Document:

exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made effective as of the date of signature by and
between ENTREMED, INC., a Delaware corporation having its principal office at 9640 Medical Center
Drive, Rockville, MD 20850 (the “Company”) and Kenneth W. Bair, Ph.D. (the “Executive”).

FOR AND IN CONSIDERATION of the mutual premises, agreements and covenants contained herein, the
parties hereto, intending to be legally bound, do hereby agree as follows:

1. Employment; Position and Duties.

Subject to the terms hereof, the Company hereby agrees to employ the Executive during the Term (as
hereafter defined) to act as, and to exercise all of the powers and functions of its Senior Vice
President, Research and Development, and to perform such acts and duties and to generally furnish
such services to the Company and its subsidiaries (if any) as is customary for a senior management
person with a similar position in like companies, such services to include 1) responsibility for
the Company’s overall research and development activities, including project management,
coordination of outsourced research, and nonclinical development activities, and 2) full
operational responsibility for the Company’s research and development programs, including program
direction and budget responsibility. Executive shall report directly to the Chief Executive
Officer (“CEO”) of the Company and have such other powers, duties and responsibilities as the CEO,
in consultation with and approval of the Board of Directors (the “Board”), shall from time to time
reasonably prescribe. Executive will be a member of the Company’s Senior Management Team and the
Business Development Committee and will be the Company’s representative on the Scientific Advisory
Board, subject to approval by the Board as a named executive officer. Executive hereby agrees to
accept such employment and shall perform and discharge faithfully, diligently, and to the best of
his abilities such duties and responsibilities and shall devote sufficient working time and efforts
to the business and affairs of the Company and its subsidiaries.

2. Place of Employment.

While Executive is employed by the Company during the Term, Executive shall conduct his duties and
responsibilities hereunder primarily from the executive offices located in Rockville, Maryland
(except for routine and customary business travel), or from such other location in the Washington
D.C. metropolitan area as designated from time to time by the CEO.

3. Compensation

     a. Base Salary. While the Company employs Executive during the Term, the Company
shall pay to Executive an annual base salary (“Base Salary”) of no less than $320,000, payable in
accordance with the Company’s customary payroll policy for its executives.

 

 

     b. Base Salary Adjustments. Executive’s Base Salary shall be reviewed at least
annually in accordance with the Company’s customary practices for its executives. The Board or a
committee thereof may make such adjustments, as it deems appropriate in its sole discretion;
provided, however, in no event shall the Company pay Executive a Base Salary of less than $320,000.
In making such adjustments the Board or a committee thereof may solicit and give consideration to
the views of the CEO.

     c. Incentive Compensation. While the Company employs Executive during the Term,
Executive’s annual incentive compensation (“Incentive Compensation”) shall be targeted at 30% of
base compensation, the exact amount of which shall be determined by the Board or a committee
thereof in its sole discretion. Executive shall be eligible for Incentive Compensation commencing
at the start of the Initial Term. Such bonus, if any, shall be paid within ninety (90) days
following the last day of each fiscal year of the Company. In making such determinations, the Board
or a committee thereof may solicit and take into consideration the views of the CEO.

     d. Certain Other Benefits. While the Company employs Executive during the Term,
Executive shall be entitled to participate in any and all employee benefit plans and arrangements
which are available to senior executive officers of the Company, including without limitation,
group medical, disability and life insurance plans, and Company’s Directors and Officers (D&O)
insurance policy. Executive shall also be afforded no fewer than twenty-three (23) days paid time
off (PTO) pursuant to policies fixed by the Company.

     e. Expenses. The Company shall pay or reimburse Executive for all reasonable business
expenses actually paid or incurred by Executive while Executive is employed by the Company during
the Term subject to reasonable documentation and in accordance with the Company’s business expense
reimbursement policy.

     f. Relocation Expenses.

     (i). The Company shall reimburse Executive an aggregate of $200,000 for relocation
expenses (the “Relocation Expense Payment”), consisting of (i) $100,000, payable in a lump
sum within thirty (30) days of the date of this Agreement and (ii) $100,000 upon the sale of
Executive’s principal residence in Oakland, California, payable upon the closing of such
sale. The Relocation Expense Payment shall be used by Executive in his discretion for
relocation expenses including, but not limited to, moving company expenses, house hunting,
temporary housing, temporary storage or vehicle transportation costs, and real estate
commissions in connection with the sale of his residence in Oakland, California.

     (ii). If Executive terminates his employment without Good Reason or is terminated for
Cause within twenty four (24) months of the date of this Agreement, Executive shall
reimburse the Company for all or a portion of the Relocation Expense Payment as follows:

     (a) if the termination occurs within twelve months of the date of this
Agreement, Executive shall repay 75% of the Relocation Expense Payment;

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     (b) if the termination occurs at any time between thirteen (13) and eighteen
(18) months of the date of this Agreement, Executive shall repay 50% of the
Relocation Expense Payment; and

     (c) if the termination occurs within nineteen (19) and twenty four (24)
months of the date of this Agreement, Executive shall repay 25% of the Relocation
Expense Payment.

Any reimbursement by Executive to the Company of the Relocation Expense Payment in accordance with
this Section 3(f) shall be made within (10) business days of Executive’s termination date, payable
in a lump sum. For the purposes of clarification, Executive shall not be obligated to reimburse
the Relocation Expense Payment in the event of a termination as a result of Death, Disability,
change in control, termination by Executive for Good Reason, termination by Company without Cause,
or termination as a result of the Company not seeking term renewal.

     g. Legal Fees. The Company shall reimburse Executive up to $2,500 for legal fees
actually paid or incurred in connection with the preparation and execution of this Agreement.

4. Term.

     The term of this Agreement shall be the period commencing on October 16, 2007 and continuing for
one year (the “Initial Term”); provided, however, that the Term of this Agreement shall be extended
automatically for successive one year periods (each one-year extension a “Successor Term” and
together with the Initial Term referred to herein as the “Term”) unless written notice of
nonextension is provided by either party to the other party at least thirty (30) days prior to the
end of the Initial Term or any Successor Term. In the event that this Agreement is not extended at
the end of the Initial Term or any Successor Term and thereby terminates, only paragraphs 6, 7,
8(d), 8(g), 8(h), 8(i) and 11 shall survive such termination, except that Executive shall be
entitled to receive compensation and benefits to the extent expressly provided herein or by the
terms of any of the Company’s compensation and benefit plans, programs or policies or as required
by applicable law.

5. Stock Options.

Upon the Executive’s commencement of employment, the Company will grant stock options to Executive
covering 350,000 shares of common stock with a per share exercise price equal to the closing price
of EntreMed’s stock on the date of grant. Such options will vest as to 25% of the covered shares
three months after the grant date, and shall vest as to the remaining covered shares in cumulative
25% share increments on each of the first, second, and third anniversary of the date of grant, if
Executive is then employed by the Company. Other periodic stock and incentive stock option grants
to Executive, if any, while the Company employs Executive during the Term shall be determined by
the Board or a committee thereof in its discretion. In the event of a termination pursuant to
paragraph 8(d) hereof or a resignation pursuant to paragraph 9 hereof, for which purposes sections
10(a) and 10(c) of this Agreement shall control, all vested options held by Executive on the
effective date of such termination or resignation shall be

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exercisable in accordance with the terms of such grants until the later of the date set forth in
such grant or twelve (12) months following Executive’s date of termination, but in no event beyond
the expiration date of the relevant option. Upon a change in control, as defined in the Executive’s
option agreement, all unvested options shall vest and become exercisable immediately. Except as set
forth herein, the terms of the stock option grants under this paragraph 5 shall be otherwise in
accordance with and subject to the terms of the Company’s 2001 Long Term Incentive Plan or
successor plan and such terms and conditions as the Board or a committee thereof may specify.

6. Unauthorized Disclosure.

During the Term and at all times thereafter, Executive shall not, without the written consent of
the Company, or except as required by applicable law, disclose to any person, other than a person
to whom disclosure is reasonably necessary or appropriate in connection with the performance by
Executive of his duties as an executive officer of the Company, any material confidential
information obtained by Executive while in the employ of the Company with respect to the businesses
of the Company or any of its subsidiaries, including but not limited to, operations, pricing,
contractual or personnel data, products, discoveries, improvements, trade secrets, license
agreements, marketing information, suppliers, dealers, principles, customers, or methods of
distribution, or any other confidential information the disclosure of which Executive knows, or in
the exercise of reasonable care should know, will be damaging to the Company; provided, however,
that confidential information shall not include any information known generally to the public or to
persons in the industry of which the Company’s business is a part (in each case, other than as a
result of unauthorized disclosure by Executive) or any information otherwise considered by the
Company not to be confidential.

7. Indemnification. 

     a. The Company shall defend, indemnify and hold harmless Executive if he is made a party, or
threatened to be made a party, to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, or investigative (a “Proceeding”), because he is or was an
officer or director of the Company or any of its subsidiaries, affiliates, or successors, or
because he is or was serving in a fiduciary capacity with respect to employee benefit plans of the
Company, whether or not the basis of such Proceeding is alleged action in an official capacity or
otherwise, against all Expenses incurred or suffered by him in connection with such Proceeding to
the fullest extent authorized by the General Corporation Law of the State of Delaware and any other
applicable law in effect from time to time, and such indemnification shall continue as to Executive
even if he ceases to be an officer or director or is no longer employed by the Company, and shall
inure to the benefit of Executive’s heirs, executors and administrators.

     b. As used in this Agreement, the term “Expenses” shall include, without limitation, damages,
losses, judgments, liabilities, fines, penalties, excise taxes, settlements and reasonable costs,
reasonable attorneys’ fees, reasonable accountants’ fees, and reasonable disbursements and costs of
attachment or similar bonds, investigations, and any reasonable expenses of establishing a right to
indemnification under this Agreement.

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     c. Expenses incurred by Executive in connection with any Proceeding shall be paid
by the Company upon presentation of appropriate documentation and a giving by Executive of any
undertakings required by applicable law.

8. Termination.

     a. Upon Death. If Executive dies while employed by the Company during the Term, his
estate shall be entitled to receive payment of Base Salary through the last day of the nine (9)
months following the month in which his death occurred, payable over nine (9) months at the
Company’s normal pay periods. If, in respect of the fiscal year in which Executive dies the Board
or a committee thereof determines in its discretion that he would otherwise have been entitled to
receive Incentive Compensation under subparagraph 3(c) by reason of the operations of the Company
during such fiscal year, Executive’s estate shall be entitled to receive a pro rata portion of his
Incentive Compensation for such fiscal year. Such pro rata portion shall equal the product of (x)
the full amount of such Incentive Compensation, and (y) a fraction, the numerator of which is the
number of days in the fiscal year of Executive’s death prior to the date of death, and the
denominator of which is the total number of days in such fiscal year.

     b. Termination Upon Disability. The Company may terminate Executive’s employment
hereunder during the Term at the end of any calendar month in the event of his Disability by giving
to Executive written notice of termination. In the event of any such termination pursuant to this
subparagraph 8(b), Executive shall be entitled to receive his Base Salary, payable in accordance
with the Company’s customary payroll policy for it executives, through the last day of the nine (9)
months following the month in which the date of termination occurred. If in respect of the fiscal
year in which Executive’s employment terminates pursuant to this subparagraph 8(b) the Board or a
committee thereof determines in its discretion that he would otherwise have been entitled to
receive Incentive Compensation under subparagraph 3(c) by reason of the operations of the Company
during such fiscal year, Executive shall be entitled to receive a pro rata portion of his Incentive
Compensation for such year. Such pro rata portion shall equal the product of (x) the full amount
of such Incentive Compensation, and (y) a fraction, the numerator of which is the number of days in
the fiscal year of Executive’s termination on account of Disability prior to the date of
termination, and the denominator of which is the total number of days in such fiscal year.

     c. Termination for Cause. The Company may terminate Executive’s employment hereunder
at any time during the Term for Cause by giving to Executive written notice of termination that
specifies the reasons for and date of termination, subject to the terms of sub-paragraph 10(a)
hereunder. Upon any such termination for Cause under this subparagraph 8(c), the Company shall pay
to Executive Base Salary through the date of termination, including the benefits provided at
paragraph 3(d), and the Company shall have no further obligations under this Agreement.

     d. Termination Without Cause. The Company may terminate Executive’s employment with
the Company at any time during the Term, for any reason and without Cause, by giving him written
notice thirty (30) days prior to the date of termination. Until the effective date of any such
termination, the Company shall continue to pay to Executive the full compensation specified in this
Agreement, including the benefits provided at paragraph 3(d). Following the date of termination,
Executive shall make himself reasonably available to

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members of the Board, the CEO, and other senior managers and officers of the Company to assist in
the transition of responsibilities and information to others and to facilitate the orderly conduct
of business operations. Upon termination, the Company shall have no other financial obligations to
Executive under any compensation or benefit plan, program or policy and Executive’s participation
in the Company’s compensation and benefit plans, programs and policies shall cease as of the date
of Executive’s termination except as set forth herein or as expressly provided under the terms of
any such plans, programs or policies, or as required by applicable law. However, in addition to the
above, if Executive is terminated pursuant to this subparagraph 8(d), the Company shall (i) pay
Executive a severance amount equal to nine (9) months Base Salary over the following nine (9)
months at the Company’s normal pay periods, and (ii) provide Executive coverage under the Company’s
health insurance program, under the same terms as are available to other senior executive officers
of the Company, for a period of nine (9) months, after which Executive would be eligible for COBRA
continuation coverage, or until he has obtained substantially equivalent new coverage, as
determined by the Board or a committee thereof in its discretion, through successor employment,
whichever occurs sooner. If, in respect of the fiscal year in which Executive’s employment
terminates pursuant to this subparagraph 8(d), the Board or a committee thereof determines in its
discretion that he would otherwise have been entitled to receive Incentive Compensation under
subparagraph 3(c) by reason of the operations of the Company during such fiscal year, Executive
shall be entitled to receive a pro rata portion of his Incentive Compensation for such year. Such
pro rata portion shall equal the product of (x) the full amount of such Incentive Compensation, and
(y) a fraction, the numerator of which is the number of days in the fiscal year of Executive’s
termination without Cause prior to the date of termination, and the denominator of which is the
total number of days in such fiscal year.

     e. Resignation for Other than Good Reason. Executive may voluntarily terminate his
employment with the Company during the Term for any reason upon at least thirty (30) days prior
written notice, which specifies the effective date of termination. Until the effective date of
such termination, the Company shall continue to pay him the full compensation specified in this
Agreement, including the benefits provided at paragraph 3(d), provided he continues to perform his
duties during this period. Thereafter, the Company shall have no further obligations to him under
this Agreement. This subparagraph 8(e) shall not apply to Executive’s resignation for Good Reason
pursuant to paragraph 9 hereof.

     f. No Mitigation. The parties hereto acknowledge and agree that, in the event
Executive’s employment with the Company is terminated pursuant to this paragraph 8, he shall not be
required to mitigate his damages by affirmatively seeking other employment. Further, except as
provided in subparagraph 8(d)(ii) above, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned by him or benefit provided to him as the
result of employment by another employer or otherwise.

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     g. Non-Competition. For a period of 1) twelve (12) months after resignation for other
than for Good Reason or 2) six (6) months after termination of employment with the Company for any
other reason, Executive shall not, as an individual, principal, agent, employee, consultant or
otherwise, directly or indirectly, or with respect to any company or entity with which the Company
has concluded partnership, licensing, joint research and development or other similar business
agreements during his employment with the Company, render any services to any firm or company or
any division or subsidiary of any firm or company, engaged in the development or commercialization
of compounds, analogs or derivatives of those compounds that (a) are of a similar type, that is,
small molecules, (for example, but not limited to, small peptidomimetic molecules), (b) have more
than one mechanism of action and cellular pathway in common with; and (c) are within the same field
(i.e. oncology or inflammation) as, those being developed and or commercialized by
the Company during the Term (“Competing Company”). In addition, for an additional period of six
(6) months after the six-month period set forth above and subject to Section 6 hereof, Executive
only may provide services to such a Competing Company if Executive does not work on, or furnish
confidential information regarding, any matter related to such compounds defined above. Moreover,
for a period of [twelve (12)] months after the termination of Executive’s employment with the
Company, Executive shall not take any action, without the prior written consent of the Company, to
assist Executive’s successor employer or any other entity in recruiting or hiring any other
employee who was an employee of the Company during Executive’s employment. This prohibition
includes (i) identifying to such successor employer or its agents or such other entity, the person
or persons who have special knowledge concerning the Company or its inventions, processes, methods
or confidential affairs, and (ii) commenting to Executive’s successor employer or its agents or
such other entity about the quantity or work, quality of work, special knowledge or personal
characteristics of any person who is still employed by the Company. Executive also agrees that he
will not provide such information to a prospective employer or to an executive search firm during
interviews preceding possible employment.

     h. Non-Disparagement. During the Term and thereafter, Executive shall not communicate
negatively about or otherwise disparage the Company or its products or each and any of the released
parties described in subparagraph 8(i) in any way whatsoever except as may be required for truthful
sworn testimony or in connection with a legal or administrative proceeding, report, claim or
dispute. The Company, acting in its official capacity, shall not make any public false, disparaging
or derogatory statements in connection with or concerning Executive’s service to the Company except
as may be required for truthful sworn testimony or in connection with a legal or administrative
proceeding, report, claim or dispute. After termination, in the event Executive materially breaches
any of the conditions set forth herein or in any other paragraph of this Agreement, the Company may
discontinue the provision of any payment or benefits to him under this Agreement, and in such event
he shall forfeit his entitlement to any further termination payments or benefits under this
Agreement. After termination, in the event the Company materially breaches any of the conditions
set forth herein or in any other paragraph of this Agreement, the Executive may pursue any remedies
available to him at law.

     i. Release. In consideration of Executive’s receipt of severance benefits subject to
and in accordance with subparagraphs 8(b) and (d) and paragraph 9 of this Agreement, Executive
agrees that, upon his first receipt and acceptance of any such benefits, he shall have released and
forever discharged the Company, its subsidiaries and affiliates, successors and assigns,

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predecessors and all of their respective officers, directors, employees and agents and
employee benefits plans from all claims, demands, liabilities and causes of action arising out of
facts or occurrences arising or occurring at any time up to and including the time of Executive’s
termination or resignation, whether known or unknown, and the parties hereto contemplate that this
release shall be broadly construed.

9. Resignation for Good Reason.

If Executive has Good Reason during the Term, Executive may resign at any time during the Term by
providing at least thirty (30) days prior written notice to the Company that specifies the reason
for, and the effective date of, his resignation. If Executive resigns during the Term for Good
Reason, such resignation shall be deemed a Termination without Cause under subparagraph 8(d) hereof
and Executive shall receive the compensation and benefits provided under subparagraph 8(d) hereof
as if he had been terminated without Cause.

10. Definitions.

     a. “Cause” shall mean Executive’s (i) habitual drunkenness or drug addiction, (ii) material
failure to perform and discharge his duties and responsibilities hereunder, (iii) misconduct that
is materially and significantly injurious to the Company, (iv) conviction of a felony involving the
personal dishonesty of Executive or moral turpitude, (v) conviction of any crime or offense
involving the property of the Company or (vi) material breach of Executive’s obligations under this
Agreement. Provided, however, with regard to a.(ii) and a.(vi.) above, the parties exclude for this
purpose an action not taken in bad faith that is remedied by Executive promptly upon receipt of
written notice thereof given to the Company.

     b. “Disability” shall mean the Executive’s incapacity due to physical or mental illness which
prevents the proper performance of Executive’s duties as set forth herein or established pursuant
hereto for ninety (90) days in any twelve (12) month period of the Term. A qualified independent
physician mutually selected by the Company and the Executive shall determine any questions as to
the existence or extent of illness or incapacity of Executive, upon which the Company and Executive
cannot agree. The determination of such physician certified in writing to the Company and to the
Executive shall be final and conclusive for all purposes of this Agreement. For purposes of the
disability provisions of this Agreement, if the Executive is unable to act on his own behalf due to
incapacity, any person legally authorized to do so may act on the Executive’s behalf.

     c. “Good Reason” shall mean the occurrence of any of the following events during the Term:
(A) the assignment to Executive of any duties inconsistent in any material respect with Executive’s
position, authority, duties or responsibilities as of the commencement of the Term or any other
action by the Company which results in a diminution in any material respect in such position,
duties or responsibilities, excluding for this purpose an isolated and inadvertent action not taken
in bad faith that is remedied by the Company promptly after receipt of written notice thereof given
by Executive; (B) a reduction by the Company in Executive’s annual Base Salary as in effect on the
date hereof or subsequently in effect hereunder, except as agreed to by Executive, unless such
change was applicable to all senior executives of the Company; (C) the failure by the Company to
continue to provide Executive with benefits substantially similar to

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those enjoyed by him under any of the Company’s pension, life insurance, medical, health and
accident, disability or other welfare plans in which he was participating as of the commencement of
the Term or subsequently in effect hereunder, unless such change was applicable to all senior
executives of the Company; (D) the failure by the Company to pay to Executive any deferred
compensation when due under any deferred compensation plan or agreement applicable to him; (E) the
failure by the Company to honor in any material respect the terms and provisions of this Agreement;
or (G) a requirement by the Company that Executive conduct his duties and responsibilities from a
permanent location more than fifty (50) miles from the place of employment, as defined in paragraph
2 herein.

11. Miscellaneous.

     a. Assignments and Binding Effect. The respective rights and obligations of the
parties under this Agreement shall be binding upon the parties hereto and their heirs, executors,
administrators, successors, and assigns, including, in the case of the Company, any other
corporation or entity with which the Company may be merged or otherwise combined and, in the case
of Executive, his estate or other legal representatives.

     b. No Assignment of Benefits. Except as otherwise provided herein or by applicable
law, no right or interest of the Executive under this Agreement shall be assignable or
transferable, in whole or in part, either directly or by the operation of law or otherwise,
including without limitation execution, levy, garnishment, attachment, pledge or in any manner; no
attempted transfer thereof shall be effective.

     c. Governing Law. This Agreement shall be governed as to its validity, interpretation
and effect by the laws of the State of Maryland, without reference to its conflict of laws
provisions.

     d. Severability. In the event that any provision or portion of this Agreement shall
be determined to be invalid, illegal, or unenforceable for any reason, the remaining provisions and
portions of this Agreement shall remain in full force and effect to the fullest extent permitted by
law. Such invalid, illegal or unenforceable provision(s) shall be deemed modified to the extent
necessary to make it (them) valid, legal, and enforceable.

     e. Withholding. All amounts payable hereunder shall be paid net of any applicable
withholding required under federal, state or local laws and any additional withholding to which
Executive has agreed.

     f. Entire Agreement; Amendments. This Agreement constitutes the entire Agreement and
understanding of the Company and Executive with respect to the terms of Executive’s employment with
the Company and supersedes all prior discussions, understandings and agreements with respect
thereto.

     g. Captions. All captions and headings used herein are for convenient reference only
and do not form part of this Agreement.

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     h. Waiver. No provision of this Agreement may be modified, waived or discharged
unless such modification, waiver or discharge is agreed to in writing and signed by the Executive
and the Board or its delegate. The failure of the Company or the Executive to insist upon
strict compliance with the terms of this Agreement or the failure of the Company or the Executive
to assert any right the Company or the Executive may have hereunder shall not be deemed a waiver of
such provision or right or any other provision of this Agreement.

     f. Notice. Any notice or communication required or permitted under this Agreement
shall be made in writing and shall be delivered by hand, or mailed by registered or certified mail,
return receipt requested, first call postage prepaid, addressed as follows:

If to Executive:

Kenneth W. Bair, Ph.D.

c/o EntreMed, Inc.

