Exhibit 10.4
     
 
MASTER AGREEMENT
BY AND BETWEEN
STMICROELECTRONICS N.V.,
INTEL CORPORATION,
REDWOOD BLOCKER S.A.R.L.,
AND
FRANCISCO PARTNERS II (CAYMAN) L.P.
MAY 22, 2007
     
 

 

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TABLE OF CONTENTS

              Page
ARTICLE I DEFINITIONS
    2  
 
       
1.1      Definitions
    2  
 
       
1.2      Defined Terms Generally
    2  
 
       
ARTICLE II AGREEMENTS
    2  
 
       
2.1      Intel Asset Transfer
    2  
 
       
2.2      ST Asset Contribution
    2  
 
       
2.3      FP Share Purchase
    3  
 
       
2.4      Other Agreements among the Parties and Newco
    3  
 
       
2.5      Closing
    3  
 
       
ARTICLE III REPRESENTATIONS AND WARRANTIES
    3  
 
       
3.1      Intel Representations
    3  
 
       
3.2      ST Representations
    6  
 
       
3.3      FP and FP Holdco Representations
    8  
 
       
ARTICLE IV COVENANTS
    11  
 
       
4.1      Access to Information
    11  
 
       
4.2      Exclusive Dealing
    11  
 
       
4.3      Reasonable Efforts
    12  
 
       
4.4      Certain Consents and Filings; Further Assurances
    12  
 
       
4.5      Press Releases
    13  
 
       
4.6      Certain Deliveries and Notices
    13  
 
       
4.7      Non-Solicitation of Employees
    13  
 
       
4.8      Tax Matters
    14  
 
       
4.9      Operation of the Intel Business Prior to the Closing
    15  

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              Page
4.10      Operation of the ST Business Prior to the Closing
    17  
 
       
4.11      Employee Matters
    20  
 
       
4.12      Additions to and Modifications of Schedules
    22  
 
       
4.13      Third Party Appraisal and Allocation; Dutch Auditors
    24  
 
       
4.14      Notices of Certain Intel Events
    25  
 
       
4.15      Notices of Certain ST Events
    25  
 
       
4.16      Newco Formation and Preparation
    26  
 
       
4.17      Newco Tax Election
    28  
 
       
4.18      Newco Closing Reorganization
    28  
 
       
4.19      Cooperation with Financing
    28  
 
       
4.20      Environmental Consultants
    29  
 
       
4.21      Hynix JV Matters
    29  
 
       
4.22      Facility Transfer Term Sheets
    29  
 
       
4.23      Governmental Consents
    29  
 
       
4.24      Release of Liens
    29  
 
       
4.25      ST Litigation
    29  
 
       
4.26      Intel Litigation
    30  
 
       
4.27      Confidentiality Agreement
    30  
 
       
4.28       Further Assurances
    30  
 
       
ARTICLE V CONDITIONS TO CLOSING
    30  
 
       
5.1      Conditions to Obligations of Intel
    30  
 
       
5.2      Conditions to Obligations of ST
    32  
 
       
5.3      Conditions to Obligations of FP and FP Holdco
    34  
 
       
ARTICLE VI TERMINATION
    36  
 
       
6.1       Grounds for Termination
    36  

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              Page
6.2      Effect of Termination
    38  
 
       
6.3      Termination of Representations and Warranties and Covenants Upon the
Closing
    39  
 
       
6.4      Exclusive Remedy
    40  
 
       
ARTICLE VII MISCELLANEOUS
    40  
 
       
7.1       Notices
    40  
 
       
7.2       Amendments; Waivers
    42  
 
       
7.3       Expenses
    43  
 
       
7.4       Successors and Assigns
    43  
 
       
7.5       Governing Law
    43  
 
       
7.6       Counterparts; Effectiveness
    43  
 
       
7.7      Entire Agreement
    43  
 
       
7.8      Captions
    43  
 
       
7.9       Severability
    43  
 
       
7.10       Dispute Resolution
    44  
 
       
7.11       Waiver of Jury Trial
    46  
 
       
7.12       Third Party Beneficiaries
    46  
 
       
7.13       Specific Performance
    47  
 
       
7.14       No Presumption Against Drafting Party
    47  

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MASTER AGREEMENT
     THIS MASTER AGREEMENT, dated as of May 22, 2007 (the “Master Agreement”
and, as referred to herein, this “Agreement”), is entered into by and among
Intel Corporation, a Delaware corporation (“Intel”), STMicroelectronics N.V., a
limited liability company organized under the laws of The Netherlands, with its
corporate seat in Amsterdam, The Netherlands (“ST”), Redwood Blocker S.a.r.l., a
limited liability company organized under the laws of The Grand-Duchy of
Luxembourg (“FP”), and Francisco Partners II (Cayman) L.P., an exempted limited
partnership organized under the laws of the Cayman Islands (“FP Holdco”). Intel,
ST, FP and FP Holdco are sometimes referred to herein as the “Parties” and each
individually as a “Party.”
     A. Intel currently designs, manufactures and produces the Intel Products
for use in various consumer electronics and other end applications.
     B. ST currently designs, manufactures and produces the ST Products for use
in various consumer electronics and other end applications.
     C. The parties desire to form a company under the laws of The Netherlands
(“Newco”), on the terms and conditions set forth in this Agreement.
     D. Intel desires to transfer, and to cause certain of its Affiliates to
transfer to Newco and its Affiliates, the Intel Transferred Assets in
consideration for the issuance by Newco of the Intel Newco Shares, the payment
by Newco of the Intel Cash Consideration, and the assumption by Newco or its
Affiliates of the Intel Transferred Liabilities, all on the terms and conditions
set forth in the Intel Asset Transfer Agreement, the Intel Ancillary Agreements
and this Agreement.
     E. ST desires to transfer, and to cause certain of its Affiliates to
transfer to Newco and its Affiliates, the ST Transferred Assets in consideration
for the issuance by Newco of the ST Newco Shares, the payment by Newco of the ST
Cash Consideration, and the assumption by Newco or its Affiliates of the ST
Transferred Liabilities, all on the terms and conditions set forth in the ST
Asset Contribution Agreement, the ST Ancillary Agreements and this Agreement.
     F. FP desires to invest in Newco by purchasing and accepting from Newco the
FP Newco Shares, on the terms and conditions set forth in the Share Purchase
Agreement.
     G. The Parties desire to enter into various agreements with one another and
with Newco, to set forth the ongoing governance and operating relationships
among the Parties and Newco relating to the business of Newco, all as
contemplated by this Agreement.
     NOW THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

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ARTICLE I
DEFINITIONS
     1.1 Definitions. Capitalized terms used in this Agreement shall have the
respective meanings ascribed to such terms in Appendix A to this Agreement.
     1.2 Defined Terms Generally. The definitions set forth in Appendix A or
otherwise referred to in this Agreement shall apply equally to both the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words “include”, “includes” and “including” shall be deemed to be followed
by the phrase “without limitation”. All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed to be references to Articles and Sections
of, and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. Unless the context shall otherwise require, any reference to
any contract, instrument, statute, rule or regulation is a reference to it as
amended and supplemented from time to time (and, in the case of a statute, rule
or regulation, to any successor provision). Any reference in this Agreement to a
“day” or a number of “days” (without the explicit qualification of “Business”)
shall be interpreted as a reference to a calendar day or number of calendar
days.
ARTICLE II
AGREEMENTS
     2.1 Intel Asset Transfer. On the Closing Date, at the Closing, subject to
(a) the fulfillment, or waiver by Intel, of each condition to the obligation of
Intel to consummate the transactions contemplated by this Agreement, (b) the
fulfillment, or waiver by ST, of each condition to the obligation of ST to
consummate the transactions contemplated by this Agreement and (c) the
fulfillment, or waiver by FP and FP Holdco, of each condition to the obligation
of FP and FP Holdco to consummate the transactions contemplated by this
Agreement, Intel shall, and the Parties shall cause Newco to, execute and
deliver the Intel Asset Transfer Agreement, substantially in the form attached
to Schedule 2.1 of the Intel Master Agreement Disclosure Letter and the Intel
Ancillary Agreements contemplated thereby to which each, respectively, is a
party, and Intel shall, and the Parties shall cause Newco to, consummate and
cause their Affiliates to consummate, as applicable, each of the transactions
contemplated by the Intel Asset Transfer Agreement and the Intel Ancillary
Agreements to be consummated at the Closing.
     2.2 ST Asset Contribution. On the Closing Date, at the Closing, subject to
(a) the fulfillment, or waiver by ST, of each condition to the obligation of ST
to consummate the transactions contemplated by this Agreement, (b) the
fulfillment, or waiver by Intel, of each condition to the obligation of Intel to
consummate the transactions contemplated by this Agreement and (c) the
fulfillment, or waiver by FP and FP Holdco, of each condition to the obligation
of FP and FP Holdco to consummate the transactions contemplated by this
Agreement, ST shall, and the Parties shall cause Newco to, execute and deliver
the ST Asset Contribution Agreement, substantially in the form attached to
Schedule 2.2 of the ST Master Agreement Disclosure Letter and the ST Ancillary
Agreements contemplated thereby to which each, respectively, is a party, and ST
shall, and the Parties shall cause Newco to, consummate and cause their
Affiliates to consummate, as applicable, each of the transactions contemplated
by

2

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the ST Asset Contribution Agreement and the ST Ancillary Agreements to be
consummated at the Closing.
     2.3 FP Share Purchase. On the Closing Date, at the Closing, subject to
(a) the fulfillment, or waiver by FP and FP Holdco, of each condition to the
obligations of FP and FP Holdco to consummate the transactions contemplated by
this Agreement, (b) the fulfillment, or waiver by Intel, of each condition to
the obligation of Intel to consummate the transactions contemplated by this
Agreement and (c) the fulfillment, or waiver by ST, of each condition to the
obligation of ST to consummate the transactions contemplated by this Agreement,
FP shall, and the Parties shall cause Newco to, execute and deliver the Share
Purchase Agreement, substantially in the form attached to Schedule 2.3 of each
of the Master Agreement Disclosure Letters and consummate each of the
transactions contemplated by the Share Purchase Agreement to be consummated at
the Closing.
     2.4 Other Agreements among the Parties and Newco. Except as otherwise set
forth herein, on the Closing Date, at the Closing, the Parties shall, and shall
cause (a) each of their respective Affiliates and (b) Newco to, as the case may
be, execute and deliver the agreements identified on Schedule 2.4 to each of the
Master Agreement Disclosure Letters to which each, respectively, is a party,
substantially in the form attached thereto, to the extent such Party, Affiliate
or Newco is a party to such respective agreements.
     2.5 Closing. The closing of the transactions contemplated by this Agreement
(the “Closing”) shall take place at the offices of Gibson, Dunn & Crutcher LLP,
Palo Alto, California, as soon as possible, but in no event later than five
Business Days, after fulfillment of the conditions set forth in Article V hereof
to each Party’s obligation to close the transactions contemplated by this
Agreement or the waiver thereof by such Party, or at such other time or place as
the Parties may agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
     3.1 Intel Representations. Except as set forth in the Intel Master
Agreement Disclosure Letter, Intel represents and warrants to ST, FP and FP
Holdco, as of the date of this Agreement, as follows:
     (a) Existence and Good Standing. Intel is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all corporate power and authority required to carry on its
business as now conducted and to own and operate its business as now owned and
operated by it. Intel is qualified to conduct business and is in good standing
in each jurisdiction in which it conducts business other than such jurisdictions
where the failure to be so qualified would not reasonably be expected to have an
Intel Material Adverse Effect.
     (b) Authorization; Enforceability. Intel has all requisite corporate power
and authority to execute and deliver this Agreement and each of the Transaction
Documents to which it is or will be a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and

3

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delivery by Intel of this Agreement and each of the Transaction Documents to
which Intel is a party, and the performance by Intel of its obligations
contemplated hereby and thereby, have been duly and validly authorized by all
necessary corporate action. This Agreement has been and, when executed at the
Closing, the other Transaction Documents will have been, duly and validly
executed and delivered by Intel and, assuming the due execution and delivery of
this Agreement and the other Transaction Documents to which it is a party by the
other parties thereto, this Agreement constitutes, and as of the Closing, each
of the Transaction Documents to which Intel is a party will constitute, the
legal, valid and binding agreement of Intel, enforceable against Intel in
accordance with their respective terms, except to the extent (i) that their
enforceability may be subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors’ rights generally or to general principles of equity or
(ii) indemnification provisions contained in the Shareholders’ Agreement may be
limited by applicable securities laws.
     (c) Governmental Authorization. Other than the Intel Approvals, the
execution, delivery and performance by Intel of this Agreement and the other
Transaction Documents to which it is a party, and the consummation by it of the
transactions contemplated hereby and thereby, require no Governmental Approval.
     (d) Non-Contravention; Consents.
     (i) The execution, delivery and performance by Intel of this Agreement and
the other Transaction Documents to which Intel is a party, and the consummation
of the transactions contemplated hereby and thereby, do not and will not:
(A) contravene or conflict with the certificate of incorporation, bylaws or
other organizational documents of Intel; (B) assuming receipt of the Intel
Approvals, the Newco Approvals and the Intel Contractual Consents, contravene or
conflict with or constitute a material violation of any provision of any
Applicable Law binding upon or applicable to Intel, the Intel Transferred
Assets; or (C) assuming receipt of the Intel Approvals and of the Intel
Contractual Consents, (1) constitute a default under, give rise to any right of
termination, cancellation, modification, acceleration of, or a loss of any
benefit under any Intel Contract, including the Intel Transferred Contracts,
(2) result in the creation or imposition of any Lien (other than Permitted
Liens) on any Intel Transferred Asset or the assets of any Intel Transferred
Entity, or (3) constitute a breach, default or violation of any settlement
agreement, judgment, injunction or decree, except in the case of clause (B) or
(C), for matters that would not reasonably be expected to have an Intel Material
Adverse Effect (provided that in determining whether an Intel Material Adverse
Effect would result, any adverse effect otherwise excluded by clause (C) of the
definition of “Intel Material Adverse Effect” shall be taken into account).
     (ii) The execution, delivery and performance by Intel of this Agreement and
the other Transaction Documents to which Intel is a party, and the consummation
of the transactions contemplated hereby and thereby, do not and will not, as of
the Closing Date, constitute a default under, give rise to any right of

4

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termination, cancellation, modification, acceleration of, or a loss of any
material benefit under, any Contract identified on Schedule 3.1(d)(ii) of the
Intel Master Agreement Disclosure Letter; provided, however, that for the
avoidance of doubt, the Parties acknowledge and agree that the representations
and warranties set forth in this Section 3.1(d)(ii) shall not be deemed to be
untrue or inaccurate in any respect as a result of (A) any action or omission by
Newco that constitutes or results in a default by Intel or any Intel Affiliate
or gives rise to any right of termination, cancellation, modification,
acceleration of, or a loss of any material benefit under any such Contact; and
(B) any withdrawal or voiding after the Closing of any consent granted prior to
the Closing by a party to such Contract, which withdrawal or voiding purports to
have retroactive effect to the Closing.
     (e) Litigation. As of the date hereof, there is no Proceeding or, to the
Knowledge of Intel, investigation pending or, to the Knowledge of Intel,
threatened in writing, by or against Intel or any of Intel’s Subsidiaries
seeking to prevent, enjoin, alter or delay the transactions contemplated by this
Agreement or any of the other Transaction Documents or encumber the Intel
Transferred Interests.
     (f) Incorporation by Reference of Additional Representations and
Warranties. As of the date hereof (except that with respect to any
representation and warranty that specifies another date, such representation and
warranty shall be made as of such specified date), subject to the exceptions set
forth in the Intel ATA Disclosure Letter, Intel hereby represents and warrants
that each of the representations and warranties set forth in Sections 3.1-3.24
of the Intel Asset Transfer Agreement attached to Schedule 2.1 of the Intel
Master Agreement Disclosure Letter are true and correct. Upon the consummation
of the Closing, the provisions of this Section 3.1(f) shall terminate and cease
to be of any further force or effect, as if never made, and no action may be
brought based on the same, whether for indemnification, breach of contract, tort
or under any other legal theory.
     (g) Reliance. Intel has conducted such investigation and inspection of the
ST Transferred Assets, the ST Transferred Liabilities, the ST Business and the
ST Products that Intel has deemed necessary or appropriate for the purpose of
entering into this Agreement and the other Transaction Documents and
consummating the transactions contemplated hereby and thereby. In executing this
Agreement and the other Transaction Documents to which it is a party, Intel is
relying on its own investigation and on the provisions set forth herein and
therein and not on any other statements, presentations, representations,
warranties or assurances of any kind made by ST, FP, any of their
representatives or any other Person. Intel acknowledges that (i) the
representations and warranties of (A) ST contained in Section 3.2 hereof and
(B) FP and FP Holdco contained in Section 3.3 hereof, constitute the sole and
exclusive representations and warranties of each such Party to Intel in
connection with this Agreement and the transactions contemplated hereby, and
(ii) all other representations and warranties are specifically disclaimed and
may not be relied upon or serve as a basis for a claim against ST or FP. INTEL
ACKNOWLEDGES THAT ST DISCLAIMS ALL WARRANTIES OTHER THAN THOSE EXPRESSLY
CONTAINED IN SECTION 3.2 AS TO THE ST TRANSFERRED ASSETS, WHETHER EXPRESS OR
IMPLIED, ORAL OR

5

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WRITTEN, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR WARRANTY FOR FITNESS FOR A
PARTICULAR PURPOSE. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED
EXPRESSLY IN SECTION 3.2 , NEWCO WILL ACQUIRE THE ST TRANSFERRED ASSETS ON AN
“AS IS, WHERE IS” BASIS. FROM AND AFTER THE CLOSING, INTEL SHALL HAVE NO RIGHTS
OR REMEDIES FOR OR WITH RESPECT TO ANY BREACH BY ST OF ITS REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTION 3.2(f) OF THIS AGREEMENT, AND INTEL SHALL HAVE
NO RIGHTS OR REMEDIES FOR OR WITH RESPECT TO ANY BREACH OF ANY PROVISION OF THE
SHARE PURCHASE AGREEMENT OR THE ST ASSET CONTRIBUTION AGREEMENT (INCLUDING THE
REPRESENTATIONS, WARRANTIES AND INDEMNITIES SET FORTH IN SUCH AGREEMENTS);
PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL AFFECT NEWCO’S RIGHTS AND REMEDIES
FOR OR WITH RESPECT TO ANY BREACH OF SUCH AGREEMENTS.
     3.2 ST Representations. Except as set forth in the ST Master Agreement
Disclosure Letter, ST represents and warrants to Intel, FP and FP Holdco, as of
the date of this Agreement, as follows:
     (a) Existence and Good Standing. ST is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all corporate power and authority required to carry on its
business as now conducted and to own and operate its business as now owned and
operated by it. ST is qualified to conduct business and is in good standing in
each jurisdiction in which it conducts business other than such jurisdictions
where the failure to be so qualified would not reasonably be expected to have an
ST Material Adverse Effect.
     (b) Authorization; Enforceability. ST has all requisite corporate power and
authority to execute and deliver this Agreement and each of the Transaction
Documents to which it is or will be a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by ST of this Agreement and each of the
Transaction Documents to which ST is a party, and the performance by ST of its
obligations contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate action. This Agreement has been and, when
executed at the Closing, the other Transaction Documents will have been, duly
and validly executed and delivered by ST and, assuming the due execution and
delivery of this Agreement and the other Transaction Documents to which it is a
party by the other parties thereto, this Agreement constitutes, and as of the
Closing, each of the Transaction Documents to which ST is a party will
constitute, the legal, valid and binding agreement of ST, enforceable against ST
in accordance with their respective terms, except to the extent (i) that their
enforceability may be subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors’ rights generally or to general principles of equity or (ii)
indemnification provisions contained in the Shareholders’ Agreement may be
limited by applicable securities laws.

