigned
Intellectual Property is valid and enforceable.

 

(e)Seller and its Affiliates have taken reasonable actions to maintain and
protect the Assigned Intellectual Property, including payment of applicable
maintenance fees and filing of applicable statements of use other than certain
foreign applications which Seller or an Affiliate thereof, in its reasonable
business judgment, has abandoned in the ordinary course of business.

 

(f)To Seller’s knowledge, no Person is engaging in any activity that infringes
or misappropriates any of the material Assigned Intellectual Property.

 

(g)Schedule 3.13(g) contains a complete and accurate list of all Information
(other than Open Source Materials) that is not owned by Seller or its
Subsidiaries and is embedded in, incorporated into or distributed by Seller with
the IoT Products (“Third Party Components”), in each case identifying (i) the
IoT Product associated with such Third Party Component and (ii) the license or
other agreement granting Seller or any of its Affiliates rights in and to such
Third Party Component.

 

(h)Schedule 2.1(g) contains a complete and accurate list of all Transferred
In-Licenses. Each such Transferred In-License is valid, binding and enforceable
against Seller or the applicable Subsidiary and, to Seller’s knowledge, the
other parties thereto in accordance with its terms and is in full force and
effect.  

 

(i)Other than patent cross-licenses and other patent licenses entered into by
Seller or a Subsidiary in connection with Seller’s patent licensing activities
or in settlement of litigation, to Seller’s knowledge, Seller has not granted
any licenses or rights under, or otherwise agreed not to assert or enforce, for
the purposes of enabling another Person to operate in the IoT Business Field of
Use.  Seller has not granted any licenses or other rights under, or otherwise
agreed not to assert or enforce, the Assigned Trademarks, except for those
rights granted in the ordinary course of business in connection with the sale of
IoT Products.

 

(j)Seller and its Affiliates have taken reasonable steps to maintain the
confidentiality of all Trade Secrets and confidential information relating to
the IoT Business (“IoT Trade Secrets”) and other information that at any time
constituted a Trade Secret relating to the IoT Business, including taking steps
to ensure that any IoT Trade Secrets disclosed by Seller or any of its

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Affiliates to a Third Party are subject to the confidentiality undertakings set
forth in an applicable written non-disclosure agreement.  To Seller’s knowledge,
there has been no misappropriation of any IoT Trade Secrets. Seller and its
Affiliates have not disclosed, nor is Seller or any of its Affiliates under any
contractual or other obligation to disclose, to another Person any IoT Trade
Secrets, except pursuant to an enforceable confidentiality agreement or
undertaking, and, to Seller’s knowledge, no Person has materially breached any
such agreement or undertaking.  Without limiting the generality of the
foregoing, Seller has and enforces in a commercially reasonable manner a policy
requiring, and each Business Employee and independent contractor, who has
participated in or has made any contributions to the creation of any IoT
Intellectual Property or have had access to any IoT Trade Secrets, to enter
into, and each such Business Employee and independent contractor has entered
into, a non-disclosure and invention assignment agreement substantially in
Seller’s standard forms (which have previously been provided to Buyer) that
provides for (i) the non-disclosure by such person of any of Seller’s or any of
its Subsidiaries’ confidential information and (ii) the irrevocable assignment
by such person to Seller or any of its Subsidiaries of all Intellectual Property
arising out of such person’s employment or engagement by, or contract with,
Seller or any of its Subsidiaries.   

 

(k)To Seller’s knowledge, no Business Employee or independent contractor of
Seller or any of its Affiliates who is employed in connection with the IoT
Business is obligated under any agreement or subject to any judgment, decree or
order of any court or Governmental Body, or any other restriction that could
reasonably be expected to materially interfere with such Business Employee or
independent contractor carrying out his or her duties for Seller or such
Affiliates, as applicable, or that could reasonably be expected to materially
conflict with the Assigned Intellectual Property, the Licensed Intellectual
Property or the IoT Business as presently conducted.

 

(l)Except as set forth in Schedule 2.1(g), neither Seller nor any of its
Affiliates has used Open Source Materials in any manner that would reasonably be
expected to , with respect to any Assigned Intellectual Property embedded in an
IoT Product, (i) require its disclosure or distribution in source code form,
(ii) require the licensing thereof for the purpose of making derivative works,
(iii) impose any restriction on the consideration to be charged for the
distribution thereof, (iv) create, or purport to create, obligations for Seller
or any of its Affiliates with respect to any Assigned Intellectual Property or
grant, or purport to grant, to any third party, any rights or immunities under
any Assigned Intellectual Property or (v) impose any other material limitation,
restriction, or condition on the right of Seller or any of its Affiliates with
respect to its use or distribution.  

 

(m)Neither Seller nor any of its Affiliates, nor any other Person acting on
their behalf has disclosed, delivered or licensed to any escrow agent or other
Person, agreed to disclose, deliver or license to any escrow agent or other
Person, or permitted the disclosure, delivery or licensing to any escrow agent
or other Person of, any material source code for any IoT Product, except for
disclosures to employees and contractors under binding written agreements that
prohibit the disclosure thereof and prohibit the use thereof except in the
performances of services to Seller or any Subsidiary thereof.  None of Seller or
any its Affiliates has any duty or obligation (whether present, contingent or
otherwise) to deliver, license or make available the material source code for

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any IoT Product to any escrow agent or other Person, including as a result of
the consummation of this Agreement. 

 

3.14IoT Product Liability and Recalls

 

(a)Each IoT Product produced or sold is, and at all times up to and including
the sale thereof has been, in compliance in all material respects with all
applicable Laws.  To Seller’s knowledge, there is no design or manufacturing
defect that: (i) is material and has been established or is being investigated
with respect to any IoT Product, or (ii) has resulted in, or could reasonably be
expected to result in death, personal injury, or property damage.

 

(b)Except as set forth in Schedule 3.14(b), since January 1, 2014, there has
been no action, suit, claim, inquiry, proceeding or investigation in any case by
or before any court or Governmental Body pending or, to Seller’s knowledge,
threatened against or involving the IoT Business or relating to any IoT Product,
including any action, suit, claim, inquiry, proceeding or investigation alleging
that any IoT Products have been defective or improperly designed or
manufactured, nor, to Seller’s knowledge, has there been any pattern of product
failure relating to any IoT Product designed, manufactured or sold by the IoT
Business.

 

(c)Except as set forth in Schedule 3.14(c), since January 1, 2014, there has
been no pending, or to Seller’s knowledge, threatened recall or investigation of
any IoT Product produced or sold and, to Seller’s knowledge, no condition or
circumstance exists, that (with or without notice or lapse of time) would
directly or indirectly be expected to give rise to or serve as the basis for any
recall or investigation.

 

3.15IoT Product Warranty

 

(a)Schedule 3.15(a) includes copies of the standard terms and conditions of sale
for the IoT Products (containing applicable guaranty, warranty and indemnity
provisions and support obligations).

 

(b)Except as set forth in Schedule 3.15(b), the products manufactured by the IoT
Business have been sold by Seller and its Subsidiaries in accordance with the
standard terms and conditions of sale except for any such deviations which could
not reasonably be expected to materially affect the IoT Business or the
Purchased Assets.  No IoT Products have been sold by Affiliates that are not
Subsidiaries.

 

Inventory

. The Inventory is, and as of the Closing Date will be, valued in accordance
with GAAP of quality and quantity usable and saleable in the ordinary course of
the IoT Business consistent with past practice, except in each case for excess,
obsolete items and items of below-standard quality that have been reserved for
or written down to estimated net realizable value in accordance with GAAP
applied on a basis consistent with past practices.

 

Customers and Suppliers

. Schedule 3.17 contains a list setting forth the twenty (20) largest customers
of the IoT Business, by dollar amount, over the twelve (12) months ended
March 31, 2016 (and the amount of sales with respect to each such customer
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twelve month period), and the twenty (20) largest suppliers of any raw material
or component for the IoT Business, by dollar amount, over the twelve (12) months
ended March 31, 2016.  Except as set forth in Schedule 3.17, neither Seller nor
any of its Affiliates has received any written notice, or to Seller’s knowledge,
any other notice, that any such customer has taken action to, or will take
action to (a) terminate or modify in a manner materially adverse to Seller its
relationship with Seller, (b) cease to purchase or license the IoT Products, or
reduce the purchase or license of IoT Products in any material manner from
Seller or any of its Subsidiaries, or (c)  renegotiate the price or other
material terms, in any material manner, pursuant to which such customer
purchases or licenses the IoT Products from Seller or any of its Subsidiaries;
and, to Seller’s knowledge, no such customers plan to do any of the
foregoing.  As of the date hereof, neither Seller nor any of its Affiliates has
received written notice, or to Seller’s knowledge, any other notice, that any
such supplier has taken action to, or will take action to (a) terminate or
modify in a manner adverse to Seller its relationship with Seller, (b) reduce
the amount of goods or services that it is willing to supply to Seller or any of
its Subsidiaries or (c) materially increase the price of any goods or services
that it has previously supplied to Seller or any of its Subsidiaries; and, to
Seller’s knowledge, no such suppliers plan to do any of the foregoing.  All
purchase and sale orders and other commitments for purchases and sales made by
Seller or any Subsidiary in connection with the IoT Business have been made in
the ordinary course of business in accordance with past practices, and no
payments have been made to any supplier or customers or any of their respective
representatives other than payments to such suppliers or their representatives
for the payment of the invoiced price of supplies purchased or goods sold in the
ordinary course of business.

 

Restrictions on the IoT Business

. Except for this Agreement and the Collateral Agreements there is no contract,
agreement or Law materially affecting (i) Seller’s or a Subsidiary’s conduct of
the IoT Business as currently conducted, or (ii) to Seller’s knowledge, Buyer’s
ability to conduct the IoT Business after the Closing as currently conducted by
Seller.

 

3.19Taxes

 

(a)There are no liens for Taxes upon any of the Purchased Assets other than
Permitted Encumbrances.  No action, proceeding or, to Seller’s knowledge,
investigation has been instituted against Seller or any Subsidiary to the extent
related to the IoT Business or the Purchased Assets.  Seller and each Subsidiary
has duly and timely filed all Returns that it was required to file; all such
Returns were correct and complete in all material respects; and all Taxes of
Seller or its Subsidiaries owed or shown as due on any Return have been paid.
Seller and its Subsidiaries (to the extent related to the IoT Business or the
Purchased Assets) have reported, withheld and paid all Taxes required to have
been reported, withheld and paid in connection with amounts paid or owing by
them to any employee, independent contractor, creditor, stockholder or other
Third Party except where the failure to make such payment, individually or in
the aggregate, is not or could not reasonably be expected to be material to the
IoT Business, taken as a whole.  Neither Seller nor any Subsidiary has received
any claim in writing in the last two (2) years from a Governmental Body or
social security administration in a jurisdiction where any Seller or Subsidiary
(to the extent related to the IoT Business or the Purchased Assets) does not
file Returns that such Seller or Subsidiary is or may be subject to taxation by
that jurisdiction.

 

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(b)None of the Purchased Assets (a) is property required to be treated as owned
by another person pursuant to the provisions of 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, (b) constitutes “tax-exempt use property” or
“tax-exempt bond financed property” within the meaning of Section 168 of the
Code, (c) secures any debt the interest of which is tax-exempt under Section
103(a) of the Code, or (d) is subject to a 467 rental agreement as defined in
Section 467 of the Code.  Seller (and not any of Seller’s Affiliates) is the
beneficial owner of the Assigned Intellectual Property and the Licensed
Intellectual Property.
 

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 Seller or any Affiliate of Seller.

 

No Other Representations or Warranties

. Except for the representations and warranties contained in this Article 3,
none of Seller, any Affiliate of Seller or any other Person makes any
representations or warranties, and Seller hereby disclaims any other
representations or warranties, whether made by Seller, or any Affiliate of
Seller, 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, the transactions contemplated hereby or the IoT
Business, notwithstanding the delivery or disclosure to Buyer or its
representatives of any documentation or other information with respect to any
one or more of the foregoing.  Notwithstanding the foregoing or anything to the
contrary set forth herein, the foregoing shall not apply in the event of fraud
or to any claims or rights of Buyer, any Buyer Designee, any Affiliate of Buyer
or any other Person arising out of fraud.

