Exhibit 10.22

OPTION AGREEMENT
This Option Agreement (this “Agreement”) is made as of October 1, 2010 (the
“Effective Date”), by and between Alpha and Omega Semiconductor Limited, a
Bermuda limited liability exempted company (“AOS”), and Integrated Device
Technology, Inc., a Delaware corporation (the “Company”).
RECITALS
A.    The Company owns and operates a 200mm semiconductor manufacturing
facility, associated campus (including a production facility, test facility,
in-house failures analysis facility and administrative office space), and the
real property thereunder, located at 3131 NE Brookwood Parkway, Hillsboro,
Oregon (the “Facility”).
B.    Alpha & Omega Semiconductor (Macau), Ltd., a Macau company and wholly
owned subsidiary of AOS (“AOS (Macau)”) and Alpha and Omega Semiconductor
(Cayman) Ltd., a Cayman Islands company and wholly owned subsidiary of AOS (“AOS
(Cayman)”), is entering into that certain Foundry Service Agreement dated as of
the date hereof (the “Foundry Agreement”) pursuant to which the Company will
provide engineering and manufacturing services to AOS (Macau) and AOS (Cayman)
and their respective affiliates through the Facility.
C.    To induce AOS (Macau) and AOS (Cayman) to enter into the Foundry Agreement
and in consideration of the Option Premium (as defined below), the Company has
agreed to grant AOS an option to acquire the Facility and certain assets
directly related to and necessary for the operation of the Facility constituting
the Purchased Assets (as defined in the Asset Purchase Agreement) and for the
avoidance of doubt, excluding the Excluded Assets (as defined in the Asset
Purchase Agreement) (the “Purchased Assets”) and to assume certain liabilities
of the Company (the “Asset Purchase”) pursuant to an Asset Purchase Agreement in
the form attached hereto as Exhibit A (the “Asset Purchase Agreement”) on the
terms and subject to the conditions set forth herein and therein.
AGREEMENT
The parties agree as follows:
1.    Purchase Option. In consideration of AOS (Macau) and AOS (Cayman) entering
into the Foundry Agreement and a cash payment of $5,000,000 (the “Option
Premium”) the Company hereby grants to AOS the option to acquire the Purchased
Assets and to assume certain liabilities of the Company pursuant to the Asset
Purchase Agreement for $26,000,000 in cash (subject to adjustment pursuant to
the Asset Purchase Agreement, the “Purchase Price”) on the terms and subject to
the conditions set forth herein and therein (the “Option”). Unless the Company
specifies otherwise, AOS shall pay or AOS shall cause to be paid the Option
Premium by wire transfer of immediately available funds to the Company upon the
execution of this Agreement. The operative

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provisions of this Agreement will not become effective until the Company
receives the Option Premium.
(a)    AOS may exercise the Option during the period commencing on 12:00 a.m.
Pacific time on September 1, 2011 and ending on 11:59 p.m. Pacific time on
November 15, 2011 (the “Option Period”) by delivering written notice to the
Company (the “Option Notice”).
(b)    Following the delivery of the Option Notice (the “Notice Date”) by AOS to
the Company:
(i)    AOS shall have the right to obligate the Company to enter into the Asset
Purchase Agreement concurrently with AOS’s execution of the Asset Purchase
Agreement and, subject to the terms in this Agreement and the Asset Purchase
Agreement and the satisfaction of the conditions to the Company’s obligations to
close the transactions contemplated by the Asset Purchase Agreement, consummate
the Asset Purchase.
(ii)    The Company (i) shall provide such updated due diligence and other
information as AOS shall reasonably and timely request and (ii) shall deliver to
AOS an updated Draft Disclosure Schedule (as defined below) (the “Updated
Disclosure Schedule”) with respect to the representations and warranties of the
Company in the Asset Purchase Agreement, in each instance as soon as practicable
following the Notice Date, and with respect to clause (i), in no event later
than the later of the tenth (10th) business day following (x) the Notice Date
and (y) the date of request by AOS of such updated due diligence or other
information and (ii) with respect to clause (ii), in no event later than the
tenth (10th) business day following the Notice Date;
(iii)    The Company and AOS shall use commercially reasonable efforts to enter
into and make effective the Asset Purchase Agreement within the twenty (20)
business day period following the Notice Date, with any modifications mutually
agreed upon by the Company and AOS (it being understood that if changes are
required to reflect changes in applicable legal requirements, the parties will
negotiate in good faith such changes considering the spirit and substance of the
Asset Purchase Agreement).
(iv)    The Company and AOS shall use commercially reasonable efforts to
consummate the Closing (as defined in the Asset Purchase Agreement) by January
31, 2012.
(c)    Notwithstanding anything to the contrary set forth herein:
(i)    AOS’s obligations to enter into the Asset Purchase Agreement are subject
to AOS’s sole discretion based upon its review of the content of any draft
Updated Disclosure Schedule delivered to AOS by the Company pursuant to this
Agreement; and
(ii)    in the event the Company and AOS enter into the Asset Purchase
Agreement, AOS may only terminate the Asset Purchase Agreement in accordance
with and pursuant to the terms of the Asset Purchase Agreement.
2.    Exclusivity.

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(a)    The Company agrees that from the date hereof of until 11:59 p.m. Pacific
time on November 15, 2011 (as extended pursuant to this Section 2(a), the
“Expiry Date”), the Company shall not, and shall direct its directors, officers,
agents, employees and affiliates (collectively, “Representatives”) not to,
directly or indirectly:
(i)    initiate, solicit, facilitate, seek, knowingly encourage or induce,
directly or indirectly, any inquiries or the making or implementation of any
proposal or offer (including, without limitation, any proposal or offer to its
stockholders or any of them) from any person other than AOS and its respective
affiliates with respect to the sale or disposition of (x) all or substantially
all of the Facility or (y) any individual item that constitutes a portion of the
Purchased Assets and has a value in excess of $100,000 (other than disposition
in accordance with Section 11(e) or replacement in accordance with Section
11(f)) at the Company’s discretion with substantially equivalent assets in good
working condition or repair in the ordinary course of operations) pursuant to a
merger, acquisition, consolidation, recapitalization, liquidation, dissolution,
equity investment or similar transaction (any such proposal or offer being
hereinafter referred to as a “Competing Company Transaction”);
(ii)    engage in any negotiations concerning, or provide any confidential
information or data to, or have any substantive discussions with, any person
other than AOS and its respective affiliates relating to a Competing Company
Transaction; or
(iii)    enter into or consummate any agreement or understanding with any person
relating to a Competing Company Transaction;
provided that if AOS exercises the Option in accordance with the terms of this
Agreement during the Option Period, the Expiry Date shall be the earliest of (i)
the date that the Asset Purchase Agreement is fully executed and becomes
effective, and (ii) twenty (20) business days after the expiration of the Option
Period.
(b)    The Company shall immediately cease and terminate, and it shall cause its
subsidiaries and its and their respective Representatives immediately to cease
and terminate, any existing activities, including discussions or negotiations
with any parties other than AOS and its respective affiliates conducted
heretofore with respect to any Competing Company Transaction. The Company
represents and warrants that AOS will not incur any liability to any third party
by virtue of the execution of this Agreement or the termination of such
activities, discussions and negotiations, and shall indemnify AOS in connection
with the defense of any such claim.
(c)    The Company shall promptly notify AOS if any inquiries, proposals or
offers related to a Competing Company Transaction are received by, any
confidential information or data is requested from, or any negotiations or
discussions related to a Competing Company Transaction are sought to be
initiated or continued with, it or any of its subsidiaries or any of their
respective Representatives.
(d)    AOS agrees that from the date hereof of until the Expiry Date, AOS shall
not, and shall direct their respective Representatives not to, directly or
indirectly:
(i)    initiate, solicit, facilitate, seek, make or implement, directly or

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indirectly, any proposal or offer concerning or related to the acquisition of
any wafer fabrication facility other than the Facility (any such proposal or
offer being hereinafter referred to as a “Competing AOS Transaction”), whether
by merger, acquisition, consolidation, purchase of assets, exclusive license,
joint venture formation, equity investment, business combination or otherwise;
(ii)    engage in any negotiations concerning, or have any substantive
discussions with, any person relating to a Competing AOS Transaction; or
(iii)    enter into or consummate any agreement or understanding with any person
relating to a Competing AOS Transaction.
(e)    AOS shall immediately cease and terminate, and it shall cause its
subsidiaries and its and their respective Representatives immediately to cease
and terminate, any existing activities, including discussions or negotiations
with any parties conducted heretofore with respect to any Competing AOS
Transaction. AOS represents and warrants that the Company will not incur any
liability to any third party by virtue of the execution of this Agreement or the
termination of such activities, discussions and negotiations, and shall
indemnify the Company in connection with the defense of any such claim.
(f)    AOS shall promptly notify the Company if any inquiries, proposals or
offers related to, or which reasonably could lead to, a Competing AOS
Transaction are received by, any confidential information or data is provided
to, or any negotiations or discussions related to a Competing AOS Transaction
are sought to be initiated or continued with, it or any of its subsidiaries or
any of their respective Representatives.
3.    Delivery of Seller Disclosure Schedules. Attached hereto as Exhibit B is a
draft Seller Disclosure Schedule (as defined in the Asset Purchase Agreement) as
of the date of this Agreement in respect of the representations and warranties
in the Asset Purchase Agreement (the “Draft Disclosure Schedule”). For the
purposes of the Draft Disclosure Schedule or any Updated Disclosure Schedule
delivered to AOS pursuant to this Agreement, the term “Purchased Assets” in the
Asset Purchase Agreement shall be deemed to have the meaning of “Purchased
Assets” as set forth in this Agreement; provided that such Draft Disclosure
Schedule or any Updated Disclosure Schedule may provide a general description of
certain Purchased Assets that are ancillary to the wafer fabrication operations
taking place at the Facility.
4.    Option Premium. In the event AOS exercises the Option during the Option
Period and the Closing is consummated pursuant to the Asset Purchase Agreement,
the Purchase Price shall be reduced by the amount of the Option Premium as set
forth in the Asset Purchase Agreement.
5.    Refund of Option Premium. In the event that the Company materially
breaches its obligations set forth in Section 11 of this Agreement or there has
occurred a Material Adverse Change (as defined below) (each, a “Material
Breach”), after AOS has provided written notice of such Material Breach to the
Company and such Material Breach has not been cured within twenty (20) business
days after delivery of such written notice (the “Cure Period”), AOS shall become
entitled to the refund (and shall receive within ten (10) business days
following the end of such Cure Period) from the Company of an amount in cash
equal to the Option Premium. As used herein,

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“Material Adverse Change” means any event, occurrence, fact, condition or change
that has resulted in, or would reasonably be expected to result in, individually
or in the aggregate, a material adverse change to the condition of the Purchased
Assets as a whole; provided that any such event, occurrence, fact, condition or
change which relate to or is attributable to the conduct of AOS following the
Effective Date, including without limitation any actions taken in connection
with the Foundry Agreement, shall not be deemed a Material Adverse Change.
6.    Confidentiality. The parties hereto acknowledge that AOS and the Company
have previously executed a Confidential Letter of Intent dated August 6, 2010
(the “Confidentiality Agreement”) which contains binding provisions regarding
confidentiality, which shall continue in full force and effect in accordance
with its terms. Except as expressly authorized in writing by the other party
hereto, or as otherwise required by law, under no circumstance shall any party
hereto (or any of such party’s Representatives) discuss or disclose the
existence or terms of this Agreement, the Option or the Ancillary Agreements (as
defined in the Asset Purchase Agreement) with or to any third party, other than
to such legal, accounting and financial advisors who have a need to know such
information solely for purposes of assisting the parties regarding the proposed
acquisition and the parties hereto agree to maintain the confidentiality of such
information. In the event any party is requested or legally required to disclose
the existence of this Agreement, the Option or the Ancillary Agreements, the
disclosing party shall provide the other party with prompt written notice of
that fact and shall use commercially reasonable efforts to consult with the
other party regarding the disclosure. The disclosing party shall, as applicable,
make commercially reasonable efforts to seek confidential treatment where such
treatment may in good faith be sought under applicable laws and regulations or
provide reasonable assistance to the other party in seeking a protective order.
7.    Cooperation. Upon AOS’s exercise of the Option and until the Closing, and
notwithstanding the Company’s obligations under Section 6 herein, the Company
shall use commercially reasonable efforts to cooperate with and assist AOS in
its efforts to negotiate those agreements with third party vendors and suppliers
set forth in Section 4.14 of the Draft Disclosure Schedule that are necessary
for the conduct and operation of the Facility and the use of the Purchased
Assets by AOS following the Closing in the same manner as conducted, operated
and used by the Company as of the Closing.  For purposes of clarification, the
Company’s cooperation and assistance in accordance with this Section 7 is
expressly permitted by AOS and shall not violate the Company’s obligations under
Section 6 herein.
8.    Representations and Warranties of the Company. The Company represents and
warrants to AOS as of the date hereof:
(a)    The Company has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company and no further corporate action is
required on the part of the Company to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and constitutes the valid and binding obligation of the
Company enforceable against it in accordance with its terms, except as such
enforceability may be limited by principles of public

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policy and subject to the laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies.
(b)    The execution, delivery and performance by the Company of this Agreement
and the consummation of the transactions contemplated hereby, will not
contravene, conflict with or result in any violation of or default under (with
or without notice or lapse of time, or both) or give rise to a right of
termination, cancellation, modification or acceleration of any obligation or
loss of any benefit, result in the creation or imposition of any lien under or
impair the Company’s rights or alter the rights or obligations of a third party
under (any such event, a “Conflict”) (i) any provision of the Company’s
certificate of incorporation or bylaws, as amended, (ii) any material mortgage,
indenture, lease, contract or other agreement or instrument, permit, concession,
franchise or license to which the Facility is subject and which have been filed
as an exhibit to the Company’s most recently filed Annual Report on Form 10‑K
(the “Company 10‑K”), and such other filings under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), which are made subsequent to the
Company 10‑K and prior to the date hereof or (c) any material judgment,
injunction, order, decree, statute, law, ordinance, rule or regulation
applicable to the Facility.
(c)    Except for Intellectual Property Rights or Technology owned by a third
party and used by the Company for its own semiconductor manufacturing operations
at the Facility and the rights provided pursuant to the Intellectual Property
License Agreement, the Facility and the other Purchased Assets constitute all
tangible assets, Technology (as defined in Asset Purchase Agreement) and
Intellectual Property Rights (as defined in Asset Purchase Agreement) necessary
for the operation of the Facility and the use of the Purchased Assets as
conducted by the Company for its own semiconductor manufacturing operations at
the Facility as of the Effective Date.
(d)    The tangible assets and properties which are part of the Purchased Assets
listed or described in the Asset Purchase Agreement attached as an exhibit
hereto (including the schedules thereto) constitute the tangible assets and
properties to be acquired pursuant to the Asset Purchase Agreement after AOS’s
exercise of the option subject to (i) any dispositions of Purchased Assets in
accordance with Section 11(e), and (ii) repair or replacement, in accordance
with Section 11(f), with a substantially equivalent asset at the Company’s
discretion in good working condition and such Purchased Assets are in normal
operating condition and repair (with the exception of normal wear and tear) and,
other than minor defects, are fit for use in the ordinary course of operations
of the Facility and the Purchased Assets as carried on by the Company as of the
Effective Date in all material respects.
(e)    The Company has used commercially reasonable efforts to prepare an
accurate and complete Draft Disclosure Schedule and, to the Company’s knowledge,
the Draft Disclosure Schedule is accurate, correct and complete in all material
respects assuming for purposes herein that the Asset Purchase Agreement was
being executed as of the date hereof.
9.    Representations and Warranties of AOS. AOS represents and warrants to the
Company as of the date hereof:
(a)    AOS has all requisite corporate power and authority to enter into this

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Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of AOS, and no further corporate action is required
on the part of AOS to authorize this Agreement and the transactions contemplated
hereby. This Agreement has been duly executed and delivered by AOS, and
constitutes the valid and binding obligations of AOS, enforceable against AOS in
accordance with its terms, except as such enforceability may be limited by
principles of public policy and subject to the laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies.
(b)    The execution, delivery and performance by AOS of this Agreement do not,
and the consummation of the transactions contemplated hereby will not, result in
any Conflict with (i) any provision of the certificate of incorporation or
bylaws of AOS, as amended, (ii) any material mortgage, indenture, lease,
contract or other agreement or instrument, permit, concession, franchise or
license to which AOS or any of its respective properties or assets are subject
and which have been filed as an exhibit to AOS’s registration statement on Form
F-1, as amended (the “AOS F-1”), and filings under the Exchange Act which are
made subsequent to the AOS F-1 and prior to the date hereof, or (iii) any
material judgment, injunction, order, decree, statute, law, ordinance, rule or
regulation applicable to AOS or its respective properties (whether tangible or
intangible) or assets.
(c)    AOS will have, or in the event a subsidiary of AOS is designated by AOS
to purchase the Purchased Assets AOS will cause such subsidiary to have,
sufficient financial resources to pay the Purchase Price upon the Closing.
Immediately prior to and immediately following the consummation of the Closing,
AOS will not be insolvent or subject to any safeguard, bankruptcy or insolvency
proceedings, nor to any other proceedings with regard to the prevention or
resolution of business difficulties nor in any situation likely to result in
such proceedings.
10.    Financial Covenant of AOS. AOS shall maintain financial resources in a
manner such that (a) it will have sufficient financial resources to pay or cause
to be paid the Purchase Price upon the Closing and (b) immediately prior to and
immediately following the consummation of the Closing, AOS will not be insolvent
or subject to any safeguard, bankruptcy or insolvency proceedings, nor to any
other proceedings with regard to the prevention or resolution of business
difficulties nor in any situation likely to result in such proceedings.
11.    Covenants of the Company. Until this Agreement is terminated pursuant to
Section 12 below:  
(a)    The Company shall not consummate a Competing Company Transaction with a
person other than AOS.
(b)    In the event AOS delivers an Option Notice pursuant to the terms of this
Agreement, the Company shall use commercially reasonable efforts to enter into
and make effective the Asset Purchase Agreement.
(c)    In the event AOS delivers an Option Notice pursuant to the terms of this
Agreement, the Company shall use commercially reasonable efforts to consummate
the Closing (as

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defined in the Asset Purchase Agreement), subject to (i) the terms in this
Agreement and the Asset Purchase Agreement and (ii) the satisfaction of the
conditions to the Company’s obligations to close the transactions contemplated
by the Asset Purchase Agreement.
(d)    The Company shall use commercially reasonable efforts to continue to
maintain the Facility and the Purchased Assets in normal operating condition and
repair, subject to normal wear and tear in the ordinary course of business, and
subject to any repairs or replacements, in accordance with Section 11(f), with
substantially equivalent assets in good working condition.
(e)    The Company shall not dispose of any individual item of Purchased Asset
that had an original purchase price in excess of $100,000 without the written
consent of AOS.
(f)    In the event the Company proposes to replace any individual item of
Purchased Asset that constitutes Equipment (as defined in the Asset Purchase
Agreement), Equipment Part Inventory (as defined in the Asset Purchase
Agreement) or any other fixed asset, in each case that had an original purchase
price in excess of $100,000, the Company shall provide AOS with written notice
of such replacement.
(g)    The Company shall not adopt or propose any amendment to its certificate
of incorporation or bylaws that would reasonably be expected to delay the
consummation of the transactions contemplated by this Agreement.
(h)    The Company shall not intentionally or willfully materially breach its
obligations in the Foundry Agreement. For the purposes of this Section 11(h),
the Company shall only be deemed to have breached its obligations
“intentionally” or “willfully” if the Company had actual knowledge at the time
of taking an action or omitting to take an action, that such action or omission
constituted a breach of the Company’s obligations under the Foundry Agreement.
12.    Termination. This Agreement shall terminate and the Option shall expire
upon the earliest of (a) the Expiry Date, (b) 5:00 p.m. Pacific time on May 1,
2011 if AOS has not complied with its obligations pursuant to Section 8.2 of the
Foundry Agreement by such time, (c) upon the termination of the Foundry
Agreement by the Company pursuant to Section 13.2 therein, (d) a date mutually
agreed upon in writing the Company and AOS and (e) upon execution of the Asset
Purchase Agreement by AOS and the Company; provided, that if AOS and the Company
enter into the Asset Purchase Agreement, Section 7 and Section 11(c) shall
continue in effect until the termination of the Asset Purchase Agreement
pursuant to the terms thereof or the Closing.
13.    Effect of Termination. Upon the termination of this Agreement pursuant to
Section 12, no party will have any obligation or other liability to any other
party; provided that in the event that the Company is obligated to make a
payment to AOS in the amount of the Option Premium pursuant to Section 5, such
obligation shall continue until such amount is paid by the Company. The
Confidentiality Agreement shall be terminated upon the termination of this
Agreement; provided, however the confidentiality obligations under the section
titled “Confidentiality” shall continue for twenty-four (24) months following
such termination.
14.    Further Assurances. Subject to the terms and conditions set forth in this
Agreement,

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from time to time after the date hereof (including during the Option Period),
the Company will use commercially reasonable efforts, as promptly as
practicable, to take or cause to be taken all actions, and to do or cause to be
done all other things, as are necessary, proper, or advisable to consummate and
make effective the transactions completed by this Agreement and the Asset
Purchase Agreement.
15.    Specific Performance. AOS and the Company agree that (i) money damages
would not adequately compensate a party for any failure to perform any
obligations set forth in this Agreement, (ii) the terms of this Agreement shall
be specifically enforceable and (iii) in any action to specifically enforce the
terms hereof, any person against whom such action or proceeding is brought
hereby waives the claim or defense that such party has an adequate remedy at law
and shall not offer in any such action or proceeding the claim or defense that
such remedy at law exists; provided that, notwithstanding anything to the
contrary elsewhere in this Agreement, in the event of a Material Adverse Change
resulting from any changes or effects arising in connection with any acts of
God, calamities, acts of war, terrorism or military action or the escalation
thereof, the sole and exclusive remedy of AOS shall be the refund of the Option
Premium pursuant to Section 5.
16.    Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California without regard to choice of laws or conflict of
laws provisions thereof.
17.    Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly delivered: (a) upon receipt if delivered
personally; (b) three (3) business days after being mailed by registered or
certified mail, postage prepaid, return receipt requested; (c) one (1) business
day after it is sent by commercial overnight courier service; or (d) upon
transmission if sent via facsimile with confirmation of receipt to the parties
at the following address (or at such other address for a party as shall be
specified upon like notice:
(a)    If to AOS, to:
Alpha and Omega Semiconductor Limited
475 Oakmead Parkway
Sunnyvale, CA 94085
Attn: Chief Financial Officer
Fax: (408) 830-9749

with a copy to (which copy shall not constitute notice):
Morgan Lewis and Bockius LLP
2 Palo Alto Square, Suite 700
300 El Camino Real
Palo Alto, CA 94306
Attn: Lucas Chang
Fax: (650) 843-4001
If to the Company, to:
Integrated Device Technology, Inc.