6

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     (c) Governmental Authorization. Other than the ST Approvals, the execution,
delivery and performance by ST of this Agreement and the other Transaction
Documents to which it is a party, and the consummation by it of the transactions
contemplated hereby and thereby, require no Governmental Approval.
     (d) Non-Contravention; Consents.
     (i) The execution, delivery and performance by ST of this Agreement and the
other Transaction Documents to which ST is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not:
(A) contravene or conflict with the articles of association, governance rules or
other organizational documents of ST; (B) assuming receipt of the ST Approvals
the Newco Approvals and the ST Contractual Consents, contravene or conflict with
or constitute a material violation of any provision of any Applicable Law
binding upon or applicable to ST, the ST Transferred Assets or the ST
Transferred Entities; or (C) assuming receipt of the ST Approvals and of the ST
Contractual Consents, (1) constitute a default under, give rise to any right of
termination, cancellation, modification, acceleration of, or a loss of any
benefit under any ST Contract, including the ST Transferred Contracts,
(2) result in the creation or imposition of any Lien (other than Permitted
Liens) on any ST Transferred Asset, or (3) constitute a breach, default or
violation of any settlement agreement, judgment, injunction or decree, except in
the case of clause (B) or (C), for matters that would not reasonably be expected
to have an ST Material Adverse Effect (provided that in determining whether an
ST Material Adverse Effect would result, any adverse effect otherwise excluded
by clause (C) of the definition of “ST Material Adverse Effect” shall be taken
into account).
     (ii) The execution, delivery and performance by ST of this Agreement and
the other Transaction Documents to which ST is a party, and the consummation of
the transactions contemplated hereby and thereby, to the Knowledge of ST, do not
and will not, as of the Closing Date: (A) contravene or conflict with the
articles of association, joint venture agreement or other organizational or
governing documents of the Hynix JV; or (B) constitute a default under, give
rise to any right of termination, cancellation, modification, acceleration of,
or a loss of any material benefit under, the Hynix JV Junior Credit Agreement or
any other contract or agreement between ST or any Subsidiary of ST and the Hynix
JV.
     (e) Litigation. As of the date hereof, there is no Proceeding or to the
Knowledge of ST, investigation pending or, to the Knowledge of ST, threatened in
writing, by or against ST or any of ST’s Subsidiaries seeking to prevent,
enjoin, alter or delay the transactions contemplated by this Agreement or any of
the other Transaction Documents or encumber the ST Transferred Interests.
     (f) Incorporation by Reference of Additional Representations and
Warranties. As of the date hereof (except that with respect to any
representation and warranty that specifies another date, such representation and
warranty shall be made as of such

7

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specified date), subject to the exceptions set forth in the ST ATA Disclosure
Letter, ST hereby represents and warrants that each of the representations and
warranties set forth in Sections 3.1-3.24 of the ST Asset Contribution Agreement
attached to Schedule 2.2 of the ST Master Agreement Disclosure Letter are true
and correct. Upon the consummation of the Closing, the provisions of this
Section 3.2(f) shall terminate and cease to be of any further force or effect,
as if never made, and no action may be brought based on the same, whether for
indemnification, breach of contract, tort or under any other legal theory.
     (g) Reliance. ST has conducted such investigation and inspection of the
Intel Transferred Assets, the Intel Transferred Liabilities, the Intel Business
and the Intel Products that ST has deemed necessary or appropriate for the
purpose of entering into this Agreement and the other Transaction Documents and
consummating the transactions contemplated hereby and thereby. In executing this
Agreement and the other Transaction Documents to which it is a party, ST is
relying on its own investigation and on the provisions set forth herein and
therein and not on any other statements, presentations, representations,
warranties or assurances of any kind made by Intel, FP, any of their
representatives or any other Person. Intel acknowledges that (i) the
representations and warranties of (A) Intel contained in Section 3.1 hereof and
(B) FP and FP Holdco contained in Section 3.3 hereof constitute the sole and
exclusive representations and warranties of each such Party to ST in connection
with this Agreement and the transactions contemplated hereby, and (ii) all other
representations and warranties are specifically disclaimed and may not be relied
upon or serve as a basis for a claim against Intel or FP. ST ACKNOWLEDGES THAT
INTEL DISCLAIMS ALL WARRANTIES OTHER THAN THOSE EXPRESSLY CONTAINED IN SECTION
3.1 AS TO THE INTEL TRANSFERRED ASSETS, WHETHER EXPRESS OR IMPLIED, ORAL OR
WRITTEN, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR WARRANTY FOR FITNESS FOR A
PARTICULAR PURPOSE. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED
EXPRESSLY IN SECTION 3.1, NEWCO WILL ACQUIRE THE INTEL TRANSFERRED ASSETS ON AN
“AS IS, WHERE IS” BASIS. FROM AND AFTER THE CLOSING, ST SHALL HAVE NO RIGHTS OR
REMEDIES FOR OR WITH RESPECT TO ANY BREACH BY INTEL OF ITS REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTION 3.1(f) OF THIS AGREEMENT, AND ST SHALL HAVE NO
RIGHTS OR REMEDIES FOR OR WITH RESPECT TO ANY BREACH OF ANY PROVISION OF THE
SHARE PURCHASE AGREEMENT OR THE INTEL ASSET TRANSFER AGREEMENT (INCLUDING THE
REPRESENTATIONS, WARRANTIES AND INDEMNITIES SET FORTH IN SUCH AGREEMENTS);
PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL AFFECT NEWCO’S RIGHTS AND REMEDIES
FOR OR WITH RESPECT TO ANY BREACH OF SUCH AGREEMENTS.
     3.3 FP and FP Holdco Representations. Each of FP and FP Holdco represents
and warrants to Intel and ST, as of the date of this Agreement, as follows:
     (a) Existence and Good Standing. FP is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and FP Holdco is a limited partnership duly organized, validly
existing and in good standing

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under the laws of its jurisdiction of organization and each has all power and
authority required to carry on its business as now conducted and to own and
operate its business as now owned and operated by it. Each of FP and FP Holdco
is qualified to conduct business and is in good standing in each jurisdiction in
which such qualification is required other than such jurisdictions where the
failure to be so qualified would not reasonably be expected to have an FP
Material Adverse Effect.
     (b) Authorization; Enforceability. Each of FP and FP Holdco has all
requisite power and authority to execute and deliver this Agreement and each of
the Transaction Documents to which it is or will be a party, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by each of FP and FP
Holdco of this Agreement and each of the Transaction Documents to which FP or FP
Holdco is a party, and the performance by each of FP and FP Holdco of its
obligations contemplated hereby and thereby, have been duly and validly
authorized by all necessary action. This Agreement has been and, when executed
at the Closing, the other Transaction Documents will have been, duly and validly
executed and delivered by each of FP and FP Holdco and, assuming the due
execution and delivery of this Agreement and the other Transaction Documents to
which it is a party by the other Parties thereto, this Agreement constitutes,
and as of the Closing, each of the Transaction Documents to which each of FP and
FP Holdco is a party will constitute, the legal, valid and binding agreement of
each of FP and FP Holdco, enforceable against FP and FP Holdco in accordance
with their respective terms, except to the extent that (i) their enforceability
may be subject to any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to creditors’
rights generally or to general principles of equity or (ii) indemnification
provisions contained in the Shareholders’ Agreement may be limited by applicable
securities laws.
     (c) Governmental Authorization. Other than the Intel Approvals, the ST
Approvals and compliance with any applicable Competition Laws, the execution,
delivery and performance by each of FP and FP Holdco of this Agreement and the
other Transaction Documents to which it is a party, and the consummation by it
of the transactions contemplated hereby and thereby, require no Governmental
Approval.
     (d) Non-Contravention; Consents. The execution, delivery and performance by
each of FP and FP Holdco of this Agreement and the other Transaction Documents
to which each of FP and FP Holdco is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not:
(i) contravene or conflict with the certificate of incorporation or bylaws of FP
or the partnership agreement and other organizational documents of FP Holdco,
(ii) assuming receipt of the Intel Approvals, the ST Approvals, the Newco
Approvals and compliance with applicable Competition Laws, contravene or
conflict with or constitute a material violation of any provision of any
Applicable Law binding upon or applicable to FP or FP Holdco, or (iii) assuming
receipt of the Intel Approvals, the ST Approvals, the Newco Approvals and
compliance with applicable Competition Laws, contravene or constitute a default
under any material agreement to which FP or FP Holdco is a party, except in the
case of clause (ii) or (iii), for matters that would not reasonably be expected
to have an FP Material Adverse Effect.

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     (e) Litigation. As of the date hereof, there is no Proceeding or to the
Knowledge of FP or FP Holdco, investigation, pending or, to the Knowledge of FP
or FP Holdco, threatened in writing, by or against FP or FP Holdco seeking to
prevent, enjoin, alter or delay the transactions contemplated by this Agreement
or any of the other Transaction Documents.
     (f) Reliance. Each of FP and FP Holdco has conducted such investigation and
inspection of the Intel Transferred Assets, the Intel Transferred Liabilities,
the Intel Business, the Intel Products, the ST Transferred Assets, the ST
Transferred Liabilities, the ST Business and the ST Products that FP and FP
Holdco, respectively, has deemed necessary or appropriate for the purpose of
entering into this Agreement and the other Transaction Documents and
consummating the transactions contemplated hereby and thereby. In executing this
Agreement and the other Transaction Documents to which it is a party, each of FP
and FP Holdco is relying on its own investigation and on the provisions set
forth herein and therein and not on any other statements, presentations,
representations, warranties or assurances of any kind made by Intel, ST, their
representatives or any other Person. Each of FP and FP Holdco acknowledges that
(i) the representations and warranties of (A) Intel contained in Section 3.1
hereof and (B) ST contained in Section 3.2 hereof constitute the sole and
exclusive representations and warranties of each such Party to FP and FP Holdco
in connection with this Agreement and the transactions contemplated hereby, and
(ii) all other representations and warranties are specifically disclaimed and
may not be relied upon or serve as a basis for a claim against Intel or ST. EACH
OF FP AND FP HOLDCO ACKNOWLEDGES THAT INTEL AND ST DISCLAIM ALL WARRANTIES OTHER
THAN THOSE EXPRESSLY CONTAINED IN SECTION 3.1 AND SECTION 3.2, RESPECTIVELY, THE
INTEL ASSET TRANSFER AGREEMENT AND THE ST ASSET CONTRIBUTION AGREEMENT AS TO THE
INTEL TRANSFERRED ASSETS AND ST TRANSFERRED ASSETS, RESPECTIVELY, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, INCLUDING ANY WARRANTY OF MERCHANTABILITY
OR WARRANTY FOR FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR THE REPRESENTATIONS
AND WARRANTIES CONTAINED EXPRESSLY IN SECTION 3.1 AND SECTION 3.2, RESPECTIVELY,
NEWCO WILL ACQUIRE THE INTEL TRANSFERRED ASSETS AND ST TRANSFERRED ASSETS,
RESPECTIVELY, ON AN “AS IS, WHERE IS” BASIS. FROM AND AFTER THE CLOSING, NEITHER
FP NOR FP HOLDCO SHALL HAVE ANY RIGHTS OR REMEDIES FOR OR WITH RESPECT TO ANY
BREACH BY (I) INTEL OF ITS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION
3.1(f) OF THIS AGREEMENT AND (II) ST OF ITS REPRESENTATIONS AND WARRANTIES SET
FORTH IN SECTION 3.2(f) OF THIS AGREEMENT. NEITHER FP NOR FP HOLDCO SHALL HAVE
ANY RIGHTS OR REMEDIES FOR OR WITH RESPECT TO ANY BREACH OF ANY PROVISION OF THE
INTEL ASSET TRANSFER AGREEMENT OR THE ST ASSET CONTRIBUTION AGREEMENT (INCLUDING
THE REPRESENTATIONS, WARRANTIES AND INDEMNITIES SET FORTH IN SUCH AGREEMENTS);
PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL AFFECT NEWCO’S RIGHTS AND REMEDIES
FOR OR WITH RESPECT TO ANY BREACH OF SUCH AGREEMENTS.

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ARTICLE IV
COVENANTS
     4.1 Access to Information.
     (a) Between the date hereof and the Closing, Intel agrees to provide FP and
ST and their authorized representatives (including each of their attorneys and
accountants and auditors) reasonable access to the offices and properties,
employees and auditors of the Intel Business and the Intel Books and Records,
upon reasonable prior notice, during normal business hours, under Intel’s
supervision and at ST or FP’s expense, as applicable, in order to conduct a
review of the Intel Transferred Assets and the Intel Business.
     (b) Between the date hereof and the Closing, ST agrees to provide FP and
Intel and their authorized representatives (including each of their attorneys
and accountants and auditors) reasonable access to the offices and properties,
employees and auditors of the ST Business and the ST Books and Records, upon
reasonable prior notice, during normal business hours, under ST’s supervision
and at Intel or FP’s expense, as applicable, in order to conduct a review of the
ST Transferred Assets and the ST Business.
     (c) Each of the Parties will hold, and will cause its representatives to
hold, in confidence all documents and information furnished to it by or on
behalf of another Party in connection with the transactions contemplated by this
Agreement and the other Transaction Documents pursuant to the terms of the
Confidentiality Agreement; provided, however, for the sake of clarification,
that Intel and ST shall be permitted to respond to direct inquiries relating to
the transaction from, and disclose the transaction immediately after the
execution hereof to Intel Business Employees and ST Business Employees,
respectively, and provided further that nothing herein shall prohibit any public
announcement in accordance with Section 4.5 (Press Releases) hereof.
     4.2 Exclusive Dealing. Prior to the earlier of the Closing or the
termination of this Agreement, none of Intel, ST, or FP will, nor will any of
them permit any of their respective Affiliates, officers, directors, agents or
advisors to, directly or indirectly: (a) solicit, encourage, initiate or
participate in any negotiations or discussions with respect to any possible debt
or equity investment in the ST Business or the Intel Business or any possible
sale, spin-off or other transfer of all or any material portion of the ST
Business or the Intel Business (other than inventory sold in the ordinary course
of business), whether by sale or transfer of assets, sale of stock,
reorganization, merger or otherwise, other than in connection with the
transactions contemplated by this Agreement and the other Transaction Documents
including the Contemplated Financing (each such transaction described in this
clause (a), a “Prohibited Transaction”); (b) provide or otherwise make available
the corporate, legal or financial documents or information relating to the Intel
Business, the ST Business or Newco or any analysis or summary thereof of Newco,
Intel or ST or any of their respective Affiliates, to any Person who has
expressed an interest in making a proposal to enter into any Prohibited
Transaction or who could reasonably be expected to consider doing so; (c) assist
or cooperate with any Person in making any proposal with respect to any
Prohibited Transaction; or (d) enter into any Contract with any Person providing
for any Prohibited Transaction. In the event that Intel, ST or FP or any of
their respective Affiliates, officers, directors, agents or advisors shall

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receive after the date hereof any offer or proposal with respect to any
Prohibited Transaction, directly or indirectly, or any request for disclosure or
access to any documents or information described in clause (b) above, such Party
shall or shall cause its Affiliate, officer, director, agent or advisor to
immediately inform the other Parties of such offer or proposal, the identity of
the Person making such offer or proposal and the material terms thereof.
     4.3 Reasonable Efforts. Each of Intel, ST, FP and FP Holdco will cooperate
and use commercially reasonable efforts to take, or cause to be taken, all
appropriate actions (and to make, or cause to be made, all filings and
notifications necessary, proper or advisable under Applicable Law) to consummate
and make effective the transactions contemplated by this Agreement and the
Transaction Documents, including commercially reasonable efforts to satisfy all
closing conditions and to obtain, as promptly as practicable, all licenses,
permits, consents, approvals, authorizations, qualifications and orders of
Governmental Authorities and parties to contracts, as are necessary for the
consummation of the transactions contemplated by this Agreement and the
Transaction Documents to which it is a party.
     4.4 Certain Consents and Filings; Further Assurances. Each Party agrees to
execute and deliver, or cause to be executed and delivered, such other
documents, certificates, agreements and other writings and to take, or cause to
be taken, such other commercially reasonable actions as may be necessary or
desirable in order to (a) consummate or implement expeditiously the transactions
contemplated by this Agreement and the other Transaction Documents and
(b) obtain from any Governmental Authorities and other Persons all consents,
approvals, authorizations, qualifications and orders as are necessary for the
consummation of the transactions contemplated by this Agreement and the
Transaction Documents and to promptly make all necessary filings and
notifications, and to supply as promptly as practicable any additional
information or documentary material that may be reasonably requested to comply
with the HSR Act or any applicable Competition Law. Subject to Applicable Laws,
and as necessary to address reasonable privilege or confidentiality concerns,
prior to the making or submission of any analysis, appearance, presentation,
memorandum, brief, argument, opinion or proposal by or on behalf of any Party in
connection with Proceedings under or relating to the HSR Act or any other
applicable Competition Law, each of Intel, ST, FP and FP Holdco will consult and
cooperate with one another, and consider in good faith the views of one another,
in connection with any such analyses, appearances, presentations, letters, white
papers, memoranda, briefs, arguments, opinions or proposals. In this regard but
without limitation, each Party hereto shall promptly inform the other of any
material communication between such Party and the Federal Trade Commission, the
Antitrust Division of the United States Department of Justice, or any other
federal, foreign or state antitrust or competition Governmental Authority
regarding the transactions contemplated by this Agreement or the Transaction
Documents. Nothing in this Agreement or any of the other Transaction Documents,
however, shall require or be construed to require any Party hereto, in order to
obtain the consent or successful termination of any review of any such
Governmental Authority regarding the transactions contemplated by this
Agreement, to (x) sell or hold separate, or agree to sell or hold separate,
before or after the Closing Date, any assets or businesses or any interests in
any assets or businesses of such Party or any of its Affiliates (or to consent
to any sale, or agreement to sell, any assets or businesses, or any interests in
any assets or businesses), or to agree to any change in or restriction on the
operation by such Party of any assets or businesses or (y) enter into any
agreement or be bound by any obligation concerning the benefits to such Party of
the transactions contemplated by this

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Agreement. Each party shall have responsibility for its respective filing fees
associated with the filings under the HSR Act and any other filings required
under the Competition Laws of any other jurisdictions in connection with the
transactions contemplated by this Agreement or any of the other Transaction
Documents.
     4.5 Press Releases. None of the Parties nor any of their respective
Affiliates, officers, directors or securityholders shall issue any press release
or otherwise make any public statement with respect to this Agreement, any of
the Transaction Documents or any of the transactions contemplated hereby or
thereby without the prior written consent of each of the other Parties, except
as may be required by Applicable Law, or by the rules and regulations of, or
pursuant to any agreement with, the Nasdaq National Market, the New York Stock
Exchange or any other U.S. or non-U.S. securities exchange on which any
securities of such Party are then listed or quoted. If any Party determines,
with the advice of counsel, that it is required by Applicable Law to publicly
disclose this Agreement, any of the Transaction Documents or any of the
transactions contemplated by this Agreement or any of the other Transaction
Documents, it shall, a reasonable time before making any public disclosure,
consult with the other Parties regarding such disclosure and seek confidential
treatment for such information to be so disclosed, as may be reasonably
requested by any other Party. If any Party determines to make any public
statements with respect to this Agreement, any of the Transaction Documents or
any of the transactions contemplated hereby or thereby in accordance with the
terms of this Agreement, then each other Party shall be entitled to make a
public statement following such public statement; provided it coordinates the
timing thereof with each other Party and obtains such other Party’s prior
written approval of the contents thereof, not to be unreasonably withheld or
delayed. The Parties agree to announce the execution of this Agreement to the
employees, customers, vendors and strategic partners of the Intel Business and
the ST Business at such time and in such form as is mutually agreed upon by all
of the Parties. Any disclosure of the existence or terms of this Agreement, any
of the Transaction Documents or any of the transactions contemplated hereby or
thereby to any person from whom consent shall be required, to whom notice shall
be provided or from whom waiver shall be sought in order to comply with the
requirements of this Agreement or any of the other Transaction Documents shall
be made at such time and in such form and with such content as is mutually
agreed upon by all of the Parties.
     4.6 Certain Deliveries and Notices. From the date of this Agreement through
the Closing Date, each Party shall promptly inform in writing the other Parties
of (a) any event or occurrence that would reasonably be expected to have a
material adverse effect on its ability to perform its or their obligations under
any of the Transaction Documents, and (b) any breach that cannot or will not be
cured by the time of the Closing or failure to satisfy any condition or covenant
contained in this Agreement or in any other Transaction Document by such Party,
if such failure cannot or will not be cured by the time of the Closing.
     4.7 Non-Solicitation of Employees.
     (a) Prior to the Closing and until the earlier of the date that is two
years following the Closing Date or two years following termination of this
Agreement, without the prior written consent of Intel, ST shall not, nor shall
it permit any of its Subsidiaries to, directly or indirectly, recruit or solicit
any employee of Intel or any of its

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Subsidiaries identified on Schedule 4.7(a) to the Intel Master Agreement
Disclosure Letter (collectively, for purposes of this Agreement, the “Intel
Restricted Employees”) to leave his or her employment with Intel or such
Subsidiary.
     (b) Prior to the Closing and until the earlier of the date that is two
years following the Closing Date or the date that is two years following
termination of this Agreement, without the prior written consent of ST, Intel
shall not, nor shall it permit any of its Subsidiaries to, directly or
indirectly, recruit or solicit any employee of ST or any of its Subsidiaries
identified on Schedule 4.7(b) to the ST Master Agreement Disclosure Letter
(collectively, for purposes of this Agreement, the “ST Restricted Employees”) to
leave his or her employment with ST or any such Subsidiary.
     (c) Neither the placement of employment advertisements or other general
solicitation for employees not specifically targeted to any Restricted Employee
by any means, including through the use of hiring agencies or through employees
of each Party who are unaware of the prohibitions against the solicitation of
the Restricted Employees shall be a recruitment or solicitation prohibited by
this Section 4.7; provided that any such hiring agencies and employees are not
instructed by persons who knew about the prohibition on the solicitation of the
Restricted Employees to solicit for hire Restricted Employees. If a Party (or
any Subsidiary thereof) inadvertently violates the prohibition against the
solicitation of Restricted Employees, such Party shall (or it shall cause its
applicable Subsidiary to), as soon as it is aware it has committed a violation
of this section, notify the other Party who formerly employed such Restricted
Employee and either withdraw any offer to the solicited individual or ensure
that such person, if hired, is restricted from working on, consulting on, or
having any knowledge with respect to matters which are designated by the Party
who formerly employed such employee in its reasonable discretion as
competitively sensitive matters, in which event such inadvertent action shall
not be deemed to be a breach of this Section 4.7 so long as there is no
repetitive pattern of such actions.
     4.8 Tax Matters.
     (a) Each Party hereto shall cooperate as reasonably requested by any other
Party and at the requesting Party’s sole cost, liability and expense, to
maximize the tax efficiency of the transactions contemplated by this Agreement
and the other Transaction Documents and the structure of each of Intel’s (and/or
its Affiliates), ST’s (and/or its Affiliates) and FP’s (or FP Holdco’s)
investment in Newco, subject to the terms of the Shareholders’ Agreement.
Requests made pursuant to this Section 4.8(a) shall not be deemed to be
reasonable if they result in costs, liabilities and expense to any
non-requesting Party (other than in insignificant amounts) that are not
determinable with accuracy at the time of the request or that involve costs
(other than in insignificant amounts) that will be incurred by any
non-requesting Party in years following the year the first of such actions (or
the first in a series of related actions) is requested.
     (b) Upon the occurrence of a Consolidation, the successor to an entity that
merges out of existence or liquidates in connection with such Consolidation
shall succeed to all of such entity’s rights and obligations under the
Transaction Documents, and shall

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execute such joinders and other documents reasonably requested by the other
Shareholders to evidence the same.
     4.9 Operation of the Intel Business Prior to the Closing. Between the date
of this Agreement and the Closing Date, except as contemplated by this Agreement
or any other Transaction Document or as set forth in Schedule 4.9 of the Intel
Master Agreement Disclosure Letter, or unless ST and FP shall otherwise agree in
writing (which consent shall not be unreasonably withheld or delayed), Intel
shall, and shall cause its Subsidiaries to, (x) operate the Intel Business in
the ordinary course of business in all material respects and (y) continue to
make capital expenditures which are, in the aggregate, consistent in all
material respects with the Intel Business Capital Expenditures Plan. Between the
date of this Agreement and the Closing Date, except as otherwise agreed in this
Agreement or any other Transaction Document or as set forth in Schedule 4.9 of
the Intel Master Agreement Disclosure Letter, unless ST and FP shall otherwise
consent in writing (which consent shall not be unreasonably withheld or
delayed), Intel shall, and shall cause its Subsidiaries to:
     (a) pay the material debts and Taxes of the Intel Business and the Intel
Transferred Entities in the ordinary course of business;
     (b) use commercially reasonable efforts to (i) maintain the tangible fixed
assets included in the Intel Transferred Assets as a whole in all material
respects in at least as good condition as they are being maintained on the date
hereof, subject to normal wear and tear, (ii) maintain in effect all material
Permits and Governmental Approvals of the Intel Business, (iii) not terminate,
other than for cause, nor materially decrease the compensation of, the key
executives of the Intel Business, and (iv) maintain satisfactory relationships
with the customers, partners, suppliers and others having material business
relationships with the Intel Business;
     (c) not sell, assign, or transfer any of the Intel Transferred Assets, or
license any of the Intel Transferred Intellectual Property, except, in each
case, in the ordinary course of business and except for the transfer of Intel
Transferred Assets to Intel Transferred Entities as contemplated or permitted
hereby, and not permit any of the Intel Transferred Assets to be subjected
(whether by action or omission) to any Lien, other than the Permitted Liens;
     (d) not sell, assign, or transfer any of the Intel Transferred Interests
and not permit any of the Intel Transferred Interests to be subjected to any
Share Encumbrances;
     (e) not fail to pay or discharge when due any Liability of which the
failure to pay or discharge would cause any material damage or loss to the Intel
Transferred Assets and the Intel Transferred Entities, taken as a whole;
     (f) not waive or amend any material term of or terminate any material Intel
Transferred Contract or relinquish any material rights thereunder, other than in
the ordinary course of business;
     (g) not make any material change in its accounting principles, methods or
practices relating to the Intel Business, and maintain the Intel Books and
Records in the