9640 Medical Center Drive

Rockville, Maryland 20850

If to the Company:

EntreMed, Inc.

9640 Medical Center Dive

Rockville, Maryland 20850

Attn.: Chief Executive Officer

     g. Counterparts. This Agreement may be executed in counterparts, each of which shall
constitute one and the same agreement.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of October
16, 2007.

	 	 	 	 	 
	 	
 	 
	 	Kenneth W. Bair, PhD 	 
	 	Executive 	 
	 
	 	ENTREMED, INC.

 	 
	 	By:  	
 	 
	 	 	James S. Burns 	 
	 	 	President and Chief Executive Officer 	 
	 

11exv10w1

 

Exhibit 10.1

EXECUTION COPY

 

AMENDED AND RESTATED MASTER AGREEMENT

BY AND BETWEEN

STMICROELECTRONICS N.V.,

INTEL CORPORATION,

REDWOOD BLOCKER S.A.R.L.,

FRANCISCO PARTNERS II (CAYMAN) L.P.,

PK FLASH, LLC,

AND

FRANCISCO PARTNERS PARALLEL FUND II L.P.

March 30, 2008

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS
	 	 	3	 
	1.1 Definitions
	 	 	3	 
	1.2 Defined Terms Generally
	 	 	3	 
	ARTICLE II AGREEMENTS
	 	 	3	 
	2.1 Intel Asset Transfer
	 	 	3	 
	2.2 ST Asset Contribution
	 	 	4	 
	2.3 FP Purchase
	 	 	4	 
	2.4 Other Agreements among the Parties and Holdings and its Affiliates
	 	 	4	 
	2.5 Closing
	 	 	4	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	5	 
	3.1 Intel Representations
	 	 	5	 
	3.2 ST Representations
	 	 	7	 
	3.3 The FP Parties Representations
	 	 	10	 
	ARTICLE IV COVENANTS
	 	 	12	 
	4.1 Access to Information
	 	 	12	 
	4.2 Exclusive Dealing
	 	 	13	 
	4.3 Reasonable Efforts
	 	 	13	 
	4.4 Certain Consents and Filings; Further Assurances
	 	 	13	 
	4.5 Press Releases
	 	 	14	 
	4.6 Certain Deliveries and Notices
	 	 	15	 
	4.7 Non-Solicitation of Employees
	 	 	15	 
	4.8 Tax Matters
	 	 	16	 
	4.9 Operation of the Intel Business Prior to the Closing
	 	 	16	 

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	 	 	Page
	4.10 Operation of the ST Business Prior to the Closing
	 	 	19	 
	4.11 Employee Matters
	 	 	22	 
	4.12 Additions to and Modifications of Schedules
	 	 	23	 
	4.13 Third Party Appraisal and Allocation; Dutch Auditors
	 	 	26	 
	4.14 Notices of Certain Intel Events
	 	 	26	 
	4.15 Notices of Certain ST Events
	 	 	27	 
	4.16 Holdings and Numonyx Formation and Preparation
	 	 	28	 
	4.17 Holdings and Numonyx Tax Elections
	 	 	30	 
	4.18 Holdings Closing Reorganization
	 	 	31	 
	4.19 Cooperation with Financing
	 	 	31	 
	4.20 Environmental Consultants
	 	 	31	 
	4.21 Hynix JV Matters
	 	 	31	 
	4.22 Facility Transfer Term Sheets
	 	 	31	 
	4.23 Governmental Consents
	 	 	32	 
	4.24 Release of Liens
	 	 	32	 
	4.25 ST Litigation
	 	 	32	 
	4.26 Intel Litigation
	 	 	32	 
	4.27 Confidentiality Agreements
	 	 	32	 
	4.28 Further Assurances
	 	 	33	 
	ARTICLE V CONDITIONS TO CLOSING
	 	 	33	 
	5.1 Conditions to Obligations of Intel
	 	 	33	 
	5.2 Conditions to Obligations of ST
	 	 	35	 
	5.3 Conditions to Obligations of the FP Parties
	 	 	37	 
	ARTICLE VI TERMINATION
	 	 	39	 
	6.1 Grounds for Termination
	 	 	39	 

ii

 

	 	 	 	 	 
	 	 	Page
	6.2 Effect of Termination
	 	 	40	 
	6.3 Termination of Representations and Warranties and Covenants Upon the Closing
	 	 	41	 
	6.4 Exclusive Remedy
	 	 	41	 
	ARTICLE VII MISCELLANEOUS
	 	 	41	 
	7.1 Notices
	 	 	41	 
	7.2 Amendments; Waivers
	 	 	44	 
	7.3 Expenses
	 	 	44	 
	7.4 Successors and Assigns
	 	 	44	 
	7.5 Governing Law
	 	 	45	 
	7.6 Counterparts; Effectiveness
	 	 	45	 
	7.7 Entire Agreement
	 	 	45	 
	7.8 Captions
	 	 	45	 
	7.9 Severability
	 	 	45	 
	7.10 Dispute Resolution
	 	 	45	 
	7.11 Waiver of Jury Trial
	 	 	48	 
	7.12 Third Party Beneficiaries
	 	 	48	 
	7.13 Specific Performance
	 	 	48	 
	7.14 No Presumption Against Drafting Party
	 	 	48	 

iii

 

AMENDED AND RESTATED MASTER AGREEMENT

     THIS AMENDED AND RESTATED MASTER AGREEMENT, dated as of March 30, 2008 (the “Master
Agreement” and, as referred to herein, this “Agreement”), is entered into by and among
Intel Corporation, a Delaware corporation (“Intel”), STMicroelectronics N.V., a limited
liability company organized under the laws of The Netherlands, with its corporate seat in
Amsterdam, The Netherlands (“ST”), Redwood Blocker S.a.r.l., a limited liability company
organized under the laws of The Grand-Duchy of Luxembourg (“FP Co.”), and Francisco
Partners II (Cayman) L.P., an exempted limited partnership organized under the laws of the Cayman
Islands (“FP Holdco”), PK Flash, LLC, a limited liability company organized under the laws
of Delaware (“FP LLC”) and Francisco Partners Parallel L.P., a Delaware limited partnership
(“FP Parallel”, together with FP Co., FP Holdco and FP LLC, the “FP Parties” ).
Intel, ST and the FP Parties are sometimes referred to herein as the “Parties” and each
individually as a “Party.”

     A. The Parties entered into that certain Master Agreement, dated as of May 22, 2007 (the
“Signing Date”) (the “Original Master Agreement”).

     B. Pursuant to Section 7.2 of the Original Master Agreement, any term of the Original
Master Agreement may be amended, if such amendment is in writing and signed by all Parties.

     C. The Parties desire to amend and restate the Original Master Agreement in its entirety.

     D. Intel currently designs, manufactures and produces the Intel Products for use in various
consumer electronics and other end applications.

     E. ST currently designs, manufactures and produces the ST Products for use in various consumer
electronics and other end applications.

     F. The Parties have formed a holding company under the laws of The Netherlands
(“Holdings”) and a wholly owned Subsidiary of Holdings organized under the laws of The
Netherlands (“Numonyx”), on the terms and conditions set forth in the Original Master
Agreement and the other Transaction Documents.

     G. Intel desires to transfer, and to cause certain of its Affiliates to transfer to Holdings
and its Affiliates, the Intel Transferred Assets in consideration for the issuance by Holdings of
the Intel Holdings Shares, the payment by Holdings or a Subsidiary of Holdings of the Intel
Aggregate Cash, and the assumption by Holdings or its Affiliates of the Intel Transferred
Liabilities, all on the terms and conditions set forth in the Intel Asset Transfer Agreement, the
Intel Ancillary Agreements and this Agreement.

     H. ST desires to transfer, and to cause certain of its Affiliates to transfer to Numonyx and
its Affiliates, the ST Transferred Assets in consideration for the issuance by Numonyx of the ST
Numonyx Shares, and the assumption by Numonyx or its Affiliates of the ST Transferred Liabilities,
followed by ST’s contribution of the ST Numonyx Shares in consideration for the

2

 

issuance by Holdings of the ST Holdings Shares and the issuance by Holdings of the ST Notes,
all on the terms and conditions set forth in the ST Asset Contribution Agreement, the ST Ancillary
Agreements, the Note Agreement and this Agreement.

     I. FP desires to invest in Holdings by purchasing and accepting from Holdings the FP Holdings
Shares and the FP Notes on the terms and conditions set forth in the FP Purchase Agreement and the
Note Agreement.

     J. Intel desires to provide financing to Holdings by purchasing and accepting from Holdings
the Intel Notes on the terms and conditions set forth in the Note Agreement.

     K. The Parties desire to enter into various agreements with one another and with Holdings and
its Affiliates, to set forth the ongoing governance and operating relationships among the Parties
and Holdings and its Affiliates relating to the business of Holdings and its Affiliates, all as
contemplated by this Agreement.

     NOW THEREFORE, in consideration of the foregoing and the mutual agreements contained herein,
the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Definitions . Capitalized terms used in this Agreement shall have the respective meanings ascribed to
such terms in Appendix A to this Agreement.

     1.2 Defined Terms Generally. The definitions set forth in Appendix A or otherwise referred to in this Agreement
shall apply equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine, feminine and neuter
forms. The words “include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed to be references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Unless the context shall otherwise require,
any reference to any contract, instrument, statute, rule or regulation is a reference to it as
amended and supplemented from time to time (and, in the case of a statute, rule or regulation, to
any successor provision). Any reference in this Agreement to a “day” or a number of “days”
(without the explicit qualification of “Business”) shall be interpreted as a reference to a
calendar day or number of calendar days.

ARTICLE II

AGREEMENTS

     2.1 Intel Asset Transfer. On the Closing Date, at the Closing, subject to (a) the fulfillment, or waiver by Intel, of
each condition to the obligation of Intel to consummate the transactions contemplated by this
Agreement, (b) the fulfillment, or waiver by ST, of each condition to the obligation of ST to
consummate the transactions contemplated by this Agreement and (c) the fulfillment, or waiver by
the FP Parties, of each condition to the obligation of the FP Parties to consummate the
transactions contemplated by this Agreement, Intel shall, and the Parties shall cause Holdings it Affiliates to, execute and deliver the Intel

3

 

Asset Transfer Agreement and the Intel Ancillary
Agreements contemplated thereby to which each, respectively, is a party, and Intel shall, and the
Parties shall cause Holdings to, consummate and cause their Affiliates to consummate, as
applicable, each of the transactions contemplated by the Intel Asset Transfer Agreement and the
Intel Ancillary Agreements to be consummated at the Closing.

     2.2 ST Asset Contribution. On the Closing Date, at the Closing, subject to (a) the fulfillment, or waiver by ST, of
each condition to the obligation of ST to consummate the transactions contemplated by this
Agreement, (b) the fulfillment, or waiver by Intel, of each condition to the obligation of Intel to
consummate the transactions contemplated by this Agreement and (c) the fulfillment, or waiver by
the FP Parties, of each condition to the obligations of the FP Parties to consummate the
transactions contemplated by this Agreement, ST shall, and the Parties shall cause Holdings and its
Affiliates to, execute and deliver the ST Asset Contribution Agreement and the ST Ancillary
Agreements contemplated thereby to which each, respectively, is a party, and ST shall, and the
Parties shall cause Holdings to, consummate and cause their Affiliates to consummate, as
applicable, each of the transactions contemplated by the ST Asset Contribution Agreement and the ST
Ancillary Agreements to be consummated at the Closing.

     2.3 FP Purchase. On the Closing Date, at the Closing, subject to (a) the fulfillment, or waiver by the FP
Parties, of each condition to the obligations of the FP Parties to consummate the transactions
contemplated by this Agreement, (b) the fulfillment, or waiver by Intel, of each condition to the
obligation of Intel to consummate the transactions contemplated by this Agreement and (c) the
fulfillment, or waiver by ST, of each condition to the obligation of ST to consummate the
transactions contemplated by this Agreement, the FP Parties shall, and the Parties shall cause
Holdings to, execute and deliver the FP Purchase Agreement and consummate each of the transactions
contemplated by the FP Purchase Agreement to be consummated at the Closing.

     2.4 Other Agreements among the Parties and Holdings and its Affiliates. Except as otherwise set forth herein, on the Closing Date, at the Closing, the Parties
shall, and shall cause (a) each of their respective Affiliates and (b) Holdings and its Affiliates
to, as the case may be, execute and deliver the Transaction Documents to which each, respectively,
is a party, to the extent such Party, Subsidiary, Holdings or an Affiliate of Holdings is a party
to such respective agreements.

     2.5 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of Gibson, Dunn & Crutcher LLP, Palo Alto, California, as soon as
possible, but in no event later than five Business Days, after fulfillment of the conditions set
forth in Article V hereof to each Party’s obligation to close the transactions contemplated
by this Agreement or the waiver thereof by such Party, or at such other time or place as the
Parties may agree.

4

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     3.1 Intel Representations. Except as set forth in the Intel Master Agreement Disclosure Letter, Intel represents and
warrants to ST and the FP Parties, as of the Signing Date, as follows:

     (a) Existence and Good Standing. Intel is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation
and has all corporate power and authority required to carry on its business as now conducted
and to own and operate its business as now owned and operated by it. Intel is qualified to
conduct business and is in good standing in each jurisdiction in which it conducts business
other than such jurisdictions where the failure to be so qualified would not reasonably be
expected to have an Intel Material Adverse Effect.

     (b) Authorization; Enforceability. Intel has all requisite corporate power and
authority to execute and deliver this Agreement and each of the Transaction Documents to
which it is or will be a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and delivery by
Intel of this Agreement and each of the Transaction Documents to which Intel is a party, and
the performance by Intel of its obligations contemplated hereby and thereby, have been duly
and validly authorized by all necessary corporate action. This Agreement has been and, when
executed at the Closing, the other Transaction Documents will have been, duly and validly
executed and delivered by Intel and, assuming the due execution and delivery of this
Agreement and the other Transaction Documents to which it is a party by the other parties
thereto, this Agreement constitutes, and as of the Closing, each of the Transaction
Documents to which Intel is a party will constitute, the legal, valid and binding agreement
of Intel, enforceable against Intel in accordance with their respective terms, except to the
extent (i) that their enforceability may be subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors’ rights generally or to general principles of equity or (ii) indemnification
provisions contained in the Securityholders’ Agreement may be limited by applicable
securities laws.

     (c) Governmental Authorization. Other than the Intel Approvals, ST Approvals
and Numonyx Approvals, the execution, delivery and performance by Intel of this Agreement
and the other Transaction Documents to which it is a party, and the consummation by it of
the transactions contemplated hereby and thereby, require no Governmental Approval.

     (d) Non-Contravention; Consents.

     (i) The execution, delivery and performance by Intel of this Agreement and the
other Transaction Documents to which Intel is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not: (A) contravene
or conflict with the certificate of incorporation, bylaws or other organizational
documents of Intel; (B) assuming receipt of the Intel

5

 

Approvals, the ST Approvals
and the Numonyx Approvals and the Intel Contractual Consents, contravene or conflict
with or constitute a material violation of any provision of any Applicable Law
binding upon or applicable to Intel, the Intel Transferred Assets; or (C) assuming
receipt of the Intel Approvals and of the Intel Contractual Consents, (1) constitute
a default under, give rise to any right of termination, cancellation, modification,
acceleration of, or a loss of any benefit under any Intel Contract, including the
Intel Transferred Contracts, (2) result in the creation or imposition of any Lien
(other than Permitted Liens) on any Intel Transferred Asset, or (3) constitute a
breach, default or violation of any settlement agreement, judgment, injunction or
decree, except in the case of clause (B) or (C), for matters that would not
reasonably be expected to have an Intel Material Adverse Effect (provided that in
determining whether an Intel Material Adverse Effect would result, any adverse
effect otherwise excluded by clause (C) of the definition of “Intel Material Adverse
Effect” shall be taken into account).

     (ii) The execution, delivery and performance by Intel of this Agreement and the
other Transaction Documents to which Intel is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not, as of the Closing
Date, constitute a default under, give rise to any right of termination,
cancellation, modification, acceleration of, or a loss of any material benefit
under, any Contract identified on Schedule 3.1(d)(ii) of the Intel Master
Agreement Disclosure Letter; provided, however, that for the avoidance of doubt, the
Parties acknowledge and agree that the representations and warranties set forth in
this Section 3.1(d)(ii) shall not be deemed to be untrue or inaccurate in
any respect as a result of (A) any action or omission by Holdings or any of its
Affiliates, other than with respect to Intel Transferred Entities prior to Closing,
that constitutes or results in a default by Intel or any Intel Subsidiary or gives
rise to any right of termination, cancellation, modification, acceleration of, or a
loss of any material benefit under any such Contract; and (B) any withdrawal or
voiding after the Closing of any consent granted prior to the Closing by a party to
such Contract, which withdrawal or voiding purports to have retroactive effect to
the Closing.

     (e) Litigation. As of the Signing Date, there is no Proceeding or, to the
Knowledge of Intel, investigation pending or, to the Knowledge of Intel, threatened in
writing, by or against Intel or any of Intel’s Subsidiaries seeking to prevent, enjoin,
alter or delay the transactions contemplated by this Agreement or any of the other
Transaction Documents or encumber the Intel Transferred Interests.

     (f) Incorporation by Reference of Additional Representations and Warranties.
As of the Signing Date (except that with respect to any representation and warranty that
specifies another date, such representation and warranty shall be made as of such specified
date), subject to the exceptions set forth in the Intel ATA Disclosure Letter, Intel hereby
represents and warrants that each of the representations and warranties set forth in
Sections 3.1-3.24 of the Intel Asset Transfer Agreement attached to
Schedule 2.1 of the Intel Master Agreement Disclosure Letter are true and correct.
Upon the consummation of the Closing, the provisions of this Section 3.1(f) shall
terminate and

6

 

cease to be of any further force or effect, as if never made, and no action
may be brought based on the same, whether for indemnification, breach of contract, tort or
under any other legal theory.

     (g) Reliance. Intel has conducted such investigation and inspection of the ST
Transferred Assets, the ST Transferred Liabilities, the ST Business and the ST Products that
Intel has deemed necessary or appropriate for the purpose of entering into this Agreement
and the other Transaction Documents and consummating the transactions contemplated hereby
and thereby. In executing this Agreement and the other Transaction Documents to which it is
a party, Intel is relying on its own investigation and on the provisions set forth herein
and therein and not on any other statements, presentations, representations, warranties or
assurances of any kind made by ST, the FP Parties, any of their representatives or any other
Person. Intel acknowledges that (i) the representations and warranties of (A) ST contained
in Section 3.2 hereof and (B) the FP Parties contained in Section 3.3
hereof, constitute the sole and exclusive representations and warranties of each such Party
to Intel in connection with this Agreement and the transactions contemplated hereby, and
(ii) all other representations and warranties are specifically disclaimed and may not be
relied upon or serve as a basis for a claim against ST or FP. INTEL ACKNOWLEDGES THAT ST
DISCLAIMS ALL WARRANTIES OTHER THAN THOSE EXPRESSLY CONTAINED IN SECTION 3.2 AS TO
THE ST TRANSFERRED ASSETS, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR WARRANTY FOR FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES CONTAINED EXPRESSLY IN SECTION 3.2 , HOLDINGS AND
ITS AFFILIATES WILL ACQUIRE THE ST TRANSFERRED ASSETS ON AN “AS IS, WHERE IS” BASIS. FROM
AND AFTER THE CLOSING, INTEL SHALL HAVE NO RIGHTS OR REMEDIES FOR OR WITH RESPECT TO ANY
BREACH BY ST OF ITS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.2(f) OF
THIS AGREEMENT, AND INTEL SHALL HAVE NO RIGHTS OR REMEDIES FOR OR WITH RESPECT TO ANY BREACH
OF ANY PROVISION OF THE FP PURCHASE AGREEMENT OR THE ST ASSET CONTRIBUTION AGREEMENT
(INCLUDING THE REPRESENTATIONS, WARRANTIES AND INDEMNITIES SET FORTH IN SUCH AGREEMENTS);
PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS AND REMEDIES OF ANY HOLDINGS
INDEMNITEE FOR OR WITH RESPECT TO ANY BREACH OF SUCH AGREEMENTS.

     3.2 ST Representations. Except as set forth in the ST Master Agreement Disclosure Letter, ST represents and
warrants to Intel and the FP Parties as of the Signing Date, as follows:

     (a) Existence and Good Standing. ST is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of incorporation and has
all corporate power and authority required to carry on its business as now conducted and to
own and operate its business as now owned and operated by it. ST is qualified to conduct
business and is in good standing in each jurisdiction in which it conducts business other
than such jurisdictions where the failure to be so qualified would not reasonably be
expected to have an ST Material Adverse Effect.

7

 

     (b) Authorization; Enforceability. ST has all requisite corporate power and
authority to execute and deliver this Agreement and each of the Transaction Documents to
which it is or will be a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and delivery by
ST of this Agreement and each of the Transaction Documents to which ST is a party, and the
performance by ST of its obligations contemplated hereby and thereby, have been duly and
validly authorized by all necessary corporate action. This Agreement has been and, when
executed at the Closing, the other Transaction Documents will have been, duly and validly
executed and delivered by ST and, assuming the due execution and delivery of this Agreement
and the other Transaction Documents to which it is a party by the other parties thereto,
this Agreement constitutes, and as of the Closing, each of the Transaction Documents to
which ST is a party will constitute, the legal, valid and binding agreement of ST,
enforceable against ST in accordance with their respective terms, except to the extent (i)
that their enforceability may be subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’
rights generally or to general principles of equity or (ii) indemnification provisions
contained in the Securityholders’ Agreement may be limited by applicable securities laws.

     (c) Governmental Authorization. Other than the ST Approvals, Intel Approvals
and Numonyx Approvals, the execution, delivery and performance by ST of this Agreement and
the other Transaction Documents to which it is a party, and the consummation by it of the
transactions contemplated hereby and thereby, require no Governmental Approval.

     (d) Non-Contravention; Consents.

     (i) The execution, delivery and performance by ST of this Agreement and the
other Transaction Documents to which ST is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not: (A) contravene
or conflict with the articles of association, governance rules or other
organizational documents of ST; (B) assuming receipt of the ST Approvals, the Intel
Approvals, the Numonyx Approvals and the ST Contractual Consents, contravene or
conflict with or constitute a material violation of any
provision of any Applicable Law binding upon or applicable to ST, the ST
Transferred Assets or the ST Transferred Entities; or (C) assuming receipt of the ST
Approvals and of the ST Contractual Consents, (1) constitute a default under, give
rise to any right of termination, cancellation, modification, acceleration of, or a
loss of any benefit under any ST Contract, including the ST Transferred Contracts,
(2) result in the creation or imposition of any Lien (other than Permitted Liens) on
any ST Transferred Asset, or (3) constitute a breach, default or violation of any
settlement agreement, judgment, injunction or decree, except in the case of clause
(B) or (C), for matters that would not reasonably be expected to have an ST Material
Adverse Effect (provided that in determining whether an ST Material Adverse Effect
would result, any adverse effect otherwise excluded by clause (C) of the definition
of “ST Material Adverse Effect” shall be taken into account).