 

Representations and Warranties of Buyer

. Except as set forth in Schedules attached hereto and delivered by Buyer to
Seller prior to the execution of this Agreement, Buyer represents and warrants
to Seller that:

 

Organization and Qualification

. Each of Buyer and any Buyer Designee is a corporation, limited partnership, or
other legal entity duly organized, validly existing and in good standing (in any
jurisdiction in which such concept exists) under the Laws of the jurisdiction of
its incorporation or organization and each of Buyer and any Buyer Designee has
all requisite legal power and authority to carry on its business as currently
conducted by it and to own or lease and operate its properties. Each of Buyer
and any Buyer Designee 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 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 Buyer’s or
any Buyer Designee’s ability to consummate the transactions under this Agreement
and the Collateral Agreements.

 

4.2Authorization; Binding Effect

 

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(a)Each of Buyer and any Buyer Designee has all requisite corporate power and
authority to execute, deliver and perform this Agreement and the Collateral
Agreements to which it will be a party, as the case may be, and to effect the
transactions contemplated hereby and thereby and the execution, delivery and
performance of this Agreement and the Collateral Agreements by Buyer has been
duly authorized by all requisite corporate action and, to the extent not
completed on the date hereof by a Buyer Designee, will be duly authorized by all
requisite corporate action. 

 

(b)This Agreement has been duly executed and delivered by Buyer and this
Agreement is, and the Collateral Agreements to which Buyer or a Buyer Designee
will be a party when duly executed and delivered by Buyer or such Buyer Designee
will be, valid and legally binding obligations of Buyer or such Buyer Designee
enforceable against Buyer or such Buyer Designee 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.

 

4.3Non-Contravention; Consents

 

(a)Assuming that the consents specified in Section 4.3(b) below have been
obtained, the execution, delivery and performance of this Agreement and the
Collateral Agreements by Buyer and any Buyer Designee 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 or any Buyer Designee’s
charter or by-laws or similar organizational document, (ii) violate or result in
a breach of or constitute an occurrence of default under any provision of,
result in the acceleration or cancellation of any obligation under, or give rise
to a right by any party to terminate or amend its obligations under, any
Contract to which Buyer or any Buyer Designee is a party or by which it or its
assets or properties are bound, or (iii) violate any applicable Law of any
Governmental Body having jurisdiction over Buyer or any Buyer Designee or any of
their respective properties, other than in the case of clauses (ii) and (iii),
any such violations, breaches, defaults, accelerations or cancellations of
obligations or rights that, individually or in the aggregate, have not had and
would not be reasonably expected to have a material adverse effect on Buyer’s or
any Buyer Designee’s ability to consummate the transactions under this Agreement
and the Collateral Agreements.

 

(b)No consent, approval, order or authorization of, or registration, declaration
or filing with, any Person is required to be obtained by Buyer or any Buyer
Designee in connection with the execution, delivery and performance of this
Agreement or the Collateral Agreements or for the consummation of the
transactions contemplated hereby or thereby, except for (i) any filings required
to be made under the HSR Act and any applicable filings required under foreign
antitrust Laws, and (ii) 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 Buyer’s or any Buyer Designee’s
ability to consummate the transactions under this Agreement and the Collateral
Agreements.

 

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Brokers

. Other than Greenhill & Co., LLC, the costs, fees and expenses of which will be
paid by Buyer, 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.

 

4.5No Inducement or Reliance; Independent Assessment; Projections

 

(a)With respect to the Purchased Assets, the IoT Business and any other rights
or obligations to be transferred hereunder or under the Collateral Agreements or
pursuant hereto or thereto, Buyer has not been induced by and has not relied
upon any representations, warranties or statements, whether express or implied,
made by Seller, any Affiliate of Seller, or any agent, employee, attorney or
other representative of Seller or by any other Person representing or purporting
to represent Seller that are not expressly set forth in this Agreement or in the
Collateral Agreements (including the Schedules and Exhibits hereto and thereto),
whether or not any such representations, warranties or statements were made in
writing or orally, and none of Seller, any Affiliate of Seller, or any agent,
employee, attorney, other representative of Seller or other Person shall have or
be subject to any liability to Buyer or any other Person resulting from the
distribution to Buyer, or Buyer’s use of, any such information, including any
information, documents or material made available in any data rooms or
management presentations or in any other form in expectation of the transactions
contemplated hereby.  Notwithstanding the foregoing or anything to the contrary
set forth herein, the foregoing shall not apply in the event of fraud or to any
claims or rights of Buyer, any Buyer Designee, any Affiliate of Buyer or any
other Person arising out of fraud.

 

(b)Buyer acknowledges that it has made its own assessment of the present
condition and the future prospects of the IoT Business and is sufficiently
experienced to make an informed judgment with respect thereto.  Buyer further
acknowledges that neither Seller nor any Affiliate of Seller has made any
warranty, express or implied, as to the future prospects of the IoT Business or
its profitability for Buyer, or with respect to any forecasts, projections or
IoT Business plans prepared by or on behalf of Seller and delivered to Buyer in
connection with the IoT Business and the negotiation and the execution of this
Agreement.

 

(c)In connection with Buyer’s investigation of the IoT Business, Buyer and its
Affiliates have received from Seller and its representatives certain
projections, forecasts and business plan information. Buyer and its Affiliates
acknowledge and agree that there are uncertainties inherent in attempting to
make such projections, forecasts and plans, that Buyer and its Affiliates are
familiar with such uncertainties, that there can be no assurances that the
projections, forecasts and plans are accurate or that the projections, forecasts
and plans will be realized, that Buyer and its Affiliates are taking full
responsibility for making their own evaluation of the adequacy and accuracy of
all projections, forecasts and plans so furnished to them, and that Buyer and
its Affiliates shall have no claim against any of Seller, its Affiliates or
their respective representatives with respect thereto.

 

Financing

.  Buyer has delivered to Seller true, complete and fully executed copies of a
commitment letter from Merrill Lynch, Pierce, Fenner & Smith Incorporated
(“MLPFS”), together with the executed fee letters related thereto of even date
herewith (which fee

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letters may be redacted so long as no redaction covers terms that would
adversely affect the aggregate amount, conditionality, availability or
termination of the debt financing contemplated therein) and any related
exhibits, schedules, annexes, supplements, term sheets and other agreements,
which provide such lenders’ respective commitments to provide Buyer with debt
financing in connection with the transactions contemplated hereby in the amount
set forth therein (the “Commitment Letter”) (such debt financing, the
“Financing”).  The Commitment Letter is in full force and effect and is a valid,
binding and enforceable obligation of Buyer and, to the knowledge of Buyer, the
other parties thereto, except insofar as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar Law
affecting creditors’ rights generally, or by principles governing the
availability of equitable remedies.  As of the date hereof, the Commitment
Letter has not been amended or modified, and the respective commitments
contained in the Commitment Letter have not been withdrawn, rescinded or
otherwise modified (and no such withdrawal, rescission or modification is
contemplated), other than to add lenders, lead arrangers, bookrunners,
syndication agents or similar entities.  As of the date hereof, there are no
side letters or other arrangements relating to the Commitment Letter that could
reasonably be expected to affect the availability of the funding in full of the
Financing at the Closing.  As of the date of this Agreement, Buyer has fully
paid, or caused to be fully paid, any and all commitment fees or other amounts
that have been incurred and are due and required to be paid in connection with
the Commitment Letter on or prior to the date of this Agreement.  As of the date
of this Agreement, no event has occurred which, with or without notice, lapse of
time or both, would constitute a default or breach on the part of Buyer or, to
the knowledge of Buyer, the other parties thereto under any term or condition of
the Commitment Letter, or otherwise result in any portion of the Financing
contemplated thereby to be unavailable.  There is no condition precedent or
other contingencies related to the funding of the full amount of the Financing,
other than as set forth in the Commitment Letter in the form so delivered to on
or Seller prior to the date of this Agreement.  As of the date of this
Agreement, Buyer has no reason to believe that any term or condition to the
Financing set forth in the Commitment Letter will not be fully satisfied on a
timely basis or that the Financing will not be available to Buyer at the
Closing.

 

Sufficiency of Funds

. At the Closing, upon receipt of the proceeds of the Financing contemplated by
the Commitment Letter, Buyer (i) will have sufficient funds available to pay the
Purchase Price and any expenses incurred by Buyer in connection with the
transactions contemplated by this Agreement or the Collateral Agreements;
(ii) will have the resources and capabilities (financial or otherwise) to
perform its obligations hereunder and under the Collateral Agreements; and
(iii) will not have incurred any obligation, commitment, restriction or
liability of any kind, absolute or contingent, present or future, which would
impair or adversely affect its ability to perform its obligations hereunder and
under the Collateral Agreements. Buyer understands and acknowledges that under
the terms of this Agreement, including for purposes of Section 4.6 and this
Section 4.7, the obligations of Buyer to consummate the transactions
contemplated by this Agreement or the Collateral Agreements are not in any way
contingent upon or otherwise subject to the consummation by Buyer of any
financing arrangements, the obtaining by Buyer of any financing or the
availability, grant, provision or extension of any financing to Buyer.

 

No Other Representations or Warranties

. Except for the representations and warranties contained in this Article 4,
none of Buyer, any Affiliate of Buyer or any other Person makes, and neither
Seller or any of its Affiliates is relying on, any representations or
warranties, and

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Buyer hereby disclaims any other representations or warranties, whether made by
Buyer, any Affiliate of Buyer, or any of their 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
and thereby, notwithstanding the delivery or disclosure to Seller or its
representatives of any documentation or other information with respect to any
one or more of the foregoing.  Notwithstanding the foregoing or anything to the
contrary set forth herein, the foregoing shall not apply in the event of fraud
or to any claims or rights of Seller, any Subsidiary, any Affiliate of Seller or
any other Person arising out of fraud.

 

5.Certain Covenants

 

 

 

 

 

 

 

 

 

 

 

 

 

5.1Access and Information

 

(a)From and after the date of this Agreement and until the Closing Date, Seller
shall give, and cause its Subsidiaries to give, to Buyer and its Affiliates, and
their respective officers, employees, accountants, counsel and other
representatives, reasonable access during Seller’s or the applicable
Subsidiary’s normal business hours to all of Seller’s and the applicable
Subsidiary’s properties (including the right to perform non-invasive
environmental assessments and audits of any Premises related to any Assumed
Lease or Sublease), books, contracts, commitments, reports of examination and
records relating to the IoT Business, the Transferred Employees, the Purchased
Assets and the Assumed Liabilities (subject to any limitations that are
reasonably required to preserve any applicable attorney-client privilege or
legal or contractual Third Party confidentiality obligation; provided, however,
that in the event that access is limited or restricted pursuant to this
parenthetical, Seller and its Subsidiaries shall use reasonable commercial
efforts to make alternative accommodations to afford access in a manner that
does not jeopardize any attorney-client privilege or legal or contractual Third
Party confidentiality obligation). Seller shall assist, and cause its
Subsidiaries to assist, Buyer and its Affiliates, and their respective officers,
employees, accountants, counsel and other representatives, in making such
investigation and shall cause its counsel, accountants, engineers, consultants
and other non‑employee representatives to be reasonably available to any of them
for such purposes.