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usual, regular and ordinary manner on a basis consistent with prior years,
except, in either case, for any change required by a change in GAAP, a change in
the accounting practices of Intel generally, or a change resulting from the
preparation of the Intel Business Audited Financial Statements;
     (h) not grant to any Intel Business Employee any increase in compensation
or in severance or termination pay, grant any severance or termination pay (or
amend in any material respect any existing arrangement for the foregoing), or
enter into any employment deferred compensation or similar agreement with any
such employee, except as may be required under Applicable Law, any termination
policy of Intel (whether existing as of the date hereof or adopted hereafter) or
any employment or termination agreement in effect on the date hereof or in the
ordinary course of business, or establish, adopt or amend (except as required by
Applicable Law) any collective bargaining, bonus, profit-sharing, thrift,
pension, retirement, deferred compensation, compensation, stock option,
restricted stock or other benefit plan or arrangement covering any director,
officer or employee of the Intel Business, that is material in the aggregate to
the Intel Business;
     (i) not enter into or renew (other than automatic renewal) any Intel
Transferred Contracts that exclusively relate to the Intel Business that provide
for payment obligations (whether by Intel or any of its Subsidiaries or the
counterparty thereto) that are material, in the aggregate, to the Intel
Business, except for those described the Intel Business Capital Expenditures
Plan;
     (j) not make any acquisition, directly or indirectly, of all or
substantially all of the assets of any business or equity interests in any
Person or any business, whether by merger, consolidation or otherwise, that
relates to the Intel Business;
     (k) not incur any additional Intel Transferred Liabilities for capital
expenditures that are material, in the aggregate, to the Intel Business, except
for those described in the Intel Business Capital Expenditures Plan;
     (l) not make any loans or advances to or capital contributions or
investments in, any other Person with respect to the Intel Business that are
material in the aggregate to the Intel Business, other than in the ordinary
course of business or as contemplated by the Transaction Documents;
     (m) not agree to any exclusivity, non-competition or similar provision or
covenant restricting the Intel Business from competing in any line of business
or with any Person or in any location or engaging in any activity or business
(including with respect to the development, manufacture, marketing or
distribution of their respective products or services), or pursuant to which any
benefit or right is required to be given or lost as a result of so competing or
engaging, the effect of which would be binding on Newco or any of its Affiliates
after the Closing Date;
     (n) not settle, or make a binding offer to settle, any material Claim or
Proceeding relating to the Intel Business unless such settlement would not
encumber any assets of Newco, impose any obligation or other Liability on Newco,
impose any

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restriction that would apply to Newco or the conduct of the Newco Business or
include any acknowledgment of validity, enforceability, infringement or Claim
interpretation with regard to any of the Intellectual Property relating to such
Claim or Proceeding;
     (o) not engage in (i) any trade loading practices or any other promotional
sales or discount activity with any customers or distributors with any intent of
accelerating to prior fiscal quarters (including the current fiscal quarter)
sales to the trade or otherwise than would otherwise reasonably be expected to
occur in subsequent fiscal quarters, or (ii) any other promotional sales or
discount activity, in each case, in a manner outside the ordinary course of
business, and not significantly inconsistent with past practices;
     (p) maintain sales incentive plans and programs and sales quotas or
incentives for Intel Products, in each case, in the ordinary course of business,
and not significantly inconsistent with past practices;
     (q) use commercially reasonable efforts to prevent any representation or
warranty of Intel hereunder or under the Intel Asset Transfer Agreement from
being inaccurate in any material respect at the Closing; provided, however, that
this covenant shall not be satisfied solely by virtue of any amendment of any
schedule to the Intel ATA Disclosure Letter; and
     (r) not enter into any agreement to take any action that would violate in
any material respect any of the foregoing.
     For purposes of Sections 4.9(a)-(f), and (i), all references therein to
“Intel Transferred Assets,” “Intel Transferred Entities,” “Intel Transferred
Interests,” “Intel Transferred Intellectual Property,” and “Intel Transferred
Contracts,” shall be deemed to mean all applicable assets or properties owned by
Intel or any of its Subsidiaries prior to the Closing which would be included in
the applicable section of the Intel ATA Disclosure Letter on the Determination
Date if such asset or property was owned by Intel or any of its Subsidiaries on
the Determination Date.
     4.10 Operation of the ST Business Prior to the Closing. Between the date of
this Agreement and the Closing Date, except as contemplated by this Agreement or
any other Transaction Document or as set forth in Schedule 4.10 of the ST Master
Agreement Disclosure Letter, or unless Intel and FP shall otherwise agree in
writing (which consent shall not be unreasonably withheld or delayed), ST shall,
and shall cause its Subsidiaries to, (x) operate the ST Business in the ordinary
course of business in all material respects (y) continue to make capital
expenditures which are, in the aggregate, consistent in all material respects
with the ST Business Capital Expenditures Plan. Between the date of this
Agreement and the Closing Date, except as otherwise agreed in this Agreement or
any other Transaction Document or as set forth in Schedule 4.10 of the ST Master
Agreement Disclosure Letter, unless Intel and FP shall otherwise consent in
writing (which consent shall not be unreasonably withheld or delayed), ST shall,
and shall cause its Subsidiaries to:
     (a) pay the material debts and Taxes of the ST Business and the ST
Transferred Entities in the ordinary course of business;

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     (b) use commercially reasonable efforts to (i) maintain the tangible fixed
assets included in the ST Transferred Assets as a whole in all material respects
in at least as good condition as they are being maintained on the date hereof,
subject to normal wear and tear, (ii) maintain in effect all material Permits
and Governmental Approvals of the ST Business, (iii) not terminate, other than
for cause, nor materially decrease the compensation of, the key executives of
the ST Business, and (iv) maintain satisfactory relationships with the
customers, partners, suppliers and others having material business relationships
with the ST Business;
     (c) not sell, assign, or transfer any of the ST Transferred Assets, or
license any of the ST Transferred Intellectual Property, except, in each case,
in the ordinary course of business and except for the transfer of ST Transferred
Assets to ST Transferred Entities as contemplated or permitted hereby, and not
permit any of the ST Transferred Assets to be subjected (whether by action or
omission) to any Lien, other than the Permitted Liens;
     (d) not sell, assign, or transfer any of the ST Transferred Interests and
not permit any of the ST Transferred Interests to be subjected to any Share
Encumbrances;
     (e) not fail to pay or discharge when due any Liability of which the
failure to pay or discharge would cause any material damage or loss to the ST
Transferred Assets and the ST Transferred Entities, taken as a whole;
     (f) not waive or amend any material term of or terminate any material ST
Transferred Contract or relinquish any material rights thereunder, other than in
the ordinary course of business;
     (g) not make any material change in its accounting principles, methods or
practices relating to the ST Business, and maintain the ST Books and Records in
the usual, regular and ordinary manner on a basis consistent with prior years,
except, in either case, for any change required by a change in GAAP, a change in
the accounting practices of ST generally, or a change resulting from the
preparation of the ST Business Audited Financial Statements;
     (h) not grant to any ST Business Employee any increase in compensation or
in severance or termination pay, grant any severance or termination pay (or
amend in any material respect any existing arrangement for the foregoing), or
enter into any employment deferred compensation or similar agreement with any
such employee, except as may be required under Applicable Law, any termination
policy of ST (whether existing as of the date hereof or adopted hereafter) or
any employment or termination agreement in effect on the date hereof or in the
ordinary course of business, or establish, adopt or amend (except as required by
Applicable Law) any collective bargaining, bonus, profit-sharing, thrift,
pension, retirement, deferred compensation, compensation, stock option,
restricted stock or other benefit plan or arrangement covering any director,
officer or employee of the ST Business, that is material in the aggregate to the
ST Business;
     (i) not enter into or renew (other than automatic renewal) any ST
Transferred Contracts that exclusively relate to the ST Business that provides
for payment obligations

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(whether by ST or any of its Subsidiaries or the counterparty thereto) that are
material, in the aggregate, to the ST Business, except for those described the
ST Business Capital Expenditures Plan;
     (j) not make any acquisition, directly or indirectly, of all or
substantially all of the assets of any business or equity interests in any
Person or business, whether by merger, consolidation or otherwise, that relates
to the ST Business;
     (k) not incur any additional ST Transferred Liabilities for capital
expenditures that are material, in the aggregate, to the ST Business, except for
those described in the ST Business Capital Expenditures Plan;
     (l) not make any loans or advances to or capital contributions or
investments in, any other Person with respect to the ST Business that are
material in the aggregate to the ST Business, other than in the ordinary course
of business or as contemplated by the Transaction Documents;
     (m) not agree to any exclusivity, non-competition or similar provision or
covenant restricting the ST Business from competing in any line of business or
with any Person or in any location or engaging in any activity or business
(including with respect to the development, manufacture, marketing or
distribution of their respective products or services), or pursuant to which any
benefit or right is required to be given or lost as a result of so competing or
engaging, the effect of which would be binding on Newco or any of its Affiliates
after the Closing Date;
     (n) not settle, or make any binding offer to settle, any material Claim or
Proceeding relating to the ST Business unless such settlement would not encumber
any assets of Newco, impose any obligation or other Liability on Newco, impose
any restriction that would apply to Newco or the conduct of the Newco Business
or include any acknowledgment of validity, enforceability, infringement, or
Claim interpretation with regard to any of the Intellectual Property relating to
such Claim or Proceeding;
     (o) not engage in (i) any trade loading practices or any other promotional
sales or discount activity with any customers or distributors with any intent of
accelerating to prior fiscal quarters (including the current fiscal quarter)
sales to the trade or otherwise than would otherwise reasonably be expected to
occur in subsequent fiscal quarters, (ii) any other promotional sales or
discount activity, (iii) any practice which would have the effect of
accelerating to the period prior to the Closing collections of receivables of
any ST Transferred Entity that would otherwise be reasonably expected (based on
past practice) to be made after the Closing, or (iv) any practice which would
have the effect of postponing to the period after the Closing payments by any ST
Transferred Entity that would otherwise be reasonably expected (based on past
practice) to be made in the period prior to the Closing, in each case, in a
manner outside the ordinary course of business, and not significantly
inconsistent with past practices;

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     (p) maintain sales incentive plans and programs and sales quotas or
incentives for ST Products, in each case, in the ordinary course of business,
and not significantly inconsistent with past practices;
     (q) use commercially reasonable efforts to prevent any representation or
warranty of ST hereunder or under the ST Asset Contribution Agreement from being
inaccurate in any material respect at the Closing; provided, however, that this
covenant shall not be satisfied solely by virtue of any amendment of any
schedule to the ST ACA Disclosure Letter; and
     (r) not enter into any agreement to take any action that would violate in
any material respect any of the foregoing.
     For purposes of Sections 4.10(a)-(f), and (i), all references therein to
“ST Transferred Assets,” “ST Transferred Entities, “ST Transferred Interests,”
“ST Transferred Intellectual Property,” and “ST Transferred Contracts,” shall be
deemed to mean all applicable assets or properties owned by ST or any of its
Subsidiaries prior to the Closing which would be included in the applicable
section of the ST ATA Disclosure Letter on the Determination Date if such asset
or property was owned by ST or any of its Subsidiaries on the Determination
Date.
     4.11 Employee Matters.
     (a) Employment Offers. Subject to Applicable Law, within 10 days following
Newco’s formation pursuant to Section 4.16 (Newco Formation and Preparation), or
such other period of time after the date hereof as may be reasonably agreed by
Newco, Intel, ST and FP, Newco may make offers of employment to Intel Business
Employees (other than any Intel Excluded Employees) and ST Business Employees
(other than any ST Excluded Employees), to be effective as of the Closing or on
such later date specified in the offer as may reasonably be agreed by Newco,
Intel, ST and FP, provided that to the extent permitted by Applicable Law, the
offers to any inactive Intel Business Employee or ST Business Employee shall be
effective on the date such Business Employee returns to active employment.
Notwithstanding the foregoing, ST Designated Employees (to the extent employed
by ST immediately prior to the Closing) shall automatically transfer to Newco on
the Closing (or if such ST Designated Employee is inactive, at such time as
specified by Applicable Law). Schedule 4.11(a) of the ST Master Agreement
Disclosure Letter sets forth the ST Designated Employees. Notwithstanding
anything in this Agreement to the contrary, in no event shall the acceptance of
employment by any Intel Business Employee or ST Business Employee be a condition
to the Closing. The offers of employment for each such Intel Business Employee
(other than Intel Excluded Employees) and ST Business Employee (other than ST
Excluded Employees) will (i) be subject to requirements of Applicable Law for
the jurisdiction in which the Intel Business Employee or ST Business Employee is
located and include employment terms reasonably determined by Newco, and
(ii) supersede, to the extent permitted by Applicable Law any prior agreements
regarding the terms and conditions of employment with such Intel Business
Employee or ST Business Employee as in effect prior to the Closing Date;
provided, however, that in no event shall any prior agreement with respect to
Intellectual Property be superseded, except that unless otherwise agreed by
Intel and Newco or ST

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and Newco, as the case may be, all Intel Transferred Employees and ST
Transferred Employees shall be permitted to disclose to Newco all information in
their possession or otherwise known by them which is directly related to the
Intel Business or ST Business, as applicable, and not related to Patents or
Confidential Information of Intel or ST, respectively, in each case, to the
extent not an Intel Transferred Asset or ST Transferred Asset. As of the Closing
Date, the Intel Transferred Entities shall employ only Intel Transferred
Employees, and the ST Transferred Entities shall employ only ST Transferred
Employees.
     (b) Excluded Employees; Allocated Positions. Prior to the Closing, the
Parties shall cooperate in good faith, and in accordance with the provisions set
forth in Schedule 4.11(b) of each of the Intel Master Agreement Disclosure
Schedule and the ST Master Agreement Disclosure Schedule, to (i) identify those
Intel Business Employees to whom an employment offer shall not be made pursuant
to Section 4.11(a) (collectively, the “Intel Excluded Employees”) and those ST
Business Employees to whom an employment offer shall not be made pursuant to
Section 4.11(a) (collectively, the “ST Excluded Employees”), (ii) identify such
other employees of Intel and ST who shall be offered Newco Allocated Positions
and (iii) avoid any transfer of employees to Newco or any of its Subsidiaries in
excess of the number of employees reasonably necessary to operate the Newco
Business at the Closing.
     (c) Executive Agreements. Intel, ST, FP, and FP Holdco agree to recommend
to Newco that, within 10 days following the formation of Newco, Newco should
(i) negotiate in good faith offers of employment with the individuals identified
in Schedule 4.11(c) of each of the Intel Master Agreement Disclosure Letter and
ST Master Agreement Disclosure Letter for the positions identified on such
Schedule; and (ii) adopt and execute employment and severance agreements with
such individuals in substantially the forms attached to Schedule 4.11(c) to each
of the Master Agreement Disclosure Letters, to be effective on the Closing Date
as of the Effective Time.
     (d) Employee Information and Access. Each of Intel and ST agrees to provide
to each other and to FP and Newco certain general information concerning their
respective compensation and benefit programs and specific information relating
to individual Business Employees, subject to Applicable Law and, to the extent
required, any such employee’s proper consent, solely for the purpose of Newco
formulating offers of employment to such employees; provided, however, that
neither Intel nor ST will make personnel records available for inspection or
copying except with respect to Intel Transferred Employees who are employed by
an Intel Transferred Entity as of the Closing Date and ST Transferred Employees
who are employed by an ST Transferred Entity as of the Closing Date.
     (e) Equity Plan. The Parties shall cause Newco to implement the Equity Plan
at or prior to the Closing.

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     4.12 Additions to and Modifications of Schedules.
     (a) If on any date on or prior to the date two Business Days prior to the
Closing Date (the “Determination Date”), any of the information provided by
Intel in any of the Specified Intel Schedules or by ST in any of the Specified
ST Schedules or by Newco in any of the Specified Newco Schedules, as the case
may be, is not true, accurate and complete in all material respects on and as of
such date, the Party that provided such schedule shall be entitled to amend such
schedule to make additions to or modifications of such schedule necessary to
make the information set forth therein true, accurate and complete in all
material respects and shall promptly deliver such amended schedule to the other
Party, and such schedule shall be deemed amended to reflect such additions and
modifications for all purposes. If any of the Specified Intel Representations
made by Intel, the Specified ST Representations made by ST, or the Specified
Newco Representations made by Newco, as the case may be, would not be true,
accurate and complete in all material respects on and as of the Closing Date
unless additional information with respect thereto were set forth in a new
schedule not previously included in the applicable Disclosure Letter, such Party
shall be entitled to amend such Disclosure Letter to add such new schedule, and
shall promptly deliver such new schedule to the other Party, which schedule
shall thereupon be deemed to be a part of such Disclosure Letter for all
purposes.
     (b) On the Determination Date, each of Intel and ST may, but shall not be
obligated to, (i) amend and deliver to Newco any schedule to the Intel ATA
Disclosure Letter or ST ACA Disclosure Letter, as applicable, upon which any
Intel Transferred Assets or ST Transferred Assets described in Section 2.1 (and
to the extent of such amendments, any Liabilities associated with such Intel
Transferred Assets or ST Transferred Assets that would be Intel Transferred
Liabilities or ST Transferred Liabilities under Section 2.3 of the Intel Asset
Transition Agreement or ST Asset Contribution Agreement, as the case may be,
including Liabilities under any Intel Transferred Contract or ST Transferred
Contract included in such amendment, shall be Intel Transferred Liabilities or
ST Transferred Liabilities, as applicable) of each of the Intel Asset Transfer
Agreement and the ST Asset Contribution Agreement are listed or identified, and
(ii) deliver any such new schedule to the Intel ATA Disclosure Letter or ST ACA
Disclosure Letter, as applicable, upon which any Intel Transferred Assets or ST
Transferred Assets described in Section 2.1 (and to the extent of such
amendments, any Liabilities associated with such Intel Transferred Assets or ST
Transferred Assets that would be Intel Transferred Liabilities or ST Transferred
Liabilities under Section 2.3 of the Intel Asset Transition Agreement or ST
Asset Contribution Agreement, as the case may be, including Liabilities under
any Intel Transferred Contract or ST Transferred Contract included in such
amendment, shall be Intel Transferred Liabilities or ST Transferred Liabilities,
as applicable) of each of the Intel Asset Transfer Agreement and the ST Asset
Contribution Agreement are listed or identified, if Intel or ST, as the case may
be, in its sole discretion, determines that such amendments will provide greater
assurances that the representations made by Intel in Section 3.17 (Intel
Transferred Assets) of the Intel Asset Transfer Agreement and by ST in
Section 3.17 (ST Transferred Assets) of the ST Asset Contribution Agreement,
respectively, are accurate on the Closing Date, or in order that each such
schedule shall more accurately reflect the

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removal of any assets or Liabilities on any such schedule which have, in the
ordinary course of the Intel Business or the ST Business, as the case may be,
ceased to exist or which have been disposed of or extinguished by the Intel
Business or the ST Business in accordance with Section 4.9 and Section 4.10,
respectively, as applicable, in the ordinary course of business between the date
hereof (or, if such schedule was prepared as of an earlier date, such earlier
date) and the Determination Date.
     (c) On or within 30 days after the Closing Date, each of Intel and ST may
(i) further amend and deliver to Newco any schedule to the Intel ATA Disclosure
Letter or ST ACA Disclosure Letter, as applicable, upon which any Intel
Transferred Assets or ST Transferred Assets described in Section 2.1 (and to the
extent of such amendments, any Liabilities associated with such Intel
Transferred Assets or ST Transferred Assets that would be Intel Transferred
Liabilities or ST Transferred Liabilities under Section 2.3 of the Intel Asset
Transition Agreement or ST Asset Contribution Agreement, as the case may be,
including Liabilities under any Intel Transferred Contract or ST Transferred
Contract included in such amendment, shall be Intel Transferred Liabilities or
ST Transferred Liabilities, as applicable) of each of the Intel Asset Transfer
Agreement and the ST Asset Contribution Agreement are listed or identified, and
(ii) deliver any such new schedule to the Intel ATA Disclosure Letter or ST ACA
Disclosure Letter, as applicable, upon which any Intel Transferred Assets or ST
Transferred Assets described in Section 2.1 (and to the extent of such
amendments, any Liabilities associated with such Intel Transferred Assets or ST
Transferred Assets that would be Intel Transferred Liabilities or ST Transferred
Liabilities under Section 2.3 of the Intel Asset Transition Agreement or ST
Asset Contribution Agreement, as the case may be, including Liabilities under
any Intel Transferred Contract or ST Transferred Contract included in such
amendment, shall be Intel Transferred Liabilities or ST Transferred Liabilities,
as applicable) of each of the Intel Asset Transfer Agreement and the ST Asset
Contribution Agreement are listed or identified, if Intel or ST, as the case may
be, in its sole discretion, determines that such amendments will provide greater
assurances that the representations made by Intel in Section 3.17 (Intel
Transferred Assets) of the Intel Asset Transfer Agreement and by ST in
Section 3.17 (ST Transferred Assets) of the ST Asset Contribution Agreement,
respectively, are accurate as of the Closing Date, or in order that, each such
schedule shall more accurately reflect the removal of any assets or Liabilities
on any such schedule which have, in the ordinary course of the Intel Business or
the ST Business, as the case may be, ceased to exist or which have been disposed
of or extinguished by the Intel Business or the ST Business, as applicable, in
the ordinary course of business between the Determination Date (or, if such
schedule was prepared as of an earlier date, such earlier date) and the Closing
Date in accordance with Section 4.9 and Section 4.10, respectively.
     (d) For any additions or modifications made by a Party (i) to correct
inaccuracies of the Specified Intel Representations or Specified ST
Representations, as the case may be (including those representations and
warranties which are expressed with respect to a date prior to the date hereof)
for facts, events or circumstances occurring prior to or existing on and as of
the date hereof, and, in the case of a representation or warranty made to the
Knowledge of a Party, of which such Party had Knowledge on and as of the date
hereof, (ii) to reflect any facts, events or circumstances which resulted from

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a breach of Section 4.9 or Section 4.10 hereof, as applicable, or (iii) to
update, correct or otherwise modify any of the representations set forth in
Section 3.2 (Authorization and Enforceability), Section 3.4 (Non-contravention),
Section 3.7 (Litigation), Section 3.9 (Compliance with Applicable Laws),
Section 3.10 (Tax Matters), Section 3.11 (Intellectual Property), Section 3.13
(Financial Information), Section 3.14 (Absence of Certain Changes), Section 3.17
(Intel Transferred Assets or ST Transferred Assets, as applicable), Section 3.20
(Inventories), Section 3.21 (Advisory Fees), Section 3.22 (Transferred Entities
and Transferred Interests) and Section 3.23 (Investment Representations) of the
Intel Asset Transfer Agreement or ST Asset Contribution Agreement, then in each
such case, Newco shall be entitled to indemnification therefor pursuant to, and
subject to the limitations set forth in, Article VI of the Intel Asset Transfer
Agreement or ST Asset Contribution Agreement, as applicable, to the same extent
as if such additions and modifications had not been made.
     (e) Notwithstanding anything in this Agreement to the contrary, any
addition or modification to the Specified Intel Schedules and/or the Specified
ST Schedules shall be disregarded for purposes of determining whether (i) the
conditions set forth in Section 5.1(a) (Performance by ST) shall have been
satisfied in respect of the representations and warranties set forth in
Section 3.14(i) (Absence of Certain Changes) of the ST Asset Contribution
Agreement, (ii) the conditions set forth in Section 5.2(a) (Performance by
Intel) shall have been satisfied in respect of the representations and
warranties set forth in Section 3.14(i) (Absence of Certain Changes) of the
Intel Asset Transfer Agreement, and (iii) the conditions set forth in
Section 5.3(a) (Performance by Intel) and Section 5.3(b) (Performance by ST)
shall have been satisfied in respect of the representations and warranties set
forth in Section 3.14(i) of the ST Asset Contribution Agreement or
Section 3.14(i) of the Intel Asset Transfer Agreement.
     (f) Other than as set forth in Section 4.12(a), (b), (c), and (d) without
the consent of the other Party or Parties, as applicable, no Party may make any
changes, supplements, amendments or modifications to any Disclosure Letter with
respect to any fact, event or circumstance occurring after the date hereof.
     4.13 Third Party Appraisal and Allocation; Dutch Auditors.
     (a) As soon as practicable but no later than 20 days following the date
hereof, ST shall identify to Intel three “internationally-recognized” firms, at
least two of which are “Big 4” firms reasonably believed not to have a conflict
of interest; and (b) as soon as reasonably practicable, but no later than
10 days after the receipt of the names, Intel, in its sole discretion, shall
select one of the firms (the “Third Party Appraisal Firm”) for each of Intel and
ST to retain to perform the Third Party Appraisals.
     (b) Intel and ST shall each select an office of the Third Party Appraisal
Firm that will jointly: (i) value Newco’s net assets; and (ii) allocate the
value of Newco’s net assets to Newco’s individual assets and liabilities, in
accordance with GAAP, which allocation shall become Newco’s opening balance
sheet.