8

 

     (ii) The execution, delivery and performance by ST of this Agreement and the
other Transaction Documents to which ST is a party, and the consummation of the
transactions contemplated hereby and thereby, to the Knowledge of ST, do not and
will not, as of the Closing Date: (A) contravene or conflict with the articles of
association, joint venture agreement or other organizational or governing documents
of the Hynix JV; or (B) constitute a default under, give rise to any right of
termination, cancellation, modification, acceleration of, or a loss of any material
benefit under, the Hynix JV Junior Credit Agreement or any other contract or
agreement between ST or any Subsidiary of ST and the Hynix JV.

     (e) Litigation. As of the Signing Date, there is no Proceeding or to the
Knowledge of ST, investigation pending or, to the Knowledge of ST, threatened in writing, by
or against ST or any of ST’s Subsidiaries seeking to prevent, enjoin, alter or delay the
transactions contemplated by this Agreement or any of the other Transaction Documents or
encumber the ST Transferred Interests.

     (f) Incorporation by Reference of Additional Representations and Warranties.
As of the Signing Date (except that with respect to any representation and warranty that
specifies another date, such representation and warranty shall be made as of such specified
date), subject to the exceptions set forth in the ST ACA Disclosure Letter, ST hereby
represents and warrants that each of the representations and warranties set forth in
Sections 3.1-3.24 of the ST Asset Contribution Agreement attached to Schedule
2.2 of the ST Master Agreement Disclosure Letter are true and correct. Upon the
consummation of the Closing, the provisions of this Section 3.2(f) shall terminate
and cease to be of any further force or effect, as if never made, and no action may be
brought based on the same, whether for indemnification, breach of contract, tort or under
any other legal theory.

     (g) Reliance. ST has conducted such investigation and inspection of the Intel
Transferred Assets, the Intel Transferred Liabilities, the Intel Business and the Intel
Products that ST has deemed necessary or appropriate for the purpose of entering into this
Agreement and the other Transaction Documents and consummating the transactions
contemplated hereby and thereby. In executing this Agreement and the other Transaction
Documents to which it is a party, ST is relying on its own investigation and on the
provisions set forth herein and therein and not on any other statements, presentations,
representations, warranties or assurances of any kind made by Intel, the FP Parties, any of
their representatives or any other Person. Intel acknowledges that (i) the representations
and warranties of (A) Intel contained in Section 3.1 hereof and (B) the FP Parties
contained in Section 3.3 hereof constitute the sole and exclusive representations
and warranties of each such Party to ST in connection with this Agreement and the
transactions contemplated hereby, and (ii) all other representations and warranties are
specifically disclaimed and may not be relied upon or serve as a basis for a claim against
Intel or the FP Parties. ST ACKNOWLEDGES THAT INTEL DISCLAIMS ALL WARRANTIES OTHER THAN
THOSE EXPRESSLY CONTAINED IN SECTION 3.1 AS TO THE INTEL TRANSFERRED ASSETS, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, INCLUDING ANY WARRANTY OF MERCHANTABILITY

9

 

OR WARRANTY
FOR FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED EXPRESSLY IN SECTION 3.1, HOLDINGS AND ITS AFFILIATES WILL ACQUIRE THE
INTEL TRANSFERRED ASSETS ON AN “AS IS, WHERE IS” BASIS. FROM AND AFTER THE CLOSING, ST
SHALL HAVE NO RIGHTS OR REMEDIES FOR OR WITH RESPECT TO ANY BREACH BY INTEL OF ITS
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.1(f) OF THIS AGREEMENT, AND ST
SHALL HAVE NO RIGHTS OR REMEDIES FOR OR WITH RESPECT TO ANY BREACH OF ANY PROVISION OF THE
FP PURCHASE AGREEMENT OR THE INTEL ASSET TRANSFER AGREEMENT (INCLUDING THE REPRESENTATIONS,
WARRANTIES AND INDEMNITIES SET FORTH IN SUCH AGREEMENTS); PROVIDED, HOWEVER, THAT NOTHING
HEREIN SHALL AFFECT THE RIGHTS AND REMEDIES OF ANY HOLDINGS INDEMNITEE FOR OR WITH RESPECT
TO ANY BREACH OF SUCH AGREEMENTS.

     3.3 The FP Parties Representations. Each of the FP Parties represents and warrants to Intel and ST, as of the Signing Date, as
follows:

     (a) Existence and Good Standing. Each of the FP Parties are duly organized,
validly existing and in good standing under the laws of each of their respective
jurisdictions of organization and each has all power and authority required to carry on its
business as now conducted and to own and operate its business as now owned and operated by
it. Each of the FP Parties is qualified to conduct business and is in good standing in each
jurisdiction in which such qualification is required other than such jurisdictions where the
failure to be so qualified would not reasonably be expected to have an FP Material Adverse
Effect.

     (b) Authorization; Enforceability. Each of the FP Parties has all requisite
power and authority to execute and deliver this Agreement and each of the Transaction
Documents to which it is or will be a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by each of the FP Parties of this Agreement and each of the
Transaction Documents to which it is a party, and the performance by each of the FP Parties
of its obligations contemplated hereby and thereby, have been duly and validly authorized by
all necessary action. This Agreement has been and, when executed at the Closing, the other
Transaction Documents will have been, duly and validly executed and delivered by each of the
FP Parties and, assuming the due execution and delivery of this Agreement and the other
Transaction Documents to which it is a party by the other Parties thereto, this Agreement
constitutes, and as of the Closing, each of the Transaction Documents to which each of the
FP Parties is a party will constitute, the legal, valid and binding agreement of each of the
FP Parties, enforceable against each of the FP Parties in accordance with their respective
terms, except to the extent that (i) their enforceability may be subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors’ rights generally or to general principles of equity or (ii)
indemnification provisions contained in the Securityholders’ Agreement may be limited by
applicable securities laws.

10

 

     (c) Governmental Authorization. Other than the Intel Approvals, the ST
Approvals, the Numonyx Approvals and compliance with any applicable Competition Laws, the
execution, delivery and performance by each of the FP Parties of this Agreement and the
other Transaction Documents to which it is a party, and the consummation by it of the
transactions contemplated hereby and thereby, require no Governmental Approval.

     (d) Non-Contravention; Consents. The execution, delivery and performance by
each of the FP Parties of this Agreement and the other Transaction Documents to which each
of the FP Parties is a party, and the consummation of the transactions contemplated hereby
and thereby, do not and will not: (i) contravene or conflict with the organizational
documents of each of the FP Parties, (ii) assuming receipt of the Intel Approvals, the ST
Approvals, the Numonyx Approvals and compliance with applicable Competition Laws, contravene
or conflict with or constitute a material violation of any provision of any Applicable Law
binding upon or applicable to any of the FP Parties, or (iii) assuming receipt of the Intel
Approvals, the ST Approvals, the Numonyx Approvals and compliance with applicable
Competition Laws, contravene or constitute a default under any material agreement to which
any of the FP Parties is a party, except in the case of clause (ii) or (iii), for matters
that would not reasonably be expected to have an FP Material Adverse Effect.

     (e) Litigation. As of the Signing Date, there is no Proceeding or to the
Knowledge of the FP Parties, investigation, pending or, to the Knowledge of the FP Parties,
threatened in writing, by or against any of the FP Parties seeking to prevent, enjoin, alter
or delay the transactions contemplated by this Agreement or any of the other Transaction
Documents.

     (f) Reliance. Each of the FP Parties has conducted such investigation and
inspection of the Intel Transferred Assets, the Intel Transferred Liabilities, the Intel
Business, the Intel Products, the ST Transferred Assets, the ST Transferred Liabilities, the
ST Business and the ST Products that the FP Parties, respectively, has deemed
necessary or appropriate for the purpose of entering into this Agreement and the other
Transaction Documents and consummating the transactions contemplated hereby and thereby. In
executing this Agreement and the other Transaction Documents to which it is a party, each of
the FP Parties is relying on its own investigation and on the provisions set forth herein
and therein and not on any other statements, presentations, representations, warranties or
assurances of any kind made by Intel, ST, their representatives or any other Person. Each
of the FP Parties acknowledges that (i) the representations and warranties of (A) Intel
contained in Section 3.1 hereof and (B) ST contained in Section 3.2 hereof
constitute the sole and exclusive representations and warranties of each such Party to the
FP Parties in connection with this Agreement and the transactions contemplated hereby, and
(ii) all other representations and warranties are specifically disclaimed and may not be
relied upon or serve as a basis for a claim against Intel or ST. EACH OF THE FP PARTIES
ACKNOWLEDGE THAT INTEL AND ST DISCLAIM ALL WARRANTIES OTHER THAN THOSE EXPRESSLY CONTAINED
IN SECTION 3.1 AND SECTION 3.2, RESPECTIVELY, THE INTEL ASSET TRANSFER
AGREEMENT AND THE ST ASSET CONTRIBUTION AGREEMENT AS TO THE

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INTEL TRANSFERRED ASSETS AND ST
TRANSFERRED ASSETS, RESPECTIVELY, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR WARRANTY FOR FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES CONTAINED EXPRESSLY IN SECTION 3.1 AND
SECTION 3.2, RESPECTIVELY, HOLDINGS AND ITS AFFILIATES WILL ACQUIRE THE INTEL
TRANSFERRED ASSETS AND ST TRANSFERRED ASSETS, RESPECTIVELY, ON AN “AS IS, WHERE IS” BASIS.
FROM AND AFTER THE CLOSING, NONE OF THE FP PARTIES SHALL HAVE ANY RIGHTS OR REMEDIES FOR OR
WITH RESPECT TO ANY BREACH BY (I) INTEL OF ITS REPRESENTATIONS AND WARRANTIES SET FORTH IN
SECTION 3.1(f) OF THIS AGREEMENT AND (II) ST OF ITS REPRESENTATIONS AND WARRANTIES
SET FORTH IN SECTION 3.2(f) OF THIS AGREEMENT. NONE OF THE FP PARTIES SHALL HAVE
ANY RIGHTS OR REMEDIES FOR OR WITH RESPECT TO ANY BREACH OF ANY PROVISION OF THE INTEL ASSET
TRANSFER AGREEMENT OR THE ST ASSET CONTRIBUTION AGREEMENT (INCLUDING THE REPRESENTATIONS,
WARRANTIES AND INDEMNITIES SET FORTH IN SUCH AGREEMENTS); PROVIDED, HOWEVER, THAT NOTHING
HEREIN SHALL AFFECT THE RIGHTS AND REMEDIES OF ANY HOLDINGS INDEMNITEE FOR OR WITH RESPECT
TO ANY BREACH OF SUCH AGREEMENTS.

ARTICLE IV

COVENANTS

     4.1 Access to Information.

     (a) Between the Signing Date and the Closing, Intel agrees to provide the FP Parties
and ST and their authorized representatives (including each of their attorneys and
accountants and auditors) reasonable access to the offices and properties, employees
and auditors of the Intel Business and the Intel Books and Records, upon reasonable prior
notice, during normal business hours, under Intel’s supervision and at the expense of ST or
the FP Parties, as applicable, in order to conduct a review of the Intel Transferred Assets
and the Intel Business.

     (b) Between the Signing Date and the Closing, ST agrees to provide the FP Parties and
Intel and their authorized representatives (including each of their attorneys and
accountants and auditors) reasonable access to the offices and properties, employees and
auditors of the ST Business and the ST Books and Records, upon reasonable prior notice,
during normal business hours, under ST’s supervision and at the expense of Intel or the FP
Parties, as applicable, in order to conduct a review of the ST Transferred Assets and the ST
Business.

     (c) Each of the Parties will hold, and will cause its representatives to hold, in
confidence all documents and information furnished to it by or on behalf of another Party in
connection with the transactions contemplated by this Agreement and the other Transaction
Documents pursuant to the terms of the Confidentiality Agreements;

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provided, however, for
the sake of clarification, that Intel and ST shall be permitted to respond to direct
inquiries relating to the transaction from, and disclose the transaction immediately after
the execution hereof to Intel Business Employees and ST Business Employees, respectively,
and provided further that nothing herein shall prohibit any public announcement in
accordance with Section 4.5 (Press Releases) hereof.

     4.2 Exclusive Dealing. Prior to the earlier of the Closing or the termination of this Agreement, none of Intel,
ST, or the FP Parties will, nor will any of them permit any of their respective Affiliates,
officers, directors, agents or advisors to, directly or indirectly: (a) solicit, encourage,
initiate or participate in any negotiations or discussions with respect to any possible debt or
equity investment in the ST Business or the Intel Business or any possible sale, spin-off or other
transfer of all or any material portion of the ST Business or the Intel Business (other than
inventory sold in the ordinary course of business), whether by sale or transfer of assets, sale of
stock, reorganization, merger or otherwise, other than in connection with the transactions
contemplated by this Agreement and the other Transaction Documents including the Contemplated
Financing (each such transaction described in this clause (a), a “Prohibited Transaction”);
(b) provide or otherwise make available the corporate, legal or financial documents or information
relating to the Intel Business, the ST Business or Holdings or any of its Affiliates or any
analysis or summary thereof of Holdings or its Affiliates, or Intel or ST or any of their
respective Affiliates, to any Person who has expressed an interest in making a proposal to enter
into any Prohibited Transaction or who could reasonably be expected to consider doing so; (c)
assist or cooperate with any Person in making any proposal with respect to any Prohibited
Transaction; or (d) enter into any Contract with any Person providing for any Prohibited
Transaction. In the event that Intel, ST, any of the FP Parties or any of their respective
Affiliates, officers, directors, agents or advisors shall receive after the Signing Date any offer
or proposal with respect to any Prohibited Transaction, directly or indirectly, or any request for
disclosure or access to any documents or information described in clause (b) above, such Party
shall or shall cause its Affiliate, officer,
director, agent or advisor to immediately inform the other Parties of such offer or proposal,
the identity of the Person making such offer or proposal and the material terms thereof.

     4.3 Reasonable Efforts. Each of Intel, ST, and the FP Parties will cooperate and use commercially reasonable
efforts to take, or cause to be taken, all appropriate actions (and to make, or cause to be made,
all filings and notifications necessary, proper or advisable under Applicable Law) to consummate
and make effective the transactions contemplated by this Agreement and the Transaction Documents,
including commercially reasonable efforts to satisfy all closing conditions and to obtain, as
promptly as practicable, all licenses, permits, consents, approvals, authorizations, qualifications
and orders of Governmental Authorities and parties to contracts, as are necessary for the
consummation of the transactions contemplated by this Agreement and the Transaction Documents to
which it is a party.

     4.4 Certain Consents and Filings; Further Assurances
        . Each Party agrees to execute and deliver, or cause to be executed and delivered, such other
documents, certificates, agreements and other writings and to take, or cause to be taken, such
other commercially reasonable actions as may be necessary or desirable in order to (a) consummate
or implement expeditiously the transactions contemplated by this Agreement and the other
Transaction Documents and (b) obtain from any Governmental Authorities and other Persons all
consents,

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approvals, authorizations, qualifications and orders as are necessary for the
consummation of the transactions contemplated by this Agreement and the Transaction Documents and
to promptly make all necessary filings and notifications, and to supply as promptly as practicable
any additional information or documentary material that may be reasonably requested to comply with
the HSR Act or any applicable Competition Law. Subject to Applicable Laws, and as necessary to
address reasonable privilege or confidentiality concerns, prior to the making or submission of any
analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal by or on
behalf of any Party in connection with Proceedings under or relating to the HSR Act or any other
applicable Competition Law, each of Intel, ST, and the FP Parties will consult and cooperate with
one another, and consider in good faith the views of one another, in connection with any such
analyses, appearances, presentations, letters, white papers, memoranda, briefs, arguments, opinions
or proposals. In this regard but without limitation, each Party hereto shall promptly inform the
other of any material communication between such Party and the Federal Trade Commission, the
Antitrust Division of the United States Department of Justice, or any other federal, foreign or
state antitrust or competition Governmental Authority regarding the transactions contemplated by
this Agreement or the Transaction Documents. Nothing in this Agreement or any of the other
Transaction Documents, however, shall require or be construed to require any Party hereto, in order
to obtain the consent or successful termination of any review of any such Governmental Authority
regarding the transactions contemplated by this Agreement, to (x) sell or hold separate, or agree
to sell or hold separate, before or after the Closing Date, any assets or businesses or any
interests in any assets or businesses of such Party or any of its Affiliates (or to consent to any
sale, or agreement to sell, any assets or businesses, or any interests in any assets or
businesses), or to agree to any change in or restriction on the operation by such Party of any
assets or businesses or (y) enter into any agreement or be bound by any obligation concerning the
benefits to such Party of the
transactions contemplated by this Agreement. Each party shall have responsibility for its
respective filing fees associated with the filings under the HSR Act and any other filings required
under the Competition Laws of any other jurisdictions in connection with the transactions
contemplated by this Agreement or any of the other Transaction Documents.

     4.5 Press Releases. None of the Parties nor any of their respective Affiliates, officers, directors or
securityholders shall issue any press release or otherwise make any public statement with respect
to this Agreement, any of the Transaction Documents or any of the transactions contemplated hereby
or thereby without the prior written consent of each of the other Parties, except as may be
required by Applicable Law, or by the rules and regulations of, or pursuant to any agreement with,
the NASDAQ Stock Market, the New York Stock Exchange or any other U.S. or non-U.S. securities
exchange on which any securities of such Party are then listed or quoted. If any Party determines,
with the advice of counsel, that it is required by Applicable Law to publicly disclose this
Agreement, any of the Transaction Documents or any of the transactions contemplated by this
Agreement or any of the other Transaction Documents, it shall, a reasonable time before making any
public disclosure, consult with the other Parties regarding such disclosure and seek confidential
treatment for such information to be so disclosed, as may be reasonably requested by any other
Party. If any Party determines to make any public statements with respect to this Agreement, any
of the Transaction Documents or any of the transactions contemplated hereby or thereby in
accordance with the terms of this Agreement, then each other Party shall be entitled to make a
public statement following such public statement; provided it coordinates the timing thereof with
each other Party and obtains such other

14

 

Party’s prior written approval of the contents thereof, not
to be unreasonably withheld or delayed. The Parties agree to announce the execution of this
Agreement to the employees, customers, vendors and strategic partners of the Intel Business and the
ST Business at such time and in such form as is mutually agreed upon by all of the Parties. Any
disclosure of the existence or terms of this Agreement, any of the Transaction Documents or any of
the transactions contemplated hereby or thereby to any person from whom consent shall be required,
to whom notice shall be provided or from whom waiver shall be sought in order to comply with the
requirements of this Agreement or any of the other Transaction Documents shall be made at such time
and in such form and with such content as is mutually agreed upon by all of the Parties.

     4.6 Certain Deliveries and Notices. From the Signing Date through the Closing Date, each Party shall promptly inform in writing
the other Parties of (a) any event or occurrence that would reasonably be expected to have a
material adverse effect on its ability to perform its or their obligations under any of the
Transaction Documents, and (b) any breach that cannot or will not be cured by the time of the
Closing or failure to satisfy any condition or covenant contained in this Agreement or in any other
Transaction Document by such Party, if such failure cannot or will not be cured by the time of the
Closing.

     4.7 Non-Solicitation of Employees.

     (a) Prior to the Closing and until the earlier of the date that is two years following
the Closing Date or two years following termination of this Agreement, without the prior
written consent of Intel, ST shall not, nor shall it permit any of its Subsidiaries to,
directly or indirectly, recruit or solicit any employee of Intel or any of its Subsidiaries
identified on Schedule 4.7(a) to the Intel Master Agreement Disclosure Letter
(collectively, for purposes of this Agreement, the “Intel Restricted Employees”) to
leave his or her employment with Intel or such Subsidiary.

     (b) Prior to the Closing and until the earlier of the date that is two years following
the Closing Date or the date that is two years following termination of this Agreement,
without the prior written consent of ST, Intel shall not, nor shall it permit any of its
Subsidiaries to, directly or indirectly, recruit or solicit any employee of ST or any of its
Subsidiaries identified on Schedule 4.7(b) to the ST Master Agreement Disclosure
Letter (collectively, for purposes of this Agreement, the “ST Restricted Employees”)
to leave his or her employment with ST or any such Subsidiary.

     (c) Neither the placement of employment advertisements or other general solicitation
for employees not specifically targeted to any Restricted Employee by any means, including
through the use of hiring agencies or through employees of each Party who are unaware of the
prohibitions against the solicitation of the Restricted Employees shall be a recruitment or
solicitation prohibited by this Section 4.7; provided that any such hiring agencies
and employees are not instructed by persons who knew about the prohibition on the
solicitation of the Restricted Employees to solicit for hire Restricted Employees. If a
Party (or any Subsidiary thereof) inadvertently violates the prohibition against the
solicitation of Restricted Employees, such Party shall (or it shall cause its applicable
Subsidiary to), as soon as it is aware it has committed a violation of this

15

 

section, notify
the other Party who formerly employed such Restricted Employee and either withdraw any offer
to the solicited individual or ensure that such person, if hired, is restricted from working
on, consulting on, or having any knowledge with respect to matters which are designated by
the Party who formerly employed such employee in its reasonable discretion as competitively
sensitive matters, in which event such inadvertent action shall not be deemed to be a breach
of this Section 4.7 so long as there is no repetitive pattern of such actions.

     4.8 Tax Matters.

     (a) Each Party hereto shall cooperate as reasonably requested by any other Party and at
the requesting Party’s sole cost, liability and expense, to maximize the tax efficiency of
the transactions contemplated by this Agreement and the other Transaction Documents and the
structure of each of Intel’s (and/or its Affiliates), ST’s (and/or its Affiliates) and any
of the FP Parties’ investment in Holdings or any of its Affiliates, subject to the terms of
the Securityholders’ Agreement. Requests made pursuant to this Section 4.8(a) shall
not be deemed to be reasonable if they result in costs, liabilities and expense to any
non-requesting Party (other than in insignificant amounts) that are not determinable with
accuracy at the time of the request or that involve costs (other than in
insignificant amounts) that will be incurred by any non-requesting Party in years
following the year the first of such actions (or the first in a series of related actions)
is requested.

     (b) Upon the occurrence of a Consolidation, the successor to an entity that merges out
of existence or liquidates in connection with such Consolidation shall succeed to all of
such entity’s rights and obligations under the Transaction Documents, and shall execute such
joinders and other documents reasonably requested by the other Shareholders to evidence the
same.