 

(b)From and after the Closing Date, Seller and Buyer and their respective
Subsidiaries shall provide, and shall cause their respective Affiliates to
provide, to each other and to their respective officers, employees, accountants,
counsel and other representatives, upon request (subject to any limitations that
are reasonably required to preserve any applicable attorney-client privilege or
legal or contractual Third Party confidentiality obligation; provided, however,
that in the event that access is limited or restricted pursuant to this
parenthetical, Seller and Buyer and their respective Subsidiaries shall use
reasonable commercial efforts to make alternative accommodations to afford
access in a manner that does not jeopardize any attorney-client privilege or
legal or contractual Third Party confidentiality obligation), reasonable access
for inspection and copying of all Business Records, Transferred Contracts,
Transferred In-Licenses and Transferred Governmental Permits and any other
information existing as of the Closing Date and relating to the IoT Business,
the Purchased Assets, the Assumed Liabilities or the Transferred Employees 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 IoT
Business, the Purchased Assets, the Assumed Liabilities or the Transferred
Employees

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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 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, if any, 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)Buyer agrees to preserve all Business Records, Transferred Contracts,
Transferred In-Licenses and Transferred Governmental Permits in accordance with
its corporate policies related to preservation of records. Buyer further agrees
that, to the extent Business Records, Transferred Contracts, Transferred
In-Licenses and Transferred Governmental Permits are placed in storage, they
will be kept in such a manner as to make individual document retrieval possible
in a reasonably expeditious manner.

 

Conduct of the IoT Business

. From and after the date of this Agreement and until the Closing Date, except
as otherwise contemplated by this Agreement or as set forth in the Schedules
hereto or as Buyer shall otherwise consent to in writing, Seller and its
Affiliates, with respect to the IoT Business:

 

(a)will carry on the IoT Business in the ordinary course consistent with past
practice and consistent therewith use its reasonable commercial efforts to keep
intact the IoT Business, keep available the services of the Business Employees
and preserve the relationships of the IoT Business with customers, suppliers,
licensors, licensees, distributors and others that have a business relationship
with the IoT Business;

 

(b)in the ordinary course consistent with past practice will maintain the
Purchased Assets in good operating condition and repair or restore such assets
as necessary for the operation of the IoT Business in the ordinary course of
business;

 

(c)will not permit, other than as may be required by Law or a Governmental Body,
all or any of the Purchased Assets (real or personal, tangible or intangible) to
be transferred, sold, licensed, disposed of, or subjected to any Encumbrance
other than Permitted Encumbrances, other than sales of Inventory in the ordinary
course of business consistent with past practice;

 

(d)will not buy or sell Inventory outside of the ordinary course of business
consistent with past practice, including with respect to pricing, discounting
practices, bundling, sales volume and services levels, and will maintain
Inventory sufficient to meet expected customer requirements, consistent with
past practice, including sufficient raw materials, capacity and work in process
in light of anticipated demand and customary cycle times and sufficient finished
goods Inventory for satisfaction of customer orders on hand at Closing;

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(e)will not acquire any asset that will be a Purchased Asset except in the
ordinary course of business consistent with past practice;

 

(f)will not fail to pay when due any material obligation related to the IoT
Business;

 

(g)will not enter into, terminate or materially extend, amend, modify or waive
any right with respect to any Lease or Material Contract except for purchase
orders entered in the ordinary course of business consistent with past practice;

 

(h)will not sell, lease, license, abandon, permit to lapse, or otherwise
transfer, or create or incur any Encumbrance other than Permitted Encumbrances
on, any of the assets, securities, properties, or interests of the IoT Business
(including the Assigned Intellectual Property), including not taking any action
to abandon, disclose, misuse, or misappropriate the Assigned Intellectual
Property in any manner or assert or threaten any claims with respect to the
Assigned Intellectual Property;

 

(i)will not incur or assume any liabilities, obligations or indebtedness for
borrowed money, other than in the ordinary course of business consistent with
past practice that will constitute Excluded Liabilities;

 

(j)other than as required by Sections 5.4(d) and 5.4(e), will not terminate or
modify the terms and conditions of employment of any Business Employee, or
modify the salaries, wage rates, other compensation or benefits of, or grant any
retention, change of control, incentive, severance or termination payment (other
than as required by Law) to, any Business Employee;

 

(k)will not, unless required by Law, enter into any collective bargaining
agreement or other similar agreement or arrangement with any labor union or
management union or association, works council, employee representative or other
labor organization or group of employees representing employees of Seller or a
Subsidiary; or

 

(l)will not fail to comply in any material respect with all Laws applicable to
the IoT Business or the Purchased Assets;

 

(m)will not do any other act which would cause any representation or warranty of
Seller in this Agreement to be or become untrue in any material respect or
intentionally omit to take any action necessary to prevent any such
representation or warranty from being untrue in any material respect;

 

(n)will not relocate any Business Employees to locations other than the Premises
and will not relocate any personnel other than Business Employees into the
Premises under the Assumed Lease or into portions of the Premises covered by the
Subleases; and

 

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(o)will not enter into any agreement or commitment with respect to any of the
foregoing. 

 

5.3Tax Reporting and Allocation of Consideration

 

(a)Seller and Buyer acknowledge and agree that (i) Seller will be responsible
for and will perform all required Tax withholding, payment and reporting duties
with respect to any wages and other compensation paid by Seller or a Subsidiary
to any Business Employee in connection with the operation or conduct of the IoT
Business for any Pre-Closing Tax Period and any Tax withholding, payment and
reporting related to payments made by Seller or a Subsidiary to any Transferred
Employee under a Benefit Plan of Seller or a Subsidiary with respect to any
Post-Closing Tax Period, and (ii) Buyer will be responsible for and will perform
all required Tax withholding, payment and reporting duties with respect to any
wages and other compensation paid by Buyer or a Buyer Designee to any
Transferred Employee with respect any Post-Closing Tax Period.  After the
Closing, Buyer and Seller agree to use the alternate procedure set forth in Rev.
Proc. 2004-053 with respect to the Transferred Employees.  For the avoidance of
doubt, nothing in this paragraph is intended to modify or adjust the substantive
liability of Buyer and Seller under this Agreement with respect to the Taxes
described in this paragraph.

 

(b)Not later than ninety (90) days after the Closing Date, Buyer shall prepare
and deliver to Seller an allocation of the Purchase Price among the Purchased
Assets in accordance with Section 1060 of the Code and the Treasury regulations
promulgated thereunder (and any similar provision of state, local or foreign
law, as appropriate) (the “Asset Level Allocation Statement”).  Seller and Buyer
shall work in good faith to resolve any disputes relating to the Asset Level
Allocation Statement.  If Seller and Buyer are unable to resolve any such
dispute, such dispute shall be resolved promptly by a nationally recognized
accounting firm acceptable to Buyer and Seller, the costs of which shall be
borne equally by Buyer and Seller. The Parties agree that they will not, and
will not permit any of their respective Affiliates to, take a position (except
as required pursuant to any order of a Governmental Body) on any Return or in
any audit or examination before any Governmental Body that is in way
inconsistent with the final Asset Level Allocation Statement (the final Asset
Level Allocation Statement being referred to herein as the “Allocation”). If the
Purchase Price is adjusted pursuant to Section 9.2(d), the Allocation shall be
adjusted in a manner consistent with the procedures set forth in this Section
5.3(b).

 

(c)Seller shall promptly notify Buyer in writing upon receipt by Seller of
notice of any pending or threatened Tax audits or assessments relating to the
income, properties or operations of Seller that reasonably may be expected to
relate to or give rise to a lien on the Purchased Assets or the IoT
Business.  Each of Buyer and Seller shall promptly notify the other in writing
upon receipt of notice of any pending or threatened Tax audit or assessment
challenging the Allocation.

 

(d)Seller shall deliver to Buyer at the Closing a properly executed affidavit
prepared in accordance with Treasury Regulations section 1.1445-2(b) certifying
Seller’s non-foreign status.

 

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5.4Business Employees 

 

(a)Prior to the Closing, Seller shall deliver to Buyer any updates to the
information provided in Schedule 3.10(a)(i) as of the day prior to the Closing
Date (the “Updated Employee List”).

 

(b)Buyer or any Buyer Designee shall make offers of employment, contingent on
the Closing, to the Business Employees listed on Schedule 3.10(a)(i) (including
those absent due to vacation, holiday, illness, leave of absence or short-term
disability, but excluding any Business Employee on long-term
disability).  Seller and any applicable Subsidiary shall cooperate and assist in
facilitating Buyer’s or a Buyer Designee’s offers and will not take any action,
or cause any of the Subsidiaries to take any action, which would impede, hinder,
interfere or otherwise compete with Buyer’s or a Buyer Designee’s effort to hire
any Business Employee.  Without limiting the foregoing, each Party shall comply
with all applicable Laws in connection with the transfer of the Business
Employees to Buyer or a Buyer Designee, including with respect to notice and
other procedural requirements and Automatic Transfer Laws.  Seller and its
applicable Subsidiaries will provide any and all information reasonably required
by Buyer or a Buyer’s Designee in order for Buyer to fulfil its obligations
under this Agreement with respect to Business Employees.  The Parties will enter
into appropriate documentation for relevant jurisdictions outside the United
States where necessary or appropriate for the transfer of any Business
Employees.  Each Business Employee who accepts Buyer’s or a Buyer Designee’s
offer of employment, as of the effective date of their employment with Buyer or
a Buyer Designee shall be referred to as a “Transferred Employee.” Employment
with Buyer or a Buyer Designee of Transferred Employees shall be effective as of
the Closing Effective Time, except that the employment of individuals receiving
short-term disability benefits or on approved leave of absence on the Closing
Date will become effective as of the date they present themselves for work with
Buyer or a Buyer Designee or such other date as is prescribed by applicable Law.

 

(c)The Parties will comply with applicable Law regarding terms of employment of
Transferred Employees.  Where terms are not dictated by applicable Law, Buyer or
a Buyer Designee shall provide, or shall cause to be provided, to Transferred
Employees, at a minimum, the same base salaries or, as applicable, base wage
rates, offered by Seller or the applicable Subsidiary immediately prior to the
Closing Date as set forth on Schedule 3.10(a)(i). Buyer or a Buyer Designee
shall provide, or shall cause to be provided, to Transferred Employees employee
benefits and new hire equity grants that are no less favorable than those
benefits and equity grants provided to similarly situated employees of Buyer or
the applicable Buyer Designee and shall structure offers to Business Employees
in any foreign jurisdiction so as not to trigger termination or severance costs,
if any.  Buyer shall use commercially reasonable efforts to recognize each
Transferred Employee’s service with Seller or a Subsidiary prior to the Closing,
including service with predecessor employers that was recognized by Seller or a
Subsidiary, for purposes of determining eligibility to participate or vesting in
each employee benefit plan, program, policy and arrangement of Buyer or a Buyer
Designee, including any vacation plans and severance plans, to the extent
permitted by such plans, programs, policies and arrangements, provided that such
service shall not be recognized to the extent such recognition would result in a
duplication of benefits.

 

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(d)Effective as of the Closing, Seller or the applicable Subsidiary will
terminate the employment of any Business Employee that is offered employment in
accordance with Sections 5.4(b) and 5.4(c) above and rejects such offer of
employment with Buyer or a Buyer Designee, including in connection with an
applicable objection under an Automatic Transfer Law.  Seller or the applicable
Subsidiary will not pay such Business Employee any severance or other similar
benefit unless otherwise required by applicable Law or an applicable Benefit
Plan listed on Schedule 3.10(b), it being understood, for the avoidance of
doubt, that any such liabilities shall be Excluded Liabilities hereunder. 

 

(e)Other than as described on Schedule 5.4(e), Transferred Employees will not be
eligible for any severance benefits under the terms of any Benefit Plan of
Seller or any Subsidiary.  Seller shall maintain and shall not amend the
transition incentive plan described on Schedule 5.4(e) for six (6) months
following the Closing and pay any and all amounts due thereunder.

 

(f)To the extent permitted under applicable Buyer benefit plans, (i) Buyer shall
use commercially reasonable efforts to 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 Seller or a Subsidiary)
and proof of insurability, and (ii) the medical and dental plans maintained by
Buyer and any Affiliate of Buyer shall recognize as dependents of the
Transferred Employees the dependents recognized by Seller’s or the applicable
Subsidiary’s medical and dental plans.