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     (c) Each Party agrees to pursue and timely obtain, or to cause Newco or its
Affiliates to pursue and timely obtain, such auditor’s certificates pursuant to
article 2.204b and 2.204c (as applicable) of the Dutch Civil Code as are
required to give effect to the transactions contemplated in this Agreement and
the other Transaction Documents.
     4.14 Notices of Certain Intel Events. Intel shall promptly notify ST and FP
of:
     (a) any notice or other communication from any Person alleging the consent
of such Person is or may be required in connection with the transactions
contemplated by this Agreement or the Intel Asset Transfer Agreement to the
extent such consent would have been required to have been disclosed on
Schedule 3.8(b) of the Intel ATA Disclosure Letter;
     (b) any notice or other communication from any Governmental Authority
regarding any material Governmental Approval in connection with the transactions
contemplated by this Agreement;
     (c) any Claims, investigations or Proceedings commenced or, to its
Knowledge, threatened against, relating to or involving or otherwise affecting
Intel or the Intel Business that, if pending on the date of this Agreement,
would have been required to have been disclosed pursuant to Section 3.7
(Litigation) of the Intel Asset Transfer Agreement or that challenge or in any
manner seek to prohibit the transactions contemplated hereby or the consummation
of the Closing; and
     (d) any damage, destruction or other casualty loss that is material to the
Intel Transferred Assets, taken as a whole;
     provided, however, that the delivery of any notice pursuant to this
Section 4.14 shall not limit or otherwise affect the remedies available to Newco
under the Intel Asset Transfer Agreement.
     4.15 Notices of Certain ST Events. ST shall promptly notify Intel and FP
of:
     (a) any notice or other communication from any Person alleging the consent
of such Person is or may be required in connection with the transactions
contemplated by this Agreement or the ST Asset Contribution Agreement to the
extent such consent would have been required to have been disclosed on
Schedule 3.8(b) of the ST ACA Disclosure Letter;
     (b) any notice or other communication from any Governmental Authority
regarding any material Governmental Approval in connection with the transactions
contemplated by this Agreement;
     (c) any Claims, investigations or Proceedings commenced or, to its
Knowledge, threatened against, relating to or involving or otherwise affecting
ST or the ST Business that, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 3.7 (Litigation) of the
ST Asset Contribution Agreement or that challenge the consummation of the
transactions contemplated hereby or thereby;

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     (d) any damage, destruction or other casualty loss that is material to the
ST Transferred Assets, taken as a whole;
     provided, however, that the delivery of any notice pursuant to this
Section 4.15 shall not limit or otherwise affect the remedies available to Newco
under the ST Asset Contribution Agreement.
     4.16 Newco Formation and Preparation. As soon as reasonably practicable
following the expiration or termination of the waiting period (and any extension
thereof) applicable to the consummation of the transactions contemplated hereby
under the HSR Act and any other applicable similar merger notification laws or
regulations of foreign Governmental Authorities, the Parties hereto shall take
any and all actions necessary in order to incorporate Newco as a private company
with limited liability organized under the laws of The Netherlands and prepare
Newco to commence its operations immediately following the Closing, including
without limitation, to:
     (a) cause a civil law notary (i) to execute a Deed of Incorporation in a
form reasonably agreed by the Parties in which the Parties each shall be named
as joint incorporators of Newco, (ii) to register Newco with the Dutch Trade
Register and (iii) to execute a deed of issuance of shares in Newco’s capital,
which shall reflect the shareholdings of the Parties in Newco in the following
manner: ST 48.58%, Intel 45.10% and FP Holdco 6.32%, and take all other actions
reasonably necessary in connection therewith;
     (b) provide the initial capitalization to Newco as provided in the Deed of
Incorporation, which capitalization shall be at least equal to the minimum
capitalization provided by the laws of The Netherlands, in the respective
percentages as provided in subsection (a) above;
     (c) cause Newco to purchase and maintain directors and officers insurance
as required by Section 6.9 of the Shareholders’ Agreement;
     (d) establish upon incorporation of Newco the Management Board of Newco
which shall, prior to the Closing, have a sole Managing Director, who shall be
FP; provided that FP shall not, in its capacity as the Managing Director, cause
Newco to take any action or execute any agreement or document that is not
contemplated by this Agreement unless each of Intel and ST shall consent thereto
in writing, and in no event shall Newco conduct operations or engage in the
conduct of any business prior to the Closing; provided, further, that each of
Intel and ST shall advance 50% of all costs or expenses incurred by or on behalf
of FP on behalf of or for the benefit of Newco in the performance of the
activities set forth in this Section 4.16, and immediately after the Closing,
Newco shall reimburse Intel and ST for all amounts so advanced; provided,
further that prior to the Closing, to the maximum extent permitted by Applicable
Law, the Managing Director of Newco shall not be personally liable for any
obligations of Newco and ST and Intel shall each indemnify FP and its directors,
officers, employees and agents, solely in respect of actions in its capacity as
sole Managing Director (the “Indemnified Persons”) against 50% of all Losses
resulting from or arising out of, and

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shall hold the Indemnified Persons harmless from, any action taken or any
failure to take any action at or prior to the Closing; provided, however, that
no indemnification shall be provided to any Indemnified Person for a Loss if
such Loss resulted primarily from any action not permitted by this Agreement or
approved by Intel and ST or resulted primarily from an act of fraud, dishonesty
or other willful misconduct by FP; provided, further, that to the extent
permitted by Applicable Law, 50% of all expenses (including legal fees) actually
and reasonably incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by each of ST
and Intel prior to the final disposition of such claim upon receipt by ST and
Intel of an undertaking by or on behalf of an Indemnified Person to repay such
amount if it shall be determined that the Indemnified Person is not entitled to
be indemnified therefor pursuant to this Section 4.16(d);
     (e) FP shall, in its capacity as Managing Director, cause Newco to take all
actions required by this Agreement to be taken by Newco prior to the Closing and
any other such actions as are reasonably necessary to consummate the
transactions contemplated by this Agreement and the other Transaction Documents;
     (f) vote at a general meeting of shareholders of Newco the shares of which
such Party is the registered holder or for which such Party shall otherwise have
the ability to control or direct the voting thereof at any such general meeting
of shareholders, or execute a written resolution with respect to such shares, in
favor of any resolution required by or necessary pursuant to the Transaction
Documents to effect the Closing; provided, that the foregoing shall not require
any Party to waive any right that such Party has under any Transaction Document,
or to consent (or withhold its consent) to any waiver requested by any party
under any Transaction Document;
     (g) FP shall, in its capacity as Managing Director, adopt any resolution
required or necessary to be adopted by Newco to effect the Closing, to the
extent required by Applicable Law;
     (h) cause Newco to organize such Subsidiaries as reasonably requested by
the Parties;
     (i) cause Newco to open bank accounts as reasonably requested by any Party
in order to facilitate the actions set forth herein and to carry out the
transactions contemplated by the Transaction Documents;
     (j) cause Newco to execute and deliver the Intel Option Agreement to Intel
or an Affiliate of Intel at least five days prior to the Closing Date;
     (k) cause Newco to execute each Transaction Document to which it is to
become a party as well as any other instruments, certificates, authorizations
and other documents or papers required to be executed and delivered by Newco on
or before the Closing;
     (l) cause Newco to execute any waivers or consents, including in connection
with the waiver of closing conditions as set forth in the Transaction Documents,
(i) with

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respect to any obligation or duty of ST, if Intel and FP each consents in
writing to Newco granting such waiver or consent, (ii) with respect to any
obligation or duty of Intel, if ST and FP each consents in writing to Newco
granting such waiver or consent, and (iii) with respect to any obligation or
duty of FP, if Intel and ST each consents in writing to Newco granting such
waiver or consent; provided, further, that Newco shall refrain from executing or
otherwise granting any waiver or consent without the prior written consent of
the Parties as set forth in the preceding clause; and
     (m) cause Newco to take all actions set forth in Section 2.10 (Deliveries
by Newco) of the Intel Asset Transfer Agreement and Section 2.10 (Deliveries by
Newco) of the ST Asset Contribution Agreement;
     provided that, in addition to the provisions set forth above in this
Section 4.16, the Parties shall use reasonable efforts to prevent Newco from
taking any actions not set forth above without the prior consent of each of the
Parties, which consent shall not be unreasonably withheld or delayed.
     4.17 Newco Tax Election. The Parties agree that, unless Intel otherwise
directs, (a) the organizational documents of Newco shall authorize Newco to
elect, and Newco will elect, effective upon its formation, to be treated as a
partnership for U.S. income tax purposes, and (b) Newco’s principal operating
subsidiary will elect, effective upon its formation, to be treated as a
disregarded entity for U.S. income tax purposes, and the Parties shall cooperate
as reasonably requested by Intel (including by executing any such election) in
order to effectuate such elections. The Parties acknowledge that any such
election shall be filed on Internal Revenue Service Form 8832 (or any successor
form) no later than 75 days after the formation under Dutch law of Newco or such
principal operating subsidiary, as the case may be. The Parties further agree
that they will notify Intel prior to the direct or indirect acquisition or
formation by Newco or its Subsidiaries of any entity that will become a
Subsidiary of Newco, and shall cooperate as Intel may request to cause any such
entity to be an “eligible entity” as defined in U.S. Treasury
Regulation Section 301.7701-3(a) and to elect such tax status with respect to
such entity (either as a disregarded entity, partnership or corporation) for
U.S. federal income tax purposes as Intel may request, effective as of the date
of formation of such entity unless otherwise requested by Intel.
     4.18 Newco Closing Reorganization. On or immediately prior to the Closing
Date, the Parties shall cause Newco to take the actions contemplated by
Schedule 4.18 to each Master Agreement Disclosure Letter.
     4.19 Cooperation with Financing. Each Party shall, and shall cause its
Subsidiaries, and cause Newco and its Subsidiaries, and their respective
appropriate representatives to, provide, reasonable cooperation in connection
with the arrangement of the Contemplated Financing as may be reasonably
requested by any other Party, including, using reasonable efforts to:
(a) provide due diligence materials to the parties to the Commitment Letter or
other potential financing sources; (b) assist Newco and its financing sources in
the preparation, if applicable, of an offering document for such Contemplated
Financing and materials for rating agency presentations; (c) cooperate with the
marketing efforts of Newco and its financing sources for such Contemplated
Financing; (d) provide such other documents as may be reasonably requested

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by Newco; and (e) facilitate the pledge of collateral owned by Newco or its
Subsidiaries to secure the Contemplated Financing at and after the Effective
Time.
     4.20 Environmental Consultants. As promptly as practicable (but in no event
later than 40 days) after the date hereof, (a) Intel shall select and engage the
Environmental Consultant to conduct the ST Environmental Reports and (b) ST
shall select and engage the Environmental Consultant to conduct the Intel
Environmental Reports.
     4.21 Hynix JV Matters. As soon as practicable following the date hereof, ST
shall agree to maintain such minimum ownership interest in Newco for such
minimum period of time (not to exceed two years) as Hynix may reasonably require
in order for Newco to be a “Designated Third Party” for purposes of the
agreements set forth in both (a) that certain letter agreement between Hynix and
ST dated March 23, 2007 amending the Joint Venture Agreement, dated as of
November 16, 2004 (as supplemented and amended by letter agreements dated
April 8, 2005, April 19, 2005, April 27, 2005 and June 10, 2005) of the Hynix JV
and (b) the Agreement on the Amendment of the Articles of Association of the
Hynix JV between Hynix and ST dated March 23, 2007.
     4.22 Facility Transfer Term Sheets.
     (a) Intel shall, and shall cause its Subsidiaries to effect the transfer of
the Intel Real Property at the Closing in accordance with the terms of the
Facility Transfer Term Sheets attached to Schedule 4.22(a) of the Intel Master
Agreement Disclosure Letter, subject to the terms and conditions thereof.
     (b) ST shall, and shall cause its Subsidiaries to effect the transfer of
the ST Transferred Facilities at the Closing in accordance with the terms of the
Facility Transfer Term Sheets attached to Schedule 4.22(b) of the ST Master
Agreement Disclosure Letter, subject to the terms and conditions thereof.
     4.23 Governmental Consents. From the date hereof until the earlier of the
Closing Date or the date upon which this Agreement is terminated in accordance
with Section 6.1(c), Intel shall, and shall cause its Subsidiaries to, use
commercially reasonable efforts to take or cause to be taken all actions, and do
or cause to be done all things necessary on their part to obtain the
Governmental Consents on the terms and conditions that satisfy the requirements
set forth in Schedule 5.1(f) of the Intel Master Agreement Disclosure Letter and
Schedule 5.2(f) of the ST Master Agreement Disclosure Letter as soon as
reasonably practicable, including preparing and filing as soon as reasonably
practicable all documentation to effect all necessary notices, reports and other
filings.
     4.24 Release of Liens. On the Closing Date, the Intel Transferors and ST
Transferors shall deliver the Intel Transferred Assets and ST Transferred
Assets, respectively, to Newco and its Subsidiaries free and clear of Liens,
other than Permitted Liens, except as otherwise provided in the Intel Asset
Transfer Agreement and the ST Asset Contribution Agreement.
     4.25 ST Litigation. ST shall be financially responsible for any and all
costs and liabilities, including but not limited to license fees, royalties, and
damages awarded by a court or administrative agency, that accrue in or as a
result of Proceedings with respect to ST Products

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imported, used or sold prior to Closing. Newco shall be financially responsible
for any and all costs and liabilities, including but not limited to license
fees, royalties, and damages awarded by a court or administrative agency, that
accrue in or as a result of Proceedings with respect to ST Products imported,
used or sold by Newco or any of its Subsidiaries on or subsequent to Closing.
Notwithstanding the above, each Party shall be responsible for their respective
legal fees and associated costs related to such Proceedings regardless of when
incurred.
     4.26 Intel Litigation. Intel shall be financially responsible for any and
all costs and liabilities, including but not limited to license fees, royalties,
and damages awarded by a court or administrative agency, that accrue in or as a
result of Proceedings with respect to Intel Products imported, used or sold
prior to Closing. Newco shall be financially responsible for any and all costs
and liabilities, including but not limited to license fees, royalties, and
damages awarded by a court or administrative agency, that accrue in or as a
result of Proceedings with respect to Intel Products imported, used or sold by
Newco or any of its Subsidiaries on or subsequent to Closing. Notwithstanding
the above, each Party shall be responsible for their respective legal fees and
associated costs related to such Proceedings regardless of when incurred.
     4.27 Confidentiality Agreement. Immediately following the formation of
Newco pursuant to Section 4.16, the Parties shall cause Newco to become a party
to the Confidentiality Agreement.
     4.28 Further Assurances. Each Party agrees to execute and deliver, or cause
to be executed and delivered, such other documents, certificates, agreements and
other writings and to take, or cause to be taken, such other commercially
reasonable actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement.
ARTICLE V
CONDITIONS TO CLOSING
     5.1 Conditions to Obligations of Intel. The obligations of Intel to
consummate the Closing are subject to the satisfaction or waiver of each of the
following conditions:
     (a) Performance by ST. (i) ST shall have performed and satisfied in all
material respects its obligations and covenants hereunder to the extent such
obligations and covenants are required to be performed and satisfied by it on or
prior to the Closing Date, (ii) the representations and warranties of ST
contained in Section 3.2 shall be true and correct at and as of the Closing as
if made at and as of the Closing Date (rather than at and as of the date
hereof), provided, however, that those representations and warranties set forth
in Sections 3.1 — 3.24 of the ST Asset Contribution Agreement (incorporated
herein by reference) and which within such sections address matters only as of a
certain date specific shall be true and correct as of such certain date),
except, in any case, for failures of such representations and warranties
(disregarding any materiality or ST Material Adverse Effect qualifications
contained in any such representation or warranty) to be true and correct that
have not had and would not reasonably be expected to have an ST Material Adverse
Effect, and (iii) Newco shall have received a certificate signed by a duly
authorized executive officer of ST to the foregoing effect.

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     (b) Performance by FP and FP Holdco. (i) Each of FP and FP Holdco shall
have performed and satisfied in all material respects its obligations and
covenants hereunder to the extent such obligations and covenants are required to
be performed and satisfied by it on or prior to the Closing Date, (ii) the
representations and warranties of FP and FP Holdco contained in Section 3.3
shall be true and correct at and as of the Closing as if made at and as of such
date (other than those representations and warranties which address matters only
as of a certain date which shall be true and correct as of such certain date),
except, in any case, for failures of such representations and warranties
(disregarding any materiality or FP Material Adverse Effect qualifications
contained in any such representation or warranty) to be true and correct that
have not had and would not reasonably be expected to have an FP Material Adverse
Effect, and (iii) Newco shall have received a certificate signed by a duly
authorized executive officer of each of FP and FP Holdco to the foregoing
effect.
     (c) No Violation. No Governmental Authority shall have enacted, issued,
promulgated or entered any Applicable Law which is in effect on the Closing Date
which has or would have the effect of prohibiting, restraining or enjoining the
consummation of the transactions contemplated by this Agreement. No temporary
restraining order, preliminary or permanent injunction, cease and desist order
or other order issued by any court or other Governmental Authority that has the
effect of making the transactions contemplated hereby illegal or otherwise
prohibiting consummation of the transfers contemplated hereby or the
consummation of the Closing, or imposing upon Intel material fines or penalties
in respect thereof, shall be in effect as of the Closing Date, and there shall
be no pending or threatened actions or proceedings by any Governmental Authority
(or determinations by any Governmental Authority) challenging or in any manner
seeking to prohibit the transfer contemplated hereby or the consummation of the
Closing.
     (d) Transaction Documents. Each of ST, FP, FP Holdco and Newco (and each of
their respective Affiliates) shall have executed and delivered to Intel each
Transaction Document, substantially in the form attached hereto, or attached to
the form of Intel Asset Transfer Agreement or ST Asset Contribution Agreement,
to which each of them, respectively, is a party.
     (e) Governmental Approvals. The waiting period (and any extension thereof)
applicable to the consummation of the transactions contemplated hereby under the
HSR Act shall have expired or been terminated, and any waiting period (and any
extension thereof) under any other applicable similar merger notification laws
or regulations of foreign Governmental Authorities shall have expired or been
terminated. Any Governmental Approvals required under any such laws or
regulations in connection with the consummation of the transactions contemplated
hereby shall have been obtained.
     (f) Consents. Intel shall have received the Consents identified on
Schedule 5.1(f) of the Intel Master Agreement Disclosure Letter on terms and
conditions that satisfy the requirements set forth in Schedule 5.1(f) of the
Intel Master Agreement Disclosure Letter.

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     (g) No ST Material Adverse Effect. There shall not have occurred since the
date hereof any ST Material Adverse Effect that is continuing, and Newco shall
have received a certificate signed by a duly authorized executive officer of ST
to the foregoing effect.
     (h) Audited Financial Statements. ST shall have delivered to Intel audited
statements of revenue and direct expenses for the ST Business for the years
ended December 31, 2005 and December 31, 2006, and the following balance sheet
captions: accounts receivable, inventories, fixed assets, intangible assets and
equity investments, as of December 31, 2005 and December 31, 2006 and related
notes to these statements. The financial statements shall be prepared to report
the ST Business as it has been reported in ST’s consolidated financial
statements applying GAAP and following the presentation basis adopted by ST in
its consolidated financial statements, consistently applied (collectively, “ST
Business Audited Financial Statements”).
     (i) Contemplated Financing. The Contemplated Financing shall have been
provided to Newco; provided that the Contemplated Financing does not result in
Newco and its Subsidiaries having more than $1,300,000,000 of aggregate
Indebtedness outstanding as of the Closing.
     (j) Dutch Auditor’s Certificates. Each Party (and its Affiliates), as
applicable, shall have obtained such auditor’s certificate(s) pursuant to
article 2:204b or 2:204c (as applicable) of the Dutch Civil Code as are required
to give effect to the transactions contemplated in this Agreement and the other
Transaction Documents.
     (k) Minimum Cash. On the Closing Date, following payment by Newco of any
fees and expenses incurred by Newco in connection with the Closing of the
Transactions contemplated hereby, but in any event not including the costs set
forth in Section 4.16(d), Newco shall have on hand at least $500,000,000 in Cash
and Cash Equivalents.
     5.2 Conditions to Obligations of ST. The obligations of ST to consummate
the Closing are subject to the satisfaction or waiver of each of the following
conditions:
     (a) Performance by Intel. (i) Intel shall have performed and satisfied in
all material respects its obligations and covenants hereunder to the extent such
obligations and covenants are required to be performed and satisfied by it on or
prior to the Closing Date, (ii) the representations and warranties of Intel
contained in Section 3.1 shall be true and correct at and as of the Closing as
if made at and as of the Closing Date (rather than at and as of the date
hereof); provided, however, that those representations and warranties set forth
in Sections 3.1 - 3.24 of the Intel Asset Transfer Agreement (incorporated
herein by reference) and which within such sections address matters only as of a
certain date specific shall be true and correct as of such certain date),
except, in any case, for failures of such representations and warranties
(disregarding any materiality or Intel Material Adverse Effect qualifications
contained in any such representation or warranty) to be true and correct that
have not had and would not reasonably be expected to have an Intel Material
Adverse Effect, and (iii) Newco shall have received a certificate signed by a
duly authorized executive officer of Intel to the foregoing effect.