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6024 Silver Creek Valley Road
San Jose, CA 95138
Attention: General Counsel
Fax: (408) 284-8454

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

Latham & Watkins LLP
140 Scott Drive
Menlo Park, CA 94025
Attention: Mark V. Roeder, Esq.
Fax: (650) 463-2600

18.    Successors and Assigns. No party’s rights and obligations under this
Agreement may be transferred or assigned directly or indirectly (whether by
merger, consolidation or otherwise) without the prior written consent of the
other party; provided, that AOS may assign its rights and obligations under this
Agreement to (a) an affiliate of AOS or (b) a person or entity into which it is
merged or which has otherwise succeeded to all or substantially all of its
business and assets by merger, reorganization or otherwise, and which has
assumed in writing or by operation of law its obligations under this Agreement.
Subject to the foregoing sentence, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.
19.    Entire Agreement. This Agreement, together with the Ancillary Agreements
(as defined in the Asset Purchase Agreement), constitute the entire agreement
among the parties with respect to the subject matter hereof and thereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof and
thereof.
20.    Amendment and Waiver. Any amendment or waiver of any of the terms or
conditions of this Agreement must be in writing and must be duly executed by or
on behalf of the party to be charged with such waiver. The failure of a party to
exercise any of its rights hereunder or to insist upon strict adherence to any
term or condition hereof on any one occasion shall not be construed as a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
the terms and conditions of this Agreement at a later date. Further, no waiver
of any of the terms and conditions of this Agreement shall be deemed to or shall
constitute a waiver of any other term of condition hereof (whether or not
similar).
21.    Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of applicable law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated herein are not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated herein be consummated as
originally contemplated to the fullest extent possible.

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22.    Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
[Remainder of this Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE COMPANY:

INTEGRATED DEVICE TECHNOLOGY, INC.

By: /s/ Ted Tewksbury        
Name: Ted Tewksbury    
Its: President and Chief Executive Officer    

AOS:

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

By: /s/ Mike Chang    
Name: Mike Chang    
Its: CEO    

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EXHIBIT A
FORM OF ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT

dated as of [ . ], 2011

between

Alpha and Omega Semiconductor Limited,
[Alpha and Omega Semiconductor (New Co.) Incorporated] and
Integrated Device Technology, Inc.

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TABLE OF CONTENTS

 
 
Page
ARTICLE I
DEFINITIONS
1

1.1
Definitions
1

1.2
Other Defined Terms
6

 
 
 
ARTICLE II
PURCHASE AND SALE OF THE SHARES
9

2.1
Purchase and Sale of the Purchased Assets
9

2.2
Excluded Assets
10

2.3
Assumed Liabilities
11

2.4
Excluded Liabilities
11

2.5
Purchase Price
12

2.6
Purchase Price Adjustment
12

2.7
Allocation
13

2.8
Consents
14

 
 
 
ARTICLE III
CLOSING
14

3.1
Closing Date
14

3.2
Deliveries by Seller at the Closing
15

3.3
Deliveries by Buyer at the Closing
15

3.4
Guarantee
16

 
 
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
16

4.1
Organization and Good Standing
17

4.2
Authority and Enforceability
17

4.3
No Conflicts; Consents
17

4.4
Equipment Part Inventory; Operational Inventory
18

4.5
Taxes
18

4.6
Compliance with Law
19

4.7
Business Authorizations
19

4.8
Title to Personal Properties
19

4.9
Condition of Tangible Assets
20

4.10
Real Property
20

4.11
Intellectual Property
21

4.12
Absence of Certain Changes or Events
22

4.13
Contracts
23

4.14
Sufficiency of Purchased Assets
24

4.15
Litigation
25

4.16
Employee Benefits
25

4.17
Labor and Employment Matters
26

4.18
Environmental
27

4.19
Insurance
`29

4.20
Suppliers
30

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TABLE OF CONTENTS

 
 
Page
4.21
Brokers or Finders
30

 
 
 
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
31

5.1
Organization and Good Standing
31

5.2
Authority and Enforceability
31

5.3
No Conflicts; Consents
31

5.4
Litigation
32

5.5
Availability of Funds
32

5.6
Brokers or Finders
32

 
 
 
ARTICLE VI
COVENANTS OF SELLER
32

6.1
Conduct of Business
32

6.2
Negative Covenants
33

6.3
Access to Information; Investigation
34

6.4
Confidentiality
34

6.5
Release of Liens
35

6.6
Consents
35

6.7
Notification of Certain Matters
35

6.8
Restrictive Covenants
35

6.9
Exclusivity
36

6.10
Vanderzanden Farms
39

 
 
 
ARTICLE VII
COVENANTS OF BUYER AND SELLER
36

7.1
Regulatory Approvals
36

7.2
Public Announcements
37

7.3
Employees
37

7.4
Taxes
39

7.5
Bulk Sales Laws
40

7.6
Discharge of Business Obligations After Closing
40

7.7
Access to Books and Records
40

7.8
Further Assurances
40

 
 
 
ARTICLE VIII
CONDITIONS TO CLOSING
41

8.1
Conditions to Obligations of Buyer and Seller
41

8.2
Conditions to Obligation of Buyer
41

8.3
Conditions to Obligation of Seller
43

 
 
 
ARTICLE IX
TERMINATION
44

9.1
Termination
44

9.2
Effect of Termination
45

9.3
Remedies
46

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TABLE OF CONTENTS

 
 
Page
ARTICLE X
INDEMNIFICATION
46

10.1
Survival
46

10.2
Indemnification by Seller
47

10.3
Indemnification by Buyer
48

10.4
Deduction of IDT Insurance Proceeds Received by AOS
49

10.5
Indemnification Procedures for Third Party Claims
49

10.6
Indemnification Procedures for Non-Third Party Claims
51

10.7
Escrow Fund
51

10.8
Contingent Claims
51

10.9
Effect of Investigation; Waiver
51

10.10
Remedies
52

10.11
Limitation on Damages
52

 
 
 
ARTICLE XI
MISCELLANEOUS
52

11.1
Notices
52

11.2
Amendments and Waivers
53

11.3
Expenses
54

11.4
Successors and Assigns
54

11.5
Governing Law
54

11.6
Consent to Jurisdiction
54

11.7
Counterparts
55

11.8
Third Party Beneficiaries
55

11.9
Entire Agreement
55

11.10
Captions
55

11.11
Severability
55

11.12
Specific Performance
55

11.13
Interpretation
56

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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of [ • ], 2011 (the “Asset Purchase
Agreement”), among Alpha and Omega Semiconductor Limited, a Bermuda limited
liability exempted company (“Parent”), [Alpha and Omega Semiconductor (New Co.)
Incorporated], a [ • ] corporation and wholly owned subsidiary of Parent
(“Buyer”), and Integrated Device Technology, Inc., a Delaware corporation
(“Seller”).
WHEREAS, Seller operates a 200mm semiconductor manufacturing facility at 3131
Northeast Brookwood Parkway, Hillsboro, Oregon, 97124-5303, USA (together with
all Real Property, and all buildings, fixtures, structures, signage and
improvements erected or located thereon, including production facility, in-house
failure analysis and test facility and administrative offices and as further
described on Schedule 1.1(a) (the “Facility”)); and
WHEREAS, the parties desire that Seller sell, assign, transfer, convey and
deliver to Buyer, and that Buyer purchase and acquire from Seller, all of the
right, title and interest of Seller in and to the Purchased Assets (as
hereinafter defined), and that Buyer assume the Assumed Liabilities (as
hereinafter defined), upon the terms and subject to the conditions of this Asset
Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the respective
representations and warranties, covenants and agreements contained herein, the
parties hereto agree as follows:

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ARTICLE I

DEFINITIONS
1.1    Definitions. When used in this Asset Purchase Agreement, the following
terms shall have the meanings assigned to them in this Article I or in the
applicable Section of this Asset Purchase Agreement to which reference is made
in this Article I.
“Accounts Receivable” means (a) any trade accounts receivable and other rights
to payment from customers of Seller and (b) any other account or note receivable
of Seller, together with, in each case, the full benefit of any security
interest of Seller therein.
“Affiliate” means, with respect to any specified Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such specified Person; as used in this definition, “control” means the ownership
of more than fifty percent (50%) of the voting securities or other voting
interest of any Person (including attribution from related parties).
“Ancillary Agreements” means the Escrow Agreement, the Bill of Sale, the
Assignment and Assumption Agreement, the Intellectual Property License
Agreement, the Special Warranty Deed, the Supply Agreement, the Transition
Services Agreement, and the other agreements, instruments and documents to be
delivered at the Closing.
“Authorization” means any authorization, approval, consent, certificate,
license, permit or franchise of or from any Governmental Entity or pursuant to
any Law.
“Benefit Plan” means (a) any “employee benefit plan” as defined in ERISA Section
3(3), including any (i) nonqualified deferred compensation or retirement plan or
arrangement which is an Employee Pension Benefit Plan (as defined in ERISA
Section 3(2)), (ii) qualified defined contribution retirement plan or
arrangement which is an Employee Pension Benefit Plan, (iii) qualified defined
benefit retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan (as defined in ERISA Section 3(37))) and (iv)
Employee Welfare Benefit Plan (as defined in ERISA Section 3(1)) or material
fringe benefit plan or program, or (b) material stock purchase, stock option,
severance pay, employment, change-in-control, vacation pay, company awards,
salary continuation, sick leave, excess benefit, bonus or other incentive
compensation, life insurance, or other employee benefit plan, contract, program,
policy or other arrangement, whether or not subject to ERISA.
“Books and Records” means books of account, general, financial, warranty and
shipping records, invoices for Equipment Part Inventory and Operational
Inventory, supplier lists, maintenance and operating records, and other
documents, records and files, in each case solely as relating to the Purchased
Assets, including employee and personnel records of the Transferred Employees
(excluding, for the avoidance of doubt, Tax Books and Records of Seller or its
Affiliates).
“Business Day” means a day other than a Saturday, Sunday or other day on which
banks located in San Francisco, California are authorized or required by Law to
close.
“Cap Amount” means an amount equal to $2,600,000.

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“Capital Stock” means (a) in the case of a corporation, its shares of capital
stock, (b) in the case of a partnership or limited liability company, its
partnership or membership interests or units (whether general or limited), and
(c) any other interest that confers on a Person the right to receive a share of
the profits and losses of, or distribution of assets, of the issuing entity.
“Charter Documents” means, with respect to any entity, the certificate of
incorporation, the articles of incorporation, by-laws, articles of organization,
limited liability company agreement, partnership agreement, formation agreement,
joint venture agreement or other similar organizational documents of such entity
(in each case, as amended).
“Code” means the Internal Revenue Code of 1986, as amended.
“Contract” means any written agreement, contract, license, lease, commitment,
arrangement or understanding, including any purchase order to a supplier under
which such supplier has not fully delivered and performed.
“Copyrights” means United States and foreign copyrights and rights under
copyrights, whether registered or unregistered, together with any registrations
and applications for registration thereof.
“Equipment” means machinery, fixtures, furniture, supplies, accessories,
materials, equipment, parts, automobiles, tooling, tools, molds, office
equipment, computers, telephones and all other items of tangible personal
property, in each case solely as installed or used by Seller at the Facility.
“Equipment Part Inventory” means the Inventory utilized in the maintenance and
repair of Equipment located at the Facility or held on consignment by third
parties, other than those specifically listed as Excluded Assets.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any entity which is a member of a “controlled group of
corporations” with, under “common control” with or a member of an “affiliated
services group” with Seller, as defined in Section 414(b), (c), (m) or (o) of
the Code.
“Facility Employee” means any individual specifically set forth on Schedule
1.1(b) and any additional individuals hired by Seller to work exclusively at the
Facility.
“GAAP” means generally accepted accounting principles in the United States.
“Governmental Entity” means any entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to United States federal, state, local, or municipal government, foreign,
international, multinational or other government, including any department,
commission, board, agency, bureau, subdivision, instrumentality, official or
other regulatory, administrative or judicial authority thereof, and any
non-governmental regulatory body to the extent that the rules and regulations or
orders of such

--------------------------------------------------------------------------------

body have the force of Law.
“Indebtedness” means any of the following: (a) any indebtedness for borrowed
money, (b) any obligations evidenced by bonds, debentures, notes or other
similar instruments, (c) any obligations to pay the deferred purchase price of
property or services, except trade accounts payable and other current
Liabilities arising in the Ordinary Course of Business, (d) any obligations as
lessee under capitalized leases, (e) any indebtedness created or arising under
any conditional sale or other title retention agreement with respect to acquired
property, (f) any obligations, contingent or otherwise, under acceptance credit,
letters of credit or similar facilities, and (g) any guaranty of any of the
foregoing, in each case solely as applicable to the Purchased Assets.
“Indemnitee” means any Person that is seeking indemnification from an Indemnitor
pursuant to the provisions of this Asset Purchase Agreement.
“Indemnitor” means any party hereto from which any Indemnitee is seeking
indemnification pursuant to the provisions of this Asset Purchase Agreement.
“Intellectual Property Rights” means (a) Patents; (b) Copyrights; (c)
Trademarks; (d) rights in databases and data collections (including knowledge
databases, customer lists and customer databases) under the laws of the United
States or any other jurisdiction, whether registered or unregistered, and any
applications for registration therefor; (e) trade secrets and other rights in
know-how and confidential or proprietary information (including any business
plans, designs, technical data, customer data, financial information, pricing
and cost information, bills of material or other similar information); (f)
United States and foreign mask work rights and registrations and applications
for registration thereof; (g) inventions (whether or not patentable) and
improvements thereto; and (h) and all claims and causes of action arising out of
or related to infringement or misappropriation of any of the foregoing.
“Inventory” means the raw materials, work-in-process, finished goods, supplies,
spare parts and other inventories of Seller located at or used in the Facility.
“Knowledge” of Seller or any similar phrase means, with respect to any fact or
matter, the actual knowledge of [Richard Crowley (the Chief Financial Officer),
Mike Hunter (the Vice President, Worldwide Manufacturing), Vince Tortolano (Vice
President and General Counsel), and Jeng Lue (Director of Fab Operations)],
together with such knowledge that such individuals would reasonably be expected
to discover after due investigation concerning the existence of the fact or
matter in question.
“Law” means any statute, law (including common law), constitution, treaty,
ordinance, code, order, decree, judgment, rule, regulation and any other binding
requirement or determination of any Governmental Entity.
“Liabilities” means liabilities, obligations or commitments of any nature
whatsoever, asserted or unasserted, known or unknown, absolute or contingent,
accrued or unaccrued, matured or unmatured or otherwise.

--------------------------------------------------------------------------------

“Licensed Intellectual Property” has the meaning as defined in the Intellectual
Property License Agreement.
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, adverse claim, encroachment or other encumbrance in
respect of such property or asset.
“Operational Inventory” means all Inventory located at the Facility and which
are not, or are not components of, work-in-progress or finished goods, other
than Inventory specifically listed as Excluded Assets.
“Option Premium” means the option premium in the amount of five million Dollars
($5,000,000) paid by Buyer to Seller on October 1, 2010 pursuant to the Option
Agreement.
“Order” means any award, injunction, judgment, decree, order, ruling, subpoena
or verdict or other decision issued, promulgated or entered by or with any
Governmental Entity of competent jurisdiction.
“Ordinary Course of Business” or “Ordinary Course” or any similar phrase shall
mean the ordinary course of business in respect of the operation of the
Purchased Assets at the Facility consistent with Seller’s past practice.
“Patents” means United States and foreign patents and patent applications and
registered design and registered design applications and disclosures relating
thereto (and any patents that issue as a result of those patent applications),
and any renewals, reissues, reexaminations, extensions, continuations,
continuations-in-part, divisions and substitutions relating to any of the
patents and patent applications.
“Permitted Liens” means (a) Liens for current Taxes not yet due and payable (or
being contested in good faith and for which reserves have been established in
accordance with GAAP), (b) purchase money liens and liens securing rental
payments under operating lease arrangements set forth in Section 4.13 of the
Seller Disclosure Schedule, (c) Liens that are immaterial in character, amount,
and extent, (d) Liens which do not materially detract from the value or
interfere with the present use of the Purchased Assets in any material respect,
(e) Liens created by or resulting from the actions of Buyer and (f) Liens
reflected on the title policies contemplated by Section 8.2(g) hereof.
“Person” means an individual, a corporation, a partnership, a limited liability
company, a trust, an unincorporated association, a Governmental Entity or any
other entity or body.
“Pre-Closing Environmental Liabilities” means Liabilities arising out of the
ownership or operation of the Facility or use of the other Purchased Assets at
any time on or prior to the Closing, in each case to the extent based upon or
arising out of (i) Environmental Law, (ii) a failure to obtain, maintain or
comply with any Environmental Permit, (iii) a Release