 

(g)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 from the Broadcom Corporation 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.  Seller shall cause
the Broadcom Corporation 401(k) Plan to fully vest Transferred Employees in
their accounts immediately prior to the Closing and permit the Transferred
Employees to elect a lump sum cash distribution of benefits accrued through the
Closing Date in accordance with the Code.

 

(h)The Parties agree to cooperate in good faith to determine whether any
notification may be required under the Worker Adjustment and Retraining
Notification Act or similar state or local law (the “WARN Act”) as a result of
the transactions contemplated by this Agreement.  Seller will be responsible for
providing any notification that may be required under the WARN Act with respect
to any of its employees. 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. In addition, Seller
shall, at its own expense, give all notices and other information required to be
given by Seller to the Business Employees pursuant to Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”), in connection with the
execution of this Agreement and the consummation of the transactions
contemplated hereby and shall be solely responsible for providing continuation
coverage under the COBRA.

 

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(i)If any Business Employee is employed in a jurisdiction in which there is an
Automatic Transfer Law, Buyer and Seller will mutually and reasonably determine
whether the Automatic Transfer Law applies to the transfer of the Business
Employee from Seller or its Subsidiaries to Buyer or its Designee.  Where the
Parties determine that an Automatic Transfer Law applies to the transfer of a
Business Employee, each Party will, and will cause its Affiliates to, comply
with their respective obligations under the Automatic Transfer Law.  Seller and
its Subsidiaries on the one hand, and Buyer and the Buyers Designees on the
other, will provide to the other such cooperation as is reasonably necessary to
permit the other to fulfill its obligations under the Automatic Transfer
Law.  Any Business Employee who transfers to Buyer or Buyer Designee pursuant to
an Automatic Transfer Law will, for the avoidance of doubt, be a Transferred
Employee. 

 

(j)To the extent to which a Transferred Employee would be in breach of any
obligation owed to Seller or one of its Affiliates solely by reason of becoming
employed by Buyer or a Buyer Designee (for example, a noncompete obligation),
Seller and its Affiliates will waive such obligation.

 

(k)Nothing in this Agreement shall require Buyer or a Buyer Designee to employ
any Business Employees, or to employ any Transferred Employee on anything other
than an at-will basis, terminable at any time with or without cause, except
where prohibited under the local Law of any jurisdiction.

 

(l)Seller shall use its reasonable commercial efforts to assist Buyer with the
transfer of visas or work permits related to the Transferred Employees.

 

5.5Collateral Agreements

 

(a)On the Closing Date, Buyer or a Buyer Designee shall execute and deliver to
Seller, and Seller or the applicable Subsidiary shall execute and deliver to
Buyer or a Buyer Designee, the Collateral Agreements.

 

(b)Prior to the Closing Date, Seller and Buyer shall negotiate in good faith the
schedules for the services to be attached to the Transition Services Agreement.

 

(c)Seller and Buyer shall share the costs of any work needed to separate the
leased or subleased Premises from the remainder of the Premises pursuant to a
plan approved by both Parties and provided that each Party will be solely
responsible for any costs due to its specialized needs.

 

(d)Between the date of this Agreement and a date that is at least ten (10) days
prior to the Closing Date, Buyer shall provide Seller with written instructions
to enable Seller to place a purchase order with one or more of its wafer
manufacturing suppliers for delivery of wafers at or after the Closing
Date.  Such purchases shall be made in accordance with the following terms: (1)
the aggregate value of the purchase order(s) shall not exceed $50 million; (2)
upon the receipt of such wafers (in one or more deliveries), Seller will
immediately transfer them to Buyer and submit an invoice to Buyer; (3) Buyer
shall pay Seller the amount set forth in the purchase order(s) within fifteen
(15) days after receipt of each invoice; (4) pricing will be the price the
applicable wafer manufacturing supplier charges Seller - no markup; and (5) to
the extent allowed

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pursuant to its agreements with wafer manufacturing suppliers, Seller will pass
through warranty, indemnification, and similar protections, or will make claims
on behalf of Buyer; provided, however, that Seller shall not assume any
liability whatsoever in connection with any such claims or at all in connection
with this arrangement. 

 

Leased Equipment

. Promptly after the date hereof, Seller shall provide Buyer with the costs and
other terms applicable to the Leased Equipment and Buyer shall decide (in its
sole discretion) whether such Leased Equipment will (a) transfer to Buyer or a
Buyer Designee as of the Closing Date by Buyer or a Buyer Designee assuming the
leases for such equipment, (b) become the property of Buyer or a Buyer Designee
as of the Closing Date by Buyer or a Buyer Designee paying for the costs of
purchasing such equipment pursuant to the leases (the “Purchased Leased
Equipment”), or (c) remain the property of Seller or a Subsidiary as of the
Closing Date (the “Excluded Leased Equipment”).

 

5.7Regulatory Compliance

 

(a)Subject to Section 5.7(b), upon the terms and subject to the conditions set
forth in this Agreement, each of the Parties agrees to use its reasonable
commercial 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 Parties 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, including using reasonable commercial 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); (iii) the obtaining of all
necessary consents, approvals or waivers from Third Parties; and (iv) 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)Seller and Buyer shall timely and promptly make all filings (if any) which
may be required by each of them in connection with the consummation of the
transactions contemplated hereby under the HSR Act and any other similar
applicable Law or by any other U.S., non-U.S. or multinational Governmental
Body, including in response to any request by any Governmental Body in
contemplation of a review of the transactions contemplated hereby, and the
Parties shall respectively use all reasonable commercial efforts to cause the
receipt of approval of, or prompt termination or expiration of the applicable
waiting period under such Laws. Seller and Buyer agree that their respective
initial filings (if any) under the HSR Act and in respect of any foreign
antitrust approval shall be made as soon as reasonably practicable following the
date of this Agreement, but in any event not later than fifteen (15) calendar
days following the date hereof. Each Party shall furnish to the other such
necessary information and assistance as the other Party may reasonably request
in connection with the preparation of any necessary filings or submissions by it
to any Governmental Body under applicable Law, including any filings (if any)
necessary under the provisions of the HSR Act. Each Party shall provide the
other Party the reasonable opportunity to make copies of all correspondence,
filings or communications (or memoranda setting forth the substance thereof) (if
any) between such Party or its representatives, on the one hand, and the

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Federal Trade Commission (the “FTC”), the Antitrust Division of the United
States Department of Justice (the “Antitrust Division”) or any state, foreign or
multinational Governmental Body or members of their respective staffs, on the
other hand, with respect to this Agreement or the transactions contemplated
hereby. Each Party agrees to inform promptly the other Party of any
communication made by or on behalf of such Party to, or received by or on behalf
of such Party from, the FTC, the Antitrust Division or any other state, foreign
or multinational Governmental Body regarding any of the transactions
contemplated hereby. 

 

(c)Notwithstanding the foregoing or anything to the contrary in this Agreement,
(i) neither Buyer nor Seller (or any Affiliates of Buyer or Seller) shall be
required to enter into any agreement that requires Buyer or Seller to dispose of
any portion of its businesses, operations, assets or product lines other than
the disposition that is contemplated in this Agreement; and (ii) it is expressly
understood and agreed that neither Buyer nor Seller (or any Affiliates of Buyer
or Seller) shall have any obligation to litigate any judicial or administrative
action or proceeding that may be brought in connection with the transactions
contemplated by this Agreement, and neither Buyer nor any Affiliate of Buyer
shall be required to agree to any license, sale or other disposition or holding
separate (through the establishment of a trust or otherwise), of shares of
capital stock or of any business, assets or property of Buyer or any of its
Affiliates, the IoT Business or the Purchased Assets, or the imposition of any
limitation on the ability of any of Buyer and its Affiliates to conduct their
businesses (including the IoT Business) or to own or exercise control of such
assets, properties and stock (including the Purchased Assets).  

 

5.8Contacts with Suppliers and Customers; Inventory

 

(a)In contemplation of the Closing, Seller shall permit Buyer to discuss and
meet, and shall reasonably cooperate in such discussions and meetings, with any
customer or supplier of the IoT Business that the Buyer so requests. A
representative of Seller or a Subsidiary shall have the right, but not the
obligation, to accompany the Buyer’s representative to such meetings and to
participate with the Buyer’s representative in any such discussions. In
addition, Seller and Buyer will prepare a communications plan for business
partners of the IoT Business, and agree on a plan to contact any suppliers to,
or customers of, the IoT Business in connection with or pertaining to any
subject matter of this Agreement or the Collateral Agreements and to facilitate
the transition of the IoT Business, including the preparation of letters to all
customers, suppliers, distributors and other business partners of the IoT
Business to notify them of the Closing and provide information regarding the
transition of the IoT Business to Buyer. Seller will be responsible for
contacting parties to any Transferred Contracts, Transferred In-Licenses and
Assigned Leases for which consent is required in connection with their
assignment pursuant to this Agreement. Notwithstanding anything to the contrary
contained herein, this Agreement shall not affect Seller’s continuing right to
contact customers and suppliers in connection with the operation or conduct of
the IoT Business nor Buyer’s continuing right to contact customers and suppliers
in connection with the operation or conduct of its business.

 

(b)At least five (5) Business Days prior to the Closing, Seller shall deliver an
itemized list, broken out by location, of all Inventory to be transferred and
conveyed to Buyer or a Buyer Designee hereunder.  Within five (5) Business Days
following the date hereof, Seller shall deliver an itemized list, broken out by
location, providing a good faith estimate of the Inventory that

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would be transferred and conveyed to Buyer or a Buyer Designee hereunder if the
Closing were to occur thirty (30) days following the date hereof. 

 

5.9Use of the Seller Name

 

(a)Buyer and Seller agree as follows:

 

(i)Except as provided below, immediately after the Closing Date, Buyer and any
Buyer Designee shall cease using “Broadcom,” “Broadcom Corporation” or other
similar mark (the “Seller Name”) and any other trademark, design or logo
previously or currently used by Seller or any of its Affiliates (other than
those that are transferred pursuant to the Intellectual Property Agreement) in
all invoices, letterhead, advertising and promotional materials, office forms or
business cards;

(ii)Except as provided below, within six (6) months after the Closing Date,
Buyer shall (A) remove any other trademark, design or logo previously or
currently used by Seller or any of its Affiliates  (other than those that are
transferred pursuant to the Intellectual Property Agreement) from all buildings,
signs and vehicles of the IoT Business; and (B) cease using the Seller Name and
any other trademark, design or logo previously or currently used by Seller or
any of its Affiliates (other than those that are transferred pursuant to the
Intellectual Property Agreement) in electronic databases, web sites, product
instructions, packaging and other materials, printed or otherwise;

  

(iii)Buyer and Buyer Designees shall not be required at any time to remove the
Seller Name and any other trademark, design or logo previously or currently used
by Seller or any of its Affiliates from Inventory of the IoT Business that is in
existence as of the Closing Date, nor shall Buyer nor Buyer Designees be
required at any time to remove such Seller Name and any such other trademark,
design or logo from schematics, plans, manuals, drawings, machinery, datasheets,
tooling including hand tools, and the like of the IoT Business in existence as
of the Closing Date to the extent that such instrumentalities are used in the
ordinary operation or conduct of the IoT Business and are not broadly
disseminated as advertisements to the public for use as means to effectuate or
enhance sales;

 

(iv)Buyer and Buyer Designees shall have the right to sell existing Inventory
and to use existing packaging, labeling, containers, supplies, advertising
materials, technical data sheets and any similar materials bearing the Seller
Name or any other trademark, design or logo previously or currently used by
Seller or any of its Affiliates until the earlier of (A) one year after the
Closing Date or (B) the depletion of existing Inventory;

 

(v)Buyer and Buyer Designees shall use Reasonable Efforts (as defined below) to
remove the Seller Name and any other trademark, design or logo previously or
currently used by Seller or any of its Affiliates (other than those that are
transferred pursuant to the Intellectual Property Agreement) from those assets
of the IoT Business (such as, but not limited to, tools, molds, and machines)
used in association with the IoT Products or otherwise reasonably used in the
operation or conduct of the IoT Business after the Closing.  For the purposes of
this Section 5.9(a)(v), “Reasonable Efforts” means Buyer and Buyer Designees
shall remove the Seller Name from such assets but only at such time when such
asset is not operated or otherwise is taken out of

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service in the normal course of business due to regular maintenance or repair
(but only for such repairs or maintenance where such removal could normally be
undertaken, for example, repair or maintenance of a mold cavity) whichever
occurs first; provided that, in no event shall Buyer or any Buyer Designee use
the Seller Name after the date which is one (1) year from the Closing
Date.  Buyer and Buyer Designees shall not be required to perform such removal
on such assets that are not or are no longer used to manufacture the IoT
Products or other parts, or if discontinuance of use of such assets is
reasonably anticipated during such time period, or from assets stored during
that period provided that such marks are removed upon such asset’s return to
service or prior to their sale or other disposition; and 

 

(vi)Seller hereby grants to Buyer and Buyer Designees a limited right to use the
Seller Name and associated trademarks, designs and logos as specified in, and
during the periods, if any, specified in clauses (i) – (v) above.