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     (b) Performance by FP and FP Holdco. (i) Each of FP and FP Holdco shall
have performed and satisfied in all material respects its obligations and
covenants hereunder to the extent such obligations and covenants are required to
be performed and satisfied by it on or prior to the Closing Date, (ii) the
representations and warranties of FP and FP Holdco contained in Section 3.3
shall be true and correct at and as of the Closing as if made at and as of such
date (other than those representations and warranties which address matters only
as of a certain date which shall be true and correct as of such certain date),
except, in any case, for failures of such representations and warranties
(disregarding any materiality or FP Material Adverse Effect qualifications
contained in any such representation or warranty) to be true and correct that
have not had and would not reasonably be expected to have an FP Material Adverse
Effect, and (iii) Newco shall have received a certificate signed by a duly
authorized executive officer of each of FP and FP Holdco to the foregoing
effect.
     (c) No Violation. No Governmental Authority shall have enacted, issued,
promulgated or entered any Applicable Law which is in effect on the Closing Date
which has or would have the effect of prohibiting, restraining or enjoining the
consummation of the transactions contemplated by this Agreement. No temporary
restraining order, preliminary or permanent injunction, cease and desist order
or other order issued by any court or other Governmental Authority that has the
effect of making the transactions contemplated hereby illegal or otherwise
prohibiting consummation of the transfers contemplated hereby or the
consummation of the Closing, or imposing upon ST material fines or penalties in
respect thereof, shall be in effect as of the Closing Date, and there shall be
no pending or threatened actions or proceedings by any Governmental Authority
(or determinations by any Governmental Authority) challenging or in any manner
seeking to prohibit the transfer contemplated hereby or the consummation of the
Closing.
     (d) Transaction Documents. Each of Intel, FP, FP Holdco and Newco (and each
of their respective Affiliates) shall have executed and delivered to ST each
Transaction Document substantially in the form attached hereto, or attached to
the form of Intel Asset Transfer Agreement or ST Asset Contribution Agreement,
to which each of them, respectively, is a party.
     (e) Governmental Approvals. The waiting period (and any extension thereof)
applicable to the consummation of the transactions contemplated hereby under the
HSR Act shall have expired or been terminated, and any waiting period (and any
extension thereof) under any other applicable similar merger notification laws
or regulations of foreign Governmental Authorities shall have expired or been
terminated. Any Governmental Approvals required under any such laws or
regulations in connection with the consummation of the transactions contemplated
hereby shall have been obtained.
     (f) Consents. Intel shall have received the Consents identified on
Schedule 5.2(f) of the ST Master Agreement Disclosure Letter on terms and
conditions that satisfy the requirements set forth in Schedule 5.2(f) of the ST
Master Agreement Disclosure Letter.

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     (g) No Intel Material Adverse Effect. There shall not have occurred since
the date hereof any Intel Material Adverse Effect that is continuing, and Newco
shall have received a certificate signed by a duly authorized executive officer
of Intel to the foregoing effect.
     (h) Audited Financial Statements. Intel shall have delivered to ST audited
statements of revenues and direct expenses for the Intel Business for the years
ended December 31, 2005 and December 30, 2006, and the following balance sheet
captions: accounts receivable, inventories, fixed assets and, if applicable,
other assets as of December 31, 2005 and December 30, 2006, and related notes to
these statements. The financial statements shall be prepared to report the Intel
Business as it has been reported in Intel’s consolidated financial statements
applying GAAP and following the presentation basis adopted by Intel in its
consolidated financial statements, consistently applied (collectively, “Intel
Business Audited Financial Statements”).
     (i) Contemplated Financing. The Contemplated Financing shall have been
provided to Newco; provided that the Contemplated Financing does not result in
Newco and its Subsidiaries having more than $1,300,000,000 of aggregate
Indebtedness outstanding as of the Closing.
     (j) Dutch Auditor’s Certificates. Each Party (and its Affiliates), as
applicable, shall have obtained such auditor’s certificate(s) pursuant to
article 2:204b or 2:204c (as applicable) of the Dutch Civil Code as are required
to give effect to the transactions contemplated in this Agreement and the other
Transaction Documents.
     (k) Minimum Cash. On the Closing Date, following payment by Newco of any
fees and expenses incurred by Newco in connection with the Closing of the
Transactions contemplated hereby, but in any event not including the costs set
forth in Section 4.16(d), Newco shall have on hand at least $500,000,000 in Cash
and Cash Equivalents.
     5.3 Conditions to Obligations of FP and FP Holdco. The obligations of FP
and FP Holdco to consummate the Closing are subject to the satisfaction or
waiver of each of the following conditions:
     (a) Performance by Intel. (i) Intel shall have performed and satisfied in
all material respects its obligations and covenants hereunder to the extent such
obligations and covenants are required to be performed and satisfied by it on or
prior to the Closing Date, (ii) the representations and warranties of Intel
contained in Section 3.1 shall be true and correct at and as of the Closing as
if made at and as of the Closing Date (rather than at and as of the date
hereof), provided, however, that those representations and warranties set forth
in Sections 3.1 - 3.24 of the Intel Asset Transfer Agreement (incorporated
herein by reference) and which within such sections address matters only as of a
certain date specific shall be true and correct as of such certain date),
except, in any case, for failures of such representations and warranties
(disregarding any materiality or Intel Material Adverse Effect qualifications
contained in any such representation or warranty) to be true and correct that
have not had and would not reasonably be expected to have an Intel

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Material Adverse Effect, and (iii) Newco shall have received a certificate
signed by a duly authorized executive officer of Intel to the foregoing effect.
     (b) Performance by ST. (i) ST shall have performed and satisfied in all
material respects its obligations and covenants hereunder to the extent such
obligations and covenants are required to be performed and satisfied by it on or
prior to the Closing Date, (ii) the representations and warranties of ST
contained in Section 3.2 shall be true and correct at and as of the Closing as
if made at and as of the Closing Date (rather than at and as of the date
hereof); provided, however, that those representations and warranties set forth
in Sections 3.1 — 3.24 of the ST Asset Contribution Agreement (incorporated
herein by reference) and which within such sections address matters only as of a
certain date specific shall be true and correct as of such certain date),
except, in any case, for failures of such representations and warranties
(disregarding any materiality or ST Material Adverse Effect qualifications
contained in any such representation or warranty) to be true and correct that
have not had and would not reasonably be expected to have an ST Material Adverse
Effect, and (iii) Newco shall have received a certificate signed by a duly
authorized executive officer of ST to the foregoing effect.
     (c) No Violation. No Governmental Authority shall have enacted, issued,
promulgated or entered any Applicable Law which is in effect on the Closing Date
which has or would have the effect of prohibiting, restraining or enjoining the
consummation of the transactions contemplated by this Agreement. No temporary
restraining order, preliminary or permanent injunction, cease and desist order
or other order issued by any court or other Governmental Authority that has the
effect of making the transactions contemplated hereby illegal or otherwise
prohibiting consummation of the transfers contemplated hereby or the
consummation of the Closing, or imposing upon FP or FP Holdco material fines or
penalties in respect thereof, shall be in effect as of the Closing Date, and
there shall be no pending or threatened actions or proceedings by any
Governmental Authority (or determinations by any Governmental Authority)
challenging or in any manner seeking to prohibit the transfer contemplated
hereby or the consummation of the Closing.
     (d) Transaction Documents. Each of Intel, ST and Newco (and each of their
respective Affiliates) shall have executed and delivered to FP and FP Holdco
each Transaction Document, substantially in the form attached hereto, or
attached to the form of Intel Asset Transfer Agreement or ST Asset Contribution
Agreement, to which each of them, respectively, is a party.
     (e) Governmental Approvals. The waiting period (and any extension thereof)
applicable to the consummation of the transactions contemplated hereby under the
HSR Act shall have expired or been terminated, and any waiting period (and any
extension thereof) under any other applicable similar merger notification laws
or regulations of foreign Governmental Authorities shall have expired or been
terminated. Any Governmental Approvals required under any such laws or
regulations in connection with the consummation of the transactions contemplated
hereby shall have been obtained.

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     (f) No Intel Material Adverse Effect. There shall not have occurred since
the date hereof any Intel Material Adverse Effect that is continuing, and Newco
shall have received a certificate signed by a duly authorized executive officer
of Intel to the foregoing effect.
     (g) No ST Material Adverse Effect. There shall not have occurred since the
date hereof any ST Material Adverse Effect that is continuing, and Newco shall
have received a certificate signed by a duly authorized executive officer of ST
to the foregoing effect.
     (h) Audited Financial Statements. Intel shall have delivered to FP the
Intel Business Audited Financial Statements and ST shall have delivered to FP
the ST Business Audited Financial Statements.
     (i) Contemplated Financing. The Contemplated Financing shall have been
provided to Newco; provided that the Contemplated Financing does not result in
Newco or its Subsidiaries having more than $1,300,000,000 of aggregate
Indebtedness outstanding as of the Closing.
     (j) Dutch Auditor’s Certificates. Each Party (and its Affiliates), as
applicable, shall have obtained such auditor’s certificate(s) pursuant to
article 2:204b or 2:204c (as applicable) of the Dutch Civil Code as are required
to give effect to the transactions contemplated in this Agreement and the other
Transaction Documents.
     (k) Minimum Cash. On the Closing Date, following payment by Newco of any
fees and expenses incurred by Newco in connection with the Closing of the
Transactions contemplated hereby, but in any event not including the costs set
forth in Section 4.16(d), Newco shall have on hand at least $500,000,000 in Cash
and Cash Equivalents.
ARTICLE VI
TERMINATION
     6.1 Grounds for Termination. This Agreement may be terminated at any time
prior to the Closing:
     (a) by mutual written agreement of the Parties;
     (b) by written notice from any Party to the other Parties if:
     (i) the Closing has not been effected on or prior to the close of business
on the Termination Date; provided, however, that the right to terminate this
Agreement pursuant to this Section 6.1(b)(i) shall not be available to any Party
whose failure to fulfill any of its obligations contained in this Agreement has
been the cause of, or resulted in, the failure of the Closing to have occurred
on or prior to the aforesaid date; provided, further, that if the sole
conditions to Closing in Article V that remain unsatisfied (or unwaived) as of
the aforesaid date are set forth in any of Sections 5.1(e) (Governmental
Approvals), 5.1(f) (Governmental Consents), 5.1(i) (Contemplated Financing),
5.1(k) (Minimum Cash), 5.2(e) (Governmental Approvals), 5.2(f) (Governmental
Consents), 5.2(i) (Contemplated Financing, 5.2(k) (Minimum Cash), 5.3(e)
(Governmental Approvals), 5.3(i) (Contemplated Financing), or 5.3(k) (Minimum

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Cash), provided that a binding commitment in respect of the Contemplated
Financing obtained by one or more Parties shall be in full force and effect with
a term ending no earlier than February 29, 2008, then any Party may, in its sole
discretion and upon written notice to the other Parties, extend the aforesaid
date to a date no later than February 29, 2008 (and in such event, all
references herein to the Termination Date shall be to such date as so extended);
provided, further, that after such Termination Date (as so extended) any further
extension of the term of this Agreement shall require the consent of each Party;
     (ii) any Applicable Law shall be enacted or become applicable that makes
the transactions contemplated hereby or the consummation of any of the Closing
illegal or otherwise prohibited;
     (iii) any judgment, injunction, order or decree enjoining any Party hereto
from consummating the transactions contemplated hereby or the Closing is
entered, and such judgment, injunction, order or decree shall become final and
nonappealable;
     (iv) any other Party is in material breach or material default of any
covenant contained herein or there are any inaccuracies or misrepresentations in
another Party’s representations or warranties herein (disregarding any
materiality or “Material Adverse Effect” qualifications contained in any such
representation or warranty) which have had, or if not cured prior to the Closing
Date would have, in the case of Intel, an Intel Material Adverse Effect, in the
case of ST, an ST Material Adverse Effect, or in the case of FP, an FP Material
Adverse Effect , as the case may be, and such breach or default, shall not be
cured or waived within 20 Business Days after written notice is delivered by any
of the non-breaching Parties specifying, in reasonable detail, such claimed
material breach or default and demanding its cure or satisfaction; provided that
if it is not reasonably practicable to cure such breach or default within 20
Business Days but such breaching Party is using its commercially reasonable
efforts to promptly cure, then such Party shall have an additional 10 Business
Days to cure the breach;
     (c) by written notice from ST to the other Parties as follows:
     (i) if the conditions to the obligations of Intel to close set forth in
Sections 5.1(a) (Performance by ST), 5.1(c) (No Violation), 5.1(e) (Governmental
Approvals), 5.1(g) (No ST Material Adverse Effect) and 5.1(h) (Audited Financial
Statements) hereof have been satisfied as of December 15, 2007, but the
condition to the obligation of ST to close set forth in Section 5.2(f)
(Governmental Consents) has not been satisfied as of such date; then ST may
provide written notice of termination to the other Parties on December 15, 2007
provided that any such written notice from ST (i) shall not be effective until
December 31, 2007 and (ii) shall only become effective on December 31, 2007 if

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(A) the condition to the obligation of ST to close set forth in Section 5.2(f)
(Governmental Consents) has not been satisfied as of such date and (B) if the
conditions to the obligations of Intel to close set forth in Sections 5.1(a)
(Performance by ST), 5.1(c) (No Violation), 5.1(e) (Governmental Approvals),
5.1(g) (No ST Material Adverse Effect) and 5.1(h) (Audited Financial Statements)
hereof have been satisfied on December 31, 2007;
     (ii) if the Termination Date shall have been extended by any Party to
February 29, 2008 in accordance with Section 6.1(b)(i), then ST and Intel shall
meet prior to January 15, 2008 to discuss the next steps to be pursued by Intel,
and unless ST shall have agreed in writing no later than January 15, 2008 to
extend the Governmental Consents Termination Date to February 29, 2008, then ST
may provide written notice of termination to the other Parties on January 15,
2008, provided that any such written notice from ST (A) shall not be effective
until January 31, 2008 and (B) shall only become effective on January 31, 2008
if (1) the condition to the obligation of ST to close set forth in
Section 5.2(f) (Governmental Consents) has not been satisfied as of such date
and (2) if the conditions to the obligations of Intel to close set forth in
Sections 5.1(a) (Performance by ST), 5.1(c) (No Violation), 5.1(e) (Governmental
Approvals), 5.1(g) (No ST Material Adverse Effect) and 5.1(h) (Audited Financial
Statements) hereof have been satisfied on January 31, 2008; or
     (iii) if the Termination Date shall have been extended by any Party to
February 29, 2008 in accordance with Section 6.1(b)(i) and the conditions to the
obligations of Intel to close set forth in Sections 5.1(a) (Performance by ST),
5.1(c) (No Violation), 5.1(e) (Governmental Approvals), 5.1(g) (No ST Material
Adverse Effect) and 5.1(h) (Audited Financial Statements) hereof have been
satisfied as of February 29, 2008, but the condition to the obligation of ST to
close set forth in Section 5.2(f) (Governmental Consents) has not been satisfied
as of such date, then ST may provide written notice of termination to the other
Parties.
     6.2 Effect of Termination.
     (a) If this Agreement is terminated pursuant to Section 6.1(a), (b), or
(c), all obligations of the Parties hereunder (except for this Section 6.2,
Section 4.7 (Non-Solicitation of Employees) and Article VII (Miscellaneous))
shall terminate without Liability of any Party to any other Party and the
representations and warranties made herein shall not survive beyond a
termination of this Agreement. Nothing contained in this Section 6.2 shall
relieve any Party of Liability for any breach of any representation, warranty or
covenant contained in this Agreement that occurred prior to the date of
termination of this Agreement.
     (b) If (i) ST terminates this Agreement pursuant to Section 6.1(c)(i), (ii)
or (iii) or (ii) if (A) the conditions to the obligations of Intel to close set
forth in Sections 5.1(a) (Performance by ST), 5.1(c) (No Violation), 5.1(e)
(Governmental Approvals), 5.1(g) (No ST Material Adverse Effect) and 5.1(h)
(Audited Financial Statements) hereof have

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been satisfied on December 31, 2007, (B) the condition to the obligation of ST
to close set forth in Section 5.2(f) has not been satisfied as of December 31,
2007, (C) the Termination Date has not been extended under Section 6.1(b)(i),
and (D) any Party terminates this Agreement pursuant to Section 6.1(b)(i), then
Intel shall pay to ST a fee of $75,000,000 (the “Termination Fee”) in
immediately available funds no later than five Business Days after such
termination and Intel shall reimburse FP for (1) up to $2,500,000 of its
reasonable costs and expenses actually incurred or accrued by FP in connection
with the transactions contemplated hereby, plus (2) up to $5,000,000 of costs
and expenses actually incurred or accrued by FP or its Affiliates on behalf of
Newco, plus (3) any additional amounts incurred by FP or its Affiliates on
behalf of Newco as may be agreed between Intel, ST and FP, in the cases of
clauses (2) and (3), for the services described on Schedule 7.3 to each of the
Master Agreement Disclosure Letters (the amounts set forth in (1), (2) and (3),
collectively, the “FP Costs”). In the event that ST terminates this Agreement
pursuant to Section 6.1(c)(i), (ii) or (iii), the Termination Fee and the FP
Costs shall be payable by Intel regardless of whether or not any other Party
shall have terminated this Agreement on the same date pursuant to Section
6.1(b)(i).
     (c) If any termination of this Agreement prior to Closing is attributable
to a willful breach (i) by Intel of any representation or warranty of Intel
contained in this Agreement, in no event shall the Liability of Intel for such
breach to ST exceed $75,000,000 million or of Intel to FP and FP Holdco,
collectively, exceed $7,500,000 million plus any additional expenses incurred by
FP and its Affiliates on behalf of Newco as agreed by Intel, ST and Newco after
the date hereof for services described on Schedule 7.3 to each of the Master
Agreement Disclosure Letters, or (ii) by ST of any representation or warranty of
ST contained in this Agreement, in no event shall the Liability of ST for such
breach to Intel exceed $75,000,000 or of ST to FP and FP Holdco, collectively,
exceed $7,500,000 plus any additional expenses incurred by FP and its Affiliates
on behalf of Newco as agreed by Intel, ST and Newco after the date hereof for
services described on Schedule 7.3 to each of the Master Agreement Disclosure
Letters.
     (d) Each of the Parties acknowledges that the agreements contained in this
Section 6.2 are an integral part of the transactions contemplated by this
Agreement and the other Transaction Documents. In the event that Intel or ST
shall fail to pay the Termination Fee when due, Intel or ST, as the case may be,
shall reimburse the other for all reasonable costs and expenses actually
incurred or accrued by the other (including reasonable fees and expenses of
counsel) in connection with the collection under and enforcement of this
Section 6.2.
     6.3 Termination of Representations and Warranties and Covenants Upon the
Closing. Except as otherwise provided pursuant to the Intel Asset Transfer
Agreement and the ST Asset Contribution Agreement including without limitation
Section 5.18 (Master Agreement Covenants) thereof, the representations and
warranties of the Parties contained in Article III of this Agreement, and the
covenants contained in Section 4.9 and Section 4.10 of this Agreement, shall
terminate and be of no further force or effect immediately upon the consummation
of the Closing; provided, however that the representations and warranties set
forth in Sections 3.1(a), 3.2(a), and 3.3(a) (Existence and Good Standing),
Sections 3.1(b), 3.2(b) and 3.3(b),

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(Authorization; Enforceability) and Sections 3.1(g), 3.2(g), and 3.3(f)
(Reliance) shall survive until the expiration of the applicable statute of
limitations.
     6.4 Exclusive Remedy. The Parties hereby acknowledge and agree that
following the Closing, no Person other than Newco shall have any rights with
respect to any breach of any of the representations or warranties contained in
Article III hereof or the covenants specified in Section 5.18 (Master Agreement
Covenants) of each of the Intel Asset Transfer Agreement and the ST Asset
Contribution Agreement. Newco’s sole remedy for any such breach (a) by Intel,
shall be pursuant to Article VI of the Intel Asset Transfer Agreement and (b) by
ST, shall be pursuant to Article VI of the ST Asset Contribution Agreement.
ARTICLE VII
MISCELLANEOUS
     7.1 Notices. All notices and other communications pursuant to this
Agreement shall be in writing and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by U.S.
registered or certified mail (return receipt requested), postage prepaid, to the
Parties at the addresses set forth below or to such other address as the Party
to whom notice is to be given may have furnished to the other Party in writing
in accordance herewith. Any such notice or communication shall be deemed to have
been delivered and received (a) in the case of personal delivery, on the date of
such delivery, (b) in the case of telecopier delivery, on the date sent if
confirmation of receipt is received and such notice is also promptly mailed by
registered or certified mail (return receipt requested), (c) in the case of a
nationally-recognized overnight courier in circumstances under which such
courier guarantees next Business Day delivery, on the next Business Day after
the date when sent and (d) in the case of mailing, on the fifth Business Day
following that on which the piece of mail containing such communication is
posted to the address provided herein or to such other address as the Person to
whom notice is given may have previously furnished to the others in writing in
the manner set forth above. Any Party hereto may give any notice, request,
demand, claim or other communication hereunder using any other means (including
ordinary mail or electronic mail), but no such notice, request, demand, claim or
other communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Notices to
Parties pursuant to this Agreement shall be given:

  (a)   to Intel Corporation:

Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95054
Attention: Treasurer
Telephone: (408) 765-8080
Facsimile: (408) 765-6038

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with a copy to:
Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95054
Attention: General Counsel
Telephone: (408) 765-8080
Facsimile: (408) 653-8050
and a copy to (which shall not constitute notice to Intel):
Gibson, Dunn & Crutcher LLP
1881 Page Mill Rd.
Palo Alto, CA 94304
Attention: Russell C. Hansen
Telephone: (650) 849-5300
Facsimile: (650) 849-5333

  (b)   if to STMicroelectronics N.V.:

STMicroelectronics N.V.
Chemin du Champ-des-Filles, 39
1228 Plan-les-Ouates
Geneva, Switzerland
Attention: Pierre Ollivier, Group Vice President and General Counsel
Telephone: 41 22 929 58 76
Facsimile: 41 22 929 59 06
with a copy to (which shall not constitute notice to ST):
STMicroelectronics N.V.
1310 Electronics Drive
Mail Station 2346
Carollton, TX 75006
Attention: Steven K. Rose, Vice President, Secretary and General Counsel
Telephone: (972) 466-6412
Facsimile: (972) 466-7044
and a copy to (which shall not constitute notice to ST):
Shearman & Sterling LLP
525 Market Street
San Francisco, CA 94105
Attention: John D. Wilson
Telephone: (415) 616-1100
Facsimile: (415) 616-1199

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  (c)   if to FP or FP Holdco:

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

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     7.3 Expenses. Except as set forth in (a) Section 5.8(c) of the Intel Asset
Transfer Agreement, (b) Section 5.8(c) of the ST Asset Contribution Agreement
and (c) Schedule 7.3 of each of the Intel Master Agreement Disclosure Letter and
the ST Master Agreement Disclosure Letter, all costs and expenses incurred in
connection with this Agreement and the other Transaction Documents and in
closing and carrying out the transactions contemplated hereby and thereby shall
be paid by the Party incurring such cost or expense.
     7.4 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective successors, heirs, personal
representatives and permitted assigns. No Party hereto may transfer or assign
either this Agreement or any of its rights, interests or obligations hereunder,
whether directly or indirectly, by operation of law, merger or otherwise,
without the prior written approval of each other Party; provided that each of FP
and FP Holdco may transfer or assign its rights and obligations under this
Agreement, in whole or from time to time in part, to one or more if its
Affiliates at any time prior to the Closing; provided, further, that in the
event of any such assignment, any of the terms “FP” or “FP Holdco,” in any
Transaction Document, shall apply to any such assignee, mutatis mutandis. No
such transfer or assignment shall relieve the transferring or assigning Party of
its obligations hereunder if such transferee or assignee does not perform such
obligations.
     7.5 Governing Law. This Agreement shall be construed in accordance with and
this Agreement and any disputes or controversies related hereto shall be
governed by the internal laws of the State of New York without giving effect to
the conflicts of laws principles thereof that would apply the laws of any other
jurisdiction.
     7.6 Counterparts; Effectiveness. This Agreement may be signed in any number
of counterparts and the signatures delivered by telecopy, each of which shall be
an original, with the same effect as if the signatures were upon the same
instrument and delivered in person. This Agreement shall become effective when
each Party hereto shall have received a counterpart hereof signed by the other
Parties.
     7.7 Entire Agreement. This Agreement (including the Schedules and Exhibits
referred to herein, which are hereby incorporated by reference), the other
Transaction Documents and the Confidentiality Agreements constitute the entire
agreement between the Parties with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings and negotiations,
both written and oral, between and among the Parties with respect to the subject
matter of this Agreement. Neither this Agreement nor any provision hereof is
intended to confer upon any Person other than the Parties any rights or remedies
hereunder. No representation, warranty, promise, inducement or statement of
intention has been made by either Party that is not embodied in this Agreement
or such other documents, and neither party shall be bound by, or be liable for,
any alleged representation, warranty, promise, inducement or statement of
intention not embodied herein or therein.
     7.8 Captions. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
     7.9 Severability. If any provision of this Agreement, or the application
thereof to any Person, place or circumstance, shall be held by a court of
competent jurisdiction to be invalid,