--------------------------------------------------------------------------------

of any Hazardous Substance, or (iv) the use, generation, storage,
transportation, treatment, sale or other off-site disposal of Hazardous
Substances.
“Software” shall mean computer software, programs and databases in any form,
including web content, source code, executable code, tools, developers kits,
utilities, graphical user interfaces, menus, images, icons, and forms, and all
versions, updates, corrections, enhancements and modifications thereof, and all
related documentation, developer notes, comments and annotations related
thereto.
“Subsidiary” or “Subsidiaries” means, with respect to any party, any Person, of
which (i) such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by such
party or any Subsidiary of such party do not have a majority of the voting
interest in such partnership) or (ii) at least a majority of the securities or
other interests having by their terms ordinary voting power to elect a majority
of the Board of Directors or others performing similar functions with respect to
such Person is directly or indirectly owned or controlled by such party and/or
by any one or more of its Subsidiaries.
“Tax” or “Taxes” means any and all federal, state, local, or foreign net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
deed, stamp, alternative or add-on minimum, environmental, profits, windfall
profits, transaction, license, lease, service, service use, occupation,
severance, energy, unemployment, social security, workers’ compensation,
capital, premium, and other taxes, assessments, customs, duties, fees, levies,
or other governmental charges of any nature whatever, whether disputed or not,
together with any interest, penalties, additions to tax, or additional amounts
with respect thereto.
“Tax Returns” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof, required to be filed
with any Taxing Authority.
“Taxing Authority” means any Governmental Entity having jurisdiction with
respect to any Tax.
“Technology” shall mean tangible embodiments of the Intellectual Property
Rights, whether in electronic, written or other media, including Software,
technical documentation, specifications, product designs or layouts, product
design technology, bills of material, build instructions, test reports,
schematics, algorithms, integrated circuit topographies, design files,
application programming interfaces, user interfaces, test vectors, reference
designs, photomasks, mask sets, routines, formulae, databases, processes,
prototypes, process technology recipes, manufacturing process flows, samples,
studies or other know-how and other works of authorship.
“Trademarks” means United States and foreign trademarks, service marks, trade
dress, logos, trade names and corporate names, whether registered or
unregistered, and the goodwill associated therewith, together with any
registrations and applications for registration

--------------------------------------------------------------------------------

thereof.
“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988.
“$” means United States dollars.
1.2    Other Defined Terms. The following terms have the meanings assigned to
such terms in the Sections of the Asset Purchase Agreement set forth below:
Accounting Principles
2.6(a)(i)
Action
4.15(a)
Allocation Statement
2.7
Applicable Survival Period
10.1(d)
Asset Purchase Agreement
Preamble
Assigned Contracts
2.1(e)
Assignment and Assumption Agreement
3.2(c)
Assumed Liabilities
2.3
Base Amount
2.6(a)(ii)
Business Authorizations
4.7(a)
Buyer
Preamble
Buyer Closing Certificate
8.3(c)
Buyer Indemnitees
10.2(a)
Buyer Restricted Business
6.8(b)
Buyer Warranty Losses
10.2(b)
Cash Consideration
2.5(a)
CERCLA
4.18(a)(iv)
Closing
3.1
Closing Consideration
2.5(b)
Closing Date
3.1
Closing Equipment Part Inventory Amount
2.6(a)(iii)
Closing Equipment Part Inventory Statement
2.6(a)(iv)
COBRA
7.3(i)
Confidentiality Agreement
6.3
Consents
4.3(a)
Environment
4.18(a)(i)
Environmental Action
4.18(a)(ii)
Environmental Clean-up Site
4.18(a)(iii)
Environmental Laws
4.18(a)(iv)
Environmental Permit
4.18(a)(v)
Escrow Agent
3.3(a)
Escrow Agreement
3.2(a)
Escrow Fund
3.3(a)
Excluded Assets
2.2
Excluded Contracts
2.2(e)
Excluded Liabilities
2.4
Facility
Preamble
Hazardous Substances
4.18(a)(vi)
In-Bound Licenses
4.11(a)

--------------------------------------------------------------------------------

Insured Real Properties
8.2(g)
Intellectual Property License Agreement
3.2(d)
Losses
10.2(a)
Material Contract
4.13(b)
Noncompetition Period
6.8(a)
Notice of Claim
10.5(a)
Option Agreement
2.5(b)
Parent
Preamble
Personal Property
4.8(a)
Policies
4.19(a)
Post-Closing Tax Period
7.4(b)
Pre-Closing Tax Period
7.4(b)
Proposal
6.9(a)
Purchase Price
2.5(a)
Purchased Assets
2.1
Real Property
4.10(a)
Release
4.18(a)(vii)
Representatives
6.3
Restricted Contract
2.8(a)
Seller
Preamble
Seller Benefit Plans
4.16(a)
Seller Closing Certificate
8.2(c)
Seller Disclosure Schedule
Preamble Article IV
Seller Employees
7.3(f)
Seller Fundamental Covenants
10.2(c)
Seller Indemnitees
10.3(a)
Seller Restricted Business
6.8(a)
Seller Warranty Losses
10.3(b)
Special Warranty Deed
3.2(e)
Supply Agreement
3.2(f)
Third Party Claim
10.5(a)
Third Party Defense
10.5(b)
Transferred Employees
7.3(b)
Transferred Vacation Benefits
7.3(c)
Transition Services Agreement
3.2(g)
Vanderzanden Farms Termination
6.1

--------------------------------------------------------------------------------

ARTICLE II

PURCHASE AND SALE
2.1    Purchase and Sale of the Purchased Assets. Upon the terms and subject to
the conditions of this Asset Purchase Agreement, at the Closing, Seller shall
sell, assign, transfer, convey and deliver to Buyer or a Subsidiary of Buyer
designated by Buyer in writing to Seller not less than ten (10) Business Days
prior to the Closing, and Buyer or such Subsidiary shall purchase, acquire and
accept from Seller, free and clear of Liens except for Permitted Liens, the
entire right, title and interest of Seller in, to and under all of (i) the
tangible assets and properties located at the Facility, including the tangible
assets and properties set forth below, and (ii) the intangible assets,
properties and rights specifically listed below, in each case other than the
Excluded Assets (the “Purchased Assets”):
(a)    the Facility;
(b)    all Equipment Part Inventory, including those listed on Schedule 2.1(b);
(c)    all Operational Inventory, including those listed on Schedule 2.1(c);
(d)    all Equipment, including those listed on Schedule 2.1(d);
(e)    all Contracts listed on Schedule 2.1(e) (the “Assigned Contracts”);
(f)    all Business Authorizations listed on Schedule 2.1(f);
(g)    all Books and Records;
(h)    all claims, causes of action, choses in action, rights of recovery and
rights under all warranties, representations and guarantees made by suppliers of
products, materials or equipment, or components thereof, to the extent
exclusively arising from or relating to the other Purchased Assets or the
Assumed Liabilities;
(i)    all insurance benefits, including rights and proceeds, to the extent
exclusively arising from or relating to the other Purchased Assets or the
Assumed Liabilities;
(j)    all prepaid expenses to the extent exclusively related to the Purchased
Assets;
(k)    all security deposits, earnest deposits and all other forms of deposit or
security placed with Seller for the performance of an Assigned Contract; and
(l)    the assets, properties and rights specifically set forth on Schedule
2.1(l).
2.2    Excluded Assets. The Purchased Assets do not include, and Seller is not
selling, assigning, transferring, conveying or delivering, and neither Buyer nor
any Subsidiary of Buyer is purchasing, acquiring or accepting from Seller any
other assets, properties or rights set forth in this Section 2.2 (collectively,
the “Excluded Assets”):
(a)    subject to Section 2.1(k) of this Asset Purchase Agreement, all cash,
cash

--------------------------------------------------------------------------------

equivalents and bank accounts of Seller;
(b)    all Accounts Receivable;
(c)    all Inventory of Seller that is not Equipment Part Inventory and
Operational Inventory;
(d)    all Intellectual Property Rights and Technology of Seller;
(e)    all Contracts that are not Assigned Contracts (the “Excluded Contracts”);
(f)    the corporate seals, Charter Documents, minute books, stock books, Tax
Returns, books of account or other records having to do with the corporate
organization or Taxes of Seller;
(g)    all Policies and, subject to Section 2.1(i) hereof, all rights and
benefits thereunder;
(h)    the shares of Capital Stock of any Subsidiaries of Seller;  
(i)    any Tax refunds or credits or any other Tax assets of Seller and its
Affiliates;
(j)    the rights which accrue or will accrue to Seller under this Asset
Purchase Agreement and the Ancillary Agreements; and
(k)    the assets, properties and rights specifically set forth on Schedule
2.2(k).
2.3    Assumed Liabilities. Upon the terms and subject to the conditions of this
Asset Purchase Agreement, Buyer or a Subsidiary of Buyer designated by Buyer in
writing to Seller not less than ten (10) Business Days prior to the Closing
shall assume effective as of the Closing, and from and after the Closing Buyer
or such Subsidiary shall pay, discharge or perform when due, as appropriate,
only the following Liabilities of Seller (the “Assumed Liabilities”), and no
other Liabilities:
(a)    all Liabilities in respect of the Assigned Contracts but only to the
extent that such Liabilities thereunder are required to be performed after the
Closing Date and do not relate to any failure to perform, improper performance,
warranty or other breach, default or violation by Seller on or prior to the
Closing; and
(b)    accrued vacation in respect of each Transferred Employees (up to a
maximum of 80 hours per Transferred Employee), as listed in Section 4.17(d) of
the Seller Disclosure Schedule.
2.4    Excluded Liabilities. Neither Buyer nor any of its Affiliates shall
assume any Liabilities of Seller (such unassumed Liabilities, the “Excluded
Liabilities”) other than those specifically set forth in Section 2.3. Without
limiting the generality of the foregoing, in no event shall Buyer or any of its
Affiliates assume or incur any Liability in respect of, and Seller shall

--------------------------------------------------------------------------------

remain bound by and liable for, and shall pay, discharge or perform when due,
the following Liabilities of Seller:
(a)    all Liabilities for Taxes of Seller or any Affiliate of Seller, including
Taxes of Seller or any Affiliate of Seller relating to the Purchased Assets for
any Pre-Closing Tax Period, other than as provided in Section 7.4;
(b)    all Liabilities in respect of the Excluded Contracts and other Excluded
Assets;
(c)    all product Liability, warranty and similar claims for damages or injury
to person or property, claims of infringement of Intellectual Property Rights
and all other Liabilities, regardless of when made or asserted, which arise out
of or are based upon any events occurring or actions taken or omitted to be
taken by Seller, or otherwise arising out of or incurred in connection with the
use or operation of the Purchased Assets, on or before the Closing Date;
(d)    all Pre-Closing Environmental Liabilities;
(e)    all Indebtedness related to the Purchased Assets;
(f)    all Liabilities under Seller Benefit Plans except as provided in Section
2.3(b); and
(g)    all Liabilities arising out of or incurred in connection with the
negotiation, preparation and execution of this Asset Purchase Agreement and the
Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby, including Taxes and fees and expenses of counsel,
accountants and other experts.
2.5    Purchase Price.
(a)    The consideration to be paid by Buyer to Seller for the Purchased Assets
(the “Purchase Price”) shall be (i) twenty-six million Dollars ($26,000,000)
(the “Cash Consideration”), subject to adjustment as set forth in Section 2.6,
and (ii) the assumption of the Assumed Liabilities.
(b)    In the event that Buyer exercised its option to acquire the Purchased
Assets on or prior to 11:59 p.m. Pacific time on November 15, 2011, pursuant to
the Option Agreement (the “Option Agreement”) dated as of October 1, 2010, by
and between Buyer and Seller, the Option Premium paid to Seller shall be
credited against the Purchase Price. The amount of the Cash Consideration
payable at the Closing (the “Closing Consideration”) shall be equal to the Cash
Consideration less than the Option Premium.
2.6    Purchase Price Adjustment.
(a)    For purposes of this Section 2.6, the following terms shall have the
meanings assigned to them in this Section 2.6(a):
(i)    “Accounting Principles” means GAAP applied on a basis

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consistent with its application in the preparation of the financial information
of the Seller.
(ii)    “Base Amount” means the average month-end stock value of the Equipment
Part Inventory for the first nine months of 2010, calculated by aggregating the
simple moving average of the purchase price of individual line items of
Equipment Part Inventory.
(iii)    “Closing Equipment Part Inventory Amount” means the aggregate dollar
amount of Equipment Part Inventory, net of applicable reserves, as of the date
two (2) Business Days prior to the Closing Date, calculated in accordance with
the Accounting Principles.
(iv)    “Closing Equipment Part Inventory Statement” means an unaudited
statement of Closing Equipment Part Inventory Amount that is prepared in
accordance with the Accounting Principles.
(b)    Within five (5) Business Days, but not less than two (2) Business Days
prior to the Closing Date, Buyer shall have conducted, or at Buyer’s option
shall have caused a third party to conduct, a physical inventory for purposes of
preparing the Closing Equipment Part Inventory Statement. Seller shall provide
reasonable access during normal business hours to Buyer to Seller’s facilities
for the purpose of preparing the Closing Equipment Part Inventory Statement.
Seller and its Representatives shall have the right to observe the taking of
such physical inventory and Buyer and the Seller shall cooperate in good faith
with respect to any such physical inventory. Subject to the consent of the
Seller with respect to the amount of the Closing Equipment Part Inventory
Amount, such consent not to be unreasonably withheld or delayed, no later than
two (2) Business Days prior to the Closing Date, Buyer will prepare, or cause to
be prepared, and deliver to Seller the Closing Equipment Part Inventory
Statement which shall set forth the calculation of the Closing Equipment Part
Inventory Amount as mutually agreed by Buyer and the Seller.
(c)    The Equipment Part Inventory shall be valued at Seller’s average purchase
cost for each item.
(d)    The Purchase Price shall be adjusted as follows: (i) if the Closing
Equipment Part Inventory Amount is less than the Base Amount, the Cash
Consideration shall be reduced by the absolute value of the difference between
the Base Amount and the Closing Equipment Part Inventory Amount; or (ii) if the
Closing Equipment Part Inventory Amount is greater than the Base Amount, the
Cash Consideration shall be increased by absolute value of the difference
between the Base Amount and the Closing Equipment Part Inventory Amount.
2.7    Allocation. Within 30 days following the Closing, Buyer shall deliver to
Seller an allocation statement setting forth the allocation of the Purchase
Price (which, for the avoidance of doubt, shall include the Option Premium
credited against the Purchase Price for purposes of this Section 2.7) for Tax
purposes, which allocation shall be agreed upon by the Parties (as agreed and as
may be revised pursuant to the last sentence of this Section 2.7, the
“Allocation Statement”). Except as otherwise required by Law, Buyer and Seller
shall file all Tax Returns (such as IRS Form 8594 or any other forms or reports
required to be filed pursuant to Section 1060 of the Code, if applicable, or any
comparable provisions of Law) in a manner that is consistent with the Allocation
Statement and refrain from taking any action inconsistent

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therewith. Buyer and Seller agree to treat any payments made pursuant to the
indemnification provisions of this Asset Purchase Agreement as an adjustment to
the Purchase Price for Tax purposes.
2.8    Consents.
(a)    Notwithstanding anything in this Asset Purchase Agreement to the
contrary, this Asset Purchase Agreement shall not constitute an agreement to
sell, assign, transfer, convey or deliver any Purchased Asset or any benefit
arising under or resulting from such Purchased Asset if the sale, assignment,
transfer, conveyance or delivery thereof, without the Consent of a third party,
(i) would constitute a breach or other contravention of the rights of such third
party, (ii) would be ineffective with respect to any party to a Contract
concerning such Purchased Asset, or (iii) would, upon transfer, in any way
adversely affect the rights of Buyer under such Purchased Asset. If the sale,
assignment, transfer, conveyance or delivery by Seller to, or any assumption by
Buyer of, any interest in, or Liability under, any Purchased Asset requires the
Consent of a third party, then such sale, assignment, transfer, conveyance,
delivery or assumption shall be subject to such Consent being obtained. Without
limiting Section 2.8(b), to the extent any Assigned Contract may not be assigned
to Buyer by reason of the absence of any such Consent (“Restricted Contract”),
Buyer shall not be required to assume any Assumed Liabilities arising under such
Restricted Contract.
(b)    To the extent that any Consent in respect of a Restricted Contract or any
other Purchased Asset shall not have been obtained on or before the Closing
Date, Buyer may elect to proceed with the Closing, in which case, Seller shall
for a period of up to ninety (90) days following the Closing Date continue to
use reasonable best efforts to obtain any such Consent after the Closing Date.
Seller shall for a period of up to ninety (90) days following the Closing Date
cooperate with Buyer in any economically feasible arrangement proposed by Buyer
to provide that Buyer shall receive the interest of Seller in the benefits under
such Restricted Contract or other Purchased Asset. As soon as a Consent for the
sale, assignment, transfer, conveyance, delivery or assumption of a Restricted
Contract or other Purchased Asset is obtained, Seller shall promptly assign,
transfer, convey and deliver such Restricted Contract or Purchased Asset to
Buyer, and Buyer shall assume the Assumed Liabilities under any such Restricted
Contract from and after the date of assignment to Buyer pursuant to a
special-purpose assignment and assumption agreement substantially similar in
terms to those of the Assignment and Assumption Agreement.
(c)    Nothing contained in this Section 2.8 or elsewhere in this Asset Purchase
Agreement shall be deemed a waiver by Buyer of its right to have received on the
Closing Date an effective assignment of all of the Purchased Assets or of the
covenant of Seller to obtain all Consents, nor shall this Section 2.8 or any
other provision of this Asset Purchase Agreement be deemed to constitute an
agreement to exclude from the Purchased Assets any Assigned Contracts or other
Purchased Asset as to which a Consent may be necessary.
ARTICLE III

CLOSING

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3.1    Closing Date. The closing of the Transactions contemplated by this Asset
Purchase Agreement (the “Closing”) shall take place at the offices of Morgan,
Lewis & Bockius LLP, 2 Palo Alto Square, Suite 700, 3000 El Camino Real, Palo
Alto, California 94306, at 10:00 a.m. on a date to be specified by the parties
which shall be no later than two (2) Business Days after satisfaction (or waiver
as provided herein) of the conditions set forth in Article VIII (other than
those conditions that by their nature will be satisfied at the Closing), unless
another time, date and/or place is agreed to in writing by the parties. The date
on which the Closing occurs is referred to in this Asset Purchase Agreement as
the “Closing Date.”
3.2    Deliveries by Seller at the Closing. At the Closing, Seller shall deliver
to Buyer the following:
(a)    an Escrow Agreement in a form reasonably satisfactory to the parties (the
“Escrow Agreement”), duly executed by Seller;
(b)    a Bill of Sale in a form reasonably satisfactory to the parties, duly
executed by Seller;
(c)    an Assignment and Assumption Agreement in a form reasonably satisfactory
to the parties (the “Assignment and Assumption Agreement”), duly executed by
Seller;
(d)    an Intellectual Property License Agreement in the form of Exhibit A (the
“Intellectual Property License Agreement”) hereto duly executed by Seller;
(e)    with respect to each parcel of Real Property, a special warranty deed
(the “Special Warranty Deed”) in a form reasonably satisfactory to the parties,
duly executed by Seller;
(f)    a Supply Agreement in the form of Exhibit B (the “Supply Agreement”)
hereto duly executed by Seller;
(g)    a Transition Services Agreement in a form reasonably satisfactory to the
parties (the “Transition Services Agreement”) hereto duly executed by Seller;
(h)    such other good and sufficient instruments of transfer as Buyer
reasonably deems necessary and appropriate to vest in Buyer all right, title and
interest in, to and under the Purchased Assets;
(i)    the Seller Closing Certificate; and
(j)    a completed certification of non-foreign status pursuant to Section
1.1445-2(b)(2) of the Treasury regulations duly executed by Seller.
3.3    Deliveries by Buyer at the Closing. At the Closing, Buyer shall deliver
to Seller the following:
(a)    Buyer shall pay the Closing Consideration as follows (i) an amount equal
to $2,600,000 (the “Escrow Fund”) to [ ] as escrow agent (the “Escrow Agent”)
pursuant to

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the Escrow Agreement to secure indemnification obligations of Seller set forth
in this Asset Purchase Agreement, and (ii) an amount equal to the Closing
Consideration less than the Escrow Fund by wire transfer to an account of Seller
designated in writing by Seller to Buyer no later than three (3) Business Days
prior to the Closing Date;
(b)    the Escrow Agreement duly executed by Buyer or its designee;
(c)    the Assignment and Assumption Agreement duly executed by Buyer or its
designee;
(d)    the Intellectual Property License Agreement duly executed by Buyer or its
designee;
(e)    the Transition Services Agreement duly executed by Buyer or its designee;
(f)    the Supply Agreement duly executed by Buyer or its designee; and
(g)    the Buyer Closing Certificate.
3.4    Guarantee. Subject to the terms hereof, Parent hereby unconditionally and
irrevocably guarantees to Seller and its Affiliates, as primary obligor and not
merely as a surety, (a) the due and punctual performance and observance by Buyer
of each term, provision and condition binding upon Buyer pursuant to this Asset
Purchase Agreement and each Ancillary Agreement and (b) the due, punctual and
full payment (when and as the same may become due and payable) of each amount
that Buyer is or may become obligated to pay under or pursuant to this Asset
Purchase Agreement and each Ancillary Agreement, in accordance with the terms
thereof, by acceleration or otherwise without offset or deduction.
ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of the date hereof that the
statements contained in this Article IV are true and correct, except as set
forth in the disclosure schedule dated and delivered as of the date hereof by
Seller to Buyer (the “Seller Disclosure Schedule”), which is attached to this
Asset Purchase Agreement and is designated therein as being the Seller
Disclosure Schedule. The Seller Disclosure Schedule shall be arranged in
paragraphs corresponding to each representation and warranty set forth in this
Article IV. Each exception to a representation and warranty set forth in the
Seller Disclosure Schedule shall qualify the specific representation and
warranty which is referenced in the applicable paragraph of the Seller
Disclosure Schedule, and other applicable representations and warranties
contained herein to the extent the relevance of such exception or qualification
as an exception or qualification to (or a disclosure for purposes of) such other
representations or warranties is readily apparent on its face from a reading of
the Seller Disclosure Schedule. Nothing in the Seller Disclosure Schedule is
intended to broaden the scope of any representation or warranty of Seller
contained in this Asset Purchase Agreement.