 

(vii)Buyer and its Affiliates shall also have the right to use (in a factual
manner that constitute fair use pursuant to applicable Law) the Seller Name
solely to the extent necessary to communicate that the IoT Products were
formerly owned by Seller.

 

(b)In no event shall Buyer or any Affiliate of Buyer advertise or hold itself
out as Broadcom or an Affiliate of Broadcom after the Closing Date.  

 

Non-Solicitation or Hiring of Transferred Employees

. None of Seller, any of its representatives or any of its Affiliates will at
any time prior to the date that is twenty-four (24) months after the date
hereof, directly or indirectly, solicit the employment of,  hire or employ any
Transferred Employee without Buyer’s prior written consent.  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 or directed to Transferred Employees.  This restriction set forth
in this Section 5.10 shall not apply to any Transferred Employee whose
employment was involuntarily terminated other than for cause by Buyer, a Buyer
Designee, or their respective successors or assigns, after the Closing.

 

No Negotiation or Solicitation

. Prior to the Closing Date, Seller and its Affiliates will not (and Seller will
cause each of its employees, officers, representatives and agents or advisors
not to and shall cause its Affiliates to cause employees, officers,
representatives and agents or advisors not to) directly or indirectly
(a) solicit, initiate, entertain, encourage or accept the submission of any
proposal, offer or any discussions relating to or that might reasonably be
expected to lead to or result in any proposal or offer from any Person relating
to the direct or indirect acquisition of the IoT Business or any portion of the
Purchased Assets (other than purchases of IoT Products or services from the IoT
Business in the ordinary course of business consistent with past practice), or
(b) participate in any discussions or negotiations regarding the IoT Business,
furnish any information with respect thereto, or assist or participate in, or
facilitate or encourage in any other manner any effort or attempt by any Person
to do or seek any of the foregoing.  Seller will notify Buyer if any Person
makes any proposal, offer, inquiry or contact with respect to any of the
foregoing promptly (and in any event within two (2) Business Days) after receipt
of any such offer or proposal, including the identity of the Person making such
proposal, offer, inquiry or contact and all material terms thereof.

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5.12Non-Competition

 

(a)Seller agrees that, as part of the consideration for the payment of the
Purchase Price, for a period of thirty-six (36) months immediately following the
Closing Date, neither Seller nor any of its Affiliates will, directly or
indirectly, as a principal, stockholder, joint venturer or otherwise, (i)
operate, perform or have any ownership interest in any business that designs,
develops, manufactures, markets, sells, installs or distributes products in
competition with the IoT Business or (ii) except in connection with patent
cross-licenses and other patent licenses entered into by Seller or an Affiliate
in connection with patent licensing activities, sales of products or settlement
of litigation, in each case in the ordinary course of business consistent with
past practice, Seller shall not knowingly grant any license to the Licensed
Intellectual Property for the purpose of enabling a third party to compete with
the IoT Business, except that Seller may purchase or otherwise acquire by
merger, purchase of assets, stock (including investing as a minority
shareholder), controlling interest or otherwise any Person or business or engage
in any similar merger and acquisition activity with any Person the primary
business of which is not in competition with the IoT Business.  For the purposes
of this Section 5.12(a), ownership of securities of a company whose securities
are publicly traded under a recognized securities exchange not in excess of ten
percent (10%) of any class of such securities shall not be considered to be
competition with the IoT Business, and a Person shall not be considered to be in
the “primary business” of competing with the IoT Business if such Person derives
less than twenty percent (20%) of its revenues from products that compete with
the IoT Business. For the avoidance of doubt, the Parties agree that the
agreements and limitations set forth in this Section 5.12 shall not apply to any
entity that acquires all or part of Seller or any of its Affiliates in any
transaction or to Seller’s purchase of any microcontroller company.

 

(b)Seller acknowledges that the restrictions set forth in Section 5.12(a)
constitute a material inducement to Buyer’s entering into and performing this
Agreement. Seller further acknowledges, stipulates and agrees that a breach of
such obligation could result in irreparable harm and continuing damage to Buyer
for which there may be no adequate remedy at Law and further agrees that in the
event of any breach of said obligation, Buyer may be entitled to injunctive
relief and to such other relief as is proper under the circumstances.

 

(c)If any provision contained in this Section shall for any reason be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Section 5.12, but
this Section 5.12 shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.  It is the intention of
the Parties that if any of the restrictions or covenants contained herein is
held to cover a geographic area or to be for a length of time which is not
permitted by applicable Law, or in any way construed to be too broad or to any
extent invalid, such provision shall not be construed to be null, void and of no
effect, but to the extent such provision would be valid or enforceable under
applicable Law, a court of competent jurisdiction shall construe and interpret
or reform this Section 5.12 to provide for a covenant having the maximum
enforceable geographic area, time period and other provisions (not greater than
those contained herein) as shall be valid and enforceable under such applicable
Law.

 

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Post-Closing Remittances

. If on or after the Closing Date, either Party receives a payment from a Third
Party (including a customer of the IoT Business) that, pursuant to the terms
hereof, should have been paid to the other Party, the Party who receives the
payment agrees to hold in trust and remit such payment to the Party entitled
thereto within five (5) Business Days of such receipt.

 

5.14Prorations and Adjustments

 

(a)Except as otherwise expressly provided herein, all ordinary course expenses
for (i) rents and other charges or amounts payable included in the Purchased
Assets and transferred to Buyer hereunder and (ii) gas, electricity, water,
sewer, rent and telephone charges at the Leased Premises, in each case, for the
period prior to the Closing Date, will be for the account of Seller and for the
period on and after the Closing Date shall be for the account of Buyer.  If any
Party actually makes any payments that are, in whole or in part, designated as
payments for the period allocated to the other Party under this Section 5.14,
such other Party shall promptly reimburse such amounts to the Party so making
such payments.

 

(b)For purposes of calculating prorations, Buyer shall be deemed to own the
Purchased Assets, and, therefore be responsible for the expense thereof, as of
12:01 a.m. local time on the day after the Closing Date.  All prorations shall
be made on the basis of the actual number of days of the month that shall have
elapsed as of the Closing Date and based upon a 365-day year.  The amount of the
prorations shall be subject to adjustment after the Closing, as and when
complete and accurate information becomes available, and the Parties agree to
cooperate and use their good faith efforts to make such adjustments.

 

5.15Financing

 

(a)Buyer shall use its reasonable best efforts to take, or cause to be taken,
all actions and do, or cause to be done, all things necessary or advisable to
arrange and obtain the proceeds of the Financing (including, to the extent
required, the full exercise of any flex provisions) at or prior to the Closing,
including using its reasonable best efforts to: (i) maintain in effect the
Commitment Letter in accordance with the terms and subject to the conditions
thereof, (ii) comply with its obligations under the Commitment Letter,
(iii) negotiate and enter into definitive agreements with respect thereto on the
terms and conditions contained in the Commitment Letter or on such other terms
and conditions no less favorable in the aggregate to Buyer (as determined by
Buyer in its reasonable discretion) than the terms and conditions contained in
the Commitment Letter, which in no event shall include such other terms or
conditions that would adversely impact or delay in any material respect the
ability of Buyer to consummate the transactions contemplated by this Agreement
or the Financing, (iv) satisfy, or cause its Representatives to satisfy, on a
timely basis, all conditions applicable to Buyer or its Representatives in the
Commitment Letter (or definitive agreements entered into with respect to the
Commitment Letter), it being understood that Buyer may seek to obtain financing
in a private placement of securities pursuant to available exemptions from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”), or in a public offering of securities pursuant to the
Securities Act in lieu of all or a portion of the Financing (and references to
the Financing in this Section 5.15(a) shall be deemed to include such private
placement or public offering, as applicable); provided, however, that (1) Buyer
shall not release or

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waive the Commitment Letter or the obligations of the arrangers and lenders
thereunder and (2) Buyer shall proceed with, and consummate, the financing
contemplated in the Commitment Letter in the event that such alternative private
placement financing or public offering financing is not available or would delay
or hinder the Closing in any material respect, (v) prepare the information
memoranda, preliminary and final offering memoranda or prospectuses,
registration statements and other materials to be used in connection with
obtaining the Financing prior to the anticipated date on which all of the
conditions in Section 8.2 have been satisfied, to the extent reasonably
practicable, and (vi) in the event that all conditions in the Commitment Letter
have been satisfied, cause the lenders and any other Persons providing financing
to fund the Financing at the Closing. 

 

(b)Without limiting the other terms and conditions of this Agreement, Buyer will
not permit any amendment, restatement, substitution, replacement, supplement or
modification to be made to, or any waiver of any provision or remedy pursuant
to, the Commitment Letter if such amendment, restatement, substitution,
replacement, supplement, modification or waiver would (i) reduce the aggregate
amount of the Financing below an amount that is necessary to consummate the
purchase of the Purchased Assets, (ii) impose new or additional conditions or
other terms to the Financing, or otherwise expand, amend or modify any of the
conditions to the receipt of the Financing, in a manner that would reasonably be
expected to (A) prevent or impede in any material respect the consummation of
the purchase of the Purchased Assets, or (B) make the funding of the Financing,
or the satisfaction of the conditions to obtaining the Financing, less likely to
occur in any material respect, or (iii) materially adversely impact the ability
of Buyer to enforce its rights against the other parties to the Commitment
Letter or the definitive agreements with respect thereto, provided, that for the
avoidance of doubt, Buyer may amend the Commitment Letter to add lenders, lead
arrangers, bookrunners, syndication agents or similar entities who had not
executed the Commitment Letter as of the date hereof.  Buyer shall furnish
Seller complete, correct and executed copies of any amendments or modifications
to the Commitment Letter. Buyer shall consult with and keep Seller reasonably
informed of the status of its efforts to arrange the Financing.  Buyer shall
give Seller prompt notice of any breach or written repudiation by any party to
the Commitment Letter of which Buyer or its Affiliates become aware.