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unenforceable or void, the remainder of this Agreement and such provisions as
applied to other Persons, places and circumstances shall remain in full force
and effect only if, after excluding the portion deemed to be unenforceable, the
remaining terms shall provide for the consummation of the transactions
contemplated hereby in substantially the same manner as originally set forth at
the later of the date this Agreement was executed or last amended.
     7.10 Dispute Resolution.
     (a) With the exception of disputes involving intellectual property
ownership and infringement issues, any dispute arising under this Agreement
shall be finally resolved by arbitration. The Parties waive their right to any
form of appeal to a court on any questions of law arising out of the arbitration
award. Any dispute or claim between the Parties which is beyond the scope of
this Section shall be submitted to the exclusive jurisdiction of the courts of
the State of New York and the Federal courts of the United States of America
located in the State of New York. The Parties hereby consent to and grant any
such court jurisdiction over such Parties and over the subject matter of such
dispute and agree that mailing of process or other papers in connection with any
such action or proceeding in the manner provided in Section 7.1 or in such other
manner as may be permitted by Applicable Law, shall be valid and sufficient
service thereof.
     (b) Mediation. Prior to arbitration, however, the Party making the original
claim shall provide the other Party with a written description of the dispute or
claim and the senior executives of the Parties shall meet in an attempt to
resolve such dispute or claim. If the disagreements cannot be resolved by the
senior management after 90 days from the date any Party made a written demand
for resolution, a binding arbitration shall be held.
     (c) Arbitration Rules. The rules of the arbitration shall be agreed upon by
the Parties prior to the arbitration and shall be based upon the nature of the
disagreement. To the extent that the Parties cannot agree on the rules of the
arbitration after 30 days from the date any party makes a written demand for
resolution, then, subject to Section 7.10(d), the Rules of Arbitration of the
ICC in effect as of the Closing Date shall apply.
     (d) Mandatory Rules. As a minimum set of rules in the arbitration the
Parties agree as follows:
     (i) The arbitration shall be held by one arbitrator appointed by mutual
agreement of the Parties. If the Parties cannot agree on a single arbitrator
within 15 days from the date written demand for arbitration has been received by
the other Party, each Party shall identify one independent individual. The
individuals appointed by the Parties shall then meet to appoint a single
arbitrator. If an arbitrator still cannot be agreed upon within an additional
15 day period, he or she shall be appointed by the ICC.
     (ii) The place of arbitration shall be New York, New York. Hearings and
meetings shall be held in New York or at such other place as the Parties may
agree.

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

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limitations on damages set forth in this Agreement, including Sections 6.2 and
6.4.
     (viii) The arbitrator may not order any conservatory or interim relief
measures of any kind. In any event, however, either Party may apply for
conservatory or interim relief measures to the courts of the State of New York
or the Federal courts of the United States of America located in the State of
New York which shall have exclusive jurisdiction to grant such injunctive
relief.
     (ix) The Parties shall agree upon what, if any, disclosure to the other
parties to the arbitration shall be permitted. If the Parties can not agree on
the form of disclosure within 30 days after the appointment of the arbitrator,
then the Parties agree that in addition to the Rules of Arbitration of the ICC,
the arbitrators shall apply the IBA Rules of Evidence. In case of conflict
between Rules of Arbitration of the ICC and the IBA Rules of evidence, the Rules
of Arbitration of the ICC shall prevail. Notwithstanding anything herein to the
contrary, in no event shall anything verbally or in writing used strictly for
settlement purposes between the Parties be permitted by the arbitration to be
used as evidence for either Party’s case.
     (x) The Parties shall equally bear the costs of the arbitration. Each Party
shall bear the fees and expenses of its appointed experts and shall bear its own
legal expenses. For the purpose of this clause, the term “costs of arbitration”
includes only: (A) the fees and expenses of the arbitrator; (B) in the case of
an arbitration governed by the ICC Rules, the ICC administrative expenses fixed
by the Court of Arbitration of the ICC; (C) the fees and expenses of any experts
appointed by the arbitrator.
     7.11 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (b) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (c) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (d) EACH
SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.11.
     7.12 Third Party Beneficiaries. Effective on the Closing Date, Newco shall
be deemed a third party beneficiary of the covenants set forth in the Sections
referenced in Section 5.18 (Master Agreement Covenants) of each of the Intel
Asset Transfer Agreement and ST Asset

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Contribution Agreement. No provision of this Agreement shall create any third
party beneficiary rights in any other Person, including any employee or former
employee of Intel or ST or any of their respective Affiliates (including any
beneficiary or dependent thereof).
     7.13 Specific Performance. The Parties hereby acknowledge and agree that
the failure of any Party to perform its agreements and covenants hereunder,
including its failure to take all actions as are necessary on its part to the
consummation of the transactions contemplated herein, may cause irreparable
injury to the other Party, for which damages, even if available, may not be an
adequate remedy. Accordingly, each Party hereby consents to the issuance of
injunctive relief by any court of competent jurisdiction to compel performance
of such Party’s obligations and to the granting by any court of the remedy of
specific performance of its obligations hereunder.
     7.14 No Presumption Against Drafting Party. Intel, ST, FP and FP Holdco
acknowledge that each of the Parties hereto has been represented by counsel in
connection with the negotiation and execution of this Agreement and the other
Transaction Documents. Accordingly, any rule of law or any legal decision that
would require interpretation of any claimed ambiguities in this Agreement
against the drafting party has no application and is expressly waived.
[Remainder of page intentionally left blank]

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          IN WITNESS WHEREOF, this Agreement has been executed and delivered as
of the date first above written.

              INTEL CORPORATION
 
       
 
  By:   / s / Arvind Sodhani
 
       
 
  Name:   Arvind Sodhani
 
  Title:   Senior Vice President; President, Intel Capital
 
            STMICROELECTRONICS N.V.
 
       
 
  By:   / s / Carlo Bozotti
 
       
 
  Name:   Carlo Bozotti
 
  Title:   President and CEO

[Signature page to Master Agreement]

 

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              FRANCISCO PARTNERS II (CAYMAN) L.P.
 
       
 
  By:   FRANCISCO PARTNERS GP II (CAYMAN)
L.P., its General Partner
 
       
 
  By:   FRANCISCO PARTNERS GP II
MANAGEMENT (CAYMAN) Limited, its General Partner
 
       
 
  By:   / s / David ibnAle
 
       
 
  Name:
Title:   David ibnAle
Manager
 
            REDWOOD BLOCKER S.A.R.L.
 
       
 
  By:   / s / Phokion Potamianos
 
       
 
  Name:   Phokion Potamianos
 
  Title:   Manager

[Signature page to Master Agreement]

 

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APPENDIX A
TO MASTER AGREEMENT
     “Affiliate”, with respect to any Person, means any other Person directly or
indirectly controlling, controlled by or under common control with, such Person.
For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling”, “controlled by” or “under common control
with”), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
     “Agreement” has the meaning set forth in the introduction to this
Agreement.
     “Applicable Law” means, with respect to any Person, any federal, state,
local or foreign statute, law, ordinance, rule, administrative interpretation,
regulation, order, writ, injunction, directive, judgment, decree or other
requirement of any Governmental Authority applicable to such Person or any of
its Affiliates or any of their respective properties, assets, officers,
directors, employees, consultants or agents.
     “Articles of Association” means the Articles of Association of Newco, in
substantially the form attached to Schedule 2.4 of both of the Master Agreement
Disclosure Letters, as amended from time to time.
     “Bank Guarantee” shall have the meaning set forth in Section 5.11(g) of the
ST Asset Contribution Agreement.
     “Business” means the Intel Business or the ST Business, as applicable.
     “Business Day” means each day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York or Geneva, Switzerland are
authorized or required by law to close.
     “Cash and Cash Equivalents” means all cash on hand and cash equivalents of
a Person (whether or not related to the applicable Business), including currency
and coins, negotiable checks, bank accounts, marketable securities, commercial
paper, certificates of deposit, treasury bills, surety bonds and money market
funds.
     “Claims” means all rights to causes of action, claims, demands, rights and
privileges against third parties, whether liquidated or unliquidated, fixed or
contingent, choate or inchoate.
     “Closing” shall have the meaning set forth in Section 2.5 of this
Agreement.
     “Closing Date” means the date of the Closing, as further described in
Section 2.5 of this Agreement.
     “Commitment Letter” means that certain Senior Secured Credit Facilities
Commitment Letter dated May 22, 2007 by and between Goldman Sachs Credit
Partners L.P., JP Morgan

 

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Chase Bank, N.A., J.P. Morgan Securities Inc., Merrill Lynch Capital
Corporation, Francisco Partners (Cayman) II, L.P., Intel Corporation and
STMicroelectronics NV.
     “Competition Law” means the Sherman Antitrust Act of 1890, the Clayton Act
of 1914, the HSR Act, the Federal Trade Commission Act, and all other domestic
or foreign Applicable Laws passed by a domestic or foreign Governmental
Authority that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade or
lessening of competition through merger or acquisition.
     “Confidential Information” means any (i) information in tangible form that
bears a “confidential,” “proprietary,” “secret” or similar legend, including the
Intel Transferred Trade Secrets set forth on Schedule 2.1(h) of the Intel ATA
Disclosure Letter, the Intel Retained Trade Secrets, the ST Transferred Trade
Secrets set forth on Schedule 2.1(h) to the ST ACA Disclosure Letter, the ST
Retained Trade Secrets, any books and records of any Party, and any other
confidential information disclosed by any Party to any other Party(ies) in
connection with the negotiation, evaluation and implementation of the
Transaction Documents, including any information disclosed on the ST ACA
Disclosure Letter or the Intel ATA Disclosure Letter and any information
provided pursuant to Section 4.1 of this Agreement; (ii) information that a
Party observes or perceives by inspection of tangible objects (including without
limitation documents, prototypes, or samples) or otherwise while present at
another Party’s facilities or any other location at which tangible objects
embodying another Party’s Confidential Information is accessible; and (iii) any
information to which a Party receives access as a result of the relationship of
the Parties or such Party’s performance under a Transaction Document. Each Party
will make a reasonable good faith effort to identify as “confidential” or the
like the information in tangible form that it wishes to be treated as
Confidential Information pursuant to this Agreement, but a Party’s failure to so
mark any such information shall not relieve a Receiving Party of its obligations
under this Agreement. Notwithstanding the foregoing, “Confidential Information”
does not include: (x) any information that is or has become generally available
to the public other than as a result of a disclosure by the Receiving Party or
any Affiliate thereof in breach of any of the provisions of the Confidentiality
Agreement or any other similar contract to which the Receiving Party, or any
Affiliate thereof is bound; (y) any information that has been independently
developed by the Receiving Party (or any Affiliate thereof) without violating
any of the provisions of the Confidentiality Agreement or any other similar
contract to which the Receiving Party, or any Affiliate thereof is bound; or
(z) any information made available to the Receiving Party (or any Affiliate
thereof) on a non-confidential basis by any third party who is not prohibited
from disclosing such information to the Receiving Party by a legal, contractual
or fiduciary obligation.
     “Confidentiality Agreement” means that certain Confidentiality Agreement
among Intel, ST and FP dated as of May 22, 2007.
     “Consolidation” means either the FP Consolidation or a transaction
undertaken by an Intel Affiliate or ST Affiliate pursuant to the last sentence
of Section 6.9 of the Shareholders’ Agreement.
     “Contemplated Financing” means either of: (i) the debt financing pursuant
to the Commitment Letter; or (ii) substitute debt financing on substantially
equivalent economic terms

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that is adequate to provide working capital requirements and funds for other
general corporate purposes of Newco and its Subsidiaries following the Closing.
     “Contract” means each contract, agreement, option, lease, license,
cross-license, sale and purchase order, commitment and other instrument of any
kind, whether written or oral.
     “Control” has the meaning such that a Person (or group of related Persons)
exercises Control over a Party when such Person or group owns or controls
(either directly or indirectly) any of the following: (a) if the Party issues
voting stock or other voting securities, more than 50% of the outstanding stock
or securities entitled to vote for the election of directors or similar managing
authority; or (b) if such Party does not issue voting stock or other voting
securities, more than 50% of the ownership interest that represents the right to
make decisions for such Party; or (c) any other ability to elect more than half
of the board of directors or similar managing authority of the subject Party,
whether by contract or otherwise.
     “Copyrights” means copyrights and mask work rights (whether or not
registered) and registrations and applications therefor, worldwide.
     “Determination Date” shall have the meaning set forth in Section 4.12(a) of
this Agreement.
     “Disclosure Letters” means the Intel ATA Disclosure Letter, the ST ACA
Disclosure Letter, the Intel Master Agreement Disclosure Letter and the ST
Master Agreement Disclosure Letter.
     “Effective Time” means, unless otherwise agreed by the Parties, 12:01 a.m.
GMT on the Closing Date.
     “Embedded PCM Product” means an Integrated Circuit that is comprised of a
PCM Product and a microcontroller, processor or other non-memory device.
     “Environmental Consultants” means one or more third-party environmental
consultants with expertise in the relevant jurisdictions.
     “Environmental Laws” means any Applicable Laws of any Governmental
Authority in effect as of the Closing Date, unless otherwise noted, relating to
pollution, protection or remediation of the environment, the use, storage,
treatment, generation, manufacture, distribution, transportation, processing,
handling, Release, disposal of or exposure to Hazardous Substances or, as such
relate to Hazardous Substances, public and occupational health and safety.
     “Environmental Liability” means any Liability or Loss, including the cost
of any Remedial Action, arising in connection with (i) the use, generation,
storage, treatment, manufacture, distribution, transportation, processing,
handling, disposal or Release of any Hazardous Substances, (ii) the violation of
or liability under any Environmental Laws or any Governmental Approval relating
to any Hazardous Substances or (iii) any third party claim, litigation or
proceeding relating to any Hazardous Substance or Environmental Laws.

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     “Environmental Permits” means all permits, licenses or other authorizations
of any Governmental Authority required pursuant to applicable Environmental Law.
     “Equity Plan” means an equity compensation plan for Newco, with terms
reasonably satisfactory to Newco, Intel, ST, and FP, pursuant to which no more
than 6% of the outstanding share capital of Newco at the Closing Date shall be
reserved for issuance.
     “Exchange Act” means the United States Securities Exchange Act of 1934.
     “Fab 18” means the facilities described in the Facility Transfer Term Sheet
for the Lachish Facility, Israel that are contemplated to be transferred by
Intel or any Subsidiary of Intel to Newco at the Closing and any Intel
Transferred Assets located on such premises.
     “Flash Memory Integrated Circuit” means a non-volatile memory integrated
circuit that contains memory cells that are electrically programmable and
electrically erasable whereby the memory cells consist of one or more
transistors that have a floating gate, charge-trapping regions or any other
functionally equivalent structure utilizing one or more different charge levels
(including binary or multi-level cell structures) with or without any on-chip
control, I/O and other support circuitry.
     “FP” has the meaning set forth in the introduction to this Agreement.
     “FP Consolidation” shall have the meaning set forth in Section 6.9 of the
Shareholders’ Agreement.
     “FP Costs” shall have the meaning set forth in Section 6.2(b) of this
Agreement.
     “FP Holdco” has the meaning set forth in the introduction to this
Agreement.
     “FP Material Adverse Effect” means any event, change or circumstance that,
individually or in the aggregate with all other such events, changes or
circumstances, that is materially adverse to the ability of FP or FP Holdco to
perform its obligations under any Transaction Document to which it is or will be
a party or to consummate the transactions contemplated thereby.
     “FP Newco Shares” shall have the meaning set forth in Section 2.1 of the
Share Purchase Agreement.
     “GAAP” means generally accepted accounting principles in the United States
of America, applied on a consistent basis, as in effect as of the date hereof.
     “Governmental Approval” means an authorization, consent, approval, permit
or license issued by, or a registration or filing with, or notice to, or waiver
from, any Governmental Authority.
     “Governmental Authority” means any United States or non-United States
federal, territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any

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regulatory, administrative or other agency, or any political or other
subdivision, department or branch of any of the foregoing.
     “Governmental Consents Termination Date” means December 31, 2007 subject to
extension as provided in Article VI of this Agreement.
     “Hazardous Substance” shall mean any hazardous substance within the meaning
of Section 101(14) of the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. § 9601(14), and any chemical,
substance, material, agent or waste defined or regulated as toxic, hazardous,
extremely hazardous or radioactive, or as a pollutant or contaminant, under any
applicable Environmental Law, including petroleum, petroleum derivatives,
petroleum by-products or other hydrocarbons, asbestos or asbestos-containing
material and polychlorinated biphenyls.
     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
     “Hynix JV” means Hynix-ST Semiconductor Ltd., a wholly foreign-owned entity
established under the laws of the People’s Republic of China.
     “Hynix JV Junior Credit Agreement” means the US$250,000,000 Facility
Agreement, dated August 24, 2006, among the Hynix JV, as borrower, and DBS Bank
Ltd. as arranger and original lender, agent and security agent.
     “IBA Rules of Evidence” means the IBA Rules on the Taking of Evidence in
International Commercial Arbitration.
     “ICC” means the International Chamber of Commerce.
     “Indebtedness” means any (i) indebtedness for borrowed money,
(ii) indebtedness evidenced by any bond, debenture, note, mortgage, indenture or
other debt instrument or debt security, or (iii) guarantees with respect to any
indebtedness or obligation of a type described in clauses (i) through (ii) above
of any other Person.
     “Indemnified Persons” has the meaning set forth in Section 4.16(d) of this
Agreement.
     “Indemnitee” shall (i) for purposes of the Intel Asset Transfer Agreement,
have the meaning set forth in Section 6.2(c) of the Intel Asset Transfer
Agreement, and (ii) for purposes of the ST Asset Contribution Agreement, have
the meaning set forth in Section 6.2(c) of the ST Asset Contribution Agreement.
     “Indemnitor” shall (i) for purposes of the Intel Asset Transfer Agreement,
have the meaning set forth in Section 6.2(c) of the Intel Asset Transfer
Agreement, and (ii) for purposes of the ST Asset Contribution Agreement, have
the meaning set forth in Section 6.2(c) of the ST Asset Contribution Agreement.
     “Integrated Circuit” means an integrated unit comprising one or more active
and/or passive circuit elements associated on one or more substrates, such unit
forming, or contributing

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to the formation of, a circuit for performing electrical functions (including,
if provided therewith, housing and/or supporting means).
     “Intel” has the meaning set forth in the introduction to this Agreement.
     “Intel Ancillary Agreements” means the Intel Assignment and Assumption
Agreements, Intel Bills of Sale, Intel Intellectual Property Agreement, Intel
Transition Services Agreements, Intel Facility Transfer Agreements, Intel Joint
Development Agreement, Intel Supply Agreements, Intel Assumption of Excluded
Liabilities, Intel Copyright Assignment, Intel Patent Assignment and Intel
Trademark Assignment.
     “Intel Approvals” means the required consents, waivers and approvals of
Intel set forth on Schedule 3.3 of the Intel ATA Disclosure Letter and
Schedule 3.1(c) of the Intel Master Agreement Disclosure Letter.
     “Intel Architecture Emulators” means software, firmware, or hardware that,
through emulation, simulation or any other process, allows a computer that does
not contain an Intel Compatible Processor (or a Processor that is not an Intel
Compatible Processor) to execute binary code that is capable of being executed
on an Intel Compatible Processor.
     “Intel Asset Transfer Agreement” means that certain Asset Transfer
Agreement to be entered into by Intel and Newco as of the Closing Date, in
substantially the form attached to Schedule 2.1 to the Intel Master Agreement
Disclosure Letter.
     “Intel Assignment and Assumption Agreement” means, collectively, the
Assignment and Assumption Agreements to be entered into by Newco or its
Affiliates, on one hand, and Intel or its Affiliates, on the other hand, as of
the Closing Date, in substantially the form attached as Exhibit A to the Intel
Asset Transfer Agreement.
     “Intel Assumption of Excluded Liabilities” shall have the meaning set forth
in Section 2.4 of the Intel Asset Transfer Agreement.
     “Intel ATA Disclosure Letter” means the disclosure letter, as agreed to
between the Parties as of the date of the Master Agreement (with such amendments
or new schedules as may be subsequently made pursuant to Section 4.12 of this
Agreement), containing the Schedules required by the provisions of such
agreement.
     “Intel Bill of Sale” means any bill of sale or other similar document
reasonably requested by any Party and reasonably necessary to transfer any Intel
Transferred Asset in accordance with applicable law to be executed by one or
more Intel Transferors in favor of Newco or a Subsidiary of Newco as of the
Closing Date, each in substantially the form attached as Exhibit B to the Intel
Asset Transfer Agreement.
     “Intel Books and Records” means all of the books of account, general and
financial records, invoices, shipping records, customer records, supplier lists,
correspondence and other documents, records and files of Intel and its
Subsidiaries whether in hard copy or computer format which relate exclusively to
the Intel Business and are necessary for the conduct of such Intel Business
after the Closing (excluding all personnel records or any employee information
for

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Intel Business Employees who are not Intel Transferred Employees employed by an
Intel Transferred Entity as of the Closing Date).
     “Intel Bus” means a proprietary bus or other proprietary data path first
introduced by Intel or any Intel Licensed Subsidiary that (i) is capable of
transmitting and/or receiving information within an Integrated Circuit or
between two or more Integrated Circuits, together with the set of protocols
defining the electrical, physical, timing and functional characteristics,
sequences and control procedures of such bus or data path; and (ii) to which
neither Intel nor any Intel Licensed Subsidiary (during any time such Intel
Licensed Subsidiary has met the requirements of being a Licensed Subsidiary) has
granted a license or committed to grant a license through its participation in a
government sponsored, industry sponsored, or contractually formed group or any
similar organization that is dedicated to creating publicly available standards
or specifications; and (iii) which neither Intel nor any Intel Licensed
Subsidiary (during any time such Intel Licensed Subsidiary has met the
requirements of being a Licensed Subsidiary) has publicly disclosed without an
obligation of confidentiality.
     “Intel Business” means the sale, manufacture, design and or development of
NOR Flash Memory Products, Phase Change Memory technology (subject to
Schedule 2.2(o) to the Intel ATA Disclosure Letter), and Stacked Memory
Products.
     “Intel Business Audited Financial Statements” shall have the meaning set
forth in Section 5.2(h) of this Agreement.
     “Intel Business Capital Expenditures Plan” means the plan set forth on
Schedule 3.14(e) of the Intel ATA Disclosure Letter setting forth (i) the actual
capital expenditures of Intel with respect to the Intel Business for its first
fiscal quarter of 2007; and (ii) the budgeted capital expenditures of Intel with
respect to the Intel Business for the second, third and fourth fiscal quarters
of 2007.
     “Intel Business Employees” means the employees who are identified on
Schedule 3.12(c) of the Intel ATA Disclosure Letter.
     “Intel Compatible Chipsets” means one or more Integrated Circuits that
alone or together are capable of electrically interfacing directly (with or
without buffering or pin reassignment) with an Intel Compatible Processor to
form the connection between the Intel Compatible Processor and any other device
(or group of devices) including Processors, input/output devices, and networks;
provided that an Integrated Circuit that functions primarily as a memory storage
device shall not be deemed to be an Intel Compatible Chipset.
     “Intel Compatible Compilers” means a compiler that generates object code
that can, without any additional processing other than linkage processing, be
executed on any Intel Processor.
     “Intel Compatible Processors” means any Processor that (i) can perform
substantially the same functions as an Intel Processor by compatibly executing
or otherwise processing (A) 50% or more of the instruction set of an Intel
Processor or (B) binary code versions of applications or other software targeted
to run on or with an Intel Processor, in order to achieve substantially the same
result as an Intel Processor; or (ii) is substantially compatible with an Intel
Processor Bus.