     4.9 Operation of the Intel Business Prior to the Closing. Between the Signing Date and the Closing Date, except as contemplated by this Agreement or
any other Transaction Document or as set forth in Schedule 4.9 of the Intel Master
Agreement Disclosure Letter, or unless ST and the FP Parties shall otherwise agree in writing
(which consent shall not be unreasonably withheld or delayed), Intel shall, and shall cause its
Subsidiaries to, (x) operate the Intel Business in the ordinary course of business in all material
respects and (y) continue to make capital expenditures which are, in the aggregate, consistent in
all material respects with the Intel Business Capital Expenditures Plan. Between the Signing Date
and the Closing Date, except as otherwise agreed in this Agreement or any other Transaction
Document or as set forth in Schedule 4.9 of the Intel Master Agreement Disclosure Letter,
unless ST and the FP Parties shall otherwise consent in writing (which consent shall not be
unreasonably withheld or delayed), Intel shall, and shall cause its Subsidiaries to:

     (a) pay the material debts and Taxes of the Intel Business and the Intel Transferred
Entities in the ordinary course of business;

     (b) use commercially reasonable efforts to (i) maintain the tangible fixed assets
included in the Intel Transferred Assets as a whole in all material respects in at least as

16

 

good condition as they are being maintained on the Signing Date, subject to normal wear and
tear, (ii) maintain in effect all material Permits and Governmental Approvals of the Intel
Business, (iii) not terminate, other than for cause, nor materially decrease the
compensation of, the key executives of the Intel Business, and (iv) maintain satisfactory
relationships with the customers, partners, suppliers and others having material business
relationships with the Intel Business;

     (c) not sell, assign, or transfer any of the Intel Transferred Assets, or license any
of the Intel Transferred Intellectual Property, except, in each case, in the ordinary course
of business and except for the transfer of Intel Transferred Assets to Intel Transferred
Entities as contemplated or permitted hereby, and not permit any of the Intel Transferred
Assets to be subjected (whether by action or omission) to any Lien, other than the Permitted
Liens;

     (d) not sell, assign, or transfer any of the Intel Transferred Interests and not permit
any of the Intel Transferred Interests to be subjected to any Share Encumbrances;

     (e) not fail to pay or discharge when due any Liability of which the failure to pay or
discharge would cause any material damage or loss to the Intel Transferred Assets and the
Intel Transferred Entities, taken as a whole;

     (f) not waive or amend any material term of or terminate any material Intel Transferred
Contract or relinquish any material rights thereunder, other than in the ordinary course of
business;

     (g) not make any material change in its accounting principles, methods or practices
relating to the Intel Business, and maintain the Intel Books and Records in the usual,
regular and ordinary manner on a basis consistent with prior years, except, in either case,
for any change required by a change in GAAP, a change in the accounting practices of Intel
generally, or a change resulting from the preparation of the Intel Business Audited
Financial Statements;

     (h) not grant to any Intel Business Employee any increase in compensation or in
severance or termination pay, grant any severance or termination pay (or amend in any
material respect any existing arrangement for the foregoing), or enter into any employment
deferred compensation or similar agreement with any such employee, except as may be required
under Applicable Law, any termination policy of Intel (whether existing as of the Signing
Date or adopted hereafter) or any employment or termination agreement in effect on the
Signing Date or in the ordinary course of business, or establish, adopt or amend (except as
required by Applicable Law) any collective bargaining, bonus, profit-sharing, thrift,
pension, retirement, deferred compensation, compensation, stock option, restricted stock or
other benefit plan or arrangement covering any director, officer or employee of the Intel
Business, that is material in the aggregate to the Intel Business;

     (i) not enter into or renew (other than automatic renewal) any Intel Transferred
Contracts that exclusively relate to the Intel Business that provide for payment

17

 

obligations
(whether by Intel or any of its Subsidiaries or the counterparty thereto) that are material,
in the aggregate, to the Intel Business, except for those described the Intel Business
Capital Expenditures Plan;

     (j) not make any acquisition, directly or indirectly, of all or substantially all of
the assets of any business or equity interests in any Person or any business, whether by
merger, consolidation or otherwise, that relates to the Intel Business;

     (k) not incur any additional Intel Transferred Liabilities for capital expenditures
that are material, in the aggregate, to the Intel Business, except for those described in
the Intel Business Capital Expenditures Plan;

     (l) not make any loans or advances to or capital contributions or investments in, any
other Person with respect to the Intel Business that are material in the aggregate to the
Intel Business, other than in the ordinary course of business or as contemplated by the
Transaction Documents;

     (m) not agree to any exclusivity, non-competition or similar provision or covenant
restricting the Intel Business from competing in any line of business or with any Person or
in any location or engaging in any activity or business (including with respect to the
development, manufacture, marketing or distribution of their respective products or
services), or pursuant to which any benefit or right is required to be given or lost as a
result of so competing or engaging, the effect of which would be binding on Holdings or any
of its Affiliates after the Closing Date;

     (n) not settle, or make a binding offer to settle, any material Claim or Proceeding
relating to the Intel Business unless such settlement would not encumber any assets of
Holdings or any of its Affiliates, impose any obligation or other Liability on Holdings or
any of its Affiliates, impose any restriction that would apply to Holdings or any of its
Affiliates or the conduct of the Numonyx Business or include any acknowledgment of validity,
enforceability, infringement or Claim interpretation with regard to any of the Intellectual
Property relating to such Claim or Proceeding;

     (o) not engage in (i) any trade loading practices or any other promotional sales or
discount activity with any customers or distributors with any intent of accelerating to
prior fiscal quarters (including the current fiscal quarter) sales to the trade or otherwise
than would otherwise reasonably be expected to occur in subsequent fiscal quarters, or (ii)
any other promotional sales or discount activity, in each case, in a manner outside the
ordinary course of business, and not significantly inconsistent with past practices;

     (p) maintain sales incentive plans and programs and sales quotas or incentives for
Intel Products, in each case, in the ordinary course of business, and not significantly
inconsistent with past practices;

     (q) use commercially reasonable efforts to prevent any representation or warranty of
Intel hereunder or under the Intel Asset Transfer Agreement from being inaccurate in any
material respect at the Closing; provided, however, that this covenant

18

 

shall not be
satisfied solely by virtue of any amendment of any schedule to the Intel ATA Disclosure
Letter; and

     (r) not enter into any agreement to take any action that would violate in any material
respect any of the foregoing.

     For purposes of Sections 4.9(a)-(f), and (i), all references therein to “Intel
Transferred Assets,” “Intel Transferred Entities,” “Intel Transferred Interests,” “Intel
Transferred Intellectual Property,” and “Intel Transferred Contracts,” shall be deemed to mean all
applicable assets or properties owned by Intel or any of its Subsidiaries prior to the Closing
which would be included in the applicable section of the Intel ATA Disclosure Letter on the
Determination Date if such asset or property was owned by Intel or any of its Subsidiaries on the
Determination Date.

     4.10 Operation of the ST Business Prior to the Closing. Between the Signing Date and the Closing Date, except as contemplated by this
Agreement or any other Transaction Document or as set forth in Schedule 4.10 of the ST
Master Agreement Disclosure Letter, or unless Intel and the FP Parties shall otherwise agree in
writing (which consent shall not be unreasonably withheld or delayed), ST shall, and shall cause its
Subsidiaries to, (x) operate the ST Business in the ordinary course of business in all material
respects (y) continue to make capital expenditures which are, in the aggregate, consistent in all
material respects with the ST Business Capital Expenditures Plan. Between the Signing Date and the
Closing Date, except as otherwise agreed in this Agreement or any other Transaction Document or as
set forth in Schedule 4.10 of the ST Master Agreement Disclosure Letter, unless Intel and
the FP Parties shall otherwise consent in writing (which consent shall not be unreasonably withheld
or delayed), ST shall, and shall cause its Subsidiaries to:

     (a) pay the material debts and Taxes of the ST Business and the ST Transferred Entities
in the ordinary course of business;

     (b) use commercially reasonable efforts to (i) maintain the tangible fixed assets
included in the ST Transferred Assets as a whole in all material respects in at least as
good condition as they are being maintained on the Signing Date, subject to normal wear and
tear, (ii) maintain in effect all material Permits and Governmental Approvals of the ST
Business, (iii) not terminate, other than for cause, nor materially decrease the
compensation of, the key executives of the ST Business, and (iv) maintain satisfactory
relationships with the customers, partners, suppliers and others having material business
relationships with the ST Business;

     (c) not sell, assign, or transfer any of the ST Transferred Assets, or license any of
the ST Transferred Intellectual Property, except, in each case, in the ordinary course of
business and except for the transfer of ST Transferred Assets to ST Transferred Entities as
contemplated or permitted hereby, and not permit any of the ST Transferred Assets to be
subjected (whether by action or omission) to any Lien, other than the Permitted Liens;

     (d) not sell, assign, or transfer any of the ST Transferred Interests and not permit
any of the ST Transferred Interests to be subjected to any Share Encumbrances;

19

 

     (e) not fail to pay or discharge when due any Liability of which the failure to pay or
discharge would cause any material damage or loss to the ST Transferred Assets and the ST
Transferred Entities, taken as a whole;

     (f) not waive or amend any material term of or terminate any material ST Transferred
Contract or relinquish any material rights thereunder, other than in the ordinary course of
business;

     (g) not make any material change in its accounting principles, methods or practices
relating to the ST Business, and maintain the ST Books and Records in the usual, regular and
ordinary manner on a basis consistent with prior years, except, in either case, for any
change required by a change in GAAP, a change in the accounting practices of ST generally,
or a change resulting from the preparation of the ST Business Audited Financial Statements;

     (h) not grant to any ST Business Employee any increase in compensation or in severance
or termination pay, grant any severance or termination pay (or amend in any material respect
any existing arrangement for the foregoing), or enter into any
employment deferred compensation or similar agreement with any such employee, except as
may be required under Applicable Law, any termination policy of ST (whether existing as of
the Signing Date or adopted hereafter) or any employment or termination agreement in effect
on the Signing Date or in the ordinary course of business, or establish, adopt or amend
(except as required by Applicable Law) any collective bargaining, bonus, profit-sharing,
thrift, pension, retirement, deferred compensation, compensation, stock option, restricted
stock or other benefit plan or arrangement covering any director, officer or employee of the
ST Business, that is material in the aggregate to the ST Business;

     (i) not enter into or renew (other than automatic renewal) any ST Transferred Contracts
that exclusively relate to the ST Business that provides for payment obligations (whether by
ST or any of its Subsidiaries or the counterparty thereto) that are material, in the
aggregate, to the ST Business, except for those described the ST Business Capital
Expenditures Plan;

     (j) not make any acquisition, directly or indirectly, of all or substantially all of
the assets of any business or equity interests in any Person or business, whether by merger,
consolidation or otherwise, that relates to the ST Business;

     (k) not incur any additional ST Transferred Liabilities for capital expenditures that
are material, in the aggregate, to the ST Business, except for those described in the ST
Business Capital Expenditures Plan;

     (l) not make any loans or advances to or capital contributions or investments in, any
other Person with respect to the ST Business that are material in the aggregate to the ST
Business, other than in the ordinary course of business or as contemplated by the
Transaction Documents;

20

 

     (m) not agree to any exclusivity, non-competition or similar provision or covenant
restricting the ST Business from competing in any line of business or with any Person or in
any location or engaging in any activity or business (including with respect to the
development, manufacture, marketing or distribution of their respective products or
services), or pursuant to which any benefit or right is required to be given or lost as a
result of so competing or engaging, the effect of which would be binding on Holdings or any
of its Affiliates after the Closing Date;

     (n) not settle, or make any binding offer to settle, any material Claim or Proceeding
relating to the ST Business unless such settlement would not encumber any assets of Holdings
or any of its Affiliates, impose any obligation or other Liability on Holdings or any of its
Affiliates, impose any restriction that would apply to Holdings or any of its Affiliates or
the conduct of the Numonyx Business or include any acknowledgment of validity,
enforceability, infringement, or Claim interpretation with regard to any of the Intellectual
Property relating to such Claim or Proceeding;

     (o) not engage in (i) any trade loading practices or any other promotional sales or
discount activity with any customers or distributors with any intent of accelerating to
prior fiscal quarters (including the current fiscal quarter) sales to the trade or
otherwise than would otherwise reasonably be expected to occur in subsequent fiscal
quarters, (ii) any other promotional sales or discount activity, (iii) any practice which
would have the effect of accelerating to the period prior to the Closing collections of
receivables of any ST Transferred Entity that would otherwise be reasonably expected (based
on past practice) to be made after the Closing, or (iv) any practice which would have the
effect of postponing to the period after the Closing payments by any ST Transferred Entity
that would otherwise be reasonably expected (based on past practice) to be made in the
period prior to the Closing, in each case, in a manner outside the ordinary course of
business, and not significantly inconsistent with past practices;

     (p) maintain sales incentive plans and programs and sales quotas or incentives for ST
Products, in each case, in the ordinary course of business, and not significantly
inconsistent with past practices;

     (q) use commercially reasonable efforts to prevent any representation or warranty of ST
hereunder or under the ST Asset Contribution Agreement from being inaccurate in any material
respect at the Closing; provided, however, that this covenant shall not be satisfied solely
by virtue of any amendment of any schedule to the ST ACA Disclosure Letter; and

     (r) not enter into any agreement to take any action that would violate in any material
respect any of the foregoing.

     For purposes of Sections 4.10(a)-(f), and (i), all references therein to “ST
Transferred Assets,” “ST Transferred Entities, “ST Transferred Interests,” “ST Transferred
Intellectual Property,” and “ST Transferred Contracts,” shall be deemed to mean all applicable
assets or properties owned by ST or any of its Subsidiaries prior to the Closing which would be
included

21

 

in the applicable section of the ST ACA Disclosure Letter on the Determination Date if
such asset or property was owned by ST or any of its Subsidiaries on the Determination Date.

     4.11 Employee Matters.

     (a) Employment Offers. Subject to Applicable Law, prior to the Closing, or
such other period of time after the Signing Date as may be reasonably agreed by Intel, ST
and FP, Holdings or any of its Subsidiaries may make offers of employment to Intel Business
Employees (other than any Intel Excluded Employees) and ST Business Employees (other than
any ST Excluded Employees), to be effective as of the Closing or on such later date
specified in the offer as may reasonably be agreed by Holdings, Intel, ST and FP; provided
that to the extent permitted by Applicable Law, the offers to any inactive Intel Business
Employee or ST Business Employee shall be effective on the date such Business Employee
returns to active employment or such earlier date as may be reasonably requested by Holdings
or one of its Subsidiaries and agreed by Intel (with respect to Intel Business Employees) or
ST (with respect to ST Business Employees). Notwithstanding the foregoing, ST Designated
Employees (to the extent employed by ST
immediately prior to the Closing) shall automatically transfer to Holdings or one of
its Subsidiaries on the Closing (or if such ST Designated Employee is inactive, at such time
as specified by Applicable Law). Schedule 4.11(a) of the ST Master Agreement
Disclosure Letter sets forth the ST Designated Employees. Notwithstanding anything in this
Agreement to the contrary, in no event shall the acceptance of employment by any Intel
Business Employee or ST Business Employee be a condition to the Closing. The offers of
employment for each such Intel Business Employee (other than Intel Excluded Employees) and
ST Business Employee (other than ST Excluded Employees) will (i) be subject to requirements
of Applicable Law for the jurisdiction in which the Intel Business Employee or ST Business
Employee is located and include employment terms reasonably determined by Holdings or one of
its Subsidiaries, as the case may be, and (ii) supersede, to the extent permitted by
Applicable Law any prior agreements regarding the terms and conditions of employment with
such Intel Business Employee or ST Business Employee as in effect prior to the Closing Date;
provided, however, that in no event shall any prior agreement with respect to Intellectual
Property be superseded, except that unless otherwise agreed by Intel and Numonyx or ST and
Holdings, as the case may be, all Intel Transferred Employees and ST Transferred Employees
shall be permitted to disclose to Holdings or any of its Subsidiaries all information in
their possession or otherwise known by them which is directly related to the Intel Business
or ST Business, as applicable, and not related to Patents or Confidential Information of
Intel or ST, respectively, in each case, to the extent not an Intel Transferred Asset or ST
Transferred Asset. As of the Closing Date, the Intel Transferred Entities shall employ only
Intel Transferred Employees, and the ST Transferred Entities shall employ only ST
Transferred Employees.

     (b) Excluded Employees; Allocated Positions. Prior to the Closing, the Parties
shall cooperate in good faith, and in accordance with the provisions set forth in
Schedule 4.11(b) of each of the Intel Master Agreement Disclosure Schedule and the
ST Master Agreement Disclosure Schedule, to (i) identify those Intel Business Employees to
whom an employment offer shall not be made pursuant to Section 4.11(a)
(collectively, the

22

 

“Intel Excluded Employees”) and those ST Business Employees to
whom an employment offer shall not be made pursuant to Section 4.11(a)
(collectively, the “ST Excluded Employees”), (ii) identify such other employees of
Intel and ST who shall be offered Numonyx Allocated Positions and (iii) avoid any transfer
of employees to Holdings or any of its Subsidiaries in excess of the number of employees
reasonably necessary to operate the Numonyx Business at the Closing.

     (c) Executive Agreements. Intel, ST and the FP Parties agree to recommend to
Holdings that, prior to the Closing, Holdings and its Subsidiaries should (i) negotiate in
good faith offers of employment with the individuals identified in Schedule 4.11(c)
of each of the Intel Master Agreement Disclosure Letter and ST Master Agreement Disclosure
Letter for the positions identified on such Schedule; and (ii) adopt and execute employment
and severance agreements with such individuals in substantially the forms attached to
Schedule 4.11(c) to each of the Master Agreement Disclosure Letters, to be effective
on the later of (i) the Closing Date as of the Effective Time, or (ii) such later date as
may reasonably be agreed by Holdings, Intel, ST, and the FP Parties. 

     (d) Employee Information and Access. Each of Intel and ST agrees to provide to
each other and to the FP Parties and Holdings and its Subsidiaries certain general
information concerning their respective compensation and benefit programs and specific
information relating to individual Business Employees, subject to Applicable Law and, to the
extent required, any such employee’s proper consent, solely for the purpose of Numonyx or
its Subsidiaries formulating offers of employment to such employees; provided, however, that
neither Intel nor ST will make personnel records available for inspection or copying except
with respect to Intel Transferred Employees who are employed by an Intel Transferred Entity
as of the Closing Date and ST Transferred Employees who are employed by an ST Transferred
Entity as of the Closing Date.

     (e) Equity Plan. The Parties shall cause Holdings to implement the Equity Plan
at or prior to the Closing.

     4.12 Additions to and Modifications of Schedules.

     (a) Unless otherwise agreed by the Parties, if on any date on or prior to the date two
Business Days prior to the Closing Date (the “Determination Date”), any of the
information provided by Intel in any of the Specified Intel Schedules or by ST in any of the
Specified ST Schedules, as the case may be, is not true, accurate and complete in all
material respects on and as of such date, the Party that provided such schedule shall be
entitled to amend such schedule to make additions to or modifications of such schedule
necessary to make the information set forth therein true, accurate and complete in all
material respects and shall promptly deliver such amended schedule to the other Party, and
such schedule shall be deemed amended to reflect such additions and modifications for all
purposes. If any of the Specified Intel Representations made by Intel, the Specified ST
Representations made by ST, or the Specified Holdings Representations made by Holdings or
Numonyx, as the case may be, would not be true, accurate and complete in all material
respects on and as of the Closing Date unless additional information with respect thereto
were set forth in a new schedule not previously included

23

 

in the applicable Disclosure
Letter, such Party shall be entitled to amend such Disclosure Letter to add such new
schedule, and shall promptly deliver such new schedule to the other Party, which schedule
shall thereupon be deemed to be a part of such Disclosure Letter for all purposes.

     (b) On the Determination Date, each of Intel and ST may, but shall not be obligated to,
(i) amend and deliver to Holdings and Numonyx any schedule to the Intel ATA Disclosure
Letter or ST ACA Disclosure Letter, as applicable, upon which any Intel Transferred Assets
or ST Transferred Assets described in Section 2.1 (and to the extent of such
amendments, any Liabilities associated with such Intel Transferred Assets or ST Transferred
Assets that would be Intel Transferred Liabilities or ST Transferred Liabilities under
Section 2.3 of the Intel Asset Transfer Agreement or ST Asset Contribution
Agreement, as the case may be, including Liabilities under any Intel Transferred Contract or
ST Transferred Contract included in such amendment, shall be Intel Transferred Liabilities
or ST Transferred Liabilities, as applicable) of each of the
Intel Asset Transfer Agreement and the ST Asset Contribution Agreement are listed or
identified, and (ii) deliver any such new schedule to the Intel ATA Disclosure Letter or ST
ACA Disclosure Letter, as applicable, upon which any Intel Transferred Assets or ST
Transferred Assets described in Section 2.1 (and to the extent of such amendments,
any Liabilities associated with such Intel Transferred Assets or ST Transferred Assets that
would be Intel Transferred Liabilities or ST Transferred Liabilities under Section
2.3 of the Intel Asset Transfer Agreement or ST Asset Contribution Agreement, as the
case may be, including Liabilities under any Intel Transferred Contract or ST Transferred
Contract included in such amendment, shall be Intel Transferred Liabilities or ST
Transferred Liabilities, as applicable) of each of the Intel Asset Transfer Agreement and
the ST Asset Contribution Agreement are listed or identified, if Intel or ST, as the case
may be, in its sole discretion, determines that such amendments will provide greater
assurances that the representations made by Intel in Section 3.17 (Intel Transferred
Assets) of the Intel Asset Transfer Agreement and by ST in Section 3.17 (ST
Transferred Assets) of the ST Asset Contribution Agreement, respectively, are accurate on
the Closing Date, or in order that each such schedule shall more accurately reflect the
removal of any assets or Liabilities on any such schedule which have, in the ordinary course
of the Intel Business or the ST Business, as the case may be, ceased to exist or which have
been disposed of or extinguished by the Intel Business or the ST Business in accordance with
Section 4.9 and Section 4.10, respectively, as applicable, in the ordinary
course of business between the Signing Date (or, if such schedule was prepared as of an
earlier date, such earlier date) and the Determination Date.

     (c) On or within 30 days after the Closing Date, each of Intel and ST may (i) further
amend and deliver to Holdings and Numonyx any schedule to the Intel ATA Disclosure Letter or
ST ACA Disclosure Letter, as applicable, upon which any Intel Transferred Assets or ST
Transferred Assets described in Section 2.1 (and to the extent of such amendments,
any Liabilities associated with such Intel Transferred Assets or ST Transferred Assets that
would be Intel Transferred Liabilities or ST Transferred Liabilities under Section
2.3 of the Intel Asset Transfer Agreement or ST Asset Contribution Agreement, as the
case may be, including Liabilities under any Intel Transferred Contract or ST Transferred
Contract included in such amendment, shall be

24

 

Intel Transferred Liabilities or ST
Transferred Liabilities, as applicable) of each of the Intel Asset Transfer Agreement and
the ST Asset Contribution Agreement are listed or identified, and (ii) deliver any such new
schedule to the Intel ATA Disclosure Letter or ST ACA Disclosure Letter, as applicable, upon
which any Intel Transferred Assets or ST Transferred Assets described in Section 2.1
(and to the extent of such amendments, any Liabilities associated with such Intel
Transferred Assets or ST Transferred Assets that would be Intel Transferred Liabilities or
ST Transferred Liabilities under Section 2.3 of the Intel Asset Transition Agreement
or ST Asset Contribution Agreement, as the case may be, including Liabilities under any
Intel Transferred Contract or ST Transferred Contract included in such amendment, shall be
Intel Transferred Liabilities or ST Transferred Liabilities, as applicable) of each of the
Intel Asset Transfer Agreement and the ST Asset Contribution Agreement are listed or
identified, if Intel or ST, as the case may be, in its sole discretion, determines that such
amendments will provide greater assurances that the representations made by Intel in
Section 3.17 (Intel Transferred Assets) of the Intel Asset Transfer Agreement and by
ST in Section 3.17 (ST Transferred
Assets) of the ST Asset Contribution Agreement, respectively, are accurate as of the
Closing Date, or in order that, each such schedule shall more accurately reflect the removal
of any assets or Liabilities on any such schedule which have, in the ordinary course of the
Intel Business or the ST Business, as the case may be, ceased to exist or which have been
disposed of or extinguished by the Intel Business or the ST Business, as applicable, in the
ordinary course of business between the Determination Date (or, if such schedule was
prepared as of an earlier date, such earlier date) and the Closing Date in accordance with
Section 4.9 and Section 4.10, respectively.