 

(c)If any portion of the Financing becomes unavailable on the terms and
conditions contemplated by the Commitment Letter (including the flex provisions)
and such portion is required to consummate the purchase of the Purchased Assets
or the other transactions contemplated by this Agreement and the Collateral
Agreements, (A) Buyer shall promptly notify Seller of such event and the
circumstances relating thereto and (B) Buyer shall use its reasonable best
efforts to arrange and obtain any such portion from alternative sources as
promptly as practicable following the occurrence of such event on terms, taken
as whole, that are no more adverse to Buyer (including after giving effect to
the flex provisions) following the occurrence of such event. Notwithstanding the
provisions of this Section 5.15(c), the Commitment Letter may be amended,
restated, supplemented or otherwise modified or superseded at the option of
Buyer after the date of this Agreement bur prior to the Closing by instruments
that either amend, amend and restate, or replace the existing Commitment Letter
or contemplate co-investment by or financing from one or more additional
parties; provided that the terms of such new or amended commitment letters shall
not (i) reduce the aggregate amount of the Financing that is necessary to
consummate the purchase of the Purchased Assets, (ii) impose new or additional
conditions or other terms to the Financing, or otherwise expand any of the
conditions to the receipt of the Financing, in a manner

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that would reasonably be expected to (A) prevent or materially impede the
consummation of the purchase of the Purchased Assets, or (B) make the funding of
the Financing, or the satisfaction of the conditions to obtaining the Financing,
less likely to occur in any material respect, or (iii) materially adversely
impact the ability of Buyer to enforce its rights against the other parties of
the Commitment Letter or definitive agreements with respect thereto. Buyer shall
promptly notify Seller of its intention to make any such amendment or obtain
such alternative financing and keep Seller reasonably informed of the terms
thereof.  Buyer shall deliver to Seller true and correct copies of all new or
amended commitment letters (including redacted fee letters in respect of any new
or amended commitment letters).  In such event, the term “Commitment Letter” as
used herein shall be deemed to include the Commitment Letter that are not so
superseded at the time in question and the new or amended commitment letters to
the extent then in effect and the term “Financing” as used herein shall be
deemed to include the financing contemplated by any such new or amended
commitment letters.  

 

(d)Seller shall use its reasonable best efforts to, and will cause its
Affiliates to use their reasonable best efforts to, cooperate with Buyer at its
reasonable request in its efforts to consummate the Financing. Such reasonable
commercial efforts shall include, without limitation, to the extent reasonably
requested by Buyer, (i) participation by senior management of the IoT Business
in a reasonable number of meetings with prospective lenders, investors and other
Debt Financing Sources related to the Financing, (ii) providing reasonable
assistance in preparation of customary information memoranda, preliminary and
final offering memoranda or prospectuses, registration statements and other
materials to be used in connection with obtaining such Financing, (iii)
reasonably cooperating with the marketing efforts of Buyer and the Debt
Financing Sources for the Financing, including participation in a reasonable
number of management presentation sessions, due diligence sessions, drafting
sessions, “road shows” and sessions with rating agencies, (iv) providing
reasonable assistance in obtaining any consents of third parties necessary in
connection with such Financing, including any necessary accountants’ consents
and customary “comfort” letters with respect to such Financing, (v) providing
assistance in releasing Liens on the Purchased Assets to take effect at the
Closing, and (vi) cooperating with respect to matters relating to pledges of
collateral to take effect at the Closing in connection with such Financing.
Notwithstanding anything in this Agreement to the contrary, neither Seller nor
any of its Affiliates shall be required in connection with the Financing to (i)
pay any commitment or other similar fee or enter into any definitive agreement
or incur any other liability or obligation in connection with the Financing (or
any alternative financing), (ii) take any action that would conflict with or
violate Seller’s or such Affiliate’s organizational documents or any applicable
Laws or result in the contravention of, or that would reasonably be expected to
result in a violation or breach of or default under, any Contract to which
Seller or any of its Affiliates is a party, (iii) take any action that would
cause any director, officer or employee of Seller or any of its Affiliates to
incur any personal liability, or (iv) unreasonably interfere with the ongoing
operations of Seller or its Affiliates.  Buyer shall reimburse Seller, its
Affiliates and their respective Representatives for any reasonable and
documented out-of-pocket expenses and costs incurred in connection with Seller’s
or its Affiliates’ obligations under this Section 5.15(d) promptly upon
presentment of invoices therefor.  Seller, its Affiliates and their respective
Representatives (collectively, the “5.15(d) Indemnitees”) shall be indemnified
and held harmless by Buyer from and against any and all losses, damages, claims,
costs, expenses (including advancing attorneys’ fees and expenses in advance of
the final disposition of any claim, suit, proceeding or investigation),
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incurred by the 5.15(d) Indemnitees in connection with the arrangement of the
Financing (or any alternative financing) and/or any information provided by
Seller or any of its Affiliates for use in connection therewith, except to the
extent such losses, damages, claims, costs, expenses, interest, awards,
judgments or penalties arose out of or resulted from the willful misconduct or
gross negligence of any 5.15(d) Indemnitee.  Notwithstanding anything to the
contrary herein, it is understood and agreed that the condition precedent set
forth in Section 8.2(b),  as applied to Seller’s and its Affiliates’ obligations
under this Section 5.15(d), shall be deemed to be satisfied unless the financing
contemplated by the Commitment Letter has not been obtained as a direct result
of Seller’s willful and material breach of its obligations under this Section
5.15(d).     

(e)All non-public or other confidential information provided by or on behalf of
Seller, its Affiliates or any of their respective Representatives pursuant to
this Agreement will be kept confidential in accordance with the Confidentiality
Agreement, except that Buyer will be permitted to disclose such information
(i) as is legally required to be disclosed in any offering documents related to
the Financing or (ii) to any financing sources or prospective financing sources,
ratings agencies and other financial institutions and investors that are or may
become parties to the Financing and to any underwriters, initial purchasers or
placement agents in connection with the Financing (and, in each case, to their
respective counsel and auditors) so long as such Persons (x) agree in writing to
be bound by the Confidentiality Agreement as if parties thereto, or (y) are
subject to other confidentiality undertakings customary for financings of the
same type as the Financing.

 

(f)Notwithstanding anything to the contrary contained herein, Seller, on behalf
of itself and any of its Affiliates, directors, officers and employees and
solely in its capacity as a party to this Agreement, hereby waives any rights or
claims against any Debt Financing Source, solely in its capacity as a Debt
Financing Source, in connection with this Agreement, the Financing or any of the
transactions contemplated hereby or thereby, whether under law or equity
(whether in tort, contract or otherwise) or in respect of any oral or written
representations made or alleged to be made in connection with this Agreement,
the Financing or any of the transactions contemplated hereby or thereby and
Seller (on behalf of itself and any of its Affiliates, directors, officers and
employees) agrees not to commence any action or proceeding against any Debt
Financing Source, solely in its capacity as a Debt Financing Source, in
connection with this Agreement, the Financing or any of the transactions
contemplated hereby or thereby, whether under law or equity, and agrees to cause
any such action or proceeding asserted by Seller (on behalf of itself and any of
its Affiliates, directors or officers, employees) in connection with this
Agreement, the Financing or any of the transactions contemplated hereby or
thereby to be dismissed or otherwise terminated.  In furtherance and not in
limitation of the foregoing waiver, it is acknowledged and agreed that no Debt
Financing Source, solely in its capacity as a Debt Financing Source, shall have
any liability for any claims or damages to Seller in connection with this
Agreement, the Commitment Letter, the Financing, or the financing agreements or
the transactions contemplated hereby or thereby.  The provisions of this
Section 5.15(f) shall inure to the benefit of, and be enforceable by, each Debt
Financing Source, its Affiliates and their respective successors and permitted
assigns, each of which is hereby intended to be an express third party
beneficiary of this Section 5.15(f).

 

(g)Buyer agrees to pay the costs, fees and expenses incurred by Buyer or its
Affiliates in connection with the transactions contemplated pursuant to this
Agreement and the Collateral Agreements and the Financing, including, without
limitation, any legal, tax, accounting, and other advisory, broker, finder or
financial advisor costs, fees and expenses.

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(h)Buyer shall deliver the Information Memorandum (as defined in the Debt
Commitment Letter) to MLPFS on or prior to May 23, 2016. 

 

6.Confidential Nature of Information

 

Confidentiality Agreement

. Buyer agrees that the Confidentiality Agreement shall apply to (a) all
documents, materials and other information that it shall have obtained regarding
Seller 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 to the
extent that they contain or otherwise reflect or are based upon, in whole or in
part, any of the provided information; provided, however, that subject to
Section 6.2(a), the Confidentiality Agreement shall be of no further force and
effect with respect to information of Seller or its Affiliates the ownership of
which is transferred to Buyer or a Buyer Designee at the Closing.

 

6.2Seller’s Proprietary Information

 

(a)Except as provided in Section 6.2(b) and as may be permitted by the
Intellectual Property Agreement, from and after the Closing and for a period of
three (3) years following the Closing Date, Buyer agrees that it will keep
confidential all of Seller’s and its Affiliates’ Information that is received
from, or made available by, Seller in the course of the transactions
contemplated hereby, and marked or identified at the time of disclosure as the
proprietary or confidential information of Seller (“Seller Proprietary
Information”), including, for purposes of this Section 6.2, information about
the IoT 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, but excluding any Seller Proprietary Information the
ownership of which is transferred to Buyer or a Buyer Designee at the Closing as
part of the Purchased Assets.

 

(b)Notwithstanding the foregoing, such Seller Proprietary Information shall not
be deemed confidential and Buyer shall have no obligation with respect to any
such Seller Proprietary 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;

 

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(iii)is received by Buyer from a Third Party without 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 required by applicable Law (for
example, by oral  or written interrogatories, requests for information or
documents, subpoenas, civil investigative demands or other similar legal
processes) to disclose any Seller Proprietary Information to a Third Party,
Buyer will promptly notify Seller of such request or requirement and will
cooperate with Seller, at Seller’s cost and expense, in any Seller efforts to
seek an appropriate protective order or other appropriate remedy to prevent or
limit the disclosure of such Seller Proprietary Information.  If, in the absence
of a protective order or the receipt of a waiver hereunder, Buyer (or any of its
Affiliates) is required by applicable Law (for example, by oral or written
interrogatories, requests for information or documents, subpoenas, civil
investigative demands or other similar processes) to disclose Seller Proprietary
Information, Buyer (or its Affiliate) may disclose only so much of Seller
Proprietary Information to the Third Party compelling disclosure as is so
required; and such Seller Proprietary Information shall retain its
confidentiality protections for all purposes other than the compelled
disclosure.

 

6.3Buyer’s Proprietary Information

 

(a)Except as provided in Section 6.3(b), from and after the Closing Date and for
a period of three (3) years thereafter, Seller agrees that it will keep
confidential all of (i) Buyer’s and its Affiliates’ Information that is received
from, or made available by, Buyer in the course of the transactions contemplated
hereby and marked or identified at the time of disclosure as the proprietary or
confidential information of Buyer, and (ii) all of Seller’s and its Affiliates’
Information the ownership of which or exclusive use of which is transferred to
Buyer as part of the Purchased Assets (collectively, “Buyer Proprietary
Information”), including, for purposes of this Section 6.3, information about
the IoT 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, other technical and
business information and information regarding Business
Employees.  Notwithstanding the foregoing, or anything herein to the contrary,
subject to Section 6.3(b) to the extent any (x) Purchased Assets constitutes a
Trade Secret as of the date hereof (including source code, semiconductor design
files, manufacturing processes, and any IoT Trade Secrets), Seller shall
maintain such Purchased Assets as Trade Secrets indefinitely (but subject to,
for the avoidance of doubt, the exceptions set forth in Section 6.3(b)), and (y)
Licensed Intellectual Property constitutes a Trade Secret as of the date hereof
(including source code, semiconductor design files and manufacturing processes),
Seller shall maintain such Licensed Intellectual Property as Trade Secrets using
the same reasonable care and discretion as Seller uses

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with respect to its own similar Trade Secrets of like importance (but subject
to, for the avoidance of doubt, the exceptions set forth in Section 6.3(b)). 

 

(b)Notwithstanding the foregoing, such Buyer Proprietary Information regarding
the IoT Business shall not be deemed confidential and Seller shall have no
obligation with respect to any such Buyer Proprietary Information that:

 

(i)is or becomes publicly known through publication, inspection of a product, or
otherwise, and through no negligence or other wrongful act of Seller;

 

(ii)is received by Seller after the Closing Date from a Third Party without
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 Seller (or any of its Affiliates) is required by applicable Law (for
example, by oral or written interrogatories, requests for information or
documents, subpoenas, civil investigative demands or other similar legal
processes) to disclose any Buyer Proprietary Information to a Third Party,
Seller will promptly notify Buyer of such request or requirement and will
cooperate with Buyer, at Buyer’s cost and expense, in any Buyer efforts to seek
an appropriate protective order or other appropriate remedy to prevent or limit
the disclosure of such Buyer Proprietary Information.  If, in the absence of a
protective order or the receipt of a waiver hereunder, Seller (or any of its
Affiliates) is required by applicable Law (for example, by oral or written
interrogatories, requests for information or documents, subpoenas, civil
investigative demands or other similar legal processes) to disclose the Buyer
Proprietary Information, Seller (or its Affiliate) may disclose only so much of
the Buyer Proprietary Information to the Third Party compelling disclosure as is
so required; and such Buyer Proprietary Information shall retain its
confidentiality protections for all purposes other than the compelled
disclosure.