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     “Intel Contract” means any Contract of Intel or its Subsidiaries.
     “Intel Contractual Consents” shall have the meaning set forth in Section
3.8(b) of the Intel Asset Transfer Agreement.
     “Intel Copyright Assignment” means any agreement for the assignment of
Intel Transferred Copyrights by an Intel Transferor to Newco or a Subsidiary of
Newco, dated as of the Closing Date, in the form agreed among Intel, ST and FP.
     “Intel Environmental Reports” means reports or audits prepared by the
Environmental Consultants summarizing the results of Phase I, Phase II and
environmental compliance audits regarding the Owned Intel Real Property, the
Leased Intel Real Property and any property that is the subject of an Intel
Lease, which shall be reasonably satisfactory to FP and ST in form and
substance, and paid for by ST. At the request of Newco, Intel shall review the
Intel Environmental Reports and confirm that all Environmental Liabilities
identified in such reports are sufficiently identified as to scope as that term
is used in clause (iii) of the definition of Intel Pre-Closing Environmental
Liability. If Intel believes the issues are not sufficiently identified, Intel
must pay for the additional investigation to further characterize the
Environmental Liability sufficient to meet the criteria in clause (iii) of the
definition of Intel Pre-Closing Environmental Liability.
     “Intel Excluded Employees” shall have the meaning set forth in
Section 4.11(b) of this Agreement.
     “Intel Facility Transfer Agreements” means the Intel Facility Transfer
Agreements to be entered into by and between Intel and Newco on the Closing
Date, based on the terms and conditions set forth in the Intel Facility Transfer
Term Sheets.
     “Intel Facility Transfer Term Sheets” means the term sheets attached to
Schedule 4.22(a) to the Intel Master Agreement Disclosure Letter reflecting the
terms and conditions upon which the agreements and other related documents
effecting the transfer by Intel and its Subsidiaries of the Intel Transferred
Facilities to Newco and its Subsidiaries shall be substantially based.
     “Intel Intellectual Property Agreement” means the Intellectual Property
Agreement to be entered into by and between Intel and Newco on the Closing Date,
in substantially the form attached to Schedule 2.1 of the Intel Master Agreement
Disclosure Letter.
     “Intel Joint Development Agreement” means the Joint Development Agreement
by and between Intel and Newco to be entered into on the Closing Date, in
substantially the form attached to the Schedule 2.1 of the Intel Master
Agreement Disclosure Letter.
     “Intel Leases” means all leases or other occupancy agreements pursuant to
which Intel or its Subsidiaries lease or occupy the Leased Intel Real Property.
     “Intel Master Agreement Disclosure Letter” means the disclosure letter, as
delivered by Intel to ST and FP as of the date of the Master Agreement (with
such amendments as may be subsequently made pursuant to the terms of such
agreement), containing the Schedules required by the provisions of such
agreement.

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     “Intel Material Adverse Effect” means any event, change or circumstance
that, individually or in the aggregate with all other such events, changes or
circumstances, (i) results in a material adverse effect on, or material adverse
change in, the Intel Transferred Assets, taken as a whole, or (ii) any event,
change or circumstance that is materially adverse to the ability of Intel to
perform its obligations under any Transaction Document to which it is or will be
a party or to consummate the transactions contemplated thereby, other than, in
the case of clause (i) above, such changes, effects or circumstances reasonably
attributable to: (A) economic, capital market or political conditions generally
in the United States or foreign economies in any locations where the Intel
Business has material operations or sales, provided the changes, effects or
circumstances do not have a materially disproportionate effect (relative to
other industry participants) on the Intel Business, (B) conditions generally
affecting the industry in which the Intel Business operates, provided that the
changes, effects or circumstances do not have a materially disproportionate
effect (relative to other industry participants) on the Intel Business; (C) the
announcement or pendency of the transactions contemplated by the Transaction
Documents; (D) outbreak of hostilities or war, acts of terrorism or acts of God;
or (E) compliance with Intel’s obligations or the satisfaction of the conditions
to the closing of the transactions contemplated by the Transaction Documents.
     “Intel Newco Shares” shall have the meaning set forth in Section 2.6(a) of
the Intel Asset Transfer Agreement.
     “Intel Option” means that certain Option to Purchase Ordinary Shares to be
entered into between Newco and Intel or one or more of Intel’s Affiliate(s), in
substantially the form attached to Schedule 4.16(d) of the Intel Master
Agreement Disclosure Letter.
     “Intel Patent Assignment” means any agreement for the assignment of Intel
Transferred Patents by an Intel Transferor to Newco or a Subsidiary of Newco,
dated as of the Closing Date, in the form agreed among Intel, ST and FP.
     “Intel Post-Closing Environmental Liability” shall mean any Environmental
Liability, including a worsening of existing conditions, to the extent arising
out of or relating to (i) Newco’s acts occurring after the Closing Date,
(ii) Newco’s inaction occurring one year or later after the Closing Date, or
(iii) Newco’s inaction occurring within one year after the Closing Date if Newco
knew about the existing condition and its inaction worsened the existing
condition; and in connection with a Newco Business or the Intel Business, the
Owned Intel Real Property, the Leased Intel Real Property, the Intel Transferred
Assets or the Intel Transferred Entities or the ownership or operation of a
Newco Business or the Intel Business, the Owned Intel Real Property, the Leased
Intel Real Property or the Intel Transferred Assets, the Intel Transferred
Entities by, or the disposal or treatment of Hazardous Substances generated by,
Newco or an Affiliate of Newco (including an Intel Transferred Entity) after the
Closing Date.
     “Intel Pre-Closing Environmental Liability” shall mean any Environmental
Liability which (i) relates to the ownership or operation of the Intel Business
(as now or previously conducted), the Owned Intel Real Property, the Leased
Intel Real Property, the Intel Transferred Assets, the Intel Transferred
Entities, the Intel Shared Facilities or any other real property or facility
owned, leased, operated or used in connection with the Intel Business (as now or
previously conducted) or for the disposal or treatment of Hazardous Substances
generated in

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connection with the Intel Business, the Owned Intel Real Property, the Leased
Intel Real Property, the Intel Transferred Assets, or the Intel Transferred
Entities, (ii) arises out of or relates to acts occurring or conditions existing
on or prior to the Closing Date, but only to the extent that the Environmental
Liability arising out of or relating to acts occurring or conditions existing on
or prior to the Closing Date can be identified from (A) the Intel Environmental
Reports so long as such reports are issued not later than one year subsequent to
the Closing or (B) documents or data generated prior to the Closing and in the
possession of Intel prior to the Closing, and (iii) is identified in the
foregoing documents and/or data with sufficient specificity so as to clearly
identify the scope of the Environmental Liability that is attributable to the
Intel Business, the Owned Intel Real Property, the Leased Intel Real Property,
the Intel Transferred Assets, or the Intel Transferred Entities. Notwithstanding
the foregoing, Intel Pre-Closing Environmental Liability shall not include any
Intel Post-Closing Environmental Liability.
     “Intel Processor” means a Processor first developed by, for or with
substantial participation by Intel or any Intel Licensed Subsidiary, or the
design of which has been purchased or otherwise acquired by Intel or any Intel
Licensed Subsidiary, including the Intel® 8086, 80186, 80286, 80386, 80486,
Celeron®, Core™, Pentium®, Xeon™, StrongARM, XScale®, Itanium®, MXP, IXP, 80860
and 80960 microprocessor families, and the 8087, 80287, and 80387 math
coprocessor families.
     “Intel Processor Bus” means an Intel Bus that is capable of connecting one
or more Intel Processors to each other or to an Intel Compatible Chipset.
     “Intel Products” means all NOR Flash Memory Products and all Stacked Memory
Products, manufactured, sold, or under development by Intel as of the Effective
Date, including those listed on Schedule 1.1(c) of the Intel ATA Disclosure
Letter.
     “Intel Proprietary Product” means Intel Compatible Processors, Intel
Architecture Emulators, Intel Compatible Compilers, any product that implements
an Intel Processor Bus, and Intel Compatible Chipsets.
     “Intel Real Property” means all real property, leaseholds and other
interests in real property owned or leased by Intel or its Subsidiaries and used
or held for use exclusively in the Intel Business, including all real property
identified in Schedule 3.6 of the Intel ATA Disclosure Letter, together in each
case with Intel’s or its Subsidiary’s right, title and interest in and to all
structures, facilities or improvements currently or as of the Closing Date
located thereon and all easements, licenses, rights and appurtenances relating
to the foregoing.
     “Intel Restricted Employees” shall have the meaning set forth in Section
4.7(a) of this Agreement.
     “Intel Retained Trade Secrets” means trade secrets, know-how and other
proprietary information owned by Intel or any Licensed Subsidiary thereof as of
the Closing Date and not included in the Intel Transferred Trade Secrets that
are or have been used by Intel in connection with the Intel Business.

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     “Intel Supply Agreement” means the Supply Agreement identified on
Schedule 2.1 of both of the Master Agreement Disclosure Letters to be entered
into by and between Intel and Newco on the Closing Date, in substantially the
form attached to such schedule.
     “Intel Trademark Assignment” means any agreement for the assignment of
Intel Transferred Trademarks by an ST Transferor to Newco or a Subsidiary of
Newco, dated as of the Closing Date, in the form agreed among Intel, ST and FP.
     “Intel Transferors” shall have the meaning set forth in the Recitals of the
Intel Asset Transfer Agreement.
     “Intel Transferred Assets” shall have the meaning set forth in Section 2.1
of the Intel Asset Transfer Agreement.
     “Intel Transferred Contracts” means all unexpired contracts set forth on
Schedule 2.1(e) of the Intel ATA Disclosure Letter, together with the Intel
Transferred Purchase Orders, the Intel Transferred Sales Orders and the Intel
Leases.
     “Intel Transferred Copyrights” means the Copyrights identified on Schedule
2.1(i) of the Intel ATA Disclosure Letter.
     “Intel Transferred Employees” means the Intel Business Employees who accept
an offer of employment from Newco and who begin their employment with Newco at
the Closing (or, to the extent permitted by Applicable Law with respect to
inactive employees on short-term, medical or other leave of absence, at the time
such employee returns to active status) or such other date as the parties may
reasonably agree.
     “Intel Transferred Entity Books and Records” means the minute books, stock
records, Tax Returns and other records related to Taxes, if any, in each case of
each of the Intel Transferred Entities
     “Intel Transferred Intellectual Property” means, collectively, the Intel
Transferred Copyrights, Intel Transferred Patents, Intel Transferred Trademarks
and Intel Transferred Trade Secrets.
     “Intel Transferred Interests” means 100% of the outstanding equity, voting
and profit interests in the Intel Transferred Entities.
     “Intel Transferred Liabilities” shall have the meaning set forth in Section
2.3 of the Intel Asset Transfer Agreement.
     “Intel Transferred Patents” means those Patents identified on
Schedule 2.1(h) of the Intel ATA Disclosure Letter.
     “Intel Transferred Permits” means those Permits identified on
Schedule 2.1(l) of the Intel ATA Disclosure Letter.

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     “Intel Transferred Sales Orders” means all pending and unfulfilled sales
orders or portions thereof for Intel Products.
     “Intel Transferred Trade Secrets” means any Trade Secrets owned by Intel or
any of its Subsidiaries as of the Closing Date (including any such Trade Secrets
that consist of technical documentation of the nature of the files and other
documentation identified on Schedule 2.1(h) to the Intel ATA Disclosure Letter)
that are used exclusively in the Intel Business and not materially embodied or
used in or with any other current product or service of Intel or any of its
Subsidiaries.
     “Intel Transferred Trademarks” means those Trademarks identified on
Schedule 2.1(k) of the Intel ATA Disclosure Letter.
     “Intel Transition Services Agreement” means the Intel Transition Services
Agreement identified on Schedule 2.1 of both of the Master Agreement Disclosure
Letters to be entered into by and between Intel and Newco on the Closing Date,
in substantially the form attached to such schedule.
     “Intellectual Property” means intellectual property rights arising from or
in respect of the following, whether protected, created or arising under the
laws of the United States or any other jurisdiction: Copyrights, Trade Secrets,
Patents and Trademarks.
     “Italian Newco” means the entity that will be formed in Italy prior to the
Closing Date in connection with the demerger of assets and liabilities of the ST
Business from STMicroelectronics S.r.l. and which will operate certain Italian
assets of the ST Business following the Closing.
     “Knowledge” means, with respect to any Person, the actual knowledge of such
Person. Notwithstanding the foregoing, with respect to any Person that is a
corporation, limited liability company, partnership or other business entity,
actual knowledge shall be deemed to mean the actual knowledge of all directors
and officers of any such Person; provided, however, that (i) with respect to
Intel, “Knowledge” shall be deemed to be solely the actual knowledge of the
individuals identified in Section A of Schedule 1.1(b) of the Intel ATA
Disclosure Letter, after obtaining from the individuals identified in Section B
of Schedule 1.1(b) of the Intel ATA Disclosure Letter a certification as to
their actual knowledge of each matter with respect to which Intel makes any
representation or warranty as to its Knowledge under any Transaction Document,
(ii) with respect to ST, “Knowledge” shall be deemed to be solely the actual
knowledge of the individuals identified on Schedule 1.1(b) of the ST ACA
Disclosure Letter, after obtaining from the individuals identified on
Schedule 1.1(b) of the ST ACA Disclosure Letter a certification as to their
actual knowledge of each matter with respect to which ST makes any
representation or warranty as to its Knowledge under any Transaction Document,
and (iii) with respect to FP, “Knowledge” shall be deemed to be solely the
actual knowledge of David ibnAle, Phokion Potamianos, and Keith Toh.
     “Leased Intel Real Property” means the Intel Real Property listed in
Schedule 3.6(b) of the Intel ATA Disclosure Letter.

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     “Leased ST Real Property” means the ST Real Property listed in
Schedule 3.6(b) of the ST ACA Disclosure Letter.
     “Letters of Approval” means the Letters of Approval dated December 7, 2005
and the Letter of Approval dated September 17, 1996, in each case, issued to
Intel Electronics Ltd. by the Investment Center pursuant to the Israel Law for
the Encouragement of Capital Investments, 1959.
     “Liability” means, with respect to any Person, any liability or obligation
of such Person of any kind, character or description, whether known or unknown,
absolute or contingent, asserted or unasserted, accrued or unaccrued, liquidated
or unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, absolute, contingent, executory, determined, determinable or
otherwise and whether or not the same is required to be accrued on the financial
statements of such Person.
     “Licensed Subsidiary” means any corporation, partnership, joint venture,
limited liability company or other entity recognized in any jurisdiction in the
world, now or hereafter, in which Intel, ST or Newco, as the case may be, owns
or controls (either directly or indirectly) any of the following:

  (i)   if such entity has voting shares or stock or other voting securities,
more than 50% of the outstanding shares or stock or securities entitled to vote
for the election of directors or similar managing authority; or     (ii)   if
such entity does not have voting shares or stock or other voting securities,
more than 50% of the ownership interest that represents the right to make
decisions for such entity; or     (iii)   any other ability to elect more than
half of the board of directors or similar managing authority of the subject
entity, whether by contract or otherwise.

     An entity shall be deemed to be a Licensed Subsidiary under this Agreement
only so long as the Party (Newco, Intel or ST, as the case may be) owning or
controlling the shares, stock, securities or other ownership interest required
above has not contractually or otherwise surrendered, limited or in any other
way constrained its authority to elect the managing authority or make decisions
for the entity, and only so long as all the requisite conditions of being a
Licensed Subsidiary are met. For clarity, any event causing a Person that was
once a Licensed Subsidiary to no longer meet the requisite conditions of being a
Licensed Subsidiary as set forth in this Section, shall render such Person to be
no longer a Licensed Subsidiary.
     “Lien” means, with respect to any asset, any lien, mortgage, pledge,
hypothecation, right of others, claim, security interest, encumbrance, lease,
sublease, license, interest, option, charge or other restriction or limitation
of any nature whatsoever in respect of such asset, including any Share
Encumbrance; provided, however, that any license of Intellectual Property shall
not be considered a Lien on such Intellectual Property.
     “Losses” means any and all deficiencies, judgments, settlements, demands,
claims, suits, actions or causes of action, assessments, liabilities, losses,
damages (excluding indirect, incidental or consequential damages), interest,
fines, penalties, costs and expenses (including

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reasonable legal, accounting and other costs and expenses) incurred in
connection with investigating, defending, settling or satisfying any and all
demands, claims, actions, causes of action, suits, proceedings, assessments,
judgments or appeals, and in seeking indemnification therefor.
     “Management Board” means the “Managing Board” as referenced in the Articles
of Association.
     “Managing Director” means any member of Newco’s Management Board.
     “Master Agreement” has the meaning set forth in the introduction to this
Agreement..
     “Master Agreement Disclosure Letter” means each of the Intel Master
Agreement Disclosure Letter and the ST Master Agreement Disclosure Letter.
     “Memory Device” shall mean an Integrated Circuit alone and not in
combination with any other product containing one or more memory cells, together
with the circuit elements connected to the memory cells that are functionally
necessary for carrying out memory hierarchy functions in association with the
memory cells, including, by way of example, decoding circuits, control circuits
for memory sequencing, sensing circuits, input protection circuits, high speed
interface circuits, signal I/O amplification circuits, redundancy circuits,
delay elements, test mode control circuits, reliability stress algorithms,
address transition detection circuits, user selectable operating mode detection
circuits, reference generators or voltage generator modules. Memory Device does
not include Processors or Intel Proprietary Products.
     “NAND Flash Memory Integrated Circuit” means a Flash Memory Integrated
Circuit wherein the memory cells included in the Flash Memory Integrated Circuit
are arranged in groups of serially connected memory cells (each such group of
serially connected memory cells called a “string”) in which the drain of each
memory cell of a string (other than the first memory cell in the string) is
connected in series to the source of another memory cell in such string, the
gate of each memory cell in such string is directly accessible, and the drain of
the uppermost bit of such string is coupled to the bitline of the memory array.
     “NAND Flash Memory Product” means a NAND Flash Memory Integrated Circuit,
in die, wafer, or packaged form, that utilizes (i) electrically programmable and
electrically erasable utilizing floating gate to substrate Fowler-Nordheim
charge transfer mechanism for both programming and erase operations;
(ii) electrically programmable and electrically erasable utilizing floating gate
to substrate Fowler-Nordheim charge transfer mechanism for programming and
hot-hole injection for erase operations; or (iii) memory cells arranged in
groups of serially connect memory cells (each such group of serially connect
memory cells called a “string”) in which the drain of each memory cell of a
string (other than the first memory cell in the string) is connected in series
to the source of another memory cell in such string, the gate of each memory
cell in such string is directly accessible, and the drain of the uppermost bit
of such string is coupled to the bitline of the memory array.
     “Newco” means [NEWCO], a Besloten Vennootschap organized under the laws of
the Netherlands, to be named by mutual agreement of Intel, ST and FP.