     (d) For any additions or modifications made by a Party (i) to correct inaccuracies of
the Specified Intel Representations or Specified ST Representations, as the case may be
(including those representations and warranties which are expressed with respect to a date
prior to the Signing Date) for facts, events or circumstances occurring prior to or existing
on and as of the Signing Date, and, in the case of a representation or warranty made to the
Knowledge of a Party, of which such Party had Knowledge on and as of the Signing Date, (ii)
to reflect any facts, events or circumstances which resulted from a breach of Section
4.9 or Section 4.10 hereof, as applicable, or (iii) to update, correct or
otherwise modify any of the representations set forth in Section 3.2 (Authorization
and Enforceability), Section 3.4 (Non-contravention), Section 3.7
(Litigation), Section 3.9 (Compliance with Applicable Laws), Section 3.10
(Tax Matters), Section 3.11 (Intellectual Property), Section 3.13 (Financial
Information), Section 3.14 (Absence of Certain Changes), Section 3.17 (Intel
Transferred Assets or ST Transferred Assets, as applicable), Section 3.20
(Inventories), Section 3.21 (Advisory Fees), Section 3.22 (Transferred
Entities and Transferred Interests) and Section 3.23 (Investment Representations) of
the Intel Asset Transfer Agreement or ST Asset Contribution Agreement, then in each such
case, Holdings and its Subsidiaries shall be entitled to indemnification therefor pursuant
to, and subject to the limitations set forth in, Article VI of the Intel Asset
Transfer Agreement or ST Asset Contribution Agreement, as applicable, to the same extent as
if such additions and modifications had not been made.

     (e) Notwithstanding anything in this Agreement to the contrary, any addition or
modification to the Specified Intel Schedules and/or the Specified ST Schedules shall be

25

 

disregarded for purposes of determining whether (i) the conditions set forth in Section
5.1(a) (Performance by ST) shall have been satisfied in respect of the representations
and warranties set forth in Section 3.14(i) (Absence of Certain Changes) of the ST
Asset Contribution Agreement, (ii) the conditions set forth in Section 5.2(a)
(Performance by Intel) shall have been satisfied in respect of the representations and
warranties set forth in Section 3.14(i) (Absence of Certain Changes) of the Intel
Asset Transfer Agreement, and (iii) the conditions set forth in Section 5.3(a)
(Performance by Intel) and Section 5.3(b) (Performance by ST) shall have been
satisfied in respect of the representations and warranties set forth in Section
3.14(i) of the ST Asset Contribution Agreement or Section 3.14(i) of the Intel
Asset Transfer Agreement.

     (f) Other than as set forth in Section 4.12(a), (b), (c), and
(d) without the consent of the other Party or Parties, as applicable, no Party may
make any changes, supplements, amendments or modifications to any Disclosure Letter with
respect to any fact, event or circumstance occurring after the Signing Date.

     4.13 Third Party Appraisal and Allocation; Dutch Auditors.

     (a) As soon as practicable but no later than 20 days following the Signing Date, ST
shall identify to Intel three “internationally-recognized” firms, at least two of which are
“Big 4” firms reasonably believed not to have a conflict of interest; and (b) as soon as
reasonably practicable, but no later than 10 days after the receipt of the names, Intel, in
its sole discretion, shall select one of the firms (the “Third Party Appraisal
Firm”) for each of Intel and ST to retain to perform the Third Party Appraisals.

     (b) Intel and ST shall each select an office of the Third Party Appraisal Firm that
will jointly: (i) value Holdings’ and its Subsidiaries’ net assets; and (ii) allocate the
value of Holdings’ and its Subsidiaries’ net assets to Holdings’ individual assets and
liabilities, in accordance with GAAP, which allocation shall become Holdings’ opening
consolidated balance sheet.

     (c) Each Party agrees to pursue and timely obtain, or to cause Holdings or its
Affiliates to pursue and timely obtain, such auditor’s certificates pursuant to article
2.204b and 2.204c (as applicable) of the Dutch Civil Code as are required to give effect to
the transactions contemplated in this Agreement and the other Transaction Documents.

     4.14 Notices of Certain Intel Events. Intel shall promptly notify ST and the FP Parties of:

     (a) any notice or other communication from any Person alleging the consent of such
Person is or may be required in connection with the transactions contemplated by this
Agreement or the Intel Asset Transfer Agreement to the extent such consent would have been
required to have been disclosed on Schedule 3.8(b) of the Intel ATA Disclosure
Letter;

     (b) any notice or other communication from any Governmental Authority regarding any
material Governmental Approval in connection with the transactions contemplated by this
Agreement;

26

 

     (c) any Claims, investigations or Proceedings commenced or, to its Knowledge,
threatened against, relating to or involving or otherwise affecting Intel or the Intel
Business that, if pending on the Signing Date, would have been required to have been
disclosed pursuant to Section 3.7 (Litigation) of the Intel Asset Transfer Agreement
or that challenge or in any manner seek to prohibit the transactions contemplated hereby or
the consummation of the Closing; and

     (d) any damage, destruction or other casualty loss that is material to the Intel
Transferred Assets, taken as a whole;

     provided, however, that the delivery of any notice pursuant to this Section 4.14 shall
not limit or otherwise affect the remedies available to Holdings or Numonyx under the Intel Asset
Transfer Agreement.

     4.15 Notices of Certain ST Events. ST shall promptly notify Intel and the FP Parties of:

     (a) any notice or other communication from any Person alleging the consent of such
Person is or may be required in connection with the transactions contemplated by this
Agreement or the ST Asset Contribution Agreement to the extent such consent would have been
required to have been disclosed on Schedule 3.8(b) of the ST ACA Disclosure Letter;

     (b) any notice or other communication from any Governmental Authority regarding any
material Governmental Approval in connection with the transactions contemplated by this
Agreement;

     (c) any Claims, investigations or Proceedings commenced or, to its Knowledge,
threatened against, relating to or involving or otherwise affecting ST or the ST Business
that, if pending on the Signing Date, would have been required to have been disclosed
pursuant to Section 3.7 (Litigation) of the ST Asset Contribution Agreement or that
challenge the consummation of the transactions contemplated hereby or thereby;

     (d) any damage, destruction or other casualty loss that is material to the ST
Transferred Assets, taken as a whole;

     provided, however, that the delivery of any notice pursuant to this Section 4.15 shall
not limit or otherwise affect the remedies available to Holdings or Numonyx under the ST Asset
Contribution Agreement.

27

 

     4.16 Holdings and Numonyx Formation and Preparation. As soon as reasonably practicable following the expiration or termination of the waiting
period (and any extension thereof) applicable to the consummation of the transactions contemplated
hereby under the HSR Act and any other applicable similar merger notification laws or regulations
of foreign Governmental Authorities, the Parties hereto shall take any and all actions necessary in
order to incorporate Holdings as a private company with limited liability organized under the laws
of The Netherlands and prepare Holdings and Numonyx to commence their respective operations
immediately following the Closing, including to:

     (a) cause a civil law notary (i) to execute a deed of incorporation in a form
reasonably agreed by the Parties (the “Holdings Deed of Incorporation”) in which the
Parties each shall be named as joint incorporators of Holdings, (ii) to register Holdings
with the Dutch Trade Register and (iii) to execute deed(s) of issuance of shares in
Holdings’ capital, which shall reflect the shareholdings of the Parties in Holdings in the
following manner: ST 48.58%, Intel 45.10% and, FP, in the aggregate, 6.32%, and (iv) take
all other actions reasonably necessary in connection therewith;

     (b) provide the initial capitalization to Holdings as provided in the Holdings Deed of
Incorporation, which capitalization shall be at least equal to the minimum capitalization
provided by the laws of The Netherlands, in the respective percentages as provided in
subsection (a) above;

     (c) cause a civil law notary (i) to execute a Numonyx deed of incorporation in a form
reasonably agreed by the Parties (the “Numonyx Deed of Incorporation”) in which a
nominee (which shall be Freeland Corporate Advisors NV) of the Parties shall be named as
incorporator of Numonyx, (ii) to register Numonyx with the Dutch Trade Register, (iii) take
receipt of a fully executed deed of transfer of all shares of Numonyx owned by such nominee
to Holdings, (iv) register the transfer of the shares from the nominee to Holdings with the
Dutch Trade Register and in share registry of Numonyx and (v) take all other actions
reasonably necessary in connection therewith;

     (d) arrange for the nominee to provide the initial capitalization to Numonyx as
provided in the Numonyx Deed of Incorporation, which capitalization shall be at least equal
to the minimum capitalization provided by the laws of The Netherlands, and for payment by
Holdings to the nominee in exchange for the transfer of shares of Numonyx from such nominee
to Holdings;

     (e) establish upon incorporation of Numonyx and transfer of shares to Holdings, the
Management Board of Numonyx which shall, prior to the Closing, have a sole Managing Director
who shall be Holdings;

     (f) cause Holdings to purchase and maintain directors and officers insurance for
Holdings and its Subsidiaries as required by Section 6.9 of the Securityholders’
Agreement;

     (g) establish upon incorporation of Holdings the Management Board of Holdings which
shall, prior to the Closing, have a sole Managing Director, who shall be

28

 

FP Co. or such
other Person designated by the Parties; provided that neither FP Co. nor such other Person
designed by the Parties shall, in its capacity as the Managing Director of Holdings (which
in turn shall be managing director of Numonyx), cause Holdings or Numonyx to take any action
or execute any agreement or document that is not contemplated by this Agreement unless each
of Intel and ST, and, if such other Person designated by the Parties is Managing Director,
FP Co., shall consent thereto in writing, and in no event shall Holdings or Numonyx conduct
operations or engage in the conduct of any business prior to the Closing except as
contemplated herein; provided, further, that each of Intel and ST shall advance 50% of all
costs or expenses incurred by or on behalf of the Managing Director on behalf of or for the
benefit of Holdings in the performance of the activities set forth in this Section
4.16 prior to the Closing, and immediately after the Closing, Holdings shall reimburse
Intel and ST for all amounts so advanced; provided, further that prior to the Closing, to
the maximum extent permitted by Applicable Law, the Managing Director of Holdings shall not
be personally liable for any obligations of Holdings and ST and Intel shall each indemnify
the Managing Director and (if applicable) its directors, officers, employees and agents,
solely in respect of actions in its capacity as sole Managing Director (the “Indemnified
Persons”) against 50% of all
Losses resulting from or arising out of, and shall hold the Indemnified Persons
harmless from, any action taken or any failure to take any action at or prior to the
Closing; provided, however, that no indemnification shall be provided to any Indemnified
Person for a Loss if such Loss resulted primarily from any action not permitted by this
Agreement or approved by Intel and ST and, if such other Person designated by the Parties is
Managing Director, FP or resulted primarily from an act of fraud, dishonesty or other
willful misconduct by an Indemnified Person; provided, further, that to the extent permitted
by Applicable Law, 50% of all expenses (including legal fees) actually and reasonably
incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by each of ST and Intel prior to the final disposition
of such claim upon receipt by ST and Intel of an undertaking by or on behalf of an
Indemnified Person to repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified therefor pursuant to this Section 4.16(g);

     (h) FP Co. or such other Person designated by the Parties, as the case may be, shall,
in its capacity as Managing Director of Holdings (which in turn shall be managing director
of Numonyx), cause Holdings or Numonyx, respectively, to take all actions required by this
Agreement to be taken by Holdings or Numonyx, respectively, prior to the Closing and any
other such actions as are reasonably necessary to consummate the transactions contemplated
by this Agreement and the other Transaction Documents;

     (i) vote at a general meeting of shareholders of Holdings the shares of which such
Party is the registered holder or for which such Party shall otherwise have the ability to
control or direct the voting thereof at any such general meeting of shareholders, or execute
a written resolution with respect to such shares, in favor of any resolution required by or
necessary pursuant to the Transaction Documents to effect the Closing; provided, that the
foregoing shall not require any Party to waive any right that such Party has under any
Transaction Document, or to consent (or withhold its consent) to any waiver requested by any
party under any Transaction Document;

29

 

     (j) FP Co. or such other Person designated by the Parties, as the case may be, shall,
in its capacity as Managing Director, adopt any resolution required or necessary to be
adopted by Holdings or Numonyx to effect the Closing, to the extent required by Applicable
Law;

     (k) cause Holdings or Numonyx to organize such Subsidiaries as reasonably requested by
the Parties;

     (l) cause Holdings or Numonyx to open bank accounts as reasonably requested by any
Party in order to facilitate the actions set forth herein and to carry out the transactions
contemplated by the Transaction Documents;

     (m) cause Holdings to execute and deliver the Intel Option to Intel or a Subsidiary of
Intel prior to the Closing Date;

     (n) cause Holdings and its Affiliates to execute each Transaction Document to which
Holdings or its Affiliates, respectively, is to become a party as well as any other
instruments, certificates, authorizations and other documents or papers required to be
executed and delivered by Holdings or its Affiliates, respectively, on or before the
Closing;

     (o) cause Holdings to execute any waivers or consents, including in connection with the
waiver of closing conditions as set forth in the Transaction Documents, (i) with respect to
any obligation or duty of ST, if Intel and FP Co. each consents in writing to Holdings
granting such waiver or consent, (ii) with respect to any obligation or duty of Intel, if ST
and FP Co. each consents in writing to Holdings granting such waiver or consent, and (iii)
with respect to any obligation or duty of the FP Parties, if Intel and ST each consents in
writing to Holdings granting such waiver or consent; provided, further, that Holdings shall
refrain from executing or otherwise granting any waiver or consent without the prior written
consent of the Parties as set forth in the preceding clause; and

     (p) cause Holdings and its Affiliates, as applicable, to take all actions set forth in
Section 2.10 (Deliveries by Holdings) of the Intel Asset Transfer Agreement and
Section 2.10 (Deliveries by Holdings) of the ST Asset Contribution Agreement;

     provided that, in addition to the provisions set forth above in this Section 4.16, the
Parties shall use reasonable efforts to prevent Holdings and its Affiliates from taking any actions
not set forth above without the prior consent of each of the Parties, which consent shall not be
unreasonably withheld or delayed.

     4.17 Holdings and Numonyx Tax Elections. The Parties agree that, unless Intel otherwise directs, (a) the organizational documents of
Holdings shall authorize Holdings to elect, and Holdings will elect, effective upon its formation,
to be treated as a partnership for U.S. income tax purposes, and (b) Numonyx will elect, effective
upon its formation, to be treated as a disregarded entity for U.S. income tax purposes, and the
Parties shall cooperate as reasonably requested by Intel (including by executing any such election)
in order to effectuate such elections. The Parties acknowledge that any such election shall be
filed on Internal Revenue Service Form 8832 (or any successor form) no later than 75 days after the
formation under Dutch

30

 

law of Holdings or Numonyx, as the case may be. The Parties further agree
that they will notify Intel prior to the direct or indirect acquisition or formation by Holdings or
its Subsidiaries of any entity that will become a Subsidiary of Holdings, and shall cooperate as
Intel may request to cause any such entity to be an “eligible entity” as defined in U.S. Treasury
Regulation Section 301.7701-3(a) and to elect such tax status with respect to such entity (either
as a disregarded entity, partnership or corporation) for U.S. federal income tax purposes as Intel
may request, effective as of the date of formation of such entity unless otherwise requested by
Intel.

     4.18 Holdings Closing Reorganization. On or immediately prior to the Closing Date, the Parties shall cause Holdings to take or
cause Numonyx to take the actions contemplated by Schedule 4.18 to each Master Agreement
Disclosure Letter.

     4.19 Cooperation with Financing. Each Party shall, and shall cause its Subsidiaries, and cause Holdings and its
Subsidiaries, and their respective appropriate representatives to, provide, reasonable cooperation
in connection with the arrangement of the Contemplated Financing and the Contributor Financing as
may be reasonably requested by any other Party, including, using reasonable efforts to: (a) provide
due diligence materials to the Numonyx Lenders or other potential financing sources for the
Contemplated Financing or Contributor Financing; (b) assist Holdings and its Subsidiaries and their
financing sources in the preparation, if applicable, of an offering document for such Contemplated
Financing and materials for rating agency presentations; (c) cooperate with the marketing efforts
of Holdings and its Subsidiaries and their financing sources for such Contemplated Financing; (d)
provide such other documents as may be reasonably requested by Holdings and its Subsidiaries; and
(e) facilitate the pledge of collateral owned by Holdings or its Subsidiaries to secure the
Contemplated Financing at and after the Effective Time.

     4.20 Environmental Consultants. As promptly as practicable (but in no event later than 40 days) after the Signing Date, (a)
Intel shall select and engage the Environmental Consultant to conduct the ST Environmental Reports
and (b) ST shall select and engage the Environmental Consultant to conduct the Intel Environmental
Reports.

     4.21 Hynix JV Matters. As soon as practicable following the Signing Date, ST shall agree to maintain such minimum
ownership interest in Holdings for such minimum period of time (not to exceed two years) as Hynix
may reasonably require in order for Numonyx to be a “Designated Third Party” for purposes of the
agreements set forth in both (a) that certain letter agreement between Hynix and ST dated March 23,
2007 amending the Joint Venture Agreement, dated as of November 16, 2004 (as supplemented and
amended by letter agreements dated April 8, 2005, April 19, 2005, April 27, 2005 and June 10, 2005)
of the Hynix JV and (b) the Agreement on the Amendment of the Articles of Association of the Hynix
JV between Hynix and ST dated March 23, 2007.

     4.22 Facility Transfer Term Sheets.

     (a) Intel shall, and shall cause its Subsidiaries to, effect the transfer of the Intel
Transferred Real Property at the Closing in accordance with the terms of the Intel Facility
Transfer Term Sheets attached to Schedule 4.22(a) of the Intel Master Agreement
Disclosure Letter, subject to the terms and conditions thereof.

31

 

     (b) ST shall, and shall cause its Subsidiaries to, effect the transfer of the ST
Transferred Real Property at the Closing in accordance with the terms of the ST Facility
Transfer Term Sheets attached to Schedule 4.22(b) of the ST Master Agreement
Disclosure Letter, subject to the terms and conditions thereof.

     4.23 Governmental Consents. From the Signing Date until the earlier of the Closing Date or the date upon which this
Agreement is terminated in accordance with Section 6.1(c), Intel shall, and shall cause its
Subsidiaries to, use commercially reasonable efforts to take or cause to be taken all actions, and
do or cause to be done all things necessary on their part to obtain the Governmental Consents on
the terms and conditions that satisfy the requirements set forth in Schedule 5.1(f) of the
Intel Master Agreement Disclosure Letter and Schedule 5.2(f) of the ST Master Agreement
Disclosure Letter as soon as reasonably practicable, including preparing and filing as soon as
reasonably practicable all documentation to effect all necessary notices, reports and other
filings.

     4.24 Release of Liens. On the Closing Date, the Intel Transferors and ST Transferors shall deliver the Intel
Transferred Assets and ST Transferred Assets, respectively, to Holdings and its Subsidiaries free
and clear of Liens, other than Permitted Liens, except as otherwise provided in the Intel Asset
Transfer Agreement and the ST Asset Contribution Agreement.

     4.25 ST Litigation. ST shall be financially responsible for any and all costs and liabilities, including but
not limited to license fees, royalties, and damages awarded by a court or administrative agency,
that accrue in or as a result of Proceedings with respect to ST Products imported, used or sold
prior to the Effective Time. Holdings and its Subsidiaries shall be financially responsible for
any and all costs and liabilities, including but not limited to license fees, royalties, and
damages awarded by a court or administrative agency, that accrue in or as a result of Proceedings
with respect to ST Products imported, used or sold by Holdings or any of its Subsidiaries on or
subsequent to the Effective Time. Notwithstanding the above, each Party shall be responsible for
their respective legal fees and associated costs related to such Proceedings regardless of when
incurred.

     4.26 Intel Litigation. Intel shall be financially responsible for any and all costs and liabilities, including but
not limited to license fees, royalties, and damages awarded by a court or administrative agency,
that accrue in or as a result of Proceedings with respect to Intel Products imported, used or sold
prior to the Effective Time. Holdings and its Subsidiaries shall be financially responsible for
any and all costs and liabilities, including but not limited to license fees, royalties, and
damages awarded by a court or administrative agency, that accrue in or as a result of Proceedings
with respect to Intel Products imported, used or sold by Holdings or any of its Subsidiaries on or
subsequent to the Effective Time. Notwithstanding the above, each Party shall be responsible for
their respective legal fees and associated costs related to such Proceedings regardless of when
incurred.

     4.27 Confidentiality Agreements. As soon as reasonably practicable prior to the Closing, the Parties shall cause Holdings,
on behalf of itself and its Subsidiaries, to become a party to each of the Confidentiality
Agreements to which it is contemplated to be a party.

32

 

     4.28 Further Assurances. Each Party agrees to execute and deliver, or cause to be executed and delivered, such other
documents, certificates, agreements and other writings and to take, or cause to be taken, such
other commercially reasonable actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement.

ARTICLE V

CONDITIONS TO CLOSING

     5.1 Conditions to Obligations of Intel. The obligations of Intel to consummate the Closing are subject to the satisfaction or
waiver of each of the following conditions:

     (a) Performance by ST. (i) ST shall have performed and satisfied in all
material respects its obligations and covenants hereunder to the extent such obligations and
covenants are required to be performed and satisfied by it on or prior to the Closing Date,
(ii) the representations and warranties of ST contained in Section 3.2 shall be true
and correct at and as of the Closing as if made at and as of the Closing Date (rather than
at and as of the Signing Date); provided, however, that those representations and warranties
set forth in Sections 3.1 — 3.24 of the ST Asset Contribution Agreement
(incorporated herein by reference) and which within such sections address matters only as of
a certain date specific shall be true and correct as of such certain date), except, in any
case, for failures of such representations and warranties (disregarding any materiality or
ST Material Adverse Effect qualifications contained in any such representation or warranty)
to be true and correct that have not had and would not reasonably be expected to have an ST
Material Adverse Effect, and (iii) Holdings shall have received a certificate signed by a
duly authorized executive officer of ST to the foregoing effect.

     (b) Performance by the FP Parties. (i) Each of the FP Parties shall have
performed and satisfied in all material respects its obligations and covenants hereunder to
the extent such obligations and covenants are required to be performed and satisfied by it
on or prior to the Closing Date, (ii) the representations and warranties of the FP Parties
contained in Section 3.3 shall be true and correct at and as of the Closing as if
made at and as of such date (other than those representations and warranties which address
matters only as of a certain date which shall be true and correct as of such certain date),
except, in any case, for failures of such representations and warranties (disregarding any
materiality or FP Material Adverse Effect qualifications contained in any such
representation or warranty) to be true and correct that have not had and would not
reasonably be expected to have an FP Material Adverse Effect, and (iii) Holdings shall
have received a certificate signed by a duly authorized executive officer of each of
the FP Parties to the foregoing effect.

     (c) No Violation. No Governmental Authority shall have enacted, issued,
promulgated or entered any Applicable Law which is in effect on the Closing Date which has
or would have the effect of prohibiting, restraining or enjoining the consummation of the
transactions contemplated by this Agreement. No temporary restraining order, preliminary or
permanent injunction, cease and desist order or other order issued by any court or other
Governmental Authority that has the effect of making the transactions

33

 

contemplated hereby
illegal or otherwise prohibiting consummation of the transfers contemplated hereby or the
consummation of the Closing, or imposing upon Intel material fines or penalties in respect
thereof, shall be in effect as of the Closing Date, and there shall be no pending or
threatened actions or proceedings by any Governmental Authority (or determinations by any
Governmental Authority) challenging or in any manner seeking to prohibit the transfer
contemplated hereby or the consummation of the Closing.