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4.1    Organization and Good Standing. Seller is a corporation duly
incorporated, validly existing and in good standing under the Laws of the State
of Delaware, has all requisite corporate power to own, lease and operate the
Purchased Assets and is duly qualified to do business and is in good standing in
the State of Oregon.
4.2    Authority and Enforceability.
(a)    Seller has the requisite corporate power and authority to enter into this
Asset Purchase Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Asset Purchase Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Seller. Seller has duly executed and
delivered this Asset Purchase Agreement. This Asset Purchase Agreement
constitutes the valid and binding obligation of Seller, enforceable against it
in accordance with its terms, except as such enforceability may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting or relating to creditors’ rights generally, and (ii) the availability
of injunctive relief and other equitable remedies.
(b)    Seller has the requisite corporate power and authority to enter into each
Ancillary Agreement and to consummate the transactions contemplated thereby. The
execution and delivery by Seller of each Ancillary Agreement and the
consummation of the transactions contemplated thereby have been duly authorized
by all necessary corporate action on the part of Seller. On or prior to the
Closing, Seller will have duly executed and delivered each Ancillary Agreement.
Upon execution and delivery of the Ancillary Agreements by Seller, the Ancillary
Agreements will constitute the valid and binding obligation of Seller,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting or relating to creditors’ rights
generally, and (ii) the availability of injunctive relief and other equitable
remedies. The Ancillary Agreements will effectively vest in Buyer good, valid
and marketable title to all the Purchased Assets free and clear of all Liens,
other than Permitted Liens.
4.3    No Conflicts; Consents.
(a)    The execution and delivery of this Asset Purchase Agreement by Seller do
not, and the execution and delivery of each Ancillary Agreement by Seller, the
performance by Seller of its obligations hereunder and thereunder and the
consummation by Seller of the transactions contemplated hereby and thereby (in
each case, with or without the giving of notice or lapse of time, or both), will
not, directly or indirectly, (i) violate the provisions of any of Seller’s
Charter Documents, (ii) violate or constitute a default, an event of default or
an event creating rights of acceleration, termination or cancellation,
imposition of additional material obligations or loss of material rights under
any Assigned Contract by which the Facility or the Purchased Assets are bound,
(iii) violate or conflict in any material respect with any Law, Authorization or
Order applicable to Seller, or (iv) result in the creation of any Liens (other
than Permitted Liens) upon the Facility or any of the Purchased Assets. Section
4.3(a) of the Seller Disclosure Schedule sets forth all consents, waivers and
other approvals that are required in connection with the transactions
contemplated by this Asset Purchase Agreement for the effective assignment to
and assumption by Buyer of any Assigned Contract to which Seller is a party
(collectively, “Consents”).

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(b)    No material Authorization or Order of, registration, declaration or
filing with, or notice to, any Governmental Entity or other Person, is required
by or with respect to Seller in connection with the execution and delivery of
this Asset Purchase Agreement and the Ancillary Agreements and the consummation
of the transactions contemplated hereby and thereby.
4.4    Equipment Part Inventory; Operational Inventory. Schedule 4.4 of the
Seller Disclosure Schedule sets forth the Equipment Part Inventory and
Operational Inventory and the stock value of the Equipment Part Inventory for
the first nine months of 2010 (calculated by aggregating the simple moving
average of the purchase price of individual line items of Equipment Part
Inventory), subject to repair and replacement in the Ordinary Course of
Business. Except for Inventory consigned to Seller by Buyer, each item of the
Equipment Part Inventory and Operational Inventory is to Seller’s Knowledge,
free of any material defect or other deficiency. All of such Equipment Part
Inventory and Operational Inventory is located at the Facility and no such
Equipment Part Inventory or Operational Inventory is held on a consignment basis
except for that received from or on behalf of Buyer.
4.5    Taxes.
(a)    To the extent that the breach of the following would reasonably be
expected to result in any liability of Buyer for Taxes: (i) Seller has timely
filed all Tax Returns that were required to be filed; (ii) all such Tax Returns
were complete and correct in all material respects; (iii) all Taxes owed by
Seller (whether or not shown on any Tax Return) have been timely paid; (iv)
Seller is not currently the beneficiary of any extension of time within which to
file any Tax Return; and (v) Seller has not received any written notice of any
action or audit now proposed or threatened or pending against, or with respect
to Seller in respect of any Taxes.
(b)    There are no Liens for Taxes on any of the Purchased Assets other than
Permitted Liens. Seller has withheld and timely paid all Taxes required to have
been withheld and paid with respect to the Purchased Assets, and all material
Tax reporting requirements associated with such Taxes have been satisfied.
(c)    To the extent that a breach of the following would reasonably be expected
to result in any liability of Buyer for Taxes, (i) Seller has withheld and paid
all material Taxes required to have been withheld and paid in connection with
any amounts paid or owing to any employee, independent contractor, creditor, or
other third party, and (ii) all material Tax reporting requirements with respect
thereto have been satisfied.
(d)    In each case with respect to the Purchased Assets, (i) there is no
dispute or claim concerning any Liability for Taxes with respect to Seller for
which written notice has been provided, or which is asserted or threatened in
writing, and (ii) Seller has not waived (or is subject to a waiver of) any
statute of limitations in respect of Taxes or has not agreed to (or is subject
to) any extension of time with respect to a Tax assessment or deficiency.
(e)    Seller is a “United States person” within the meaning of Section
7701(a)(30) of the Code.
(f)    Seller is not a party to or bound by any Tax indemnity agreement, Tax

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sharing agreement or similar Contract that would become binding upon Buyer upon
completion of the transactions contemplated by this Asset Purchase Agreement.
4.6    Compliance with Law.
(a)    Since January 1, 2009, Seller has used and operated the Purchased Assets
in compliance in all material respects with all applicable Laws.
(b)    To Seller’s knowledge, no event has occurred and no circumstances exist
that (with or without the passage of time or the giving of notice) would
reasonably be expected to result in a material violation of, conflict with or
failure on the part of Seller to operate the Purchased Assets in material
compliance with, any applicable Law. Since January 1, 2009, Seller has not
received written notice regarding any violation of, conflict with, or failure to
operate the Purchased Assets in compliance with, any applicable Law.
4.7    Business Authorizations.
(a)    Seller has all material Authorizations required under applicable Law with
respect to the operation or ownership of the Purchased Assets as currently
operated or owned by Seller (the “Business Authorizations”). Seller owns or
possesses such Business Authorizations free and clear of all Liens other than
Permitted Liens. Such Business Authorizations are valid and in full force and
effect. All Business Authorizations are listed in the Seller Disclosure
Schedule.
(b)    To Seller’s Knowledge, no event has occurred and no circumstances exist
that (with or without the passage of time or the giving of notice) may result in
a material violation of, conflict with, failure on the part of Seller to comply
with the terms of, or the revocation, withdrawal, termination, cancellation,
suspension or modification of any Business Authorization. Seller has not
received written notice regarding any violation of, conflict with, failure to
comply with the terms of, or any revocation, withdrawal, termination,
cancellation, suspension or modification of, any such Business Authorization. To
Seller’s Knowledge, Seller is not in material default, nor has Seller received
written notice of any claim of material default, with respect to any Business
Authorization.
(c)    No Person other than Seller owns or has any proprietary, financial or
other interest (direct or indirect) in any Business Authorization
4.8    Title to Personal Properties.
(a)    The Seller Disclosure Schedule sets forth a complete and accurate list of
all personal properties and assets that are included in the Purchased Assets
(“Personal Property”) with a current fair market value in excess of $30,000,
specifying whether such Personal Property is owned or leased and, in the case of
leased assets, indicating the parties to, execution dates of and annual payments
under, the lease.
(b)    With respect to Personal Property that it purports to own (other than
Inventory sold in the Ordinary Course of Business since the date thereof),
Seller has good and marketable title to all such Personal Property, free and
clear of all Liens except for Permitted Liens.

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(c)    All leases under which Personal Property is leased are in full force and
effect in accordance with its terms, and Seller is not, to Seller’s Knowledge,
is in breach of any of the terms of any such lease.
4.9    Condition of Tangible Assets. To Seller’s Knowledge, all Purchased Assets
that are tangible property are in good operating condition and repair (subject
to normal wear and tear given the use and age of such assets).
4.10    Real Property.
(a)    The Seller Disclosure Schedule contains a list of all real property and
interests in real property owned in fee by Seller that constitutes part of the
Facility (the “Real Property”). Seller does not lease any real property that
constitutes part of the Facility.
(b)    With respect to each parcel of Real Property:
(i)    Seller has good and marketable title to each such parcel of Real Property
free and clear of all Liens, except (A) Permitted Liens and (B) zoning and
building restrictions, easements, covenants, rights‑of‑way and other similar
restrictions of record, none of which impairs the current use of such Real
Property in any material respect.
(ii)    Seller has provided to Buyer copies of the deed by which Seller acquired
each parcel of Real Property, and copies of the most recent title insurance
policy and survey in the possession of Seller (if any) with respect to such
parcels.
(iii)    There are no outstanding options or rights of first refusal to purchase
such parcel of Real Property, or any portion thereof or interest therein.
(c)    The Real Property is not currently in violation of any zoning ordinance,
in any material respect.
(d)    No Governmental Entity having the power of eminent domain over the Real
Property has commenced or, to Seller’s Knowledge, intends to exercise the power
of eminent domain or a similar power with respect to all or any part of the Real
Property. There are no pending or, to Seller’s Knowledge, threatened
condemnation, building, zoning or other land use regulatory proceedings relating
to any portion of the Real Property which would reasonably be expected to
adversely effect in any material respect the current use, occupancy or value
thereof. Seller has not received notice of any pending or threatened special
assessment proceedings affecting any portion of the Real Property.
(e)    Seller has not received any written notice of any material violation of
any Laws or administrative or judicial orders (including those relating to
hazardous materials) affecting or regarding the Real Property.
(f)    Seller has legal rights of ingress and egress to and from all Real
Property from and to the Facility to a public street.
(g)    No Person other than Seller is in possession of any of the Real Property
or any portion thereof, and there are no leases, subleases, licenses,
concessions or other

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agreements, written or oral, granting to any Person other than Seller the right
of use or occupancy of the Real Property or any portion thereof.
(h)    All water, sewer, gas, electric, telephone and drainage facilities, and
all other utilities required by any Law or currently used in the operation of
the Facility are installed to the property lines of the Real Property (taken as
a whole).
4.11    Intellectual Property.
(a)    The Seller Disclosure Schedule lists all licenses, sublicenses and other
agreements (“In-Bound Licenses”) pursuant to which a third party authorizes
Seller to use, practice any rights under, or grant sublicenses with respect to,
any Intellectual Property Rights or Technology owned by a third party and used
by Seller at the Facility, other than In-Bound Licenses that consist solely of
“shrink-wrap” and similar commercially available end-user licenses, and, with
respect to each In-Bound License, whether the In-Bound License is exclusive or
non-exclusive.
(b)    Seller represents and warrants that it possesses the rights necessary to
enter into and perform its obligations under the Intellectual Property License
Agreement.
(c)    To Seller’s knowledge and except for uses that apply solely to
Seller-proprietary products, by operating the Facility and using the other
Purchased Assets and Licensed Intellectual Property to manufacture
Seller-proprietary semiconductor devices, Seller has not infringed and is not
infringing upon, or otherwise unlawfully used or uses, any Intellectual Property
Rights of a third party. Since January 1, 2009, and except as set forth in
Section 4.11(c) of the Seller Disclosure Schedule or with respect to claims
solely related to Seller-proprietary products, Seller has not received any
communication alleging that Seller has violated or, by operating the Facility
and using the other Purchased Assets to manufacture Seller-proprietary
semiconductor devices, would violate, any Intellectual Property Rights of a
third party.
(d)    To Seller’s Knowledge, no Facility Employee has been or is, by performing
services related to Seller’s operation of the Facility and use of the other
Purchased Assets to manufacture Seller-proprietary semiconductor devices, in
violation of any term of any employment, invention disclosure or assignment,
confidentiality or noncompetition agreement or other restrictive covenant or any
Order.
(e)    The execution and delivery of this Asset Purchase Agreement by Seller
does not, and the consummation of the transactions contemplated hereby (in each
case, with or without the giving of notice or lapse of time, or both), will not,
directly or indirectly, result in the loss or impairment of, or give rise to any
right of any third party to terminate or reprice or otherwise renegotiate any of
the In-Bound Licenses, nor require the consent of any Governmental Entity or
other third party in respect of any such In-Bound Licenses.
(f)    To Seller’s Knowledge, the Software and other information technology used
to operate the Facility and that will be included as a Purchased Asset or that
constitutes Licensed Intellectual Property under the Intellectual Property
License Agreement (i) are configured and maintained to mitigate the effects of
viruses and do not contain Trojan horses or

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other malicious code and (ii) have not suffered any material error, breakdown,
failure, or security breach in the last twenty-four months that has caused
material disruption or damage to the Facility or the use of the other Purchased
Assets to manufacture Seller-proprietary semiconductor devices or that was
potentially reportable to any Governmental Entity.
(g)    Seller is in possession of and the Buyer will receive such working copies
of all Software included in the Purchased Assets or that constitutes Licensed
Intellectual Property licensed to Seller under the Intellectual Property License
Agreement, including, object and (for Software owned by or exclusively licensed
to any Acquired Company) source code, and all related manuals and other
documentation, as included in the Purchased Assets or Licensed Intellectual
Property.
4.12    Absence of Certain Changes or Events. From the date of Seller’s most
recent balance sheet filed with the Securities and Exchange Commission on or
prior to the date of this Asset Purchase Agreement to the Closing Date:
(a)    there has not been any material adverse change in the condition of the
Purchased Assets, except as set forth in Section 4.12(a) of the Seller
Disclosure Schedule;
(b)    Seller has not amended or changed, or proposed to amend or change, its
Charter Documents in a manner that would reasonably be expected to delay the
consummation of the transactions contemplated by this Asset Purchase Agreement;
(c)    Seller has not (i) increased or modified the compensation or benefits
payable or to become payable by Seller to any current or former directors,
employees, consultants or contractors engaged in the operation of the Facility
in any material respect, (ii) increased or modified any Benefit Plan made to,
for or with any current or former directors, employees, consultants or
contractors engaged in the operation of the Facility, or (iii) entered into any
employment, severance or termination agreement regarding any of the Transferred
Employees;
(d)    Seller has not sold, leased, transferred or assigned any Purchased
Assets, except for (i) the sale of Inventory other than Equipment Part Inventory
and Operational Inventory, (ii) the sale of obsolete Equipment, in each case in
the Ordinary Course of the Business, and (iii) except as set forth in Section
4.12(d) of the Seller Disclosure Schedule;
(e)    Seller has not removed or disposed of any Equipment, except as set forth
in Section 4.12(e) of the Seller Disclosure Schedule;
(f)    Seller has not mortgaged, pledged or subjected to Liens any Purchased
Assets, except for Liens arising under lease financing arrangements existing as
of the date of Seller’s most recent balance sheet filed with the Securities and
Exchange Commission on or prior to the date of this Asset Purchase Agreement,
Permitted Liens and Liens set forth in Section 4.12(f) of the Seller Disclosure
Schedule;
(g)    Seller has not entered into, amended, modified, canceled or waived any
rights under, any Material Contract and no Material Contract has been terminated
or cancelled, except for in the Ordinary Course of the Business or as set forth
in Section 4.12(g) of the Seller

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Disclosure Schedule;
(h)    there has not been any material labor dispute, other than individual
grievances, or to the Knowledge of Seller, any activity or proceeding by a labor
union or representative thereof to organize any Facility Employee;
(i)    Seller has not agreed, or entered into any arrangement, to take any
action which, if taken prior to the date hereof, would have made any
representation or warranty set forth in this Article IV as qualified by the
Seller Disclosure Schedule materially untrue or incorrect as of the date when
made;
(j)    there has not been any material damage, destruction or loss with respect
to the Purchased Assets, whether or not covered by insurance; and
(k)    Seller has not agreed, whether in writing or otherwise, to do any of the
foregoing.
4.13    Contracts.
(a)    Except as set forth in Section 4.13(a) of the Seller Disclosure Schedule,
Seller is not a party to, or bound by any Contract that is, in each case related
to the Purchased Assets but not solely related to Seller-proprietary products,
and is in effect as of the date of this Asset Purchase Agreement:
(i)    a Contract or series of related Contracts for the purchase of materials,
supplies, goods, services, equipment or other assets that involves (A) annual
payments by Seller of $30,000 or more, or (B) aggregate payments by Seller of
$30,000 or more;
(ii)    a Contract or series of related Contracts for the sale by Seller of (A)
materials, supplies, goods, services, equipment or other assets, that involves a
specified annual minimum dollar sales amount of $30,000 or more, or (B) pursuant
to which Seller received payments of more than $30,000 in the year ended
December 31 of the last full fiscal year prior to the date of this Agreement;
(iii)    a Contract that requires Seller to purchase its total requirements of
any product or service from a third party or that contains “take or pay”
provisions;
(iv)    a Contract or series of related Contracts that (A) continues over a
period of more than one (1) year from the date hereof or (B) involves payments
to or by Seller exceeding $30,000, other than arrangements disclosed pursuant to
the preceding paragraphs (i) and (ii);
(v)    a partnership, joint venture or similar Contract;
(vi)    a distribution, dealer, representative or sales agency Contract;
(vii)    a Contract for the lease of personal property which provides for
payments to or by Seller in any one case of $30,000 or more annually or $30,000
or more over the term of the Contract;

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(viii)    a Contract which provides for the indemnification by Seller of any
Person, the undertaking by Seller to be responsible for consequential damages,
or the assumption by any member of Seller of any material Tax, environmental or
other Liability;
(ix)    a Contract which restrains the ability of Seller to engage or compete in
any manner or in any business in a manner that would reasonably be expected to
have a material adverse effect on the Purchased Assets as currently used by
Seller;
(x)    an In-Bound License;
(xi)    a Contract relating to the acquisition by another Person or disposition
to another Person of a material portion of the Purchased Assets (whether by
merger, sale of stock, sale of assets or otherwise);
(xii)    a collective bargaining Contract or other Contract with any labor
organization, union or association with respect to the Facility Employees; and
(xiii)    an employment or consulting Contract with a Facility Employee other
than those that are terminable at-will by Seller on less than 30 days’ notice.
(b)    Each Contract required to be listed in Section 4.13(a) of the Seller
Disclosure Schedule (collectively, the “Material Contracts”) is valid and
enforceable in accordance with its terms. Seller has complied with and is in
compliance with, and to Seller’s Knowledge, all other parties thereto have
complied with and are in compliance with, the provisions of each Material
Contract.
(c)    Seller is not, and to Seller’s Knowledge, no other party thereto is, in
default in the performance, observance or fulfillment of any obligation,
covenant, condition or other term contained in any Material Contract, and Seller
has not given or received written notice to or from any Person relating to any
such alleged or potential default that has not been cured. To Seller’s
Knowledge, no event has occurred which with or without the giving of notice or
lapse of time, or both, may materially conflict with or result in a material
violation or breach of, or give any Person the right to accelerate the maturity
or performance of, or cancel, terminate or modify, any Material Contract.
(d)    Seller has made available accurate and complete copies of each Material
Contract to Buyer.
4.14    Sufficiency of Purchased Assets. Except for any Facility Employees who
do not become Transferred Employees, Intellectual Property Rights or Technology
owned by a third party and used by Seller for its own semiconductor
manufacturing operations at the Facility and the rights provided pursuant to the
Intellectual Property License Agreement, and except as set forth in Section 4.14
of the Seller Disclosure Schedule, the Purchased Assets constitute all tangible
assets, Technology and Intellectual Property Rights necessary for the operation
of the Facility and the use of the Purchased Assets as conducted by Seller for
its own semiconductor manufacturing operations at the Facility as of the date of
this Asset Purchase Agreement.
4.15    Litigation.
(a)    There is no action, suit or proceeding, claim, arbitration, litigation or