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     “Newco Allocated Positions” means those positions with Newco for which a
Intel Business Employee or a ST Business Employee is not allocated on
Schedule 3.12(c) to the Intel ATA Disclosure Letter or Schedule 3.12(c) to the
ST ACA Disclosure Letter.
     “Newco Approvals” means any Governmental Approval which Intel, ST and FP
reasonably agree Newco must obtain in order to consummate the transactions
contemplated by the Transaction Documents.
     “Newco Business” means the sale, manufacture, design and/or development of
advanced memory solutions, including Flash Memory Integrated Circuits, Phase
Change Memory Products, Stacked Memory Products and platform memory products
which include data management memory components for applications including
without limitation cellular phones, memory cards, digital audio players, data
processing platform memory and embedded form factors.
     “NOR Flash Memory Integrated Circuit” means a Flash Memory Integrated
Circuit wherein the memory cells included in the Flash Memory Integrated Circuit
are arranged in groups of connected memory cells in which the gate, source and
drain of each memory cell is directly accessible.
     “NOR Flash Memory Product” means a NOR Flash Memory Integrated Circuit, in
die, wafer or packaged form, utilizing a hot carrier injection programming
mechanism and one floating gate charge storage region per transistor whereby the
memory array is arranged so that the drain of one memory cell is connected
directly to a source line through at most one memory transistor.
     “Ordinary Shares” means ordinary shares of Newco, par value [ ] eurocent
per share.
     “Owned Intel Real Property” means the Intel Real Property listed in
Schedule 3.6(a) of the Intel ATA Disclosure Letter.
     “Owned ST Real Property” means the Intel Real Property listed in Schedule
3.6(a) of the ST ACA Disclosure Letter.
     “Party” has the meaning set forth in the introduction to this Agreement.
     “Patents” means patents and applications worldwide, including continuation,
divisional, continuation in part, reexamination, or reissue patent applications
and patents issuing thereon.
     “Permits” means all permits, licenses, franchises, approvals, certificates,
consents, waivers, concessions, exemptions, orders, registrations, notices or
other authorizations of any Governmental Authority necessary for a Party or its
Subsidiaries to own, lease and operate such Party’s Transferred Assets and to
carry on such Party’s Business as currently conducted.
     “Permitted Liens” means (i) Liens for Taxes or governmental assessments,
charges or claims the payment of which is not yet due or which are both
(A) being contested in good faith, and (B) described in reasonable detail on a
Schedule to the applicable Transaction Document, (ii) statutory Liens of
landlords and statutory Liens of carriers, warehousemen, mechanics or

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materialmen incurred in the ordinary course of business which are either for
sums not yet due or are immaterial in amount, (iii) zoning, entitlement, and
other land use laws, and (iv) easements and other imperfections of title or
encumbrances, in each case, that do not materially detract from the value of the
relevant Transferred Asset or materially interfere with any present or intended
use of such Transferred Asset.
     “Permitted Transferee” means with respect to a Shareholder, any direct or
indirect wholly owned subsidiary of such Shareholder, any parent company that
directly or indirectly wholly owns such Shareholder, or any direct or indirect
wholly owned subsidiary of such parent company.
     “Person” means an individual, corporation, partnership, association,
limited liability company, trust, estate or other similar business entity or
organization, including a Governmental Authority and any syndicate or group that
would be deemed to be a person under Section 13(d)(3) of the Exchange Act.
     “Phase Change Memory” or “PCM” means a Memory Device in die, wafer or
packaged form, adjusting the phase of material, such as a chalcogenide, as a
means to store one or more different data states (including binary or
multi-level cell structures) with or without any on-chip control, I/O and other
support circuitry.
     “Phase Change Memory Products” or “PCM Products” mean non-volatile memory
Integrated Circuits that contain memory cells that are electrically programmable
and electrically erasable whereby the memory cells consist of one or more
structures that contain a chalcogenide or any other functionally equivalent
phase change material utilizing one or more different material phases (including
binary or multi-level cell structures), with or without any on-chip control, I/O
and other support circuitry.
     “Preferred Shares” means convertible preferred shares of Newco, par value [
] eurocent per share.
     “Proceeding” means any action, suit, claim, charge, hearing, arbitration,
audit, or proceeding (public or private).
     “Processor” means any Integrated Circuit or combination of Integrated
Circuits capable of processing digital data, such as a microprocessor or
coprocessor (including a math coprocessor, graphics coprocessor, or digital
signal processor).
     “Prohibited Transaction” shall have the meaning set forth in Section 4.2 of
this Agreement.
     “Receiving Party” shall (i) for purposes of the Intel Asset Transfer
Agreement, have the meaning set forth in Section 5.1(b) of the Intel Asset
Transfer Agreement, (ii) for purposes of the ST Asset Contribution Agreement,
have the meaning set forth in Section 5.1(b) of the ST Asset Contribution
Agreement and (iii) for purposes of the Intel Intellectual Property Agreement
and the ST Intellectual Property Agreement, with respect to Confidential
Information of a Party, mean another Party that is not a Licensing Affiliate of
such Party and that receives (or receives

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access to) such Confidential Information pursuant to or in connection with the
Intel Intellectual Property Agreement or the ST Intellectual Agreement.
     “Release” means (i) any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing, or
other release of any Hazardous Substance at, in, on, into, or onto the
environment; (ii) the abandonment or discard of barrels, containers, tanks, or
other receptacles containing or previously containing any Hazardous Substance;
or (iii) any release, emission, or discharge, as those terms are defined in any
applicable Environmental Laws.
     “Remedial Action” means investigation, evaluation, risk assessment,
monitoring, response, removal, clean-up, remediation, corrective action or other
terms of similar import and any related closure, post-closure, operations and
maintenance or engineering control activities.
     “Share Encumbrances” means Liens, claims, options, rights of other parties,
voting trusts, proxies, shareholder or similar agreements, encumbrances or other
restrictions (other than restrictions imposed by applicable securities laws).
     “Share Purchase Agreement” means the Share Purchase Agreement to be entered
into by FP and Newco as of the Closing Date, in substantially the form attached
to Schedule 2.3 to the Intel Master Agreement Disclosure Letter and to
Schedule 2.3 to the ST Master Agreement Disclosure Schedule.
     “Shareholder” means each Person (other than Newco) that shall be a party to
the Shareholders’ Agreement, whether in connection with the execution and
delivery thereof as of the Closing Date or otherwise, so long as such Person
shall beneficially own, hold of record or be a registered holder of any Shares.
     “Shareholders’ Agreement” means the Shareholders’ Agreement by and among
Intel (as used in this definition, “Intel” has the meaning ascribed to such term
in the Shareholders’ Agreement), ST (as used in this definition, “ST” has the
meaning ascribed to such term in the Shareholders’ Agreement), FP (as used in
this definition, “FP” has the meaning ascribed to such term in the Shareholders’
Agreement), FP Holdco and Newco to be entered into on the Closing Date,
substantially in the form attached to Schedule 2.4 to both of the Master
Agreement Disclosure Letters.
     “Shares” means the Ordinary Shares, the Preferred Shares and any other
shares of the share capital of Newco issued on or after the date of the
Shareholders’ Agreement.
     “Specified Intel Representations” means any representation or warranty made
by Intel in Sections 3.1 through 3.24 (other than Section 3.17) of the Intel
Asset Transfer Agreement or Sections 3.1(a) through 3.1(g) of this Agreement
(other than Section 3.17 of the Intel Asset Transfer Agreement).
     “Specified Intel Schedules’ means Schedule 3.1 through 3.24 (other than
Schedule 3.17) of the Intel ATA Disclosure Letter or Schedules 3.1(a) through
3.1(g) of the Intel Master Agreement Disclosure Letter.

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     “Specified Newco Representations” means any representation or warranty made
by Newco in Sections 4.1 through 4.8 of either of the Intel Asset Transfer
Agreement or the ST Asset Contribution Agreement.
     “Specified Newco Schedules” means Schedules 4.1 through 4.9 of the Newco
ATA Disclosure Letter or Newco ACA Disclosure Letter.
     “Specified ST Representations” means any representation or warranty made by
ST in Sections 3.1 through 3.24 (other than Section 3.17) of the ST Asset
Contribution Agreement or Sections 3.2(a) through 3.2(g) of this Agreement
(other than Section 3.17 of the ST Asset Contribution Agreement).
     “Specified ST Schedules” means Schedule 3.1 through 3.24 (other than
Schedule 3.17) of the ST ACA Disclosure Letter or Schedules 3.2(a) through
3.2(g) of the ST Master Agreement Disclosure Letter.
     “ST” has the meaning set forth in the introduction to this Agreement.
     “ST ACA Disclosure Letter” means the disclosure letter, as agreed to
between the Parties as of the date of the Master Agreement (with such amendments
as may be subsequently made pursuant to the terms of such agreement), containing
the Schedules required by the provisions of such agreement.
     “ST Ancillary Agreements” means the ST Assignment and Assumption
Agreements, ST Bills of Sale, ST Intellectual Property Agreement, ST Transition
Services Agreements, ST Facility Transfer Agreements, ST Joint Development
Agreement, ST Back-End Supply Agreement, ST M5 Consortium Agreement, ST R2
Consortium Agreement, TFR Indemnification Agreement, Bank Guarantee, ST
Assumption of Excluded Liabilities, ST Copyright Assignment, ST Patent
Assignment, ST Trademark Assignment and the Newco Transition Services Agreement.
     “ST Approvals” means the required consents, waivers and approvals of ST set
forth on Schedule 3.3 of the ST ACA Disclosure Letter and Schedule 3.2(c) of the
ST Master Agreement Disclosure Letter.
     “ST Asset Contribution Agreement” means that certain Asset Contribution
Agreement to be entered into by ST and Newco as of the Closing Date, in
substantially the form attached to Schedule 2.4 to the ST Master Agreement
Disclosure Letter.
     “ST Assignment and Assumption Agreement” means, collectively, the
Assignment and Assumption Agreements to be entered into by Newco or its
Affiliates, on one hand, and ST or its Affiliates, on the other hand, as of the
Closing Date in substantially the form attached as Exhibit A to the ST Asset
Contribution Agreement.
     “ST Assumption of Excluded Liabilities” shall have the meaning set forth in
Section 2.4 of the ST Asset Contribution Agreement.

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     “ST Back-End Supply Agreement” means the ST Back-End Supply Agreement
identified on Schedule 2.4 of the ST Master Agreement Disclosure Letter to be
entered into by and between ST and Newco on the Closing Date, in substantially
the form attached to such schedule.
     “ST Bill of Sale” means any bill of sale or other similar document
reasonably requested by any Party and reasonably necessary to transfer any ST
Transferred Asset in accordance with applicable law to be executed by one or
more ST Transferors in favor of Newco or a Subsidiary of Newco as of the Closing
Date, each in substantially the form attached as Exhibit B to the ST Asset
Contribution Agreement.
     “ST Books and Records” means all of the books of account, general and
financial records, invoices, shipping records, customer records, supplier lists,
correspondence and other documents, records and files of ST and its Subsidiaries
whether in hard copy or computer format which relate exclusively to the ST
Business and are necessary for the conduct of such ST Business after the Closing
(excluding all personnel records or any employee information for ST Business
Employees who are not ST Transferred Employees employed by an ST Transferred
Entity as of the Closing Date).
     “ST Business” means the sale, manufacture, design and or development of NOR
Flash Memory Products, NAND Flash Memory Products, Phase Change Memory Products
and Stacked Memory Products.
     “ST Business Audited Financial Statements” shall have the meaning set forth
in Section 5.1(h) of this Agreement.
     “ST Business Capital Expenditures Plan” means the plan set forth on
Schedule 3.14(e) of the ST ACA Disclosure Letter setting forth (i) the actual
capital expenditures of ST with respect to the ST Business for its first fiscal
quarter of 2007; and (ii) the budgeted capital expenditures of ST with respect
to the ST Business for the second, third and fourth fiscal quarters of 2007.
     “ST Business Employees” means the employees who are identified on Schedule
3.12(c) of the ST ACA Disclosure Letter.
     “ST Contract” means any Contract of ST or its Subsidiaries.
     “ST Contractual Consents” shall have the meaning set forth in
Section 3.8(b) of the ST Asset Contribution Agreement.
     “ST Copyright Assignment” means any agreement for the assignment of ST
Transferred Copyrights by an ST Transferor to Newco or a Subsidiary of Newco,
dated as of the Closing Date, in the form agreed among Intel, ST and FP.
     “ST Designated Employees” means those ST Business Employees who are
identified as ST Designated Employees on Schedule 4.11(a) of the ST Master
Disclosure Letter.
     “ST Environmental Reports” means reports or audits prepared by the
Environmental Consultants summarizing the results of Phase I, Phase II and
environmental compliance audits regarding the Owned ST Real Property, the Leased
ST Real Property and any property that is the

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subject of an ST Lease, which shall be reasonably satisfactory to FP and Intel
in form and substance, and paid for by Intel. At the request of Newco, ST shall
review the ST Environmental Reports and confirm that all Environmental
Liabilities identified in such reports are sufficiently identified as to scope
as that term is used in clause (iii) of the definition of ST Pre-Closing
Environmental Liability. If ST believes the issues are not sufficiently
identified, ST must pay for the additional investigation to further characterize
the Environmental Liability sufficient to meet the criteria in clause (iii) of
the definition of ST Pre-Closing Environmental Liability.
     “ST Excluded Employees” shall have the meaning set forth in Section 4.11(b)
of this Agreement.
     “ST Facility Transfer Agreements” means the ST Facility Transfer Agreements
to be entered into by and between ST and Newco on the Closing Date, based on the
terms and conditions set forth in the ST Facility Transfer Term Sheets.
     “ST Facility Transfer Term Sheets” means the term sheets attached to
Schedule 4.22(a) to the ST Master Agreement Disclosure Letter reflecting the
terms and conditions upon which the agreements and other related documents
effecting the transfer by ST and its Subsidiaries of the ST Transferred
Facilities to Newco and its Subsidiaries shall be substantially based.
     “ST Intellectual Property Agreement” means the Intellectual Property
Agreement to be entered into by and between ST and Newco on the Closing Date, in
substantially the form attached to Schedule 2.4 of the ST Master Agreement
Disclosure Letter.
     “ST Joint Development Agreement” means the Joint Development Agreement by
and between ST and Newco entered into on the Closing Date, based substantially
on the term sheet attached to Schedule 2.4 of the ST Master Agreement Disclosure
Letter, and reasonably acceptable to ST, FP and ST.
     “ST Leases” means all leases or other occupancy agreements pursuant to
which ST or its Subsidiaries lease or occupy the Leased ST Real Property.
     “ST M5 Consortium Agreement” means the ST M5 Consortium Agreement to be
entered into by and between Italian Newco and STMicroelectronics S.r.l. on or
prior to the Closing Date, in substantially the form attached to Schedule 2.4 of
the ST Master Agreement Disclosure Letter.
     “ST Master Agreement Disclosure Letter” means the disclosure letter, as
delivered by ST to ST and FP as of the date of the Master Agreement (with such
amendments as may be subsequently made pursuant to the terms of such agreement),
containing the Schedules required by the provisions of such agreement.
     “ST Material Adverse Effect” means any event, change or circumstance that,
individually or in the aggregate with all other such events, changes or
circumstances, (a) results in a material adverse effect on, or material adverse
change in, the ST Transferred Assets, taken as a whole, or (b) any event, change
or circumstance that is materially adverse to the ability of ST to perform its
obligations under any Transaction Document to which it is or will be a party or
to consummate the transactions contemplated thereby, other than, in the case of
clause (a) above, such changes,

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effects or circumstances reasonably attributable to: (i) economic, capital
market or political conditions generally in the United States or foreign
economies in any locations where the ST Business has material operations or
sales, provided the changes, effects or circumstances do not have a materially
disproportionate effect (relative to other industry participants) on the ST
Business, (ii) conditions generally affecting the industry in which the ST
Business operates, provided that the changes, effects or circumstances do not
have a materially disproportionate effect (relative to other industry
participants) on the ST Business; (iii) the announcement or pendency of the
transactions contemplated by the Transaction Documents; (iv) outbreak of
hostilities or war, acts of terrorism or acts of God; or (v) compliance with
ST’s obligations or the satisfaction of the conditions to the closing of the
transactions contemplated by the Transaction Documents.
     “ST Newco Shares” shall have the meaning set forth in Section 2.6(a) of the
ST Asset Contribution Agreement.
     “ST Patent Assignment” means any agreement for the assignment of ST
Transferred Patents by an ST Transferor to Newco or a Subsidiary of Newco, dated
as of the Closing Date, in the form agreed among Intel, ST and FP.
     “ST Post-Closing Environmental Liability” shall mean any Environmental
Liability, including a worsening of existing conditions, to the extent arising
out of or relating to (i) Newco’s acts occurring after the Closing Date,
(ii) Newco’s inaction occurring one year or later after the Closing Date, or
(iii) Newco’s inaction occurring within one year after the Closing Date if Newco
knew about the existing condition and its inaction worsened the existing
condition; and in connection with a Newco Business or the ST Business, the Owned
ST Real Property, the Leased ST Real Property, the ST Transferred Assets or the
ST Transferred Entities or the ownership or operation of a Newco Business or the
ST Business, the Owned ST Real Property, the Leased ST Real Property or the ST
Transferred Assets, the ST Transferred Entities by, or the disposal or treatment
of Hazardous Substances generated by, Newco or an Affiliate of Newco (including
an ST Transferred Entity) after the Closing Date.
     “ST Pre-Closing Environmental Liability” shall mean any Environmental
Liability which (i) relates to the ownership or operation of the ST Business (as
now or previously conducted), the Owned ST Real Property, the Leased ST Real
Property, the ST Transferred Assets, the ST Transferred Entities, the ST Shared
Facilities or any other real property or facility owned, leased, operated or
used in connection with the ST Business (as now or previously conducted) or for
the disposal or treatment of Hazardous Substances generated in connection with
the ST Business, the Owned ST Real Property, the Leased ST Real Property, the ST
Transferred Assets, or the ST Transferred Entities, (ii) arises out of or
relates to acts occurring or conditions existing on or prior to the Closing
Date, but only to the extent that the Environmental Liability arising out of or
relating to acts occurring or conditions existing on or prior to the Closing
Date can be identified from (A) the ST Environmental Reports so long as such
reports are issued not later than one (1) year subsequent to the Closing or
(B) documents or data generated prior to the Closing and in the possession of ST
prior to the Closing, and (iii) is identified in the foregoing documents and/or
data with sufficient specificity so as to clearly identify the scope of the
Environmental Liability that is attributable to the ST Business, the Owned ST
Real Property, the Leased ST Real Property, the ST Transferred Assets, or the ST

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Transferred Entities. Notwithstanding the foregoing, ST Pre-Closing
Environmental Liability shall not include any ST Post-Closing Environmental
Liability.
     “ST Products” means NOR Flash Memory Products, NAND Flash Memory Products,
and Stacked Memory Products, including those listed on Schedule 1.1(c) of the ST
ACA Disclosure Letter.
     “ST R2 Consortium Agreement” means the ST R2 Consortium Agreement to be
entered into by and between Italian Newco and STMicroelectronics S.r.l. on or
prior to the Closing Date, in substantially the form attached to Schedule 2.4 of
the ST Master Agreement Disclosure Letter.
     “ST Real Property” means all real property, leaseholds and other interests
in real property owned or leased by ST or its Subsidiaries and used or held for
use exclusively in the ST Business, including all real property identified in
Schedule 3.6 of the ST ACA Disclosure Letter, together in each case with ST’s or
its Subsidiary’s right, title and interest in and to all structures, facilities
or improvements currently or as of the Closing Date located thereon and all
easements, licenses, rights and appurtenances relating to the foregoing.
     “ST Restricted Employees” shall have the meaning set forth in
Section 4.7(b) of this Agreement.
     “ST Retained Trade Secrets” means trade secrets, know-how and other
proprietary information owned by ST or any Licensed Subsidiary thereof as of the
Effective Date and not included in the ST Transferred Trade Secrets that are or
have been used by ST in connection with the ST Business.
     “ST Trademark Assignment” means any agreement for the assignment of ST
Transferred Trademarks by an ST Transferor to Newco or a Subsidiary of Newco,
dated as of the Closing Date, in the form agreed among Intel, ST and FP.
     “ST Transferors” shall have the meaning set forth in the Recitals of the ST
Asset Contribution Agreement.
     “ST Transferred Assets” shall have the meaning set forth in Section 2.1 of
the ST Asset Contribution Agreement.
     “ST Transferred Contracts” means all unexpired contracts set forth on
Schedule 2.1(e) of the ST ACA Disclosure Letter, together with the ST
Transferred Purchase Orders, the ST Transferred Sales Orders and the ST Leases.
     “ST Transferred Employees” means the ST Business Employees and ST
Designated Employees who accept an offer of employment from Newco and who begin
their employment with Newco at the Closing (or, to the extent permitted by
Applicable Law with respect to inactive employees on short-term, medical or
other leave of absence, at the time such employee returns to active status) or
such other date as the parties may reasonably agree.
     “ST Transferred Entities” means the entities set forth on Schedule 1.1(a)
of the ST ACA Disclosure Letter.

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     “ST Transferred Intellectual Property” means, collectively, the ST
Transferred Copyrights, ST Transferred Patents, ST Transferred Trademarks and ST
Transferred Trade Secrets.
     “ST Transferred Interests” means 100% of the outstanding equity, voting and
profit interests in the ST Transferred Entities.
     “ST Transferred Liabilities” shall have the meaning set forth in
Section 2.3 of the ST Asset Contribution Agreement.
     “ST Transferred Purchase Orders” means each purchase order or portion
thereof issued by ST or a Subsidiary of ST to the extent relating to the ST
Business.
     “ST Transferred Sales Orders” means all pending and unfulfilled sales
orders or portions thereof for ST Products.
     “ST Transferred Trademarks” means those Trademarks identified on Schedule
2.1(k) of the ST ACA Disclosure Letter.
     “ST Transferred Trade Secrets” means any Trade Secrets owned by ST or any
of its Subsidiaries as of the Closing Date (including any such Trade Secrets
that consist of technical documentation of the nature of the files and other
documentation identified on Schedule 2.1(h) to the ST ACA Disclosure Letter)
that are used exclusively in the ST Business and not materially embodied or used
in or with any other current product or service of ST or any of its
Subsidiaries.
     “ST Transition Services Agreement” means the ST Transition Services
Agreement identified on Schedule 2.4 of the ST Master Agreement Disclosure
Letter to be entered into by and between ST and Newco on the Closing Date, in
substantially the form attached to such schedule.
     “Stacked Memory Products” means the assembly of multiple Memory Devices
packaged together as a single product unit which fits within the footprint
associated with a single Memory Device socket. Notwithstanding the foregoing,
nothing in this Agreement shall be deemed to include within the Intel
Transferred Assets or ST Transferred Assets any Intellectual Property for
non-NOR Flash Integrated Circuits that may be components of Stacked Memory
Products.
     “Subsidiary” means, with respect to any Person, (i) any corporation,
limited liability company or other similar entity as to which more than 50% of
the outstanding capital stock or other securities having voting rights or power
is owned or controlled, directly or indirectly, by such Person and/or by one or
more of such Person’s direct or indirect subsidiaries and (ii) any Person with a
partnership, joint venture or other similar relationship between such Persons
and any other Person, provided, however, that with respect to Intel, Silicon
Philippines, Inc., a corporation organized and existing under Philippines law
(“SPI”), shall be deemed to be a Subsidiary of Intel for purposes of the
Transaction Documents and for convenience only, and such inclusion of SPI within
this definition shall not imply that such entity is a subsidiary or affiliate of
Intel for any purpose independent of the Transaction Documents.

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     “Taxes” means (i) all foreign, federal, state, local and other net income,
gross income, gross receipts, sales, use, ad valorem, value added, intangible,
unitary, capital gain, transfer, franchise, profits, license, lease, service,
service use, withholding, backup withholding, payroll, employment, estimated,
excise, severance, stamp, occupation, premium, property, prohibited
transactions, windfall or excess profits, value added tax, goods and services
tax, social service tax, import tax, export tax, or other taxes of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts with respect thereto, (ii) any Liability for payment of
amounts described in clause (i) whether as a result of transferee Liability, of
being a member of an affiliated, consolidated, combined or unitary group for any
period, or otherwise through operation of law, and (iii) any Liability for the
payment of amounts described in clause (i) or (ii) as a result of any tax
sharing, tax indemnity or tax allocation agreement or any other express or
implied agreement to indemnify any other Person for Taxes; and the term “Tax”
means any one of the foregoing Taxes.
     “Termination Date” means December 31, 2007, subject to extension as
provided in Article VI of this Agreement.
     “Termination Fee” shall have the meaning set forth in Section 6.2(b) of
this Agreement.
     “TFR Indemnification Agreement” means the TFR Indemnification Agreement to
be entered into by Newco, the applicable Newco Subsidiaries and ST on the
Closing Date, in a form reasonably acceptable to Intel, FP and ST.
     “Third Party” means, with respect to any Shareholder, any other Person
other than any Permitted Transferee of such Shareholder and, with respect to
Newco, any other Person other than its Subsidiaries.
     “Third Party Appraisal Firm” shall have the meaning set forth in
Section 4.13 of this Agreement.
     “Trade Secrets” means confidential know how, inventions, discoveries,
concepts, ideas, methods, processes, designs, formulae, technical data, source
code, drawings, specifications (including logic specifications), data bases,
data sheets, customer lists, Customer Data and other confidential information
that constitute trade secrets under applicable law, in each case excluding any
rights in respect of any of the foregoing that comprise Copyrights, mask work
rights or Patents.
     “Trademarks” means trademarks and registrations and applications therefor.
     “Transaction Documents” means the Master Agreement, the Intel Asset
Transfer Agreement, the ST Asset Contribution Agreement, the Share Purchase
Agreement, the Intel Ancillary Agreements, the ST Ancillary Agreements, the
Shareholders’ Agreement, the Confidentiality Agreement, and all of the documents
contemplated by any such agreement or entered into by any of the Parties thereto
or their Subsidiaries in connections with the transactions contemplated by such
agreements.

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