     (d) Transaction Documents. Each of ST, the FP Parties, Holdings and Numonyx
(and each of their respective Affiliates) shall have executed and delivered to Intel each
Transaction Document to which each of them, respectively, is a party.

     (e) Governmental Approvals. The waiting period (and any extension thereof)
applicable to the consummation of the transactions contemplated hereby under the HSR Act
shall have expired or been terminated, and any waiting period (and any extension thereof)
under any other applicable similar merger notification laws or regulations of foreign
Governmental Authorities shall have expired or been terminated. Any Governmental Approvals
required under any such laws or regulations in connection with the consummation of the
transactions contemplated hereby shall have been obtained.

     (f) Consents. Intel shall have received the Consents identified on
Schedule 5.1(f) of the Intel Master Agreement Disclosure Letter on terms and
conditions that satisfy the requirements set forth in Schedule 5.1(f) of the Intel
Master Agreement Disclosure Letter.

     (g) No ST Material Adverse Effect. There shall not have occurred since the
Signing Date any ST Material Adverse Effect that is continuing, and Holdings shall have
received a certificate signed by a duly authorized executive officer of ST to the foregoing
effect.

     (h) Audited Financial Statements. ST shall have delivered to Intel audited
statements of revenue and direct expenses for the ST Business for the years ended December
31, 2005 and December 31, 2006, and the following balance sheet captions: accounts
receivable, inventories, fixed assets, intangible assets and equity investments, as of
December 31, 2005 and December 31, 2006 and related notes to these statements. The financial
statements shall be prepared to report the ST Business as it has been reported in ST’s
consolidated financial statements applying GAAP and following the presentation
basis adopted by ST in its consolidated financial statements, consistently applied
(collectively, “ST Business Audited Financial Statements”).

     (i) Contemplated Financing; Contributor Financing. The Contemplated Financing
shall have been provided to Holdings or one or more of its Subsidiaries; provided that the
Contemplated Financing and the Contributor Financing do not, in the aggregate, result in
Holdings and its Subsidiaries having more than $875,000,000 of aggregate Indebtedness
outstanding as of the Closing.

34

 

     (j) Dutch Auditor’s Certificates. Each Party (and its Affiliates), as
applicable, shall have obtained such auditor’s certificate(s) pursuant to article 2:204b or
2:204c (as applicable) of the Dutch Civil Code as are required to give effect to the
transactions contemplated in this Agreement and the other Transaction Documents.

     (k) Minimum Cash. On the Closing Date, following payment by Holdings and its
Subsidiaries of any fees and expenses incurred by Holdings or any of its Subsidiaries in
connection with the Closing of the Transactions contemplated hereby and the Contemplated
Financing, but in any event not including (i) the costs set forth in Section
4.16(g), (ii) the costs incurred as reimbursement obligations by Holdings or its
Subsidiaries pursuant to the Infrastructure Procurement Agreement, (iii) any fees and
expenses to be paid to the FP Parties in excess of $7,000,000, and (iv) any fees and
expenses to be paid to the Contemplated Financing Lenders in excess of $5,800,000, but only
to the extent such excess is equal to or less than $7,500,000, Holdings and its
Subsidiaries, in the aggregate, shall have on hand at least $585,000,000 in Cash and Cash
Equivalents.

     5.2 Conditions to Obligations of ST. The obligations of ST to consummate the Closing are subject to the satisfaction or waiver
of each of the following conditions:

     (a) Performance by Intel. (i) Intel shall have performed and satisfied in all
material respects its obligations and covenants hereunder to the extent such obligations and
covenants are required to be performed and satisfied by it on or prior to the Closing Date,
(ii) the representations and warranties of Intel contained in Section 3.1 shall be
true and correct at and as of the Closing as if made at and as of the Closing Date (rather
than at and as of the Signing Date); provided, however, that those representations and
warranties set forth in Sections 3.1 — 3.24 of the Intel Asset Transfer
Agreement (incorporated herein by reference) and which within such sections address matters
only as of a certain date specific shall be true and correct as of such certain date),
except, in any case, for failures of such representations and warranties (disregarding any
materiality or Intel Material Adverse Effect qualifications contained in any such
representation or warranty) to be true and correct that have not had and would not
reasonably be expected to have an Intel Material Adverse Effect, and (iii) Holdings shall
have received a certificate signed by a duly authorized executive officer of Intel to the
foregoing effect.

     (b) Performance by the FP Parties. (i) Each of the FP Parties shall have
performed and satisfied in all material respects its obligations and covenants hereunder to
the extent such obligations and covenants are required to be performed and satisfied by it
on or prior to the Closing Date, (ii) the representations and warranties of the FP Parties
contained in Section 3.3 shall be true and correct at and as of the Closing as if
made at and as of such date (other than those representations and warranties which address
matters only as of a certain date which shall be true and correct as of such certain date),
except, in any case, for failures of such representations and warranties (disregarding any
materiality or FP Material Adverse Effect qualifications contained in any such
representation or warranty) to be true and correct that have not had and would not
reasonably be expected to have an FP Material Adverse Effect, and (iii) Holdings shall

35

 

have
received a certificate signed by a duly authorized executive officer of each of the FP
Parties to the foregoing effect.

     (c) No Violation. No Governmental Authority shall have enacted, issued,
promulgated or entered any Applicable Law which is in effect on the Closing Date which has
or would have the effect of prohibiting, restraining or enjoining the consummation of the
transactions contemplated by this Agreement. No temporary restraining order, preliminary or
permanent injunction, cease and desist order or other order issued by any court or other
Governmental Authority that has the effect of making the transactions contemplated hereby
illegal or otherwise prohibiting consummation of the transfers contemplated hereby or the
consummation of the Closing, or imposing upon ST material fines or penalties in respect
thereof, shall be in effect as of the Closing Date, and there shall be no pending or
threatened actions or proceedings by any Governmental Authority (or determinations by any
Governmental Authority) challenging or in any manner seeking to prohibit the transfer
contemplated hereby or the consummation of the Closing.

     (d) Transaction Documents. Each of Intel, the FP Parties (and each of their
respective Affiliates), Holdings and Numonyx (and each of their Subsidiaries) shall have
executed and delivered to ST each Transaction Document to which each of them, respectively,
is a party.

     (e) Governmental Approvals. The waiting period (and any extension thereof)
applicable to the consummation of the transactions contemplated hereby under the HSR Act
shall have expired or been terminated, and any waiting period (and any extension thereof)
under any other applicable similar merger notification laws or regulations of foreign
Governmental Authorities shall have expired or been terminated. Any Governmental Approvals
required under any such laws or regulations in connection with the consummation of the
transactions contemplated hereby shall have been obtained.

     (f) Consents. Intel shall have received the Consents identified on
Schedule 5.2(f) of the ST Master Agreement Disclosure Letter on terms and conditions
that satisfy the requirements set forth in Schedule 5.2(f) of the ST Master
Agreement Disclosure Letter.

     (g) No Intel Material Adverse Effect. There shall not have occurred since the
Signing Date any Intel Material Adverse Effect that is continuing, and Holdings shall
have received a certificate signed by a duly authorized executive officer of Intel to
the foregoing effect.

     (h) Audited Financial Statements. Intel shall have delivered to ST audited
statements of revenues and direct expenses for the Intel Business for the years ended
December 31, 2005 and December 30, 2006, and the following balance sheet captions: accounts
receivable, inventories, fixed assets and, if applicable, other assets as of December 31,
2005 and December 30, 2006, and related notes to these statements. The financial statements
shall be prepared to report the Intel Business as it has been reported in Intel’s
consolidated financial statements applying GAAP and following the

36

 

presentation basis adopted
by Intel in its consolidated financial statements, consistently applied (collectively,
“Intel Business Audited Financial Statements”).

     (i) Contemplated Financing; Contributor Financing. The Contemplated Financing
shall have been provided to Holdings or one or more of its Subsidiaries; provided that the
Contemplated Financing and the Contributor Financing do not, in the aggregate, result in
Holdings and its Subsidiaries having more than $875,000,000 of aggregate Indebtedness
outstanding as of the Closing.

     (j) Dutch Auditor’s Certificates. Each Party (and its Affiliates), as
applicable, shall have obtained such auditor’s certificate(s) pursuant to article 2:204b or
2:204c (as applicable) of the Dutch Civil Code as are required to give effect to the
transactions contemplated in this Agreement and the other Transaction Documents.

     (k) Minimum Cash. On the Closing Date, following payment by Holdings and its
Subsidiaries of any fees and expenses incurred by Holdings or any of its Subsidiaries in
connection with the Closing of the Transactions contemplated hereby, but in any event not
including (i) the costs set forth in Section 4.16(g), (ii) the costs incurred as
reimbursement obligations by Holdings or its Subsidiaries pursuant to the Infrastructure
Procurement Agreement, (iii) any fees and expenses to be paid to the FP Parties in excess of
$7,000,000, and (iv) any fees and expenses to be paid to the Contemplated Financing Lenders
in excess of $5,800,000, but only to the extent such excess is equal to or less than
$7,500,000, Holdings and its Subsidiaries, in the aggregate, shall have on hand at least
$585,000,000 in Cash and Cash Equivalents.

     5.3 Conditions to Obligations of the FP Parties. The obligations of the FP Parties to consummate the Closing are subject to the satisfaction
or waiver of each of the following conditions:

     (a) Performance by Intel. (i) Intel shall have performed and satisfied in all
material respects its obligations and covenants hereunder to the extent such obligations and
covenants are required to be performed and satisfied by it on or prior to the Closing Date,
(ii) the representations and warranties of Intel contained in Section 3.1 shall be
true and correct at and as of the Closing as if made at and as of the Closing Date (rather
than at and as of the Signing Date); provided, however, that those representations and
warranties set forth in Sections 3.1 — 3.24 of the Intel Asset Transfer
Agreement (incorporated herein by reference) and which within such sections address matters only
as of a certain date specific shall be true and correct as of such certain date), except, in
any case, for failures of such representations and warranties (disregarding any materiality
or Intel Material Adverse Effect qualifications contained in any such representation or
warranty) to be true and correct that have not had and would not reasonably be expected to
have an Intel Material Adverse Effect, and (iii) Holdings shall have received a certificate
signed by a duly authorized executive officer of Intel to the foregoing effect.

     (b) Performance by ST. (i) ST shall have performed and satisfied in all
material respects its obligations and covenants hereunder to the extent such obligations and
covenants are required to be performed and satisfied by it on or prior to the Closing

37

 

Date, (ii) the representations and warranties of ST contained in Section 3.2 shall be true
and correct at and as of the Closing as if made at and as of the Closing Date (rather than
at and as of the Signing Date); provided, however, that those representations and warranties
set forth in Sections 3.1 — 3.24 of the ST Asset Contribution Agreement
(incorporated herein by reference) and which within such sections address matters only as of
a certain date specific shall be true and correct as of such certain date), except, in any
case, for failures of such representations and warranties (disregarding any materiality or
ST Material Adverse Effect qualifications contained in any such representation or warranty)
to be true and correct that have not had and would not reasonably be expected to have an ST
Material Adverse Effect, and (iii) Holdings shall have received a certificate signed by a
duly authorized executive officer of ST to the foregoing effect.

     (c) No Violation. No Governmental Authority shall have enacted, issued,
promulgated or entered any Applicable Law which is in effect on the Closing Date which has
or would have the effect of prohibiting, restraining or enjoining the consummation of the
transactions contemplated by this Agreement. No temporary restraining order, preliminary or
permanent injunction, cease and desist order or other order issued by any court or other
Governmental Authority that has the effect of making the transactions contemplated hereby
illegal or otherwise prohibiting consummation of the transfers contemplated hereby or the
consummation of the Closing, or imposing upon the FP Parties material fines or penalties in
respect thereof, shall be in effect as of the Closing Date, and there shall be no pending or
threatened actions or proceedings by any Governmental Authority (or determinations by any
Governmental Authority) challenging or in any manner seeking to prohibit the transfer
contemplated hereby or the consummation of the Closing.

     (d) Transaction Documents. Each of Intel, ST, Holdings and Numonyx (and each
of their respective Affiliates) shall have executed and delivered to the FP Parties each
Transaction Document to which each of them, respectively, is a party.

     (e) Governmental Approvals. The waiting period (and any extension thereof)
applicable to the consummation of the transactions contemplated hereby under the HSR Act
shall have expired or been terminated, and any waiting period (and any extension thereof)
under any other applicable similar merger notification laws or regulations of foreign
Governmental Authorities shall have expired or been terminated. Any
Governmental Approvals required under any such laws or regulations in connection with
the consummation of the transactions contemplated hereby shall have been obtained.

     (f) No Intel Material Adverse Effect. There shall not have occurred since the
Signing Date any Intel Material Adverse Effect that is continuing, and Holdings shall have
received a certificate signed by a duly authorized executive officer of Intel to the
foregoing effect.

     (g) No ST Material Adverse Effect. There shall not have occurred since the
Signing Date any ST Material Adverse Effect that is continuing, and Holdings shall have
received a certificate signed by a duly authorized executive officer of ST to the foregoing
effect.

38

 

     (h) Audited Financial Statements. Intel shall have delivered to FP Co. the
Intel Business Audited Financial Statements and ST shall have delivered to FP Co. the ST
Business Audited Financial Statements.

     (i) Contemplated Financing; Contributor Financing. The Contemplated Financing
shall have been provided to Holdings or one or more of its Subsidiaries; provided that the
Contemplated Financing and the Contributor Financing do not, in the aggregate, result in
Holdings and its Subsidiaries having more than $875,000,000 of aggregate Indebtedness
outstanding as of the Closing.

     (j) Dutch Auditor’s Certificates. Each Party (and its Affiliates), as
applicable, shall have obtained such auditor’s certificate(s) pursuant to article 2:204b or
2:204c (as applicable) of the Dutch Civil Code as are required to give effect to the
transactions contemplated in this Agreement and the other Transaction Documents.

     (k) Minimum Cash. On the Closing Date, following payment by Holdings and its
Subsidiaries of any fees and expenses incurred by Holdings or any of its Subsidiaries in
connection with the Closing of the Transactions contemplated hereby, but in any event not
including (i) the costs set forth in Section 4.16(g), (ii) the costs incurred as
reimbursement obligations by Holdings or its Subsidiaries pursuant to the Infrastructure
Procurement Agreement, (iii) any fees and expenses to be paid to the FP Parties in excess of
$7,000,000, and (iv) any fees and expenses to be paid to the Contemplated Financing Lenders
in excess of $5,800,000, but only to the extent such excess is equal to or less than
$7,500,000, Holdings and its Subsidiaries, in the aggregate, shall have on hand at least
$585,000,000 in Cash and Cash Equivalents.

ARTICLE VI

TERMINATION

     6.1 Grounds for Termination. This Agreement may be terminated at any time prior to the Closing:

     (a) by mutual written agreement of the Parties;

     (b) by written notice from any Party to the other Parties if:

     (i) the Closing has not been effected on or prior to the close of business on
the Termination Date; provided, however, that the right to terminate this Agreement
pursuant to this Section 6.1(b)(i) shall not be available to any Party whose
failure to fulfill any of its obligations contained in this Agreement has been the
cause of, or resulted in, the failure of the Closing to have occurred on or prior to
the aforesaid date;

     (ii) any Applicable Law shall be enacted or become applicable that makes the
transactions contemplated hereby or the consummation of any of the Closing illegal
or otherwise prohibited;

39

 

     (iii) any judgment, injunction, order or decree enjoining any Party hereto from
consummating the transactions contemplated hereby or the Closing is entered, and
such judgment, injunction, order or decree shall become final and nonappealable;

     (iv) any other Party is in material breach or material default of any covenant
contained herein or there are any inaccuracies or misrepresentations in another
Party’s representations or warranties herein (disregarding any materiality or
“Material Adverse Effect” qualifications contained in any such representation or
warranty) which have had, or if not cured prior to the Closing Date would have, in
the case of Intel, an Intel Material Adverse Effect, in the case of ST, an ST
Material Adverse Effect, or in the case of the FP Parties, an FP Material Adverse
Effect , as the case may be, and such breach or default, shall not be cured or
waived within 20 Business Days after written notice is delivered by any of the
non-breaching Parties specifying, in reasonable detail, such claimed material breach
or default and demanding its cure or satisfaction; provided that if it is not
reasonably practicable to cure such breach or default within 20 Business Days but
such breaching Party is using its commercially reasonable efforts to promptly cure,
then such Party shall have an additional 10 Business Days to cure the breach;

     6.2 Effect of Termination.

     (a) If this Agreement is terminated pursuant to Section 6.1(a), (b), or
(c), all obligations of the Parties hereunder (except for this Section 6.2,
Section 4.7 (Non-Solicitation of Employees) and Article VII (Miscellaneous))
shall terminate without Liability of any Party to any other Party and the representations
and warranties made herein shall not survive beyond a termination of this Agreement.
Nothing contained in this Section 6.2 shall relieve any Party of Liability for any
breach of any representation, warranty or covenant contained in this Agreement that occurred
prior to the date of termination of this Agreement.

     (b) Intentionally Omitted.

     (c) If any termination of this Agreement prior to Closing is attributable to a willful
breach (i) by Intel of any representation or warranty of Intel contained in this Agreement,
in no event shall the Liability of Intel for such breach to ST exceed $75,000,000 or of
Intel to the FP Parties, collectively, exceed $7,500,000 plus any additional expenses
incurred by FP and its Affiliates on behalf of Holdings as agreed by Intel, ST and Holdings
after the Signing Date for services described on Schedule 7.3 to each of the Master
Agreement Disclosure Letters, or (ii) by ST of any representation or warranty of ST
contained in this Agreement, in no event shall the Liability of ST for such breach to Intel
exceed $75,000,000 or of ST to the FP Parties, collectively, exceed $7,500,000 plus any
additional expenses incurred by FP and its Affiliates on behalf of Holdings as agreed by
Intel, ST and Holdings after the Signing Date for services described on Schedule 7.3
to each of the Master Agreement Disclosure Letters.

40

 

     (d) Each of the Parties acknowledges that the agreements contained in this Section
6.2 are an integral part of the transactions contemplated by this Agreement and the
other Transaction Documents.

     6.3 Termination of Representations and Warranties and Covenants Upon the Closing.
Except as otherwise provided pursuant to the Intel Asset Transfer Agreement and the ST
Asset Contribution Agreement including Section 5.18 (Master Agreement Covenants) thereof,
the representations and warranties of the Parties contained in Article III of this
Agreement, and the covenants contained in Section 4.9 and Section 4.10 of this
Agreement, shall terminate and be of no further force or effect immediately upon the consummation
of the Closing; provided, however that the representations and warranties set forth in Sections
3.1(a), 3.2(a), and 3.3(a) (Existence and Good Standing), Sections
3.1(b), 3.2(b) and 3.3(b), (Authorization; Enforceability) and Sections
3.1(g), 3.2(g), and 3.3(f) (Reliance) shall survive until the expiration of the
applicable statute of limitations; provided further that the covenant set forth in Section
4.5 shall survive for a period of 12 months after the Closing Date.

     6.4 Exclusive Remedy. The Parties hereby acknowledge and agree that following the Closing, no Person other than
Holdings and Numonyx shall have any rights with respect to any breach of any of the representations
or warranties contained in Article III hereof or the covenants specified in Section
5.18 (Master Agreement Covenants) of each of the Intel Asset Transfer Agreement and the ST
Asset Contribution Agreement. Holdings’ and Numonyx’s sole remedy for any such breach (a) by
Intel, shall be pursuant to Article VI of the Intel Asset Transfer Agreement and (b) by ST,
shall be pursuant to Article VI of the ST Asset Contribution Agreement.

ARTICLE VII

MISCELLANEOUS

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

41

 

     (a) to Intel:

Intel Corporation

2200 Mission College Boulevard

Santa Clara, CA 95054

Attention: Treasurer

Telephone: (408) 765-8080

Facsimile: (408) 765-6038

with a copy to:

Intel Corporation

2200 Mission College Boulevard

Santa Clara, CA 95054

Attention: General Counsel

Telephone: (408) 765-8080

Facsimile: (408) 653-8050

and a copy to:

Intel Corporation

2200 Mission College Boulevard

Santa Clara, CA 95054

Attention: Portfolio Manager

M/S: RN6-59

Facsimile: (408) 653-8050

Email: portfolio.manager@intel.com

and a copy to (which shall not constitute notice to Intel):

Gibson, Dunn & Crutcher LLP

1881 Page Mill Rd.

Palo Alto, CA 94304

Attention: Russell C. Hansen

Telephone: (650) 849-5300

Facsimile: (650) 849-5333

     (b) to ST:

STMicroelectronics N.V.

Chemin du Champ-des-Filles, 39

1228 Plan-les-Ouates

Geneva, Switzerland

Attention: Pierre Ollivier, Group Vice President and General Counsel

Telephone: 41 22 929 58 76

Facsimile: 41 22 929 59 06

42

 

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

STMicroelectronics N.V.

1310 Electronics Drive

Mail Station 2346

Carollton, TX 75006

Attention: Steven K. Rose, Vice President, Secretary and General Counsel

Telephone: (972) 466-6412

Facsimile: (972) 466-7044

and a copy to (which shall not constitute notice to ST):

Shearman & Sterling LLP

525 Market Street

San Francisco, CA 94105

Attention: John D. Wilson

Telephone: (415) 616-1100

Facsimile: (415) 616-1199

     (c) to one or more of the FP Parties:

Francisco Partners

One Letterman Drive

Building C – Suite 410

San Francisco, CA 94129

Attention: Dipanjan Deb

Telephone: (415) 418-2900

Facsimile: (415) 418-2999

with a copy to:

Francisco Partners

100 Pall Mall

4th Floor

London SW1 YSNG

United Kingdom

Attention: Phokion Potamianos

Telephone: 44 0 207 907 8600

Facsimile: 44 0 207 907 8650

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and a copy to (which shall not constitute notice to the FP Parties):

Davis Polk & Wardwell

1600 El Camino Real

Menlo Park, CA 94025

Attention: William M. Kelly

Martin A. Wellington

Telephone: (650) 752-2000

Facsimile: (650) 752-2112

     7.2 Amendments; Waivers.

     (a) Any provision of this Agreement or any other Transaction Document may be amended or
waived if, and only if, such amendment or waiver is in writing and signed in the case of an
amendment, by all Parties, or in the case of a waiver, by the Party against whom the waiver
is to be effective.

     (b) No waiver by a Party of any default, misrepresentation or breach of a warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation or breach of a warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent occurrence. No
failure or delay by a Party hereto in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided under Applicable Law.

     7.3 Expenses. Except as set forth in (a) Section 5.8(c) of the Intel Asset Transfer Agreement,
(b) Section 5.8(c) of the ST Asset Contribution Agreement and (c) Schedule 7.3 of
each of the Intel Master Agreement Disclosure Letter and the ST Master Agreement Disclosure Letter,
all costs and expenses incurred in connection with this Agreement and the other Transaction
Documents and in closing and carrying out the transactions contemplated hereby and thereby shall be
paid by the Party incurring such cost or expense.

     7.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their
respective successors, heirs, personal representatives and permitted assigns. No Party hereto may
transfer or assign either this Agreement or any of its rights, interests or obligations hereunder,
whether directly or indirectly, by operation of law, merger or otherwise, without the prior written
approval of each other Party; provided, however, that each of the FP Parties may transfer or assign
its rights and obligations under this Agreement, in whole or from time to time in part, to one or
more if its Affiliates at any time prior to the Closing; provided, further, that in the event of
any such assignment, any of the terms “FP Co.,” “FP Holdco,” “FP LLC,” or “FP Parallel” in any
Transaction Document, shall apply to any such assignee, mutatis mutandis. No such transfer or
assignment shall relieve the transferring or assigning Party of its obligations hereunder if such
transferee or assignee does not perform such obligations.