 

6.4Confidential Nature of Agreements. Except to the extent that disclosure
thereof is required under accounting, stock exchange or federal securities or
labor relations Laws regarding disclosure obligations or pursuant to legal
process (such as oral or written interrogatories, requests for information or
documents, subpoenas, civil investigative demands or other similar legal
processes), both Parties agree that the terms and conditions of this Agreement,
the Collateral Agreements and all Schedules, attachments and amendments hereto
and thereto shall be considered confidential or proprietary information
protected under this Article 6.  Notwithstanding anything in this Article 6 to
the contrary, in the event that any such Information is also subject to a
limitation on disclosure or use contained in another written agreement between
Buyer and Seller or either 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.

 

Closing

. At the Closing, the following transactions shall take place:

 

Deliveries by Seller or the Subsidiaries

. On the Closing Date, Seller shall, or shall cause a Subsidiary to, execute and
deliver to Buyer or a Buyer Designee the following:

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(a)the Collateral Agreements;

 

(b)a certificate of an appropriate officer of Seller, dated the Closing Date,
certifying the fulfillment of the conditions set forth in Sections 8.2(a) and
(b), and an incumbency certificate of an Assistant Secretary of Seller, dated
the Closing Date, in customary form; and

 

(c)all such other bills of sale, assignments and other instruments of
assignment, transfer or conveyance as Buyer or a Buyer Designee may reasonably
request or as may be otherwise necessary to evidence and effect the sale,
transfer, assignment, conveyance and delivery of the Purchased Assets to Buyer
or a Buyer Designee or to put Buyer or a Buyer Designee in actual possession or
control of the Purchased Assets; provided that all information (including
documents) capable of electronic transmission will be transmitted to Buyer or
the applicable Buyer Designee in such manner, in which case such information
shall not be transferred in any tangible form, and any inadvertent transfer of a
tangible manifestation of such information shall promptly be returned to Seller
or the applicable Subsidiary upon discovery of Buyer’s or such Buyer Designee’s
receipt thereof.

 

Deliveries by Buyer or a Buyer Designee

.  On the Closing Date, Buyer shall, or shall cause a Buyer Designee to, execute
and deliver to Seller or a Subsidiary the following:

 

(a)the Purchase Price;

 

(b)the Collateral Agreements;

 

(c)a certificate of an appropriate officer of Buyer, dated the Closing Date,
certifying the fulfillment of the conditions set forth in Sections 8.3(a) and
(b), and an incumbency certificate of an appropriate officer of Buyer, dated the
Closing Date, in customary form; and

 

(d)all such other documents and instruments as Seller or a Subsidiary may
reasonably request or as may be otherwise necessary or desirable to evidence and
effect the assumption by Buyer or a Buyer Designee of the Assumed Liabilities.

 

Closing Date

. The Closing shall take place at the offices of Seller, 1320 Ridder Park Drive,
San Jose, California, 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 (other than conditions which
can only be satisfied on 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 Seller and Buyer may agree upon in writing provided, however, that if the
Marketing Period has not ended at the time of the satisfaction or, to the extent
permissible, waiver of the conditions set forth in Section 8.2 at the Closing
(other than those conditions that by their terms are to be satisfied or waived
(if permitted hereunder), but subject to the satisfaction or waiver (to the
extent permitted hereunder) of such conditions), the Closing shall occur (i) on
the date following the satisfaction or, to the extent permissible, waiver of
such conditions that is the earliest to occur of (A) a date during the Marketing
Period to be specified by Buyer on no less than three (3) Business Days’ prior
written notice to Seller and (B) the first Business Day following the last day
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Marketing Period, or (ii) or at such other place or time or on such other date
as Seller and Buyer may agree upon in writing.  The date upon which the Closing
shall actually occur pursuant hereto is referred to herein as the “Closing
Date”.

 

Closing Effective Time and Contemporaneous Effectiveness

. The Closing shall be deemed to take place and be effective as of 12:01 a.m.
Pacific time on the Closing Date (the “Closing Effective Time”).  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

 

General Conditions

. The respective obligations of Buyer and Seller to consummate the Closing of
the transactions contemplated hereby are subject to the fulfillment, prior to or
at the Closing, of each of the following conditions:

 

(a)Legal Proceedings.  No Governmental Body shall have enacted, issued,
promulgated, enforced or entered any applicable Law which is in effect and which
prohibits consummation of the transactions contemplated by this Agreement or the
Collateral Agreements and there shall be no pending lawsuit, claim or legal
action relating to the transactions contemplated by this Agreement or any of the
Collateral Agreements which seeks to prohibit or restrict the transactions
contemplated by this Agreement.

 

(b)Antitrust Laws.  Any applicable waiting period or approvals of a Governmental
Body under applicable antitrust Laws, respectively, relating to the transactions
contemplated by this Agreement or the Collateral Agreements shall have expired
or been terminated.

 

Conditions Precedent to Buyer’s Obligations

.  The obligations of Buyer to consummate 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 True and Correct at Closing.  The
representations and warranties of Seller contained in this Agreement or in any
certificate delivered pursuant to the provisions of this Agreement that are
qualified by the words “material,” “Seller Material Adverse Effect” and similar
phrases shall be true and correct in all respects at and as of the date of this
Agreement 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
respects as of the specified date, and the representations and warranties of
Seller 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 that are not so qualified shall be true and
correct in all material respects at and as of the date of this Agreement 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

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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 Seller. Seller and/or the applicable Subsidiary shall have
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
executing the Collateral Agreements.

 

(c)Seller Material Adverse Effect.  There shall not have occurred a Seller
Material Adverse Effect from the date hereof to the Closing Date.

 

Conditions Precedent to Seller’s Obligations

.  The obligations of Seller 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
Seller:

 

(a)Representations and Warranties of Buyer True and Correct at Closing.  The
representations and warranties of Buyer contained in this Agreement or in any
certificate delivered pursuant to the provisions of this Agreement that are
qualified by the words “material,” “material adverse effect” and similar phrases
shall be true and correct in all respects at and as of the date of this
Agreement 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
respects as of the specified date, and the representations and warranties of
Buyer 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 that are not so qualified shall be true and
correct in all material respects at and as of the date of this Agreement 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 Buyer.  Buyer and/or the applicable Buyer Designee 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 prior to or at the Closing, including
executing the Collateral Agreements.

 

9.Indemnification

 

Survival of Representations and Warranties and Related Indemnification
Obligations

.  The representations and warranties of Buyer and Seller contained in this
Agreement, and the their respective rights to indemnification hereunder for any
breaches of or inaccuracies in such representations and warranties, shall
survive the Closing until the close of business on the date that is eighteen
(18) months after the Closing Date (the “Expiration Date”).  Except in the event
of fraud, neither Seller nor Buyer shall have any liability hereunder with
respect to any such

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representations or warranties, and neither Buyer nor Seller may bring any
indemnification claims arising out of any breaches of or inaccuracies in such
representations and warranties after the Expiration Date; provided, however,
that, notwithstanding anything herein to the contrary, the obligations of Buyer
or Seller to indemnify and hold harmless any Indemnified Party shall not
terminate with respect to any claim or right to indemnification as to which such
Indemnified Party shall have made in good faith and with reasonable specificity
before the Expiration Date in accordance with this Article 9, in which case such
claim or right to indemnification shall survive indefinitely until such claim
has been finally resolved.

 

9.2General Agreement to Indemnify

 

(a)Each of Seller and Buyer shall indemnify, defend and hold harmless the other
Party hereto, and Affiliates thereof, and any director, officer, employee or
agent of such other Party or Affiliates thereof (each an “Indemnified Party”)
from and against any and all claims, actions, suits, proceedings, liabilities,
obligations, losses, and damages, amounts paid in settlement, interest, costs
and expenses (including reasonable attorney’s fees, court costs and other
out-of-pocket expenses incurred in investigating, preparing or defending the
foregoing) (collectively, “Losses”) paid, sustained, incurred or suffered by any
Indemnified Party to the extent that the Losses arise by reason of, or result
from, (i) subject to Section 9.1, any breach of or any failure of any
representation or warranty of such Party contained in this Agreement to have
been true when made or to be true at and as of the Closing Date; or (ii) to the
extent not expressly waived by the other Party in writing, the breach by such
Party of any covenant or agreement of such Party contained in this Agreement.  

 

(b)Seller further agrees to indemnify and hold harmless Buyer and Affiliates
thereof, and any director, officer, employee or agent of Buyer or Affiliates
thereof (each a “Buyer Indemnified Party”) from and against any Losses paid,
sustained, incurred or suffered by any Buyer Indemnified Party arising out of,
resulting from, or relating to: (i) the Excluded Liabilities; (ii) Buyer’s
waiver of, or noncompliance with, any applicable Bulk Sales Laws and (iii) any
claim, demand or liability for Taxes relating to, pertaining to, or arising out
of the IoT Business or the Purchased Assets for any Pre-Closing Tax Period.

 

(c)Buyer further agrees to indemnify and hold harmless Seller and Affiliates
thereof, and any director, officer, employee or agent of Seller or Affiliates
thereof (each a “Seller Indemnified Party”) from and against any Losses paid,
sustained, incurred or suffered by any Seller Indemnified Party arising out of,
resulting from, or relating to: (i) any failure of Buyer to discharge any of the
Assumed Liabilities, and (ii)  any claim, demand or liability for Taxes relating
to, pertaining to, or arising out of the IoT Business or the Purchased Assets
for any Post-Closing Tax Period.

 

(d)Amounts payable in respect of the Parties’ indemnification obligations shall
be treated as an adjustment to the Purchase Price for Tax purposes and shall be
treated as such by Buyer and Seller on their Returns to the extent permitted by
law.  Whether or not the Indemnifying Party (as defined below) chooses to defend
or prosecute any Third Party Claim (as defined below), both Parties hereto shall
cooperate in the defense or prosecution thereof and shall furnish such records,
information and testimony, and attend such conferences, discovery

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proceedings, hearings, trials and appeals, as may be reasonably requested in
connection therewith or as provided in Section 5.1. 

 

(e)The amount of the Indemnifying Party’s liability under this Agreement shall
be net of any applicable insurance proceeds (net of the costs of recovery
thereof and any premium increases resulting therefrom) actually received by the
Indemnified Party that actually reduce the overall impact of the Losses upon the
Indemnified Party (it being understood, however, that the Indemnified Party
shall have no obligation to seek or procure any such insurance proceeds, whether
pursuant to the terms of this Agreement or applicable Law).  

 

(f)The Indemnifying Party’s liability for all claims made under Section 9.2(a)
(i) shall be subject to the following limitations: (i) the Indemnifying Party
shall have no liability for such claims until the aggregate amount of the Losses
incurred shall exceed $2,750,000 (the “Threshold Amount”) in which case the
Indemnifying Party shall be liable only for the portion of the indemnifiable
Losses exceeding the Threshold Amount and (ii) the Indemnifying Party’s
aggregate liability for all such claims shall not exceed $55,000,000 (the “Cap
Amount”).

 

(g)The Indemnified Party may not make a claim for indemnification under
Section 9.2(a)(i) after the Expiration Date ; provided, however, that,
notwithstanding anything herein to the contrary, so long as such Indemnified
Party shall have  made an indemnification claim in good faith and with
reasonable specificity before the Expiration Date in accordance with this
Article 9, then such claim or right to indemnification shall survive
indefinitely until such claim has been finally resolved.