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investigation (each, an “Action”), in each case related exclusively to the
Purchased Assets, (i) pending or, to Seller’s Knowledge, threatened against or
affecting Seller, or (ii) that challenges or seeks to prevent, enjoin or
otherwise delay the transactions contemplated by this Asset Purchase Agreement
or the Ancillary Agreements. To Seller’s Knowledge, no event has occurred or
circumstances exist that serve as a reasonable basis for any such Action. There
is no Action against any current or, to Seller’s Knowledge, former Facility
Employee with respect to which Seller has or is reasonably likely to have an
indemnification obligation.
(b)    There is no unsatisfied judgment, penalty or award, in each case related
to the Purchased Assets, against or affecting Seller or any of the Purchased
Assets, except as solely related to Seller-proprietary products.
4.16    Employee Benefits.
(a)    The Seller Disclosure Schedule sets forth a complete and accurate list of
all Benefit Plans maintained or contributed to by Seller for the benefit of any
Facility Employee (collectively, “Seller Benefit Plans”). A current, accurate
and complete copy of each Seller Benefit Plan has been provided to Buyer. Seller
has no intent or commitment to create any additional Seller Benefit Plan or
amend any Seller Benefit Plan.
(b)    Except as would not reasonably be expected to result in a material
Liability to Buyer following the Closing, each Seller Benefit Plan that is an
employee pension benefit plan (as defined in Section 3(2) of ERISA) and which is
intended to be qualified under Section 401(a) of the Code, has been determined
by the Internal Revenue Service to be so qualified and to the Knowledge of
Seller no condition exists that would adversely affect any such determination.
No Seller Benefit Plan is a “defined benefit plan” as defined in Section 3(35)
of ERISA.
(c)    None of Seller or any ERISA Affiliate has been or is currently party to
any “multi‑employer plan,” as that term is defined in Section 3(37) of ERISA.
(d)    There are no actions, suits or claims (other than routine claims for
benefits in the ordinary course) pending or, to Seller’s Knowledge, threatened
by any Facility Employee against any Seller Benefit Plan, or, with respect to
any Seller Benefit Plan against Seller, any ERISA Affiliate or, to the Knowledge
of Seller, any trustee or agent of Seller.
(e)    With respect to each Seller Benefit Plan to which Seller or any ERISA
Affiliate is a party which constitutes a group health plan subject to Section
4980B of the Code, except as would not reasonably be expected to result in a
material Liability to Buyer following the Closing, each such Seller Benefit Plan
complies, and in each case has complied, with all applicable requirements of
Section 4980B of the Code.
(f)    Except as would not result in a material Liability to Buyer following the
Closing, there are not any outstanding Liabilities to Transferred Employees
under any Seller Benefit Plan that will become the obligation of Buyer after the
Closing.
(g)    Except as would not result in a material Liability to Buyer following the
Closing, the consummation of the transactions contemplated by this Asset
Purchase Agreement

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will not create any obligation of Buyer under any Seller Benefit Plan that (i)
entitles any Facility Employee to severance pay, unemployment compensation or
any other payment or (ii) accelerates the time of payment or vesting, or
increase the amount of, compensation due to any such Facility Employee, or
results in the payment of any other benefits to any Facility Employee or the
forgiveness of any Indebtedness of any Facility Employee.
4.17    Labor and Employment Matters.
(a)    The Seller Disclosure Schedule sets forth (i) a list of all Facility
Employees (including title, position, employment starting date, whether active
or on a leave of absence), contractors and consultants primarily engaged in
activities at the Facility as of the date hereof, and (ii) the base compensation
(listing annual salary) and bonus opportunity (if applicable) of each such
Facility Employee, contractor and consultant.
(b)    Seller is not a party or subject to any labor union or collective
bargaining agreement with respect to the Facility Employees. There have not been
since January 1, 2009, and there are not pending or, to Seller’s Knowledge,
threatened, any labor disputes, labor strikes, work stoppages, requests for
representation, pickets, work slow-downs due to labor disagreements or any
actions or arbitrations that involve Facility Employees. There is no unfair
labor practice, charge or complaint pending, unresolved or, to Seller’s
Knowledge, threatened before the National Labor Relations Board that involve
Facility Employees. To Seller’s Knowledge, no event has occurred or circumstance
exist that may provide the basis of any work stoppage or other labor dispute
with respect to the Facility Employees.
(c)    Except as would not result in a material Liability to Buyer following the
Closing, Seller has complied with each, and is not in violation of any, Law
relating to anti-discrimination and equal employment opportunities in connection
with the operation of the Facility. Except as would not result in a material
Liability to Buyer following the Closing, there are no pending or, to Seller’s
Knowledge, threatened discrimination or retaliation complaint or charge relating
to any characteristic protected by any Law against Seller before any
Governmental Entity nor, to Seller’s Knowledge, does any basis therefor exist.
Except as would not result in a material Liability to Buyer following the
Closing, there are, and have been, no violations of any other Law respecting the
hiring, hours, wages, occupational safety and health, employment, promotion,
termination or benefits of any Facility Employee.
(d)    Seller has paid or properly accrued in the Ordinary Course of the
Business all wages and compensation due to Facility Employees, including all
vacations or vacation pay, holidays or holiday pay, sick days or sick pay, and
bonuses. The Seller Disclosure Schedule sets forth accrued vacation hours and
aggregate dollar value of all such accrued vacation with respect to each
Facility Employee.
(e)    Since January 1, 2009, Seller has not effectuated a “plant closing” (as
defined in the WARN Act) or a “mass lay-off” (as defined in the WARN Act), in
either case affecting the Facility, except in accordance with the WARN Act.
(f)    Except as would not result in a material Liability to Buyer following the
Closing, Seller has complied and is in compliance with the requirements of the
Immigration Reform and Control Act of 1986. The Seller Disclosure Schedule sets
forth a true and complete

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list of all Facility Employees working in the United States who are not U.S.
citizens and a description of the legal status under which each such Facility
Employee is permitted to work in the United States. All Facility Employees who
are performing services for Seller in the United States are legally able to work
in the United States.
4.18    Environmental.
(a)    As used in this Asset Purchase Agreement, the following words and terms
have the following definitions:
(i)    The term “Environment” means all indoor or outdoor air, surface water,
groundwater, surface or subsurface land, including all fish, wildlife, biota and
all other natural resources.
(ii)    The term “Environmental Action” means any claim, proceeding or other
Action brought or threatened under any Environmental Law or the assertion of any
claim with respect to Pre-Closing Environmental Liabilities.
(iii)    The term “Environmental Clean‑up Site” means any location which is
listed on the National Priorities List, the Comprehensive Environmental
Response, Compensation and Liability Information System, or on any similar state
list of sites requiring investigation or cleanup, or which is the subject of any
pending Action related to or arising from any alleged violation of any
Environmental Law, or at which there has been a threatened or actual Release of
a Hazardous Substance.
(iv)    The term “Environmental Laws” means any and all applicable Laws and
Authorizations issued, promulgated or entered into by any Governmental Entity
prior to Closing relating to the Environment, worker health and safety,
preservation or reclamation of natural resources, or to the management,
handling, use, generation, treatment, storage, transportation, disposal,
manufacture, distribution, formulation, packaging, labeling, Release or
threatened Release of or exposure to Hazardous Substances, including but not
limited to: the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601 et seq. (“CERCLA”); the Federal Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Clean Air Act, 42
U.S.C. Section 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq.; the Occupational Safety and Health Act, 29 U.S.C. Section 651 et
seq.; the Emergency Planning and Community Right‑to‑Know Act of 1986, 42 U.S.C.
Section 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300(f) et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et
seq.; the Federal Insecticide, Fungicide and Rodenticide Act 7 U.S.C. Section
136 et seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and any
similar or implementing state or local Law, and all amendments or regulations
promulgated thereunder; and any common law doctrine, including but not limited
to, negligence, nuisance, trespass, personal injury, or property damage related
to or arising out of the presence, Release, or exposure to Hazardous Substances.
(v)    The term “Environmental Permit” means any Authorization under
Environmental Law and includes any and all Orders issued or entered into by a

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Governmental Entity under Environmental Law.
(vi)    The term “Hazardous Substances” means all explosive or radioactive
materials or substances, hazardous or toxic materials, hazardous or toxic
wastes, hazardous or toxic chemicals, petroleum and petroleum products
(including crude oil or any fraction thereof), asbestos or asbestos containing
materials, and all other materials, wastes, chemicals or substances which are
regulated by, form the basis of liability or are defined as hazardous, extremely
hazardous, toxic or words of similar import, under any Environmental Law,
including materials listed in 49 C.F.R. Section 172.101 and materials defined as
hazardous pursuant to Section 101(14) of CERCLA.
(vii)    The term “Release” means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing of Hazardous Substances into the Environment.
(b)    Seller has obtained, and is in compliance with, all material
Environmental Permits required in connection with the Real Property and all the
other Purchased Assets. All such Environmental Permits are valid and in full
force and effect and all renewal applications for such Environmental Permits
have been timely filed with the appropriate Governmental Entity. To Seller’s
Knowledge, none of such Environmental Permits will be terminated or impaired or
become terminable as a result of the consummation of the transactions
contemplated by this Asset Purchase Agreement.
(c)    Seller has been, and is currently, in material compliance with all
applicable Environmental Laws, and Seller has not received written notice
alleging that Seller is not in such compliance with Environmental Laws, in each
case in connection with the Real Property or any of the other Purchased Assets.
To Seller’s Knowledge, neither the execution of this Asset Purchase Agreement or
the Ancillary Agreements will require any notification to or the consent of any
Governmental Entity or the undertaking of any investigations or remedial actions
pursuant to Environmental Law.
(d)    There are no past, pending or, to Seller’s Knowledge, threatened
Environmental Actions against or affecting Seller in connection with the Real
Property or any of the other Purchased Assets, and Seller is not aware of any
facts or circumstances which could reasonably be expected to form the basis for
any such Environmental Action with respect to the Real Property or the Purchased
Assets.
(e)    Seller has not entered into or agreed to any Order, and Seller is not
subject to any Order, relating to compliance with any Environmental Law or to
investigation or cleanup of a Hazardous Substance under any Environmental Law,
in each case in connection with the Real Property or any of the other Purchased
Assets.
(f)    No Lien other than a Permitted Lien has been attached to, or asserted
against the Real Property or any of the other Purchased Assets pursuant to any
Environmental Law, and, to Seller’s Knowledge, no such Lien has been threatened.
To Seller’s Knowledge, there are not facts, circumstances or other conditions
that could reasonably be expected to give

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rise to any Liens on or affecting the Real Property or any of the other
Purchased Assets under Environmental Law.
(g)    Except in material compliance with all applicable Environmental Laws,
there has been no treatment, storage, disposal or Release of, and no Person has
been exposed to, any Hazardous Substance at, from, into, on or under the Real
Property in a manner that could result in a Liability to Seller under
Environmental Laws.
(h)    To Seller’s Knowledge, there are no aboveground or underground storage
tanks on or about the Real Property except in compliance with Environmental
Laws.
(i)    To the Knowledge of Seller, there is no asbestos containing material or
lead based paint containing materials in at, on, under or within the Real
Property.
(j)    Neither Seller nor, to Seller’s Knowledge, any of its predecessors has in
connection with the Real Property or any of the other Purchased Assets,
transported or arranged for the treatment, storage, handling, disposal, or
transportation of any Hazardous Material to any off‑site location which is an
Environmental Clean‑up Site or which could result in an Environmental Action
against Seller.
(k)    Seller has provided to Buyer true and complete copies of, or access to,
all written environmental assessments, studies, Phase I reports and related
data, analyses and compliance audits that have been prepared with respect to the
Real Property and the other Purchased Assets to the extent that such materials
are in Seller’s possession or under their immediate control.
4.19    Insurance.
(a)    The Seller Disclosure Schedule sets forth (i) an accurate and complete
list of each insurance policy and fidelity bond which covers the Purchased
Assets and the Facility Employees (the “Policies”) and (ii) with respect to the
Purchased Assets, a list of all pending claims and the claims history for Seller
during the current year and the preceding three years (including with respect to
insurance obtained but not currently maintained). There are no pending claims
under any of such Policies with respect to the Purchased Assets as to which
coverage has been questioned, denied or disputed by the insurer or in respect of
which the insurer has reserved its rights.
(b)    The Seller Disclosure Schedule describes any self-insurance arrangement
by or affecting Seller with respect to the Purchased Assets, including any
reserves thereunder, and describes the loss experience for all claims that were
self-insured in the current year and the preceding three years.
(c)    All Policies are issued by an insurer that is financially sound and
reputable, are in full force and effect and are enforceable in accordance with
their terms. Such Policies provide adequate insurance coverage for the Purchased
Assets as currently operated and owned, and are sufficient for compliance with
all Laws and Contracts to which Seller is a party or by which it is bound in
connection with the Purchased Assets.
(d)    All premiums due under the Policies have been paid in full or, with

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respect to premiums not yet due, accrued. Seller has not received a written
notice of cancellation of any Policy or of any material changes that are
required in the operation of the Facility or use of the other Purchased Assets
as a condition to the continuation of coverage under, or renewal of, any such
Policy. There is no existing default or event which, with the giving of notice
or lapse of time or both, would constitute a default under any Policy or entitle
any insurer to terminate or cancel any Policy with respect to the Purchased
Assets. Seller has no Knowledge of any threatened termination of any Policy.
4.20    Suppliers.
(a)    Section 4.20 of the Seller Disclosure Schedule sets forth with respect to
the Purchased Assets:
(i)    each supplier from whom purchases by Seller exceeded $30,000 in the year
ended December 31, [2008] or December 31, [2009] pursuant to a Contract; and
(ii)    each supplier who constitutes a sole source of supply to Seller in
connection with Seller’s manufacture of Seller-proprietary semiconductor
products at the Facility as currently operated by Seller; and
(b)    No such supplier has canceled or otherwise terminated, or threatened to
cancel or otherwise terminate, its relationship with Seller in connection with
Seller’s manufacture of Seller-proprietary semiconductor products at the
Facility. Seller has not received notice that any such supplier may cancel,
terminate or otherwise materially and adversely modify its relationship with
Seller in connection with Seller’s manufacture of Seller-proprietary
semiconductor products at the Facility or limit its services, supplies or
materials to Seller in connection with Seller’s manufacture of
Seller-proprietary semiconductor products at the Facility, either as a result of
the consummation of the transactions contemplated by this Asset Purchase
Agreement or otherwise.
4.21    Brokers or Finders. Seller represents, as to itself and its Affiliates,
that no agent, broker, investment banker or other firm or Person is or will be
entitled to any broker’s or finder’s fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Asset Purchase
Agreement and the Ancillary Agreements, except ATREG, whose fees and expenses
will be paid by Seller.
ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that each statement contained in this
Article V is true and correct as of the date hereof.
5.1    Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation and has the requisite corporate power to own, lease and operate
its properties and to carry on its business as now being conducted.

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5.2    Authority and Enforceability. Buyer has the requisite corporate power and
authority to enter into this Asset Purchase Agreement and the Ancillary
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Asset
Purchase Agreement and the Ancillary Agreements to which Buyer is a party and
the consummation of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of Buyer. This
Asset Purchase Agreement has been, and the Ancillary Agreements to which Buyer
is a party will be, duly executed and delivered by Buyer and, assuming due
authorization, execution and delivery by Seller, constitutes the valid and
binding obligations of Buyer, enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting or relating to creditors’ rights generally, and (b) the availability
of injunctive relief and other equitable remedies.
5.3    No Conflicts; Consents.
(a)    The execution and delivery of this Asset Purchase Agreement by Buyer do
not, and the execution and delivery of the Ancillary Agreements to which Buyer
is a party and the consummation of the transactions contemplated hereby and
thereby will not, (i) violate the provisions of any of the Charter Documents of
Buyer, (ii) violate any Contract to which Buyer is a party, (iii) to the
knowledge of Buyer, violate any Law of any Governmental Entity applicable to
Buyer on the date hereof, or (iv) to the knowledge of Buyer, result in the
creation of any Liens upon any of the assets owned or used by Buyer, except in
each such case where such violation or Lien would not reasonably be expected
materially to impair or delay the ability of Buyer to perform its obligations
under this Asset Purchase Agreement or the Ancillary Agreements.
(b)    No Authorization or Order of, registration, declaration or filing with,
or notice to any Governmental Entity is required by Buyer in connection with the
execution and delivery of this Asset Purchase Agreement and the Ancillary
Agreements to which it is a party and the consummation of the transactions
contemplated hereby and thereby, except for the failure to obtain which would
not reasonably be expected to materially impair the ability of Buyer to perform
its obligations under this Asset Purchase Agreement and the Ancillary Agreements
to which Buyer is a party.
5.4    Litigation. There is no Action pending or, to the knowledge of Buyer,
threatened against, Buyer which (a) challenges or seeks to enjoin, alter or
materially delay the consummation of the transactions contemplated by this Asset
Purchase Agreement, or (b) would reasonably be expected to have a material
adverse effect on Buyer.
5.5    Availability of Funds. Buyer has cash available or has existing borrowing
facilities which together are sufficient to enable it to consummate the
transactions contemplated by this Asset Purchase Agreement.
5.6    Brokers or Finders. Buyer represents, as to itself and its Affiliates,
that no agent, broker, investment banker or other firm or Person is or will be
entitled to any broker’s or finder’s fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Asset Purchase
Agreement and the Ancillary Agreements.
ARTICLE VI

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COVENANTS OF SELLER
6.1    Conduct of Business. During the period from the date of this Asset
Purchase Agreement and continuing until the earlier of the termination of this
Asset Purchase Agreement or the Closing Date, except with regard to performance
of the Foundry Services Agreement or the Ancillary Agreements, or except with
the prior written consent of Buyer, such consent not to be unreasonably
conditioned, delayed or withheld, Seller shall:
(a)    (i) maintain its corporate existence, (ii) pay or perform the Liabilities
of the Purchased Assets when due, (iii) operate the Purchased Assets in the
Ordinary Course of Business and in accordance with the provisions of this Asset
Purchase Agreement and in compliance with all Laws, Business Authorizations and
Material Contracts, and (iv) maintain the level and quality of the Equipment
Part Inventory and Operational Inventory;
(b)    use commercially reasonable efforts consistent with past practices and
policies to preserve intact the Facility, keep available the services of its
present Facility Employees, subject to Seller’s obligations and other
limitations on Seller’s actions set forth in this Asset Purchase Agreement, and
preserve its relationships with suppliers, distributors, licensors and others
having dealings with the Facility pursuant to Assigned Contracts; provided that
Seller is not authorized to, and shall not, make any commitments on behalf of
Buyer;
(c)    use commercially reasonable efforts to maintain the Real Property and
other assets, properties and rights included in the Purchased Assets in the same
state of repair, order and conditions as they are on the date hereof, subject to
normal wear and tear in the Ordinary Course of Business, and subject to any
repairs or replacements and except with respect to Equipment purchased by Seller
for non-operational purposes to serve as spare parts;
(d)    maintain the Books and Records in accordance with past practice, and use
its reasonable efforts to maintain in full force and effect all Business
Authorizations and Policies;
(e)    (i) confer with Buyer prior to implementing operational decisions of a
material nature at the Facility, (ii) report on a regular basis concerning the
status of the Purchased Assets, and (iii) promptly notify Buyer of any event or
occurrence not in the Ordinary Course of Business; and
(f)    use commercially reasonable efforts to (i) operate the Facility and use
the other Purchased Assets in such a manner that on the Closing Date the
representations and warranties of Seller contained in this Asset Purchase
Agreement shall be true and correct, as though such representations and
warranties were made on and as of such date, and (ii) cause all of the
conditions to the obligations of Buyer under this Asset Purchase Agreement to be
satisfied as soon as practicable following the date hereof.
6.2    Negative Covenants. Except as expressly provided in this Asset Purchase
Agreement, Seller shall not do any of the following, in each case with respect
to the Purchased Assets, without the prior written consent of Buyer, such
consent not to be unreasonably conditioned, delayed or withheld:
(a)    adopt or propose any amendment to Charter Documents of the Seller that