44

 

     7.5 Governing Law. This Agreement shall be construed in accordance with and this Agreement and any disputes or
controversies related hereto shall be governed by the internal laws of the State of New York
without giving effect to any conflicts of laws principles thereof that would apply the laws of any
other jurisdiction.

     7.6 Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts and the signatures delivered by
telecopy, each of which shall be an original, with the same effect as if the signatures were upon
the same instrument and delivered in person. This Agreement shall become effective when each Party
hereto shall have received a counterpart hereof signed by the other Parties.

     7.7 Entire Agreement. This Agreement (including the schedules and exhibits referred to herein, which are hereby
incorporated by reference), the other Transaction Documents and the Confidentiality Agreements
constitute the entire agreement between the Parties with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings and negotiations, both written and oral,
express or implied, between and among the Parties with respect to the subject matter of this
Agreement. Neither this Agreement nor any provision hereof is intended to confer upon any Person
other than the Parties any rights or remedies hereunder. No representation, warranty, promise,
inducement or statement of intention has been made by either Party that is not embodied in this
Agreement or such other documents, and neither party shall be bound by, or be liable for, any
alleged representation, warranty, promise, inducement or statement of intention not embodied herein
or therein.

     7.8 Captions. The captions herein are included for convenience of reference only and shall be ignored in
the construction or interpretation hereof.

     7.9 Severability. If any provision of this Agreement, or the application thereof to any Person, place or
circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or
void, the remainder of this Agreement and such provisions as applied to other Persons, places and
circumstances shall remain in full force and effect only if, after excluding the portion deemed to
be unenforceable, the remaining terms shall provide for the consummation of the transactions
contemplated hereby in substantially the same manner as originally set forth at the later of the
date this Agreement was executed or last amended.

     7.10 Dispute Resolution.

     (a) With the exception of disputes involving Intellectual Property ownership and
infringement issues, any dispute arising under this Agreement shall be finally resolved by
arbitration. The Parties waive their right to any form of appeal to a court on any questions
of law arising out of the arbitration award. Any dispute or claim between the Parties which
is beyond the scope of this Section shall be submitted to the exclusive jurisdiction of the
courts of the State of New York and the Federal courts of the United States of America
located in the State of New York. The Parties hereby consent to and grant any such court
jurisdiction over such Parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or proceeding in the
manner provided in Section 7.1 or in such other manner as may be permitted by
Applicable Law, shall be valid and sufficient service thereof.

45

 

     (b) Mediation. Prior to arbitration, however, the Party making the original
claim shall provide the other Party with a written description of the dispute or claim and
one or more of the senior executives of each Party shall meet in an attempt to resolve such
dispute or claim. If the disagreements cannot be resolved by the senior management after 90
days from the date any Party made a written demand for resolution, a binding arbitration
shall be held.

     (c) Arbitration Rules. The rules of the arbitration shall be agreed upon by
the Parties prior to the arbitration and shall be based upon the nature of the disagreement.
To the extent that the Parties cannot agree on the rules of the arbitration after 30 days
from the date any Party makes a written demand for resolution, then, subject to Section
7.10(d), the Rules of Arbitration of the ICC in effect as of the Closing Date shall
apply.

     (d) Mandatory Rules. As a minimum set of rules in the arbitration the Parties
agree as follows:

     (i) The arbitration shall be held by one arbitrator appointed by mutual
agreement of the Parties. If the Parties cannot agree on a single arbitrator within
15 days from the date written demand for arbitration has been received by the other
Party, each Party shall identify one independent individual. The individuals
appointed by the Parties shall then meet to appoint a single arbitrator.  If an
arbitrator still cannot be agreed upon within an additional 15 day period, he or she
shall be appointed by the ICC.

     (ii) The place of arbitration shall be New York, New York. Hearings and
meetings shall be held in New York or at such other place as the Parties may agree.

     (iii) The English language shall be used in the proceedings. Documents and
written testimonies may be submitted in any language provided that the Party
submitting such documents and testimonies shall provide, at its own expense, a
translation of the same in the English language.

     (iv) The arbitrator shall specify the basis for the award, the basis for the
damages award and a breakdown of the damages awarded, and the basis of any other
remedy authorized under this section.  The award shall be considered as a final and
binding resolution of the dispute or claim.

     (v) The Parties agree to maintain the confidentiality of the arbitral
proceedings, the existence of the same and the status of the hearings. In addition,
the Parties undertake to maintain the confidentiality of any document exchanged in,
produced in, or created by the Parties for the arbitration proceedings as well as
the confidentiality of the award. Notwithstanding the foregoing, if the disclosure
of the arbitral proceedings, or of any of the documents exchanged in, produced in or
created for the arbitration proceedings or if the disclosure of the award is
required by Applicable Law or is compelled by a court or other Governmental
Authority: (A) the Parties shall use the legitimate and legal means available to

46

 

minimize the scope of their disclosure to third parties; and (B) the Party compelled
to make the disclosure shall inform the other Party and the arbitrator at least 20
Business Days in advance of the disclosure (or if 20 Business Days’ notice is not
practicable because the Party is required to make the disclosure less than 20
Business Days after becoming aware of the event or occurrence giving rise to such
disclosure requirement, then notice to the other Party and the arbitrator shall be
provided as soon as practicable after such event or occurrence).

     (vi) The duty of the Parties to arbitrate any dispute or claim within the scope
of this Section shall survive the expiration or termination of this Agreement for
any reason.  The Parties specifically agree that any action must be brought, if at
all, within two years from discovery of the cause of action.

     (vii) The discretion of the arbitrator to fashion remedies shall be no broader
than the legal and equitable remedies available to a court (unless the parties
expressly agree otherwise prior to the start of arbitration). In no event, however,
shall the arbitrator award a remedy which enjoins a Party or its customers to stop
manufacturing, using, marketing, selling, offering for sale, or importing such
Party’s products. In addition, notwithstanding anything herein to the contrary, in
no event, shall the arbitrator award a remedy which enjoins a Party to license to
the other Party any of its intellectual property rights of whatever nature. The
arbitrator will have no authority to award damages in excess of compensatory damages
and each Party expressly waives and foregoes any right to punitive, exemplary or
similar damages, except as such damages may
be required by statute. In no event shall the amount of damages awarded to the
prevailing Party exceed or otherwise be inconsistent with any of the applicable
limitations on damages set forth in this Agreement, including Sections 6.2
and 6.4.

     (viii) The arbitrator may not order any conservatory or interim relief measures
of any kind. In any event, however, either Party may apply for conservatory or
interim relief measures to the courts of the State of New York or the Federal courts
of the United States of America located in the State of New York which shall have
exclusive jurisdiction to grant such injunctive relief.

     (ix) The Parties shall agree upon what, if any, disclosure to the other parties
to the arbitration shall be permitted. If the Parties can not agree on the form of
disclosure within 30 days after the appointment of the arbitrator, then the Parties
agree that in addition to the Rules of Arbitration of the ICC, the arbitrators shall
apply the IBA Rules of Evidence. In case of conflict between Rules of Arbitration of
the ICC and the IBA Rules of Evidence, the Rules of Arbitration of the ICC shall
prevail. Notwithstanding anything herein to the contrary, in no event shall anything
verbally or in writing used strictly for settlement purposes between the Parties be
permitted by the arbitration to be used as evidence for either Party’s case.

47

 

     (x) The Parties shall equally bear the costs of the arbitration. Each Party
shall bear the fees and expenses of its appointed experts and shall bear its own
legal expenses. For the purpose of this clause, the term “costs of arbitration”
includes only: (A) the fees and expenses of the arbitrator; (B) in the case of an
arbitration governed by the ICC Rules, the ICC administrative expenses fixed by the
Court of Arbitration of the ICC; and (C) the fees and expenses of any experts
appointed by the arbitrator.

     7.11 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER,
(b) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (d) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.11.

     7.12 Third Party Beneficiaries. Effective on the Closing Date, Holdings and Numonyx shall be deemed third party
beneficiaries of the covenants set forth in the Sections referenced in Section 5.18 (Master
Agreement Covenants) of each of the Intel Asset Transfer Agreement and ST Asset Contribution
Agreement. No provision of this Agreement shall create any third party beneficiary rights in any
other Person, including any employee or former employee of Intel or ST or any of their respective
Affiliates (including any beneficiary or dependent thereof).

     7.13 Specific Performance. The Parties hereby acknowledge and agree that the failure of any Party to perform its
agreements and covenants hereunder, including its failure to take all actions as are necessary on
its part to the consummation of the transactions contemplated herein, may cause irreparable injury
to the other Parties, for which damages, even if available, may not be an adequate remedy.
Accordingly, each Party hereby consents to the issuance of injunctive relief by any court of
competent jurisdiction to compel performance of such Party’s obligations and to the granting by any
court of the remedy of specific performance of its obligations hereunder.

     7.14 No Presumption Against Drafting Party. Intel, ST and the FP Parties acknowledge that each of the Parties hereto has been
represented by counsel in connection with the negotiation and execution of this Agreement and the
other Transaction Documents. Accordingly, any rule of law or any legal decision that would require
interpretation of any claimed ambiguities in this Agreement against the drafting party has no
application and is expressly waived.

48

 

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

	 	 	 	 	 	 	 
	 	 	INTEL CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Cary I. Klafter
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Cary I. Klafter

Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	STMICROELECTRONICS N.V.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Carlo Bozotti	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Carlo Bozotti

Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	REDWOOD BLOCKER S.A.R.L.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Keith Toh	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Keith Toh

Title: Manager	 	 

[Signature page to Master Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	FRANCISCO PARTNERS II (CAYMAN) L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	FRANCISCO PARTNERS GP II (CAYMAN) L.P., its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	FRANCISCO PARTNERS GP II MANAGEMENT (CAYMAN) Limited, its General Partner
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dipanjan Deb	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Dipanjan Deb

Title: Director	 	 
	 
	 	 	 	 	 	 
	 	 	PK FLASH, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	FRANCISCO PARTNERS PARALLEL FUND II, L.P., its Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	FRANCISCO PARTNERS GP II, L.P., its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	FRANCISCO PARTNERS GP II MANAGEMENT, LLC, its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dipanjan Deb	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Dipanjan Deb

Title: Director	 	 
	 
	 	 	 	 	 	 
	 	 	FRANCISCO PARTNERS

PARALLEL FUND II, L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	By: FRANCISCO PARTNERS GP II, L.P., its General Partner	 	 
	 
	 	 	 	 	 	 
	 	 	By: FRANCISCO PARTNERS GP II MANAGEMENT, LLC, its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dipanjan Deb	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Dipanjan Deb

Title: Director	 	 

[Signature page to Master Agreement]

 

 

APPENDIX A

TO MASTER AGREEMENT

     “Affiliate”, with respect to any Person, means any other Person directly or indirectly
controlling, controlled by or under common control with, such Person; provided, however, that with
respect to Intel and ST, “Affiliates” shall be deemed to only include their respective
Subsidiaries; provided further, that with respect to Holdings and any of its Subsidiaries,
“Affiliates” shall be deemed to expressly exclude Intel, ST, the FP Parties and each of their
Affiliates. For purposes of this definition, “control” (including, with correlative meanings, the
terms “controlling”, “controlled by” or “under common control with”), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.

     “Agreement” has the meaning set forth in the introduction to this Agreement.

     “Applicable Law” means, with respect to any Person, any federal, state, local or
foreign statute, law, ordinance, rule, administrative interpretation, regulation, order, writ,
injunction, directive, judgment, decree or other requirement of any Governmental Authority
applicable to such Person or any of its Affiliates or any of their respective properties, assets,
officers, directors, employees, consultants or agents.

     “Articles of Association” means the Articles of Association of Holdings, dated as of
March 30, 2008, as amended from time to time.

     “Bank Guarantee” shall have the meaning set forth in Section 5.11(g) of the ST
Asset Contribution Agreement.

     “Business” means the Intel Business or the ST Business, as applicable.

     “Business Day” means each day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York or Geneva, Switzerland are authorized or required by law to
close.

     “Cash and Cash Equivalents” means all cash on hand and cash equivalents of a Person
(whether or not related to the applicable Business), including currency and coins, negotiable
checks, bank accounts, marketable securities, commercial paper, certificates of deposit, treasury
bills, surety bonds and money market funds.

     “Claims” means all rights to causes of action, claims, demands, rights and privileges
against third parties, whether liquidated or unliquidated, fixed or contingent, choate or inchoate.

     “Closing” shall have the meaning set forth in Section 2.5 of this Agreement.

     “Closing Date” means the date of the Closing, as further described in Section
2.5 of this Agreement.

 

 

     “Competition Law” means the Sherman Antitrust Act of 1890, the Clayton Act of 1914,
the HSR Act, the Federal Trade Commission Act, and all other domestic or foreign Applicable Laws
passed by a domestic or foreign Governmental Authority that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or restraint of trade
or lessening of competition through merger or acquisition.

     “Confidentiality Agreements” means (i) the Corporate Non-Disclosure Agreement No.
1367780 between Intel and ST, dated March 13, 2006, as amended by a side letter dated March 9, 2006
and executed by the parties on or about March 13, 2006; (ii) the Corporate Non-Disclosure Agreement
between Intel Corporation and Francisco Partners II, L.P. (“Francisco”) dated September 13,
2006, as amended by a side letter dated September 13, 2006; (iii) the Confidential Disclosure
Agreement between ST and Francisco, dated September 14, 2006; (iv) the Multiparty Confidential
Information Exchange Agreement by and among Intel, ST and Francisco, dated September 14, 2006; (v)
the Corporate Non-Disclosure Agreement between Intel and Holdings, dated as of the Closing Date;
(vi) the Confidential Disclosure Agreement between ST and Holdings, dated as of the Closing Date;
and (vii) the Corporate Non-Disclosure Agreement between Francisco and Holdings, dated as of the
Closing Date, and the Mutual Confidentiality Agreement by and among Intel, ST, the FP Parties,
Holdings and Numonyx, dated as of the Closing Date.

     “Confidential Information” means any (i) information in tangible form that bears a
“confidential,” “proprietary,” “secret” or similar legend, including the Intel Transferred Trade
Secrets set forth on Schedule 2.1(h) of the Intel ATA Disclosure Letter, the Intel Retained
Trade Secrets, the ST Transferred Trade Secrets set forth on Schedule 2.1(h) to the ST ACA
Disclosure Letter, the ST Retained Trade Secrets, any books and records of any Party, and any other
confidential information disclosed by any Party to any other Party(ies) in connection with the
negotiation, evaluation and implementation of the Transaction Documents, including any information
disclosed on the ST ACA Disclosure Letter or the Intel ATA Disclosure Letter and any information
provided pursuant to Section 4.1 of this Agreement; (ii) information that a Party observes
or perceives by inspection of tangible objects (including without limitation documents, prototypes,
or samples) or otherwise while present at another Party’s facilities or any other location at which
tangible objects embodying another Party’s Confidential Information is accessible; and (iii) any
information to which a Party receives access as a result of the relationship of the Parties or such
Party’s performance under a Transaction Document. Each Party will make a reasonable good faith
effort to identify as “confidential” or the like the information in tangible form that it wishes to
be treated as Confidential Information pursuant to this Agreement, but a Party’s failure to so mark
any such information shall not relieve a Receiving Party of its obligations under this Agreement.
Notwithstanding the foregoing, “Confidential Information” does not include: (x) any
information that is or has become generally available to the public other than as a result of a
disclosure by the Receiving Party or any Affiliate thereof in breach of any of the provisions of
the Confidentiality Agreements or any other similar contract to which the Receiving Party or any
Affiliate thereof is bound; (y) any information that has been independently developed by the
Receiving Party (or any Affiliate thereof) without violating any of the provisions of the
Confidentiality Agreements or any other similar contract to which the Receiving Party or any
Affiliate thereof is bound; or (z) any information made available to the Receiving Party (or any
Affiliate thereof) on a non-

A-2

 

confidential basis by any third party who is not prohibited from disclosing such information
to the Receiving Party by a legal, contractual or fiduciary obligation.

     “Consolidation” means either the FP Consolidation or a transaction undertaken by an
Intel Affiliate or ST Affiliate pursuant to the last sentence of Section 6.9 of the
Securityholders’ Agreement.

     “Contemplated Financing” means the debt financing provided to Numonyx pursuant to that
certain US $550,000,000 Facilities Agreement dated March 25, 2008 and made between Numonyx, Intesa,
Unicredit, the Original Lenders (as defined therein) and the Agent (as defined therein).

     “Contemplated Financing Lenders” means Intesa and Unicredit.

     “Contract” means each contract, agreement, option, lease, license, cross-license, sale
and purchase order, commitment and other instrument of any kind, whether written or oral.

     “Contribution Agreement” means that certain Reimbursement, Guaranty, Contribution and
Intercreditor Agreement dated as of March 25, 2008 among Numonyx, Holdings and the Guarantors.

     “Contributor Financing” means the debt financing pursuant to the Note Agreement.

     “Control” has the meaning such that a Person (or group of related Persons) exercises
Control over a Party when such Person or group owns or controls (either directly or indirectly) any
of the following: (a) if the Party issues voting stock or other voting securities, more than 50% of
the outstanding stock or securities entitled to vote for the election of directors or similar
managing authority; or (b) if such Party does not issue voting stock or other voting securities,
more than 50% of the ownership interest that represents the right to make decisions for such Party;
or (c) any other ability to elect more than half of the board of directors or similar managing
authority of the subject Party, whether by contract or otherwise.

     “Copyrights” means copyrights and mask work rights (whether or not registered) and
registrations and applications therefor, worldwide.

     “Customer Data” means the data related to customers of a Party’s Business which is
included in such Party’s Transferred Assets.

     “Determination Date” shall have the meaning set forth in Section 4.12(a) of
this Agreement.

     “Disclosure Letters” means the Intel ATA Disclosure Letter, the ST ACA Disclosure
Letter, the Intel Master Agreement Disclosure Letter and the ST Master Agreement Disclosure Letter.

     “Effective Time” means, unless otherwise agreed by the Parties, 12:01 a.m. GMT on the
Closing Date.

A-3

 

     “Embedded PCM Product” means an Integrated Circuit that is comprised of a PCM Product
and a microcontroller, processor or other non-memory device.

     “Environmental Consultants” means one or more third-party environmental consultants
with expertise in the relevant jurisdictions.

     “Environmental Laws” means any Applicable Laws of any Governmental Authority in effect
as of the Closing Date, unless otherwise noted, relating to pollution, protection or remediation of
the environment, the use, storage, treatment, generation, manufacture, distribution,
transportation, processing, handling, Release, disposal of or exposure to Hazardous Substances or,
as such relate to Hazardous Substances, public and occupational health and safety.

     “Environmental Liability” means any Liability or Loss, including the cost of any
Remedial Action, arising in connection with (i) the use, generation, storage, treatment,
manufacture, distribution, transportation, processing, handling, disposal or Release of any
Hazardous Substances, (ii) the violation of or liability under any Environmental Laws or any
Governmental Approval relating to any Hazardous Substances or (iii) any third party claim,
litigation or proceeding relating to any Hazardous Substance or Environmental Laws.

     “Equity Plan” means the Numonyx Holdings B.V. Equity Incentive Plan, an equity
compensation plan for Holdings, with terms reasonably satisfactory to Holdings, Intel, ST, and the
FP Parents.

     “Exchange Act” means the United States Securities Exchange Act of 1934.

     “Facilities Agreement” means the Term and Revolving Facilities Agreement dated as of
March 25, 2008, among Numonyx, the several lenders and issuing bank from time to time party thereto
and Intesa Sanpaolo S.p.A., as agent, which provides for unsecured credit facilities, consisting of
a term loan and revolving credit facility in an aggregate principal amount of $550,000,000.

     “Flash Memory Integrated Circuit” means a non-volatile memory integrated circuit that
contains memory cells that are electrically programmable and electrically erasable whereby the
memory cells consist of one or more transistors that have a floating gate, charge-trapping regions
or any other functionally equivalent structure utilizing one or more different charge levels
(including binary or multi-level cell structures) with or without any on-chip control, I/O and
other support circuitry.

     “FP Co.” has the meaning set forth in the introduction to this Agreement.

     “FP Consolidation” shall have the meaning set forth in Section 6.9 of the
Securityholders’ Agreement.

     “FP Costs” shall have the meaning set forth in Section 6.2(b) of this
Agreement.

     “FP Holdco” has the meaning set forth in the introduction to this Agreement.

A-4

 

     “FP Holdings Shares” shall have the meaning set forth in Section 2.1 of the FP
Purchase Agreement.

     “FP LLC” has the meaning set forth in the introduction to this Agreement.

     “FP Material Adverse Effect” means any event, change or circumstance that,
individually or in the aggregate with all other such events, changes or circumstances, that is
materially adverse to the ability of the FP Parties to perform its obligations under any
Transaction Document to which it is or will be a party or to consummate the transactions
contemplated thereby.

     “FP Notes” means the 9.5% Subordinated Notes due 2038 to be issued by Holdings to FP,
in substantially the form attached as Exhibit A to the Note Agreement..

     “FP Parallel” has the meaning set forth in the introduction to this Agreement.

     “FP Parents” means FP Holdco and FP Parallel.

     “FP Parties” means FP Holdco, FP Co., FP Parallel and FP LLC.

     “FP Purchase Agreement” means the FP Purchase Agreement entered into by FP Co., FP LLC
and Holdings dated as of the Closing Date.

     “GAAP” means generally accepted accounting principles in the United States of America,
applied on a consistent basis, as in effect as of the date hereof.

     “Governmental Approval” means an authorization, consent, approval, permit or license
issued by, or a registration or filing with, or notice to, or waiver from, any Governmental
Authority.

     “Governmental Authority” means any United States or non-United States federal,
territorial, state or local governmental authority, quasi-governmental authority, instrumentality,
court, government or self-regulatory organization, commission, tribunal or organization or any
regulatory, administrative or other agency, or any political or other subdivision, department or
branch of any of the foregoing.

     “Guarantee” or “Guarantees” means that certain Guarantee of Specific
Liabilities dated as of March 27, 2008 made by each of Intel and ST in favor of Intesa and the
other lenders named in the Facilities Agreement.

     “Guarantor” or “Guarantors” means each of ST and Intel in their capacity as
guarantors of certain payment obligations of Numonyx under the Facilities Agreement pursuant to a
Guarantee.

     “Hazardous Substance” shall mean any hazardous substance within the meaning of Section
101(14) of the United States Comprehensive Environmental Response, Compensation and Liability Act
of 1980, 42 U.S.C. § 9601(14), and any chemical, substance, material, agent or waste defined or
regulated as toxic, hazardous, extremely hazardous or radioactive, or as a

A-5

 

pollutant or contaminant, under any applicable Environmental Law, including petroleum,
petroleum derivatives, petroleum by-products or other hydrocarbons, asbestos or asbestos-containing
material and polychlorinated biphenyls.

     “Holdings” means Numonyx Holdings B.V., a private company with limited liability
organized under the laws of The Netherlands, with its corporate seat in Amsterdam, The Netherlands.

     “Holdings Deed of Incorporation” shall have the meaning set forth in Section
4.16(a) of this Agreement.