 

(h)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 terms, conditions, covenants,
representations or warranties contained herein or any right, claim or action
arising from the transactions contemplated by this Agreement (but not claims
arising under any Collateral Agreement); provided, however, this exclusive
remedy for damages does not preclude a Party from bringing any action (or, in
the case of clause (ii), limit the amounts recoverable in any action) for
(i) specific performance or other equitable remedy to require a Party to perform
its obligations under this Agreement or any Collateral Agreement or (ii) fraud
or intentional misrepresentation.

 

(i)Notwithstanding anything contained in this Agreement to the contrary (but
subject to the proviso of this Section 9.2(h)), no Party shall be liable to the
other Party or any other Indemnified Party for any indirect, special, punitive
(unless paid to a Third Party), exemplary or consequential loss or damage
pursuant to arising out of an indemnification claim made under this Agreement.

 

(j)Both Parties shall mitigate their damages for which they may seek
indemnification hereunder; provided, however, that neither the foregoing nor
anything else in this Agreement will be construed to expand or extend a Party’s
common law obligation to mitigate damages to the extent required by common law.

 

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(k)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. 

 

9.3Third Party Claims

 

(a)The Indemnified Party seeking indemnification under this Agreement shall
promptly notify 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 (a “Third Party Claim”), 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 material prejudice by such failure).  The
Indemnifying Party shall have the right, but not the obligation, exercisable by
written notice to the Indemnified Party within twenty (20) days of receipt of
notice from the Indemnified Party of the commencement of or assertion of such
Third Party Claim, to assume the defense and control the settlement of any such
Third Party Claim if and only if (i) the Indemnifying Party acknowledges in
writing its obligation to indemnify the Indemnified Party for any and all
damages, losses and liabilities arising out of such Third Party Claim, (ii) such
Third Party Claim involves (and continues to involve) claims solely for money
damages and/or involves (and continues to involve) claims for both money damages
and equitable relief against the Indemnified Party that cannot be severed,
where, in the reasonable good faith opinion of Buyer, 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.  In the event
that the Indemnifying Party exercises its right to control the defense of any
Third Party Claim as provided above, then the other Party shall cooperate in
such defense and make available all witnesses, pertinent records, materials and
information in such Party’s possession and control relating thereto as is
reasonably required to by the Indemnifying Party conducting the defense.

 

(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)If the Indemnifying Party has assumed the defense of any Third Party Claim as
provided in this Agreement, the Indemnifying Party shall not settle, consent to
a settlement of, or consent to the entry of any judgment arising from, such
Third Party Claim without the Indemnified Party’s prior written consent (which
consent shall not be unreasonably withheld, conditioned or delayed) unless
(i) such settlement or judgment relates solely to monetary damages for which the
Indemnified Party has acknowledged and accepted full responsibility to indemnify
the Indemnified Party, and (ii) the terms of the settlement include a full and
unconditional release of the Indemnified Party and all of its Affiliates in
respect of the subject matter of such Third Party Claim and all related claims
and damages arising therefrom.  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 full and unconditional release
by such Third Party of the Indemnified Party.

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Indemnification Claim Procedures Generally

.  In the event an Indemnified Party shall claim a right to indemnification
pursuant to this Agreement, such Indemnified Party shall send written notice of
such indemnification claim to the Indemnifying Party; provided, however, that
the 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 material 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 be incurred.  Such notice shall be given as promptly as is reasonably
practicable 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 with particularity
the basis upon which it contests the existence or amount thereof. If the
Indemnifying Party so contests such existence or amount of part or all of such a
Loss the Indemnified Party and Indemnifying Party shall work in good faith to
resolve any dispute in respect of such Loss for a period of thirty (30) days,
after which either the Indemnified Party or Indemnifying Party may submit such
dispute to any court of competent jurisdiction.

 

10.Miscellaneous Provisions

 

Notices

.  All notices and other communications hereunder shall be in writing and shall
be deemed to have been duly given upon receipt if (i) mailed by certified or
registered mail, return receipt requested, (ii) sent by Federal Express or other
express carrier, fee prepaid, or (iii) delivered personally, addressed as
follows or to such other address or addresses of which the respective Party
shall have notified the other.

 

If to Seller, to:Broadcom Corporation

Attn: Vice President, Corporate Development

1320 Ridder Park Drive

San Jose, California  95131

United States of America

 

With a copy to:Broadcom Corporation

Attn: Senior Director, Corporate Counsel

1110 American Parkway NE

Allentown, Pennsylvania 18064

United States of America

 

If to Buyer, to:Cypress Semiconductor Corporation

Attn: General Counsel

198 Champion Court

San Jose, California  95134

United States of America

 

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With a copy (which shall not constitute notice) to:  

 

Wilson Sonsini Goodrich & Rosati

One Market Street, Spear Tower, Suite 3300

San Francisco, California 94105

United States of America

Attention: Michael S. Ringler

 

Expenses

.  Except as otherwise provided herein, each Party to this Agreement will bear
all of the fees, costs and expenses incurred by it in connection with the
transactions contemplated hereby, whether or not such transactions are
consummated.

 

Entire Agreement; Modification

.  The agreement of the Parties, which consists of this Agreement, the Schedules
and Exhibits hereto and the documents referred to herein, 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, including the Confidentiality 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 in accordance with
Section 11.3.

 

Assignment; Binding Effect; Severability

.  This Agreement may not be assigned by any Party hereto without the other
Party’s written consent; provided that Buyer may transfer or assign in whole or
in part to one or more Buyer Designee its right to purchase all or a portion of
the Purchased Assets, but no such transfer or assignment will relieve Buyer 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 commercial efforts to arrive at an accommodation that best preserves
for the Parties the benefits and obligations of the offending provision.

 

Governing Law

.  THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

 

Consent to Jurisdiction

.  Each of the Parties hereto irrevocably consents to the exclusive jurisdiction
and venue of any state and appellate court within the State of New York (or, if
any such court declines to accept jurisdiction over a particular matter, any
federal court within the State of New York)  in connection with any matter based
upon or arising out of this Agreement or the matters contemplated herein, agrees
that process may be served upon them in any manner authorized by the laws of the
State of New York for such persons and irrevocably waives, to the fullest extent
permitted by applicable Law, and covenants not to assert or plead any objection
it may

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now or hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.  Without limiting
the foregoing, each of the Parties hereto agrees that it will not bring or
support any suit, action, proceeding, cross-claim or third party claim of any
kind of description, whether in law or in equity, whether in contract or in tort
or otherwise, against Debt Financing Sources in any way relating to this
Agreement, the Financing or any of the transactions contemplated hereby or
thereby, including any dispute arising out of or relating in any way to the
Commitment Letter or any other letter or agreement related to the Financing or
the performance thereof, in any forum other than any State or Federal court
sitting in the Borough of Manhattan in the City of New York.

 

10.7Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES,
AND AGREES TO CAUSE EACH OF ITS AFFILIATES TO WAIVE, ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
INCLUDING THE FINANCING, OR THE ACTIONS OF A PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF (IN EACH CASE, INCLUDING ANY
PROCEEDING THAT INVOLVES THE DEBT FINANCING SOURCES). EACH PARTY (I) CERTIFIES
THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY OR ITS AFFILIATES WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.7.

 

Execution in Counterparts

.  This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

 

Public Announcement

.  Prior to the signing of this Agreement, Seller and Buyer shall have prepared
a mutually agreeable release announcing the transaction contemplated hereby.
Except for such press release, neither Seller nor Buyer shall, without the
approval of the other, make any press release or other 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 commercial efforts to cause a mutually agreeable
release or announcement to be issued; provided, however, that the foregoing
shall not preclude communications or disclosures necessary to comply with
accounting, stock exchange or federal securities Law disclosure obligations.

 

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 and their respective successors
or assigns any rights (including third party beneficiary rights), remedies,
obligations or liabilities under or by reason of this Agreement or
(b) constitute the Parties hereto as partners or as participants in a joint
venture, provided, that (i) the Debt Financing Sources, its Affiliates and their

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respective successors and permitted assigns shall have the right to enforce
their respective rights under Section 5.15(f), Section 10.5, Section 10.6(b),
Section 10.7, this Section 10.10 and Section 11.3 and (ii) the 5.15(d)
Indemnitees and their respective successors and permitted assigns shall have the
right to enforce their respective rights under Section 5.15(d).  Except as set
forth in the immediately preceding sentences, this Agreement shall not provide
Third Parties with any remedy, claim, liability, reimbursement, cause of action
or other right in excess of those existing without reference to the terms of
this Agreement.  Nothing in this Agreement shall be construed as giving to any
Business Employee, or any other individual, any right or entitlement to
employment or continued employment or any right or entitlement under any Benefit
Plan, policy or procedure maintained by Seller, except as expressly provided in
such Benefit Plan, policy or procedure.  No Third Party shall have any rights
under Section 502, 503 or 504 of ERISA, any comparable applicable Law of any
other jurisdiction, 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 exists 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.

 

11.Termination; Amendment and Waiver

 

Termination

.  This Agreement may be terminated at any time prior to the Closing Date by:

 

(a)Mutual Consent.  The mutual written consent of Buyer and Seller;

 

(b)Failure of Buyer Condition.  Buyer upon written notice to Seller if any of
the conditions to the Closing set forth in Section 8.2 shall have become
incapable of fulfillment by the Termination Date and shall not have been waived
in writing by Buyer;

 

(c)Failure of Seller Condition.  Seller 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 by the Termination Date and shall not have been waived
in writing by Seller;

 

(d)Court or Administrative Order.  Buyer or Seller if (i) there shall be in
effect a final, non-appealable order of a Governmental Body of competent
jurisdiction prohibiting the consummation of the transactions contemplated
hereby or (ii) if there shall be any Law that makes consummation of the
transactions contemplated hereby illegal or otherwise prohibited; or

 

(e)Delay. Buyer or Seller if the Closing shall not have occurred on or prior to
the date that is four (4) months from the date hereof (the “Termination Date”);
provided, however, that the Party seeking termination pursuant to clause (e) is
not then in breach in any material respect of any of its covenants or agreements
contained in this Agreement.

 

Effect of Termination

.  In the event of the termination of this Agreement in accordance with
Section 11.1, this Agreement shall become void and have no effect, without any
liability on the part of any Party or its directors, officers or stockholders,
except for the obligations of the Parties hereto as provided in Section 5.15(d)
relating to the expense reimbursement and

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indemnification obligations of Buyer, Article 6 relating to the obligations of
Buyer and Seller to keep confidential certain information, Section 10.2 relating
to certain expenses, Section 10.9 relating to publicity and this Section
11.2.  Nothing in this Section 11.2 shall be deemed to release either Party from
any liability for any material breach of any representation, warranty, covenant
or agreement hereunder prior to termination or any fraud.

 

Amendment and Waiver

.  The Agreement may be amended with respect to any provision contained herein
at any time prior to the Closing Date by action of the Parties hereto taken by
their Boards of Directors or by their duly authorized officers or employees,
whether before or after such Party’s action. Any term or condition hereof may be
waived and at any time prior to the Closing Date 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, whether before or after the action of
such Party. Any such amendment or waiver shall be evidenced by a written
instrument duly executed on behalf of each 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. Notwithstanding anything herein to the contrary, any
amendment or modification of Section 5.15(f), Section 10.5, Section 10.6(b),
Section 10.7, Section 10.10, or this Section 11.3 that is materially adverse to
the Debt Financing Sources under the financing commitments shall not be made
without the prior written consent of such Debt Financing Sources.

 

[SIGNATURES PAGE FOLLOWS]

 

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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.

 

BROADCOM CORPORATION

 

 

 

By: /s/ Thomas H. Krause, Jr.

Name:Thomas H. Krause, Jr.

Title:Acting Chief Financial Officer

 

CYPRESS SEMICONDUCTOR
CORPORATION

 

 

 

By: /s/ T.J. Rodgers

Name: T.J. Rodgers

Title: President and Chief Executive Officer

 

Broadcom and Cypress Semiconductor Confidential