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would reasonably be expected to delay the consummation of the transactions
contemplated by this Asset Purchase Agreement;
(b)    (i) other than pursuant to a written agreement or Seller Benefit Plan
disclosed in the Seller Disclosure Schedule in the amount required thereunder,
(A) modify the compensation or benefits payable or to become payable by Seller
to any Transferred Employee, or (B) modify any bonus, severance, termination,
pension, insurance or other employee benefit plan, payment or arrangement made
to, for or with any Transferred Employee, or (ii) enter into any employment,
severance or termination agreement with any Transferred Employee;
(c)    establish, adopt, enter into, amend or terminate any Seller Benefit Plan
or any collective bargaining, thrift, compensation or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any Transferred Employee;
(d)    sell, lease, transfer or assign any Purchased Assets, except the sale,
lease, transfer or assignment (i) of Inventory other than Equipment Part
Inventory and Operational Inventory, (ii) of obsolete Equipment, (iii) of
Excluded Assets or (iv) in the Ordinary Course of Business;
(e)    remove, dispose or replace of any individual piece of Equipment; provided
however the use of Equipment purchased by Seller for non-operational purposes to
serve as spare parts or maintain existing Equipment shall not constitute the
removal, disposal or replacement of any individual piece of Equipment;
(f)    mortgage, pledge or subject to Liens, other than Permitted Liens, any
Purchased Assets;
(g)    amend, modify, cancel or waive any material rights under any Contract
which is an Assigned Contract;
(h)    be party to any merger, acquisition, consolidation, recapitalization,
liquidation, dissolution or similar transaction solely with respect to the
Purchased Assets;
(i)    take any action or omit to do any act which action or omission will cause
it to breach any obligation contained in this Asset Purchase Agreement or cause
any representation or warranty of Seller not to be true and correct as of the
Closing Date; or
(j)    agree, whether in writing or otherwise, to do any of the foregoing.
6.3    Access to Information; Investigation. Subject to the terms of the
Confidentiality Agreement by and between Buyer and Seller dated May 20, 2010
(the “Confidentiality Agreement”), Seller shall afford to Buyer’s officers,
directors, employees, accountants, counsel, consultants, advisors and agents
(“Representatives”) free and full access to and the right to inspect, during
normal business hours, all of the properties, assets, records, Contracts and
other documents with respect to the operation and ownership of the Purchased
Assets, subject to reasonable policies and procedures at the Facility and
requirements not to unreasonably affect the operation of the Facility, and shall
permit them to consult with the officers, employees, accountants, counsel and
agents of Seller for the purpose of making such investigation of the Purchased
Assets as Buyer shall reasonably desire to make. Seller shall furnish to Buyer
all such

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documents and copies of documents and records and information with respect to
the Purchased Assets and copies of any working papers solely relating thereto as
Buyer may reasonably request. Without limiting the foregoing, Seller shall
permit Buyer and Buyer’s Representatives to conduct environmental due diligence
of the Real Property and the other Purchased Assets, including the collecting
and analysis of samples of indoor or outdoor air, surface water, groundwater or
surface or subsurface land on, at, in, under or from the Facility.
6.4    Confidentiality. From and after the Closing Date until the third
anniversary of the Closing Date, unless otherwise required by Law or the rules
and regulations of any stock exchange on which such party’s stock is traded or
quoted, each party will, and will cause its Affiliates to, hold, and will use
its reasonable best efforts to cause its and their respective Representatives to
hold, in confidence any and all information, whether written or oral, concerning
the Purchased Assets, except to the extent that such party can show that such
information (a) is in the public domain through no fault of such party or any of
its Affiliates or their respective Representatives, (b) is lawfully acquired by
such party or any of its Affiliates after the Closing Date from sources that are
not prohibited from disclosing such information by a legal, contractual or
fiduciary obligation, (c) was in the possession of such party prior to
disclosure by the disclosing party or its Representatives or (d) is developed by
such party independent of any confidential information provided hereunder. If a
party or any of its Affiliates or Representatives is compelled to disclose any
such information by judicial or administrative process or by other requirements
of Law, such party shall promptly notify the other party in writing and shall
disclose only that portion of such information that such party is advised by its
counsel in writing is legally required to be disclosed; provided that such party
shall exercise its reasonable efforts to obtain an appropriate protective order
or other reasonable assurance that confidential treatment will be accorded such
information.
6.5    Release of Liens. Prior to the Closing Date, Seller shall cause to be
released all Liens other than Permitted Liens in and upon any of the Purchased
Assets (all of such Liens are set forth in the Seller Disclosure Schedule).
6.6    Consents. Prior to the Closing Date, Seller shall use commercially
reasonable efforts to obtain all Consents that are required under Assigned
Contracts in connection with the consummation of the transactions contemplated
by this Asset Purchase Agreement.
Notification of Certain Matters, Seller shall give prompt notice to Buyer of (a)
any fact, event or circumstance known to it that individually or taken together
with all other facts, events and circumstances known to it, has had or would
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the Purchased Assets, or would cause or constitute a material
breach of any of its representations, warranties, covenants or agreements
contained herein, (b) the failure of any condition precedent to Buyer’s
obligations hereunder, (c) any notice or other communication from any third
party alleging that the consent of such third party is or may be required in
connection with the consummation of the transactions contemplated by this Asset
Purchase Agreement, (d) any notice or other communication from any Governmental
Entity in connection with the consummation of the transactions contemplated by
this Asset Purchase Agreement, or (e) the commencement of any Action that, if
pending on the date of this Asset Purchase Agreement, would have been required
to have been disclosed pursuant to Section 4.12; provided, however, (i) the
delivery of any notice pursuant to this Section 6.7 shall not limit or otherwise
affect any remedies available to Buyer, pursuant to the terms of this Asset
Purchase

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Agreement, and (ii) disclosure by Seller shall not be deemed to amend or
supplement the Seller Disclosure Schedule or prevent or cure any
misrepresentation, breach of warranty or breach of covenant.
6.8    Restrictive Covenants.
(a)    Seller covenants that, commencing on the Closing Date and ending on the
third anniversary of the Closing Date (the “Noncompetition Period”), Seller
shall not, and it shall cause its Affiliates not to, directly or indirectly, in
any capacity, engage in or have any direct or indirect ownership interest in any
business anywhere in the world which is engaged, either directly or indirectly,
in the business of developing, manufacturing, marketing or selling any products
manufactured using Buyer’s proprietary Diffusion Metal Oxide Semiconductor
(“DMOS”) process technology (the “Seller Restricted Business”). It is recognized
that the Seller Restricted Business is expected to be conducted throughout the
world and that more narrow geographical limitations of any nature on this
non‑competition covenant are therefore not appropriate.
(b)    Buyer covenants that during the Noncompetition Period, Buyer shall not,
and it shall cause its Affiliates not to, directly or indirectly, in any
capacity, engage in or have any direct or indirect ownership interest in, any
business anywhere in the world which is engaged, either directly or indirectly,
in the business of developing, manufacturing, marketing or selling any products
which are competitive with the products listed in Schedule 6.8(b)(i) that are
produced by Seller using the Purchased Assets prior to the Closing, excluding
specifically the products listed in Schedule 6.8(b)(ii) that are produced by
Buyer prior to the Closing (the “Buyer Restricted Business”). For the purpose of
clarity, the business of developing, manufacturing, marketing or selling power
semiconductor products is not deemed to be a Buyer Restricted Business. The
noncompetition obligation of Buyer shall not apply to products exclusively sold
to Seller after the Closing. It is recognized that the Buyer Restricted Business
is expected to be conducted throughout the world and that more narrow
geographical limitations of any nature on this non‑competition covenant are
therefore not appropriate.
6.9    Exclusivity. Seller agrees as follows:
(a)    Except with respect to the transactions contemplated by this Asset
Purchase Agreement, the Seller agrees that it will not, and it will cause its
Subsidiaries and its and their respective Representatives not to, (i) initiate,
solicit, facilitate, seek, knowingly encourage or induce, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to its stockholders
or any of them) from any Person other than Buyer with respect to the sale or
disposition of (x) all or substantially all of the Facility or (y) any material
Purchased Assts located at the Facility (other than replacement at Seller’s
discretion with substantially equivalent assets in good working condition or
repair in the Ordinary Course of Business) pursuant to a merger, acquisition,
consolidation, recapitalization, liquidation, dissolution, equity investment or
similar transaction (any such proposal or offer being hereinafter referred to as
a “Proposal”), or (ii) engage in any negotiations concerning, or provide any
confidential information or data to, or have any substantive discussions with,
any Person relating to a Proposal or (iii) enter into or consummate any
agreement or understanding with any Person relating to a Proposal.
(b)    Except with respect to the transaction contemplated herein, Seller shall

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immediately cease and terminate, and it shall cause its Subsidiaries and its and
their respective Representatives immediately to cease and terminate, any
existing activities, including discussions or negotiations with any parties
conducted heretofore with respect to any Proposal.
(c)    Seller shall promptly notify Buyer if any inquiries, proposals or offers
related to a Proposal are received by, any confidential information or data is
requested from, or any negotiations or discussions related to a Proposal are
sought to be initiated or continued with, it or any of its Subsidiaries or any
of their respective Representatives.
6.10    Vanderzanden Farms. Seller, at its sole cost and expense, shall use
commercially reasonable efforts to terminate Vanderzanden Farms’ right to use of
the 2.69 acres of the Real Property as disclosed in Schedule 4.10 of the Seller
Disclosure Schedule in a writing (i) signed by Seller and (ii) signed by
Vanderzanden Farms (the “Vanderzanden Farms Termination”).
ARTICLE VII

COVENANTS OF BUYER AND SELLER
7.1    Regulatory Approvals.
(a)    Buyer and Seller shall each promptly apply for, and take all reasonably
necessary actions to obtain or make, as applicable, all Orders and
Authorizations of, and all filings with, any Governmental Entity or other Person
required to be obtained or made by it for the consummation of the transactions
contemplated by this Asset Purchase Agreement. Each party shall cooperate with
and promptly furnish information to the other party necessary in connection with
any requirements imposed upon such other party in connection with the
consummation of the transactions contemplated by this Asset Purchase Agreement.
Buyer and Seller shall each be responsible for one half of all filing and other
similar fees payable in connection with such filings and for any local counsel
fees.
(b)    For the period of six (6) months after the Closing Date, Seller shall use
commercially reasonable efforts to assist Buyer in identifying the Business
Authorizations (including Environmental Permits) required by Buyer to own and
operate the Purchased Assets to manufacture its own products from and after the
Closing Date and will either transfer current Business Authorizations (including
Environmental Permits) of Seller to Buyer or use commerically reasonably efforts
to assist Buyer in obtaining new Authorizations.
7.2    Public Announcements. Neither Buyer nor Seller shall issue any press
releases or otherwise make any public statements with respect to the
transactions contemplated by this Asset Purchase Agreement; provided, however,
that Buyer or Seller may, without such approval, make such press releases or
other public announcement as it believes are required pursuant to any listing
agreement with any national securities exchange or stock market or applicable
securities Laws, in which case the party required to make the release or
announcement shall allow the other party reasonable time to comment on such
release or announcement in advance of such issuance; provided, further, that
each of the parties may make internal announcements to their respective
employees that are consistent with the parties’ prior public disclosures
regarding the transactions contemplated by this Asset Purchase Agreement.

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7.3    Employees.
(a)    Promptly following the execution of this Asset Purchase Agreement, Seller
shall provide reasonable access to Buyer to the facilities and the personnel
records of Seller for Facility Employees the purpose of preparing for and
conducting employment interviews with Facility Employees. Buyer shall not be
obligated to offer employment to any Facility Employee.
(b)    Buyer may offer employment to any Facility Employee on such terms and
conditions as it deems appropriate in its sole discretion, such employment to be
contingent upon and effective immediately following the Closing; provided that
no later than three (3) business days prior to Buyer’s offer of employment to
any Facility Employee, Buyer shall provide to Seller written notice of the
compensation terms of such offer with respect to title and/or position and cash
compensation. Seller shall use commercially reasonable efforts to assist Buyer
in employing as new employees of Buyer, all Facility Employees to whom Buyer has
offered employment pursuant to this Section 7.3(b). The Facility Employees who
accept Buyer’s offer of employment and commence employment with Buyer shall be
referred to, collectively, as “Transferred Employees.” Seller shall terminate
the employment of all Transferred Employees with Seller effective immediately
prior to the Closing.
(c)    Any and all Liabilities relating to or arising out of the employment, or
cessation of employment, of any Facility Employee (whether or not a Transferred
Employee) on or prior to the close of business on the Closing Date shall be the
sole responsibility of Seller including wages and other remuneration due through
the close of business on the Closing Date. Notwithstanding the foregoing, Buyer
shall assume and honor accrued vacation of Transferred Employees, up to eighty
(80) hours of vacation per Transferred Employee (“Transferred Vacation
Benefits”), to the extent permissible under Law. Should any Transferred Employee
request any portion of his or her Transferred Vacation Benefits to be paid out
in cash, Buyer shall pay such Transferred Vacation Benefits at a rate of pay
equal to the Transferred Employee’s base salary that is in effect at the time of
the request.
(d)    From and after the Closing Date, Buyer shall offer to Transferred
Employees such Benefit Plans and arrangements as it deems appropriate in its
sole discretion, provided that, Transferred Employees shall receive credit for
their prior service with Seller and its Affiliates, including prior service with
predecessor employers where such prior service is recognized by Seller as of
immediately prior to the Closing, for purposes of eligibility to participate,
vesting and determination of level of benefits (but not to the extent that such
recognition would result in duplication of benefits or with respect to any
defined benefit plan) in Benefit Plans (other than under an equity, equity
derivative or deferred compensation plan, program or policy) offered by Buyer
and shall be entitled to enjoy the benefits available to similarly situated
Buyer employees. From and after the Closing Date, Buyer shall use commercially
reasonable efforts to cause any pre-existing conditions or limitations and
eligibility waiting periods under any group health plans of Buyer or its
Affiliates to be waived with respect to Transferred Employees and their eligible
dependents to the extent such Transferred Employees and their eligible
dependents were not subject to such preexisting conditions and limitations and
eligibility waiting periods under the comparable Seller Benefit Plans as of
immediately

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preceding the Closing. Buyer shall not assume any Liability under any of the
Seller Benefit Plans.
(e)    All Transferred Employees shall become vested in their accrued benefits
per Seller’s benefit vesting schedule under Seller’s pension benefit plans as of
the Closing Date, and Seller shall retain Liability for the payment of such
accrued benefits in accordance with the terms of such pension benefit plans.
(f)    Seller shall be liable for any severance, separation, deferred
compensation or similar benefits that are payable (i) to any Person who is or
was an employee of Seller and who is not a Transferred Employee, including any
Facility Employee whose employment was terminated prior to the Closing (“Seller
Employees”), and (ii) to Transferred Employees, to the extent that such
Transferred Employee’s right to severance, separation, deferred compensation or
similar benefits arises under a Seller Benefit Plan as a result of the
transactions contemplated by this Asset Purchase Agreement and the Ancillary
Agreements.
(g)    Seller shall be liable for the administration and payment of all workers’
compensation Liabilities and benefits with respect to (i) Transferred Employees
to the extent resulting from claims, events, circumstances, exposures,
conditions or occurrences occurring on or prior to the Closing, and (ii) Seller
Employees. Buyer shall be liable for the administration and payment of all
workers’ compensation Liabilities and benefits with respect to Transferred
Employees to the extent resulting from claims, events, circumstances, exposures,
conditions or occurrences occurring after the Closing Date.
(h)    Seller shall be liable for the administration and payment of all health
and welfare Liabilities and benefits under the Seller Benefit Plans with respect
to (i) Transferred Employees to the extent resulting from claims, events,
circumstances, exposures, conditions or occurrences occurring on or prior to the
Closing, and (ii) Seller Employees. Buyer shall be liable for the administration
and payment of all health and welfare Liabilities and benefits under Buyer’s
Benefit Plans with respect to Transferred Employees participating therein to the
extent resulting from claims, events, circumstances, exposures, conditions or
occurrences occurring after the Closing Date.
(i)    Seller shall retain and perform all Liabilities and maintain all
insurance under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) with respect to Seller Employees and their covered dependents;
provided that Buyer shall perform all of its obligations under COBRA with
respect to Transferred Employees and their covered dependents that become
eligible for COBRA after the Closing Date.
(j)    Except as expressly set forth in this Section 7.3 with respect to
Transferred Employees, Buyer shall have no obligation with respect to any
Facility Employee or any other employee of Seller.
(k)    Nothing in this Asset Purchase Agreement confers upon any Facility
Employee or Transferred Employee any rights or remedies of any nature or kind
whatsoever under or by reason of this Section 7.3. Nothing in this Asset
Purchase Agreement shall limit the

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right of Buyer to terminate or reassign any Transferred Employee after the
Closing or to change the terms and conditions of his or employment in any
manner.
7.4    Taxes.
(a)    Seller shall pay fifty percent (50%) and Buyer shall pay fifty percent
(50%) of all transfer taxes, including all federal, state and local sales,
documentary and real estate and other transfer Taxes, if any, due as a result of
the purchase, sale or transfer of the Purchased Assets in accordance herewith
whether imposed by Law on Seller or Buyer.
(b)    All real property Taxes, personal property Taxes and similar ad valorem
obligations levied with respect to the Purchased Assets for a taxable period
that includes (but does not end on) the Closing Date shall be apportioned
between Seller and Buyer as of the Closing Date based on the number of days of
such taxable period included in the period ending with and including the Closing
Date (with respect to any such taxable period, the “Pre-Closing Tax Period”),
and the number of days of such taxable period beginning after the Closing Date
(with respect to any such taxable period, the “Post-Closing Tax Period”). Seller
shall be liable for the proportionate amount of such Taxes that is attributable
to the Pre-Closing Tax Period, and Buyer shall be liable for the proportionate
amount of such Taxes that is attributable to the Post-Closing Tax Period. If
bills for such Taxes have not been issued as of the Closing Date, and, if the
amount of such Taxes for the period including the Closing Date is not then
known, the estimated apportionment of such Taxes shall be made at Closing on the
basis of the prior period’s Taxes. After Closing, upon receipt of bills for the
period including the Closing Date, adjustments to the apportionment shall be
made by the parties, so that if either party would otherwise bear more than its
proper share as a result of the estimated apportionment made at the Closing, the
other party shall promptly reimburse such party.
(c)    Buyer and Seller agree to furnish or cause to be furnished to each other,
upon request, as promptly as practicable, such information and assistance
relating to the Purchased Assets and Assumed Liabilities (including access to
books and records) as is reasonably necessary for the filing of all Tax Returns,
the making of any election relating to Taxes, the preparation for any audit by
any Taxing Authority, and the prosecution or defense of any Action relating to
any Tax. Any expenses incurred in furnishing such information or assistance
shall be borne by the party requesting it.
7.5    Bulk Sales Laws. Buyer and Seller hereby waive compliance by Buyer and
Seller with the bulk sales Law and any other similar Laws in any applicable
jurisdiction in respect of the transactions contemplated by this Asset Purchase
Agreement and the Ancillary Agreements.
7.6    Discharge of Business Obligations After Closing. From and after the
Closing, if Seller or any of its Affiliates receives or collects any funds
relating to any Purchased Asset, Seller or its Affiliate shall remit such funds
to Buyer within thirty (30) Business Days after its receipt thereof. From and
after the Closing, if Buyer receives or collects any funds relating to any
Excluded Asset, Buyer shall remit any such funds to Seller within thirty (30)
Business Days after its receipt thereof.
7.7    Access to Books and Records. Each of Seller and Buyer shall preserve
until the tenth anniversary of the Closing Date all records possessed or to be
possessed by such party

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relating to any of the Purchased Assets, Liabilities or operation of the
Facility prior to the Closing. After the Closing Date, where there is a
legitimate business purpose, such party shall provide the other party with
access, upon prior reasonable written request specifying the need therefor,
during regular business hours, to (i) the officers and employees of such party
and (ii) the books of account and records of such party, but, in each case, only
to the extent relating to the assets, Liabilities or operation of the Facility
prior to the Closing, and the other party and its Representatives shall have the
right to make copies of such books and records at their sole cost; provided,
however, that the foregoing right of access shall not be exercisable in such a
manner as to interfere unreasonably with the normal operations and business of
such party or to permit Buyer access to any books and records relating to Taxes
of Seller. Such records may nevertheless be destroyed by a party if such party
sends to the other party written notice of its intent to destroy records,
specifying with particularity the contents of the records to be destroyed. Such
records may then be destroyed after the 30th day after such notice is given
unless the other party objects to the destruction in which case the party
seeking to destroy the records shall deliver such records to the objecting party
at the objecting party’s cost.
7.8    Further Assurances. Buyer and Seller shall execute such documents and
other instruments and take such further actions as may be reasonably required or
desirable to carry out the provisions of this Asset Purchase Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby. Upon the terms and subject to the conditions hereof, Buyer and Seller
shall each use its respective reasonable best efforts to (a) take or cause to be
taken all actions and to do or cause to be done all other things necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated by this Asset Purchase Agreement and the Ancillary
Agreements and (b) obtain in a timely manner all Consents and Authorizations and
effect all necessary registrations and filings. From time to time after the
Closing, at Buyer’s request, Seller shall execute, acknowledge and deliver to
Buyer such other instruments of conveyance and transfer and will take such other
actions and execute and deliver such other documents, certifications and further
assurances as Buyer may reasonably require in order to vest more effectively in
Buyer, or to put Buyer more fully in possession of, any of the Purchased Assets.
Seller and Buyer shall use commercially reasonable efforts to consummate the
Closing by January 31, 2012.
ARTICLE VIII

CONDITIONS TO CLOSING
8.1    Conditions to Obligations of Buyer and Seller. The obligations of Buyer
and Seller to consummate the transactions contemplated by this Asset Purchase
Agreement are subject to the satisfaction on or prior to the Closing Date of the
following conditions:
(a)    All Authorizations and Orders of, declarations and filings with, and
notices to any Governmental Entity, required to permit the consummation of the
transactions contemplated by this Asset Purchase Agreement and set forth on
Schedule 8.1(a) shall have been obtained or made and shall be in full force and
effect.
(b)    No temporary restraining order, preliminary or permanent injunction or
other Order preventing the consummation of the transactions contemplated by this
Asset

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Purchase Agreement shall be in effect. No Law shall have been enacted or shall
be deemed applicable to the transactions contemplated by this Asset Purchase
Agreement which makes the consummation of such transactions illegal.
8.2    Conditions to Obligation of Buyer. The obligation of Buyer to consummate
the transactions contemplated by this Asset Purchase Agreement is subject to the
satisfaction (or waiver by Buyer in its sole discretion) of the following
further conditions:
(a)    The representations and warranties of Seller set forth in Article IV (i)
that are not qualified by “material adverse effect” or other materiality
qualifications shall have been true and correct in all material respects at and
as of the date hereof and shall be true and correct in all material respects at
and as of the Closing Date as if made at and as of the Closing Date, except to
the extent that such representations and warranties refer specifically to an
earlier date, in which case such representations and warranties shall have been
true and correct as of such earlier date, and (ii) that are qualified by
“material adverse effect” or other materiality qualifications shall have been
true and correct in all respects at and as of the date hereof and shall be true
and correct in all respects at and as of the Closing Date as if made at and as
of the Closing Date, except to the extent that such representations and
warranties refer specifically to an earlier date, in which case such
representations and warranties shall have been true and correct as of such
earlier date.
(b)    Seller shall have performed or complied in all material respects with all
obligations and covenants required by this Asset Purchase Agreement to be
performed or complied with by Seller at or prior to the Closing.
(c)    Buyer shall have received a certificate dated the Closing Date signed on
behalf of Seller by the President of Seller to the effect that the conditions
set forth in Sections 8.2(a) and 8.2(b) have been satisfied (the “Seller Closing
Certificate”).
(d)    There shall have been no material adverse change in the condition of the
Purchased Assets taken as a whole; provided however, that none of the following
(individually or in combination) shall be deemed to constitute, or shall be
taken into account in determining whether there has been, a material adverse
change: (a) any adverse change resulting from any action taken by Buyer; (b) any
action taken or any action not taken by Seller in compliance with its covenants
and obligations contained in this Asset Purchase Agreement; or (c) any action
taken or any action not taken by Seller at the written request or with the
written consent of Buyer.
(e)    No Action shall be pending or threatened before any court or other
Governmental Entity or before any other Person wherein an unfavorable Order
would (i) prevent consummation of any of the transactions contemplated by this
Asset Purchase Agreement or the Ancillary Agreements, (ii) affect adversely the
right of Buyer to own the Purchased Assets or (iii) restrain or prohibit Buyer’s
ownership or operation (or that of its Subsidiaries or Affiliates) of all or any
material portion of the Facility or Purchased Assets, or compel Buyer or any of
its Subsidiaries or Affiliates to dispose of or hold separate all or any
material portion of the Facility or Purchased Assets or all or any material
portion of the business and assets of Buyer and its Subsidiaries. No such Order
shall be in effect.
(f)    No Law shall have been enacted or shall be deemed applicable to the

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transactions contemplated by this Asset Purchase Agreement or the Ancillary
Agreements which has any of the effects set forth in clauses (i) through (iii)
in Section 8.2(e).
(g)    Buyer shall have received (i) an owner’s title insurance policy issued by
a nationally recognized insurance company with respect to each parcel of Real
Property listed on Schedule 8.2(g) (the “Insured Real Properties”), issued as of
the Closing Date in an amount based on the amount of the Purchase Price to be
allocated to the Real Property to be mutually and reasonably agreed upon by
Seller and Buyer for the purposes of this Section 8.2(g), insuring Buyer’s fee
simple title to each Insured Real Property free of all Liens except Permitted
Liens and standard title policy exceptions, and (ii) a certified ALTA/ACSM Land
Title Survey for each of the Insured Real Properties, in form and substance
satisfactory to Buyer that shall not reveal any condition not permitted by
Section 4.10(b)(i). Seller shall be responsible for the costs related to the
owner’s title insurance policy referenced in the forgoing clause (i) and Buyer
and Seller shall each be responsible for fifty percent (50%) of the costs
related to the ALTA/ACSM Land Title Survey referenced in the forgoing clause
(ii). Buyer shall be responsible for the cost of extended coverage and any
endorsements to the title policy.
(h)    Seller shall have obtained the Consent of each Person whose Consent is
required under the Contracts set forth in Schedule 8.2(h) and shall have
provided evidence of each such Consent in form and substance satisfactory to
Buyer.
(i)    Buyer shall have received (i) all material Authorizations (including any
Environmental Permits) that are necessary for it to operate the Purchased Assets
to manufacture its own products, or (ii) reasonable assurances from relevant
Governmental Entities that Buyer may operate under Seller’s Authorizations until
such time that Buyer receives its own Authorizations and Seller provides consent
to such use.
(j)    Seller shall have delivered to Buyer all agreements and other documents
required to be delivered by Seller to Buyer pursuant to Section 3.2 of this
Asset Purchase Agreement.
(k)    Buyer shall have received a certificate of the Secretary of Seller dated
the Closing Date and certifying: (A) that attached thereto are true and complete
copies of all resolutions adopted by the Board of Directors in connection with
the transactions contemplated by this Asset Purchase Agreement and the Ancillary
Agreements, and that all such resolutions are in full force and effect and are
all the resolutions adopted in connection with the transactions contemplated by
this Asset Purchase Agreement and the Ancillary Agreements; and (B) to the
incumbency and specimen signature of each officer of Seller executing this Asset
Purchase Agreement and/or the Ancillary Agreements, and a certification by
another officer of Seller as to the incumbency and signature of the Secretary of
Seller.
(l)    Buyer shall have received evidence in form and substance satisfactory to
Buyer that all Liens other than Permitted Liens with respect to the Purchased
Assets have been released.
(m)    Seller shall have obtained the Vanderzanden Farms Termination.
8.3    Conditions to Obligation of Seller. The obligation of Seller to
consummate the

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transactions contemplated by this Asset Purchase Agreement is subject to the
satisfaction (or waiver by Seller in its sole discretion) of the following
further conditions:
(a)    The representations and warranties of Buyer set forth in Article V (i)
that are not qualified by “material adverse effect” or other materiality
qualifications shall have been true and correct in all material respects at and
as of the date hereof and shall be true and correct in all material respects at
and as of the Closing Date as if made at and as of the Closing Date, except to
the extent that such representations and warranties refer specifically to an
earlier date, in which case such representations and warranties shall have been
true and correct as of such earlier date, and (ii) that are qualified by
“material adverse effect” or other materiality qualifications shall have been
true and correct in all respects at and as of the date hereof and shall be true
and correct in all respects at and as of the Closing Date as if made at and as
of the Closing Date, except to the extent that such representations and
warranties refer specifically to an earlier date, in which case such
representations and warranties shall have been true and correct as of such
earlier date.
(b)    Buyer shall have performed or complied in all material respects with all
obligations and covenants required by this Asset Purchase Agreement to be
performed or complied with by Buyer at or prior to the Closing.
(c)    Seller shall have received a certificate dated the Closing Date signed on
behalf of Buyer by the President of Buyer to the effect that the conditions set
forth in Section 8.3(a) and 8.3(b) have been satisfied (the “Buyer Closing
Certificate”).
(d)    No Action shall be pending or threatened before any court or other
Governmental Entity or other Person wherein an unfavorable Order would (i)
prevent consummation of any of the transactions contemplated by this Asset
Purchase Agreement and the Ancillary Agreements or (ii) cause any of the
transactions contemplated by this Asset Purchase Agreement and the Ancillary
Agreements to be rescinded following consummation. No such Order shall be in
effect.
(e)    Buyer shall have delivered to Seller all agreements and other documents
required to be delivered by Buyer to Seller pursuant to Section 3.3 of this
Asset Purchase Agreement.
(f)    Seller shall have received a certificate of the Secretary of Buyer dated
the Closing Date and certifying: (A) that attached thereto are true and complete
copies of all resolutions adopted by the Board of Directors of Buyer in
connection with the transactions contemplated by this Asset Purchase Agreement
and the Ancillary Agreements, and that all such resolutions are in full force
and effect and are all the resolutions adopted in connection with the
transactions contemplated by this Asset Purchase Agreement and the Ancillary
Agreements; and (B) to the incumbency and specimen signature of each officer of
Buyer executing this Asset Purchase Agreement and the Ancillary Agreements to
which it is a party, and a certification by another officer of Buyer as to the
incumbency and signature of the Secretary of Buyer.
ARTICLE IX

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TERMINATION
9.1    Termination.
(a)    This Asset Purchase Agreement may be terminated at any time prior to the
Closing:
(i)    by mutual written consent of Buyer and Seller;
(ii)    by Buyer or Seller if:
(A)    the Closing does not occur on or before January 31, 2012; provided that
the right to terminate this Asset Purchase Agreement under this clause (ii)(A)
shall not be available to any party whose breach of a representation, warranty,
covenant or agreement under this Asset Purchase Agreement has been the cause of
or resulted in the failure of the Closing to occur on or before such date;
or    
(B)    a Governmental Entity shall have issued an Order or taken any other
action, in any case having the effect of permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Asset Purchase
Agreement, which Order or other action is final and non-appealable;
(iii)    by Buyer if:
(A)    any condition to the obligations of Buyer hereunder becomes incapable of
fulfillment other than as a result of a breach by Buyer of any covenant or
agreement contained in this Asset Purchase Agreement, and such condition is not
waived by Buyer; or
(B)    there has been a material breach by Seller of any representation,
warranty, covenant or agreement contained in this Asset Purchase Agreement, and
such breach shall not have been cured within ten (10) Business Days after
receipt by Seller of written notice of such breach; or
(iv)    by Seller if:
(A)    any condition to the obligations of Seller hereunder becomes incapable of
fulfillment other than as a result of a breach by Seller of any covenant or
agreement contained in this Asset Purchase Agreement, and such condition is not
waived by Seller; or
(B)    there has been a material breach by Buyer of any representation,
warranty, covenant or agreement contained in this Asset Purchase Agreement, and
such breach shall not have been cured within ten (10) Business Days after
receipt by Buyer of written notice of such breach.
(b)    The party desiring to terminate this Asset Purchase Agreement pursuant to
clause (ii), (iii) or (iv) shall give written notice of such termination to the
other party hereto.
9.2    Effect of Termination. In the event of termination of this Asset Purchase
Agreement as provided in Section 9.1, this Asset Purchase Agreement shall
immediately become

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null and void and there shall be no Liability or obligation on the part of
Seller or Buyer or their respective officers, directors, stockholders or
Affiliates, except as set forth in Section 9.3; provided, however, the
provisions of Section 6.4 (Confidentiality), Section 7.2 (Public Announcements)
and Section 9.3 (Remedies) and Article X of this Asset Purchase Agreement shall
remain in full force and effect and survive any termination of this Asset
Purchase Agreement.
9.3    Remedies. Any party terminating this Asset Purchase Agreement pursuant to
Section 9.1 shall have the right to recover damages sustained by such party as a
result of any breach by the other party of any representation, warranty,
covenant or agreement contained in this Asset Purchase Agreement or fraud or
willful misrepresentation; provided, however, that the party seeking relief is
not in breach of any representation, warranty, covenant or agreement contained
in this Asset Purchase Agreement under circumstances which would have permitted
the other party to terminate the Agreement under Section 9.1.
ARTICLE X

INDEMNIFICATION
10.1    Survival.
(a)    Except as set forth in Section 10.1(b), all representations and
warranties contained in this Asset Purchase Agreement, the Ancillary Agreements,
any Schedule, certificate or other document delivered pursuant to this Asset
Purchase Agreement or the Ancillary Agreements, shall survive the Closing for a
period of one (1) year.
(b)    The representations and warranties of Seller contained in Sections 4.1
(Organization and Good Standing), 4.2 (Authority and Enforceability), 4.14
(Sufficiency of Purchased Assets) and 4.21 (Brokers or Finders), and the
representations and warranties of Buyer contained in Sections 5.1 (Organization
and Good Standing), 5.2 (Authority and Enforceability) and 5.6 (Brokers or
Finders) shall survive the Closing until sixty (60) days after the expiration of
the applicable statute of limitations (after giving effect to any waivers and
extensions thereof). The representations and warranties of Seller contained in
Section 4.18 (Environmental) shall survive the Closing for five (5) years.
(c)    The covenants and agreements which by their terms do not contemplate
performance after the Closing shall survive the Closing for a period of one (1)
year. The covenants and agreements which by their terms contemplate performance
after the Closing Date shall survive until the expiration of the applicable
statute of limitations, unless otherwise expressly provided for by their terms.
(d)    The period for which a representation or warranty, covenant or agreement
survives the Closing is referred to herein as the “Applicable Survival Period.”
Any claim for indemnification under Section 10.2(a)(i) and (ii) or 10.3(a)(i)
and (ii) must be asserted by written notice within the Applicable Survival
Period and in the event a notice of claim for indemnification under Section 10.2
or 10.3 is given within the Applicable Survival Period, the representation or
warranty, covenant or agreement that is the subject of such indemnification
claim (whether or not formal legal action shall have been commenced based upon
such claim)

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shall survive with respect to such claim until such claim is finally resolved.
The Indemnitor shall indemnify the Indemnitee for all Losses (subject to the
limitations set forth herein, if applicable) that the Indemnitee may incur in
respect of such claim, regardless of when incurred.
10.2    Indemnification by Seller.
(a)    Seller shall indemnify and defend Buyer and its Affiliates and their
respective stockholders, members, managers, officers, directors, employees,
agents, successors and assigns (the “Buyer Indemnitees”) against, and shall hold
them harmless from, any and all losses, damages, claims (including third party
claims), charges, interest, penalties, Taxes, costs and expenses (including
legal, consultant, accounting and other professional fees, and fees and costs
incurred in enforcing rights under this Section 10.2, but excluding any special,
indirect, incidental, consequential, exemplary and punitive damages, and any
damages associated with any lost profits or lost opportunities (including loss
of future revenue, income or profits, diminution of value or loss of business
reputation)) (collectively, “Losses”) resulting from or incurred by any Buyer
Indemnitee as a proximate cause of:
(i)    the failure of any representation and warranty made by Seller contained
in Article IV of this Asset Purchase Agreement and the Seller Closing
Certificate to be furnished to Buyer in connection with the transactions
contemplated by this Asset Purchase Agreement to be true and correct in all
respects as of the date of this Asset Purchase Agreement and as of the Closing
Date as though such representation and warranty were made as of the Closing Date
(except in the case of representations and warranties which by their terms speak
only as of a specific date or dates, which representations and warranties shall
be true and correct as of such date);
(ii)    any breach of any covenant or agreement of Seller contained in this
Asset Purchase Agreement;
(iii)    any Excluded Liability;
(iv)    any fees, expenses or other payments incurred or owed by Seller to any
agent, broker, investment banker or other firm or person retained or employed by
it in connection with the transactions contemplated by this Asset Purchase
Agreement and the Ancillary Agreements; and
(v)    violation of fraudulent transfer Laws or the failure to comply with any
bulk sales Laws or similar Laws by Seller in connection with the transactions
contemplated by this Asset Purchase Agreement.
Notwithstanding anything herein to the contrary, in determining the amount of
any Losses with respect to a breach of a representation or warranty by Seller
for purposes of Section 10.2(a)(i), such representations and warranties shall be
read without regard to any materiality qualifier, including any reference to
material adverse effect (except where any such provision requires disclosure of
lists of items of a material nature or above a specified threshold), contained
therein.
(b)    Seller shall not be liable for any Loss or Losses pursuant to Section
10.2(a)(i) (“Buyer Warranty Losses”) (i) unless and until the aggregate amount
of all Buyer

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Warranty Losses incurred by the Buyer Indemnitees exceeds two hundred fifty
thousand Dollars ($250,000), in which event Seller shall be liable for all Buyer
Warranty Losses from the first dollar.
(c)    The maximum aggregate liability of Seller under Section 10.2(a)(i) and
Section 10.2(a)(ii) shall not exceed the Cap Amount; provided however the Cap
Amount shall not apply to, or otherwise reduce or limit a Buyer’s recovery for,
any Losses resulting from or in connection with indemnification claims made
pursuant to Section 10.2(a)(ii) for breaches of Seller’s obligations set forth
in Sections 6.2(d), 6.2(e), 6.2(i), 6.8(a) and 6.9(a) (the “Seller Fundamental
Covenants”). The maximum aggregate liability of Seller with respect to Losses
resulting from or in connection with indemnification claims made pursuant to
Section 10.2(a)(i) and Section 10.2(a)(ii), as limited by the foregoing
sentence, and Section 10.2(a)(ii) in respect of the Seller Fundamental Covenants
shall not exceed the Purchase Price. Notwithstanding anything to the contrary
elsewhere in this Asset Purchase Agreement, nothing contained in Sections
10.2(b) and 10.2(c) shall be deemed to limit or restrict in any manner any
rights or remedies which Buyer has, or might have, at Law, in equity or
otherwise, based on fraud or a willful misrepresentation hereunder.
10.3    Indemnification by Buyer.
(a)    Buyer shall indemnify and defend Seller and its Affiliates and their
respective stockholders, members, managers, officers, directors, employees,
agents, successors and assigns (the “Seller Indemnitees”) against, and shall
hold them harmless from, any and all Losses resulting from, arising out of, or
incurred by any Seller Indemnitee in connection with, or otherwise with respect
to:
(i)    the failure of any representation and warranty or other statement by
Buyer contained in Article V of this Asset Purchase Agreement and the Buyer
Closing Certificate to be furnished to Seller in connection with the
transactions contemplated by this Asset Purchase Agreement to be true and
correct in all respects as of the date of this Asset Purchase Agreement and as
of the Closing Date as though such representation or warranty were made as of
the Closing Date (except in the case of representations and warranties which by
their terms speak only as of a specific date or dates, which representations and
warranties shall be true and correct as of such date),
(ii)    any breach of any covenant or agreement of Buyer contained in this Asset
Purchase Agreement; and
(iii)    any failure to perform when due the Assumed Liabilities.
(b)    Buyer shall not be liable for any Loss or Losses pursuant to Section
10.3(a)(i) (“Seller Warranty Losses”) unless and until the aggregate amount of
all Seller Warranty Losses incurred by the Seller Indemnitees exceeds two
hundred fifty thousand Dollars ($250,000), in which event Buyer shall be liable
for all Seller Warranty Losses from the first dollar.
(c)    The maximum aggregate liability of Buyer under Section 10.3(a)(i) shall
not exceed the Cap Amount. Notwithstanding anything to the contrary elsewhere in
this Asset

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Purchase Agreement, nothing contained in Sections 10.3(b) and 10.3(c) shall be
deemed to limit or restrict in any manner any rights or remedies which Seller
has, or might have, at Law, in equity or otherwise, based on fraud or a willful
misrepresentation hereunder.
10.4    Deduction of IDT Insurance Proceeds Received By AOS. Without limiting
the effect of any other limitation contained in this Article X, for purposes of
computing the amount of any Losses incurred by Buyer under this Article X, there
shall be deducted an amount equal to the amount of any insurance proceeds
actually received by Buyer or any of its Affiliates under any IDT policy to
which Buyer is entitled under Section 2.1(i) in connection with such Losses or
any of the circumstances giving rise thereto. For the avoidance of doubt, there
shall be no amount deducted for any self-insurance or for proceeds or recovery
under any insurance obtained by Buyer at its own expense.
10.5    Indemnification Procedures for Third Party Claims.
(a)    In the event that an Indemnitee receives notice of the assertion of any
claim or the commencement of any Action by a third party in respect of which
indemnity may be sought under the provisions of this Article X (“Third Party
Claim”), the Indemnitee shall promptly notify the Indemnitor in writing of such
Third Party Claim (“Notice of Claim”). Failure or delay in notifying the
Indemnitor will not relieve the Indemnitor of any Liability it may have to the
Indemnitee, except and only to the extent that such failure or delay causes
actual harm to the Indemnitor with respect to such Third Party Claim. The Notice
of Claim shall set forth the amount, if known, or, if not known, an estimate of
the foreseeable maximum amount of claimed Losses (which estimate shall not be
conclusive of the final amount of such Losses) and a description of the basis
for such Third Party Claim.
(b)    Subject to the further provisions of this Section 10.5, the Indemnitor
will have twenty (20) days (or less if the nature of the Third Party Claim
requires) from the date on which the Indemnitor received the Notice of Claim to
notify the Indemnitee that the Indemnitor will assume the defense or prosecution
of such Third Party Claim and any litigation resulting therefrom with counsel of
its choice and at its sole cost and expense (a “Third Party Defense”). If the
Indemnitor assumes the Third Party Defense in accordance with this Section
10.5(b), (i) the Indemnitor shall be conclusively deemed to have acknowledged
that the Third Party Claim is within the scope of its indemnity obligation
hereunder and shall hold the Indemnitee harmless from and against the full
amount of any Losses resulting therefrom (subject to the terms and conditions of
this Asset Purchase Agreement); (ii) the attorneys’ fees, other professionals’
and experts’ fees and court or arbitration costs incurred by the Indemnitor in
connection with defending such Third Party Claim shall be payable by such
Indemnitor; (iii) the Indemnitor shall diligently defend such Third Party Claim;
(iv) the Indemnitee shall not be entitled to be indemnified for any costs or
expenses incurred by the Indemnitee in connection with the defense of such Third
Party Claim; (v) the Indemnitee shall be entitled to monitor and participate in
such defense at its sole expense; (vi) the Indemnitee shall make available to
the Indemnitor all books, records and other documents and materials that are
under the direct or indirect control of the Indemnitee or any of its
Subsidiaries or other Affiliates and that the Indemnitor considers necessary or
desirable for the defense of such Third Party Claim; (vii) the Indemnitee shall
execute such documents and take such other actions as the Indemnitor may
reasonably request for the purpose of facilitating the defense of, or any
settlement, compromise or adjustment relating to, such Third Party Claim; (viii)
the Indemnitee shall otherwise fully cooperate as

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reasonably requested by the Indemnitor in the defense of such Third Party Claim;
and (ix) the Indemnitee shall not admit any liability with respect to such Third
Party Claim.
(c)    The Indemnitor will not be entitled to assume (or in the case of Section
10.5(c)(iv), to continue to be entitled to assume) the Third Party Defense if:
(i)    the Third Party Claim seeks, in addition to or in lieu of monetary
damages, any injunctive or other equitable relief (except where non-monetary
relief is merely incidental to a primary claim or claims for monetary damages);
(ii)    the Third Party Claim relates to or arises in connection with any
criminal proceeding, action, indictment, allegation or investigation;
(iii)    the Third Party Claim would reasonably be expected to give rise to
Losses which are more than the amount indemnifiable by the Indemnitor pursuant
to this Article X; or
(iv)    upon petition by the Indemnitee, the appropriate court rules that the
Indemnitor failed or is failing to vigorously prosecute or defend such Third
Party Claim.
(d)    The Indemnitor will not consent to the entry of any judgment or enter
into any settlement except with the written consent of the Indemnitee (which
consent shall not be unreasonably withheld, conditioned or delayed) to which the
Indemnitor is obligated to furnish indemnification pursuant to this Asset
Purchase Agreement; provided that the consent of the Indemnitee shall not be
required if all of the following conditions are met: (i) the terms of the
judgment or proposed settlement include as an unconditional term thereof the
giving to the Indemnitees by the third party of a release of the Indemnitees
from all Liability in respect of such Third Party Claim, (ii) there is no
finding or admission of (A) any violation of Law by the Indemnitees (or any
Affiliate thereof), (B) any violation of the rights of any Person and (C) no
effect on any other Action or claims of a similar nature that may be made
against the Indemnitees (or any Affiliate thereof), and (iii) the sole form of
relief is monetary damages which are paid in full by the Indemnitor.
Notwithstanding the foregoing, the Indemnitee shall have the right to pay or
settle any such Third Party Claim; provided that, in such event, subject to the
following sentence, it shall waive any right to indemnity therefor by the
Indemnitor for such claim unless the Indemnitor shall have consented to such
payment or settlement (such consent not to be unreasonably withheld or delayed).
(e)    In the event that (i) an Indemnitee gives Notice of Claim to the
Indemnitor and the Indemnitor fails or elects not to assume a Third Party
Defense which the Indemnitor had the right to assume under this Section 10.5,
(ii) the Indemnitor is not entitled to assume the Third Party Defense pursuant
to this Section 10.5 or (iii) the Indemnitee and the Indemnitor are both named
parties to the Proceedings and the Indemnitee reasonably concludes that the
representation of both parties by the same counsel would be inappropriate due to
the actual or potential differing interests between the Indemnitor and the
Indemnitee, the Indemnitee shall have the right, with counsel of its choice, to
defend, conduct and control the Third Party Defense. In each case, the
Indemnitee shall conduct the Third Party Defense actively and diligently, and

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the Indemnitor will provide reasonable cooperation in the Third Party Defense.
The Indemnitee shall have the right to consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim on such terms as
it may deem appropriate; provided, however, that the amount of any settlement
made or entry of any judgment consented to by the Indemnitee without the consent
of the Indemnitor shall not be determinative of the validity of the claim,
except with the consent of the Indemnitor (not to be unreasonably withheld or
delayed). If the Indemnitor does not elect to assume a Third Party Defense which
it has the right to assume hereunder, the Indemnitee shall have no obligation to
do so.
(f)    Each party to this Asset Purchase Agreement shall use commercially
reasonable efforts to cooperate and to cause its employees to cooperate with and
assist the Indemnitee or the Indemnitor, as the case may be, in connection with
any Third Party Defense, including attending conferences, discovery proceedings,
hearings, trials and appeals and furnishing records, information and testimony,
as may reasonably be requested; provided that each party shall use its best
efforts, in respect of any Third Party Claim of which it has assumed the
defense, to preserve the confidentiality of all confidential information and the
attorney-client and work-product privileges.
10.6    Indemnification Procedures for Non-Third Party Claims. In the event of a
claim that does not involve a Third Party Claim being asserted against it, the
Indemnitee shall send a Notice of Claim to the Indemnitor. The Notice of Claim
shall set forth the amount, if known, or, if not known, an estimate of the
foreseeable maximum amount of claimed Losses (which estimate shall not be
conclusive of the final amount of such Losses) and a description of the basis
for such claim. The Indemnitor will have 30 days from receipt of such Notice of
Claim to dispute the claim and the Indemnitor and the Indemnitee will reasonably
cooperate and assist each other in determining the validity of the claim for
indemnity. If the Indemnitor does not give notice to the Indemnitee that it
disputes such claim within 30 days after its receipt of the Notice of Claim, the
claim specified in such Notice of Claim will be conclusively deemed a Loss
subject to indemnification hereunder.
10.7    Escrow Fund. At the Closing, the Escrow Fund shall be delivered to the
Escrow Agent to be held and administered by the Escrow Agent in accordance with
the terms of the Escrow Agreement. In addition to any other remedies Buyer may
have for Losses described in Section 10.2 hereof, Buyer may make a claim against
the Escrow Fund for the amount of such Losses by sending a Notice of Claim
described in Section 10.5 or 10.6 to the Escrow Agent. Buyer’s recourse to the
Escrow Fund shall be without prejudice to any and all other remedies Buyer may
have pursuant to this Article X or otherwise. Buyer’s remedies for Losses shall
not be limited to the assets comprising the Indemnity Escrow Fund. Following the
date that is one (1) year following the Closing Date, Seller shall be entitled
to receive the remaining portion of the Escrow Fund, if any, as determined in
accordance with the Escrow Agreement.
10.8    Contingent Claims. Nothing herein shall be deemed to prevent an
Indemnitee from making a claim hereunder for potential or contingent claims or
demands; provided that the Notice of Claim sets forth the specific basis for any
such contingent claim to the extent then feasible and the Indemnified Party has
reasonable grounds to believe that such a claim may be made.
10.9    Effect of Investigation; Waiver. An Indemnitee’s right to
indemnification or other

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remedies based upon the representations and warranties and covenants and
agreements of the Indemnitor will not be affected by any investigation or
knowledge of the Indemnitee or any waiver by the Indemnitee of any condition
based on the accuracy of any representation or warranty, or compliance with any
covenant or agreement. Such representations and warranties and covenants and
agreements shall not be affected or deemed waived by reason of the fact that the
Indemnitee knew or should have known that any representation or warranty might
be inaccurate or that the Indemnitor failed to comply with any agreement or
covenant. Any investigation by such party shall be for its own protection only
and shall not affect or impair any right or remedy hereunder.
10.10    Remedies. Subsequent to the Closing, the remedies in this Article X
shall be the sole and exclusive remedies of the parties with respect to any
breach of the respective representations, warranties, covenants and agreements
pursuant to this Asset Purchase Agreement or otherwise arising out of this Asset
Purchase Agreement, regardless of the theory or cause of action pled except for
the remedies of specific performance, injunction and other equitable relief.
Notwithstanding anything to the contrary elsewhere in this Asset Purchase
Agreement, nothing contained in this Section 10.10 shall be deemed to limit or
restrict in any manner any rights or remedies which each party has, or might
have, at Law, in equity or otherwise, based on fraud or a willful
misrepresentation of or by the other party.
10.11    Limitation on Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY
ELSEWHERE IN THIS ASSET PURCHASE AGREEMENT OR PROVIDED FOR UNDER ANY APPLICABLE
LAW, NO PARTY NOR ANY CURRENT OR FORMER STOCKHOLDER, DIRECTOR, OFFICER,
EMPLOYEE, AFFILIATE OR ADVISOR OF ANY OF THE FOREGOING, SHALL, IN ANY EVENT, BE
LIABLE TO ANY OTHER PERSON, EITHER IN CONTRACT, TORT OR OTHERWISE, FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES OR ANY DAMAGES
ASSOCIATED WITH ANY LOST PROFITS OR LOST OPPORTUNITIES OF SUCH OTHER PERSON
(INCLUDING LOSS OF FUTURE REVENUE, INCOME OR PROFITS, DIMINUTION OF VALUE OR
LOSS OF BUSINESS REPUTATION) RELATING TO THE BREACH OR ALLEGED BREACH HEREOF,
WHETHER OR NOT THE POSSIBILITY OF SUCH DAMAGES HAS BEEN DISCLOSED TO THE OTHER
PARTY IN ADVANCE OR COULD HAVE BEEN REASONABLY FORESEEN BY SUCH OTHER PARTY.
ARTICLE XI

MISCELLANEOUS
11.1    Notices. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing and
shall be deemed given (a) on the date established by the sender as having been
delivered personally, (b) on the date delivered by a private courier as
established by the sender by evidence obtained from the courier, (c) on the date
sent by facsimile, with confirmation of transmission, if sent during normal
business hours of the recipient, if not, then on the next Business Day, or (d)
on the fifth day after the date mailed, by certified or registered mail, return
receipt requested, postage prepaid. Such communications, to be valid, must be
addressed as follows:
If to Buyer, to:

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_______________
_______________
_______________
Attn:
Facsimile:

With a required copy to:

_______________
_______________
_______________
Attn:
Facsimile:

If to Seller, to:

_______________
_______________
_______________
Attn:
Facsimile:

With a required copy to:

_______________
_______________
_______________
Attn:
Facsimile:

or to such other address or to the attention of such Person or Persons as the
recipient party has specified by prior written notice to the sending party (or
in the case of counsel, to such other readily ascertainable business address as
such counsel may hereafter maintain). If more than one method for sending notice
as set forth above is used, the earliest notice date established as set forth
above shall control.
11.2    Amendments and Waivers.
(a)    Any provision of this Asset Purchase Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and is signed, in the
case of an amendment, by each party to this Asset Purchase Agreement, or in the
case of a waiver, by the party against whom the waiver is to be effective.
(b)    No failure or delay by any party in exercising any right 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.
(c)    To the maximum extent permitted by Law, (i) no waiver that may be given

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by a party shall be applicable except in the specific instance for which it was
given and (ii) no notice to or demand on one party shall be deemed to be a
waiver of any obligation of such party or the right of the party giving such
notice or demand to take further action without notice or demand.
11.3    Expenses. Each party shall bear its own costs and expenses in connection
with this Asset Purchase Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby, including all legal, accounting,
financial advisory, consulting and all other fees and expenses of third parties,
whether or not the transactions contemplated by this Asset Purchase Agreement
are consummated.
11.4    Successors and Assigns. This Asset Purchase Agreement may not be
assigned by either party hereto without the prior written consent of the other
party; provided that, without such consent, Buyer may transfer or assign this
Asset Purchase Agreement, in whole or in part or from time to time, to one or
more of its Affiliates, but no such transfer or assignment will relieve Buyer of
its obligations hereunder. Subject to the foregoing, all of the terms and
provisions of this Asset Purchase Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective executors, heirs, personal
representatives, successors and assigns.
11.5    Governing Law. This Asset Purchase Agreement and Schedules hereto shall
be governed by and interpreted and enforced in accordance with the Laws of the
State of California, without giving effect to any choice of Law or conflict of
Laws rules or provisions (whether of the State of California or any other
jurisdiction) that would cause the application of the Laws of any jurisdiction
other than the State of California.
11.6    Consent to Jurisdiction. Each party irrevocably submits to the exclusive
jurisdiction of (a) the United States District Court for Northern District of
California and (b) the State of California, County of Santa Clara, for the
purposes of any Action arising out of this Asset Purchase Agreement or any
transaction contemplated hereby. Each party agrees to commence any such Action
either in the courts of the United States District Court for Northern District
of California or if such Action may not be brought in such court for
jurisdictional reasons, in the courts of the State of California, County of
Santa Clara. Each party further agrees that service of any process, summons,
notice or document by U.S. registered mail to such party’s respective address
set forth above shall be effective service of process for any Action in any such
court with respect to any matters to which it has submitted to jurisdiction in
this Section 11.6. Each party irrevocably and unconditionally waives any
objection to the laying of venue of any Action arising out of this Asset
Purchase Agreement or the transactions contemplated hereby in (i) the United
States District Court for Northern District of California, or (ii) the State of
California, County of Santa Clara, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Action brought in any such court has been brought in an inconvenient
forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
TO THIS ASSET PURCHASE AGREEMENT AND THE ANCILLARY AGREEMENTS OR THE ACTIONS OF
SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF AND THEREOF.
11.7    Counterparts. This Asset Purchase Agreement may be executed in any
number of

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counterparts, and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Asset Purchase Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by the other party
hereto. The parties agree that the delivery of this Asset Purchase Agreement,
and the delivery of the Ancillary Agreements and any other agreements and
documents at the Closing, may be effected by means of an exchange of facsimile
signatures with original copies to follow by mail or courier service.
11.8    Third Party Beneficiaries. No provision of this Asset Purchase Agreement
is intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder; except that in the case of Article X hereof, the other
Indemnitees and their respective heirs, executors, administrators, legal
representatives, successors and assigns, are intended third party beneficiaries
of such sections and shall have the right to enforce such sections in their own
names.
11.9    Entire Agreement. This Asset Purchase Agreement, the Ancillary
Agreements, the Schedules and the other documents, instruments and agreements
specifically referred to herein or therein or delivered pursuant hereto or
thereto set forth the entire understanding of the parties hereto with respect to
the transactions contemplated by this Asset Purchase Agreement. All Schedules
referred to herein are intended to be and hereby are specifically made a part of
this Asset Purchase Agreement. Any and all previous agreements and
understandings between or among the parties regarding the subject matter hereof,
whether written or oral, are superseded by this Asset Purchase Agreement, except
for the Confidentiality Agreement which shall continue in full force and effect
in accordance with its terms.
11.10    Captions. All captions contained in this Asset Purchase Agreement are
for convenience of reference only, do not form a part of this Asset Purchase
Agreement and shall not affect in any way the meaning or interpretation of this
Asset Purchase Agreement.
11.11    Severability. Any provision of this Asset Purchase Agreement which is
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.12    Specific Performance. Buyer and Seller agree that (i) money damages
would not adequately compensate a party for any failure to perform any
obligations set forth in this Asset Purchase Agreement, (ii) the terms of this
Asset Purchase Agreement shall be specifically enforceable and (iii) in any
action to specifically enforce the terms hereof, any Person against whom such
action or proceeding is brought hereby waives the claim or defense that such
party has an adequate remedy at law and shall not offer in any such action or
proceeding the claim or defense that such remedy at law exists.
11.13    Interpretation.
(a)    The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term and vice
versa, and words denoting either gender shall include both genders as the
context requires. Where a word or

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phrase is defined herein, each of its other grammatical forms shall have a
corresponding meaning.
(b)    The terms “hereof”, “herein” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Asset Purchase
Agreement as a whole and not to any particular provision of this Asset Purchase
Agreement.
(c)    When a reference is made in this Asset Purchase Agreement to an Article,
Section, paragraph, Exhibit or Schedule, such reference is to an Article,
Section, paragraph, Exhibit or Schedule to this Asset Purchase Agreement unless
otherwise specified.
(d)    The word “include”, “includes”, and “including” when used in this Asset
Purchase Agreement shall be deemed to be followed by the words “without
limitation”, unless otherwise specified.
(e)    A reference to any party to this Asset Purchase Agreement or any other
agreement or document shall include such party’s predecessors, successors and
permitted assigns.
(f)    Reference to any Law means such Law as amended, modified, codified,
replaced or reenacted, and all rules and regulations promulgated thereunder.
(g)    The parties have participated jointly in the negotiation and drafting of
this Asset Purchase Agreement and the Ancillary Agreements. Any rule of
construction or interpretation otherwise requiring this Asset Purchase Agreement
or the Ancillary Agreements to be construed or interpreted against any party by
virtue of the authorship of this Asset Purchase Agreement or the Ancillary
Agreements shall not apply to the construction and interpretation hereof and
thereof.
(h)    All accounting terms used and not defined herein shall have the
respective meanings given to them under GAAP.

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IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement
to be duly executed by their respective authorized officers as of the date first
above written.

[BUYER]

By:                     
Name:
Title:

[SELLER]

By:                     
Name:
Title:

[PARENT]

By:                     
Name:
Title:

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EXHIBIT B
DRAFT DISCLOSURE SCHEDULE