     “Holdings Indemnitees” means Holdings and its Subsidiaries, officers, directors,
stockholders, representatives and agents; provided, however, that “Holdings Indemnitees” shall be
deemed to exclude Intel, ST, the FP Parties and each of their respective Affiliates.

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

     “Hynix JV” means Hynix-ST Semiconductor Ltd., a wholly foreign-owned entity
established under the laws of the People’s Republic of China.

     “Hynix JV Junior Credit Agreement” means the US$250,000,000 Facility Agreement, dated
August 24, 2006, among the Hynix JV, as borrower, and DBS Bank Ltd. as arranger and original
lender, agent and security agent, as amended and restated pursuant to the Master Amendment
Agreement.

     “IBA Rules of Evidence” means the IBA Rules on the Taking of Evidence in International
Commercial Arbitration.

     “ICC” means the International Chamber of Commerce.

     “Indebtedness” means any (i) indebtedness for borrowed money, (ii) indebtedness
evidenced by any bond, debenture, note, mortgage, indenture or other debt instrument or debt
security, or (iii) guarantees with respect to any indebtedness or obligation of a type described in
clauses (i) through (ii) above of any other Person.

     “Indemnified Persons” has the meaning set forth in Section 4.16(d) of this
Agreement.

     “Infrastructure Procurement Agreement” means that certain Infrastructure Procurement
Agreement entered into by and among Intel, ST and Holdings dated as of the Closing Date.

     “Integrated Circuit” means an integrated unit comprising one or more active and/or
passive circuit elements associated on one or more substrates, such unit forming, or contributing
to the formation of, a circuit for performing electrical functions (including, if provided
therewith, housing and/or supporting means).

     “Intel” has the meaning set forth in the Introduction to this Agreement.

A-6

 

     “Intel Aggregate Cash” has the meaning set forth in Section 2.6(b) of the
Intel Asset Transfer Agreement.

     “Intel Ancillary Agreements” means the Intel Assignment and Assumption Agreements,
Intel Entity Bills of Sale, Intel Intellectual Property Agreement, Intel Transition Services
Agreements, Intel Facility Transfer Agreements, Intel Joint Development Agreement, Intel Supply
Agreements, Intel Entity Assignment and Assumption of Excluded Assets and Excluded Liabilities
Agreements, Intel Patent Assignment, Intel Trademark Assignment, Intel Entity Capitalization and
Assignment Agreement, Intel Pudong Services Agreement, Intel Secondment Agreement and Intel Option.

     “Intel Approvals” means the required consents, waivers and approvals of Intel set
forth on Schedule 3.3 of the Intel ATA Disclosure Letter and Schedule 3.1(c) of the
Intel Master Agreement Disclosure Letter.

     “Intel Architecture Emulators” means software, firmware, or hardware that, through
emulation, simulation or any other process, allows a computer that does not contain an Intel
Compatible Processor (or a Processor that is not an Intel Compatible Processor) to execute binary
code that is capable of being executed on an Intel Compatible Processor.

     “Intel Asset Transfer Agreement” means that certain Asset Transfer Agreement entered
into by and among Intel, Holdings and Numonyx dated as of the Closing Date.

     “Intel Assignment and Assumption Agreement” means, collectively, the Assignment and
Assumption Agreements entered into by Holdings or its Affiliates, on one hand, and Intel or its
Affiliates, on the other hand, dated as of the Closing Date.

     “Intel ATA Disclosure Letter” means the disclosure letter, as agreed to between the
Parties as of the Signing Date (with such amendments or new schedules as have been subsequently
made in accordance with Section 4.12 of this Agreement), containing the Schedules required
by the provisions of the Intel Asset Transfer Agreement.

     “Intel Books and Records” means all of the books of account, general and financial
records, invoices, shipping records, customer records, supplier lists, correspondence and other
documents, records and files of Intel and its Subsidiaries whether in hard copy or computer format
which relate exclusively to the Intel Business and are necessary for the conduct of such Intel
Business after the Closing (excluding all personnel records or any employee information for Intel
Business Employees who are not Intel Transferred Employees employed by an Intel Transferred Entity
as of the Closing Date).

     “Intel Bus” means a proprietary bus or other proprietary data path first introduced by
Intel or any Intel Licensed Subsidiary that (i) is capable of transmitting and/or receiving
information within an Integrated Circuit or between two or more Integrated Circuits, together with
the set of protocols defining the electrical, physical, timing and functional characteristics,
sequences and control procedures of such bus or data path; and (ii) to which neither Intel nor any
Intel Licensed Subsidiary (during any time such Intel Licensed Subsidiary has met the requirements
of being a Licensed Subsidiary) has granted a license or committed to grant a license through its
participation in a government sponsored, industry sponsored, or contractually

A-7

 

formed group or any similar organization that is dedicated to creating publicly available
standards or specifications; and (iii) which neither Intel nor any Intel Licensed Subsidiary
(during any time such Intel Licensed Subsidiary has met the requirements of being a Licensed
Subsidiary) has publicly disclosed without an obligation of confidentiality.

     “Intel Business” means the sale, manufacture, design and or development of NOR Flash
Memory Products, Phase Change Memory technology (subject to Schedule 2.2(o) to the Intel
ATA Disclosure Letter), and Stacked Memory Products.

     “Intel Business Audited Financial Statements” shall have the meaning set forth in
Section 5.2(h) of this Agreement.

     “Intel Business Capital Expenditures Plan” means the plan set forth on Schedule
3.14(e) of the Intel ATA Disclosure Letter setting forth (i) the actual capital expenditures of
Intel with respect to the Intel Business for its first fiscal quarter of 2007; and (ii) the
budgeted capital expenditures of Intel with respect to the Intel Business for the second, third and
fourth fiscal quarters of 2007 and the first fiscal quarter of 2008.

     “Intel Business Employees” means the employees who are identified on Schedule
3.12(c) of the Intel ATA Disclosure Letter.

     “Intel Compatible Chipsets” means one or more Integrated Circuits that alone or
together are capable of electrically interfacing directly (with or without buffering or pin
reassignment) with an Intel Compatible Processor to form the connection between the Intel
Compatible Processor and any other device (or group of devices) including Processors, input/output
devices, and networks; provided that an Integrated Circuit that functions primarily as a memory
storage device shall not be deemed to be an Intel Compatible Chipset.

     “Intel Compatible Compilers” means a compiler that generates object code that can,
without any additional processing other than linkage processing, be executed on any Intel
Processor.

     “Intel Compatible Processors” means any Processor that (i) can perform substantially
the same functions as an Intel Processor by compatibly executing or otherwise processing (A) 50% or
more of the instruction set of an Intel Processor or (B) binary code versions of applications or
other software targeted to run on or with an Intel Processor, in order to achieve substantially the
same result as an Intel Processor; or (ii) is substantially compatible with an Intel Processor Bus.

     “Intel Contract” means any Contract of Intel or its Subsidiaries.

     “Intel Contractual Consents” shall have the meaning set forth in Section
3.8(b) of the Intel Asset Transfer Agreement.

     “Intel Employee Transfer Date” means the date Intel Business Employees become Intel
Transferred Employees employed by Holdings or any of its Subsidiaries.

A-8

 

     “Intel Entity Assignment and Assumption of Excluded Assets and Excluded Liabilities
Agreement” shall have the meaning set forth in Section 2.4 of the Intel Asset Transfer
Agreement.

     “Intel Entity Bill of Sale” means any bill of sale or other similar document
reasonably requested by any Party and reasonably necessary to transfer any Intel Transferred Asset
in accordance with applicable law to be executed by one or more Intel Transferors in favor of
Holdings or a Subsidiary of Holdings as of the Closing Date.

     “Intel Entity Capitalization and Assignment Agreement” means that certain Intel Entity
Capitalization and Assignment Agreement between Intel and Numonyx, dated as of the Closing Date.

     “Intel Environmental Reports” means reports or audits prepared by the Environmental
Consultants summarizing the results of Phase I, Phase II and environmental compliance audits
regarding the Owned Intel Real Property, the Leased Intel Real Property and any property that is
the subject of an Intel Lease, which shall be reasonably satisfactory to FP and ST in form and
substance, and paid for by ST. At the request of Holdings or a Subsidiary of Holdings, Intel shall
review the Intel Environmental Reports and confirm that all Environmental Liabilities identified in
such reports are sufficiently identified as to scope as that term is used in clause (iii) of the
definition of Intel Pre-Closing Environmental Liability. If Intel believes the issues are not
sufficiently identified, Intel must pay for the additional investigation to further characterize
the Environmental Liability sufficient to meet the criteria in clause (iii) of the definition of
Intel Pre-Closing Environmental Liability.

     “Intel Excluded Employees” shall have the meaning set forth in Section 4.11(b)
of this Agreement.

     “Intel Facility Transfer Agreements” means the agreements and other documents used to
consummate or implement the transfer by Intel and its Subsidiaries to Holdings and its Subsidiaries
of the assets described therein which shall be substantially based on the Intel Facility Transfer
Term Sheets.

     “Intel Facility Transfer Term Sheets” means the term sheets attached to Schedule
4.22(a) to the Intel Master Agreement Disclosure Letter reflecting the terms and conditions
upon which the agreements and other related documents effecting the transfer by Intel and its
Subsidiaries of the assets described therein to Holdings and its Subsidiaries.

     “Intel Holdings Shares” shall have the meaning set forth in Section 2.6(a) of
the Intel Asset Transfer Agreement.

     “Intel Intellectual Property Agreement” means the Intellectual Property Agreement
entered into by and between Intel, Holdings and Numonyx dated as of the Closing Date.

     “Intel Joint Development Agreement” means the Joint Development Agreement entered into
by and between Intel and Numonyx dated as of on the Closing Date.

A-9

 

     “Intel Leases” means all leases or other occupancy agreements pursuant to which Intel
or its Subsidiaries lease or occupy the Intel Transferred Leased Real Property.

     “Intel Master Agreement Disclosure Letter” means the disclosure letter, as delivered
by Intel to ST and the FP Parties as of the Signing Date (with such amendments as have been
subsequently made in accordance with Section 4.12 of this Agreement), containing the
Schedules required by the provisions of this Agreement.

     “Intel Material Adverse Effect” means any event, change or circumstance that,
individually or in the aggregate with all other such events, changes or circumstances, (i) results
in a material adverse effect on, or material adverse change in, the Intel Transferred Assets, taken
as a whole, or (ii) any event, change or circumstance that is materially adverse to the ability of
Intel to perform its obligations under any Transaction Document to which it is or will be a party
or to consummate the transactions contemplated thereby, other than, in the case of clause (i)
above, such changes, effects or circumstances reasonably attributable to: (A) economic, capital
market or political conditions generally in the United States or foreign economies in any locations
where the Intel Business has material operations or sales, provided the changes, effects or
circumstances do not have a materially disproportionate effect (relative to other industry
participants) on the Intel Business, (B) conditions generally affecting the industry in which the
Intel Business operates, provided that the changes, effects or circumstances do not have a
materially disproportionate effect (relative to other industry participants) on the Intel Business;
(C) the announcement or pendency of the transactions contemplated by the Transaction Documents; (D)
outbreak of hostilities or war, acts of terrorism or acts of God; or (E) compliance with Intel’s
obligations or the satisfaction of the conditions to the closing of the transactions contemplated
by the Transaction Documents.

     “Intel Notes” means the 9.5% Subordinated Notes due 2038 to be issued by Holdings to
Intel Singapore, in substantially the form attached as Exhibit A to the Note Agreement.

     “Intel Option” means that certain Option to Purchase Ordinary Shares by and between
Holdings and Intel Singapore dated March 29, 2008.

     “Intel Patent Assignment” means any agreement for the assignment of Intel Transferred
Patents by an Intel Transferor to Holdings or a Subsidiary of Holdings dated as of the Closing
Date.

     “Intel Post-Closing Environmental Liability” shall mean any Environmental Liability,
including a worsening of existing conditions, to the extent arising out of or relating to (i) acts
of Holdings or any of its Affiliates occurring on or after the Effective Time, (ii) inaction of
Holdings or any of its Affiliates occurring one year or later after the Effective Time, or (iii)
inaction of Holdings or any of its Affiliates occurring within one year after the Effective Time if
Holdings or any of its Affiliates knew about the existing condition and its inaction worsened the
existing condition; and in connection with the Numonyx Business or the Intel Business, the Intel
Transferred Owned Real Property, the Intel Transferred Leased Real Property, the Intel Transferred
Assets or the Intel Transferred Entities or the ownership or operation of a Numonyx Business or the
Intel Business, the Intel Transferred Owned Real Property, the Intel Transferred Leased Real
Property or the Intel Transferred Assets, the Intel Transferred Entities by, or the

A-10

 

disposal or treatment of Hazardous Substances generated by, Holdings or an Affiliate of
Holdings (including an Intel Transferred Entity) after the Effective Time.

     “Intel Pre-Closing Environmental Liability” shall mean any Environmental Liability
which (i) relates to the ownership or operation of the Intel Business (as now or previously
conducted), the Intel Transferred Owned Real Property, the Intel Transferred Leased Real Property,
the Intel Transferred Assets, the Intel Transferred Entities or any other real property or facility
owned, leased, operated or used in connection with the Intel Business (as now or previously
conducted) or for the disposal or treatment of Hazardous Substances generated in connection with
the Intel Business, the Intel Transferred Owned Real Property, the Intel Transferred Leased Real
Property, the Intel Transferred Assets, or the Intel Transferred Entities, (ii) arises out of or
relates to acts occurring or conditions existing prior to the Effective Time, but only to the
extent that the Environmental Liability arising out of or relating to acts occurring or conditions
existing prior to the Effective Time can be identified from (A) the Intel Environmental Reports so
long as such reports are issued not later than one year subsequent to the Closing or (B) documents
or data generated prior to the Effective Time and in the possession of Intel prior to the Effective
Time, and (iii) is identified in the foregoing documents and/or data with sufficient specificity so
as to clearly identify the scope of the Environmental Liability that is attributable to the Intel
Business, the Intel Transferred Owned Real Property, the Intel Transferred Leased Real Property,
the Intel Transferred Assets, or the Intel Transferred Entities. Notwithstanding the foregoing,
Intel Pre-Closing Environmental Liability shall not include any Intel Post-Closing Environmental
Liability.

     “Intel Processor” means a Processor first developed by, for or with substantial
participation by Intel or any Intel Licensed Subsidiary, or the design of which has been purchased
or otherwise acquired by Intel or any Intel Licensed Subsidiary, including the Intel®
8086, 80186, 80286, 80386, 80486, Celeron®, CoreTM, Pentium®, XeonTM,
StrongARM, XScale®, Itanium®, MXP, IXP, 80860 and 80960 microprocessor
families, and the 8087, 80287, and 80387 math coprocessor families.

     “Intel Processor Bus” means an Intel Bus that is capable of connecting one or more
Intel Processors to each other or to an Intel Compatible Chipset.

     “Intel Products” means all NOR Flash Memory Products and all Stacked Memory Products,
manufactured, sold, or under development by Intel as of the Effective Date, including those listed
on Schedule 1.1(c) of the Intel ATA Disclosure Letter.

     “Intel Proprietary Product” means Intel Compatible Processors, Intel Architecture
Emulators, Intel Compatible Compilers, any product that implements an Intel Processor Bus, and
Intel Compatible Chipsets.

     “Intel Pudong Services Agreement” means the Intel Pudong Services Agreement entered
into by and between Intel and Numonyx dated as of the Closing Date.

     “Intel Restricted Employees” shall have the meaning set forth in Section
4.7(a) of this Agreement.

A-11

 

     “Intel Retained Trade Secrets” means trade secrets, know-how and other proprietary
information owned by Intel or any Licensed Subsidiary thereof as of the Closing Date and not
included in the Intel Transferred Trade Secrets that are or have been used by Intel in connection
with the Intel Business.

     “Intel Secondment Agreement” means the Intel Personnel Secondment Agreement entered
into by and between Intel and Numonyx dated as of the Closing Date.

     “Intel Singapore” means Intel Technology Asia Pte. Ltd., a limited liability company
organized under the laws of Singapore.

     “Intel Supply Agreement” means the Supply Agreement entered into by and between Intel
and Holdings or a Subsidiary of Holdings dated as of the Closing Date.

     “Intel Trademark Assignment” means any agreement for the assignment of Intel
Transferred Trademarks by an Intel Transferor to Holdings or a Subsidiary of Holdings dated as of
the Closing Date.

     “Intel Transferors” shall have the meaning set forth in the Recitals of the Intel
Asset Transfer Agreement.

     “Intel Transferred Assets” shall have the meaning set forth in Section 2.1 of
the Intel Asset Transfer Agreement.

     “Intel Transferred Contracts” means all unexpired contracts set forth on Schedule
2.1(e) of the Intel ATA Disclosure Letter, together with the Intel Transferred Purchase Orders,
the Intel Transferred Sales Orders and the Intel Leases.

     “Intel Transferred Copyrights” means the Copyrights identified on Schedule
2.1(i) of the Intel ATA Disclosure Letter.

     “Intel Transferred Employees” means the Intel Business Employees who accept an offer
of employment from Numonyx or a Subsidiary of Numonyx and who begin their employment with Numonyx
or a Subsidiary of Numonyx on the Intel Employee Transfer Date (or, to the extent permitted by
Applicable Law with respect to inactive employees on short-term, medical or other leave of absence,
at the time such employee returns to active status) or such other date as the parties may
reasonably agree; provided, however, that Intel Business Employees must begin their employment with
Numonyx or a Subsidiary of Numonyx no later than June 30, 2008, or such other date as required by
Applicable Law or as otherwise mutually agreed upon by the Parties to be considered an Intel
Transferred Employee.

     “Intel Transferred Entities” means the entities set forth on Schedule 1.1(a)
of the Intel ATA Disclosure Letter.

     “Intel Transferred Entity Books and Records” means the minute books, stock records,
Tax Returns and other records related to Taxes, if any, in each case of each of the Intel
Transferred Entities.

A-12

 

     “Intel Transferred Intellectual Property” means, collectively, the Intel Transferred
Copyrights, Intel Transferred Patents, Intel Transferred Trademarks and Intel Transferred Trade
Secrets.

     “Intel Transferred Interests” means 100% of the outstanding equity, voting and profit
interests in the Intel Transferred Entities.

     “Intel Transferred Leased Real Property” means the real property leased by Intel or
its Subsidiaries identified in Schedule 3.6(b) of the Intel ATA Disclosure Letter.

     “Intel Transferred Liabilities” shall have the meaning set forth in Section
2.3 of the Intel Asset Transfer Agreement.

     “Intel Transferred Owned Real Property” means the real property owned by Intel or its
Subsidiaries identified in Schedule 3.6(a) of the Intel ATA Disclosure Letter.

     “Intel Transferred Patents” means those Patents identified on Schedule 2.1(h)
of the Intel ATA Disclosure Letter.

     “Intel Transferred Real Property” means the Intel Transferred Owned Real Property and
the Intel Transferred Leased Real Property transferred to Holdings or one of its Subsidiaries
pursuant to the terms of the Intel Facility Transfer Agreements.

     “Intel Transferred Sales Orders” means all pending and unfulfilled sales orders or
portions thereof for Intel Products.

     “Intel Transferred Trade Secrets” means any Trade Secrets owned by Intel or any of its
Subsidiaries as of the Closing Date (including any such Trade Secrets that consist of technical
documentation of the nature of the files and other documentation identified on Schedule
2.1(h) to the Intel ATA Disclosure Letter) that are used exclusively in the Intel Business and
not materially embodied or used in or with any other current product or service of Intel or any of
its Subsidiaries.

     “Intel Transferred Trademarks” means those Trademarks identified on Schedule
2.1(k) of the Intel ATA Disclosure Letter.

     “Intel Transition Services Agreement” means the Intel Transition Services Agreement
entered into by and between Intel and Numonyx dated as of the Closing Date.

     “Intellectual Property” means intellectual property rights arising from or in respect
of the following, whether protected, created or arising under the laws of the United States or any
other jurisdiction: Copyrights, Trade Secrets, Patents and Trademarks.

     “Intesa” means Intesa Sanpaolo S.p.A.

     “Knowledge” means, with respect to any Person, the actual knowledge of such Person.
Notwithstanding the foregoing, with respect to any Person that is a corporation, limited liability
company, partnership or other business entity, actual knowledge shall be deemed to mean the

A-13

 

actual knowledge of all directors and officers of any such Person; provided, however, that (i)
with respect to Intel, “Knowledge” shall be deemed to be solely the actual knowledge of the
individuals identified in Section A of Schedule 1.1(b) of the Intel ATA Disclosure Letter,
after obtaining from the individuals identified in Section B of Schedule 1.1(b) of the
Intel ATA Disclosure Letter a certification as to their actual knowledge of each matter
with respect to which Intel makes any representation or warranty as to its Knowledge under any
Transaction Document, (ii) with respect to ST, “Knowledge” shall be deemed to be solely the actual
knowledge of the individuals identified in Section A on Schedule 1.1(b) of the ST ACA
Disclosure Letter, after obtaining from the individuals identified in Section B on Schedule
1.1(b) of the ST ACA Disclosure Letter a certification as to their actual knowledge of each
matter with respect to which ST makes any representation or warranty as to its Knowledge under any
Transaction Document, and (iii) with respect to the FP Parties, “Knowledge” shall be deemed to be
solely the actual knowledge of Dipanjan Deb, Phokion Potamianos, and Keith Toh.

     “Liability” means, with respect to any Person, any liability or obligation of such
Person of any kind, character or description, whether known or unknown, absolute or contingent,
asserted or unasserted, accrued or unaccrued, liquidated or unliquidated, secured or unsecured,
joint or several, due or to become due, vested or unvested, absolute, contingent, executory,
determined, determinable or otherwise and whether or not the same is required to be accrued on the
financial statements of such Person.

     “Licensed Subsidiary” means any corporation, partnership, joint venture, limited
liability company or other entity recognized in any jurisdiction in the world, now or hereafter, in
which Intel, ST or Holdings, as the case may be, owns or controls (either directly or indirectly)
any of the following:

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

     An entity shall be deemed to be a Licensed Subsidiary under this Agreement only so long as the
Party (Holdings, Intel or ST, as the case may be) owning or controlling the shares, stock,
securities or other ownership interest required above has not contractually or otherwise
surrendered, limited or in any other way constrained its authority to elect the managing authority
or make decisions for the entity, and only so long as all the requisite conditions of being a
Licensed Subsidiary are met. For clarity, any event causing a Person that was once a Licensed
Subsidiary to no longer meet the requisite conditions of being a Licensed Subsidiary as set forth
in this Section, shall render such Person to be no longer a Licensed Subsidiary.

     “Licensing Affiliate”, with respect to any Person, means any other Person directly or
indirectly Controlling, Controlled by or under common Control with, such Person.

A-14

 

     “Lien” means, with respect to any asset, any lien, mortgage, pledge, hypothecation,
right of others, claim, security interest, encumbrance, lease, sublease, license, interest, option,
charge or other restriction or limitation of any nature whatsoever in respect of such asset,
including any Share Encumbrance; provided, however, that any license of Intellectual Property shall
not be considered a Lien on such Intellectual Property.

     “Losses” means any and all deficiencies, judgments, settlements, demands, claims,
suits, actions or causes of action, assessments, liabilities, losses, damages (excluding indirect,
incidental or consequential damages), interest, fines, penalties, costs and expenses (including
reasonable legal, accounting and other costs and expenses) incurred in connection with
investigating, defending, settling or satisfying any and all demands, claims, actions, causes of
action, suits, proceedings, assessments, judgments or appeals, and in seeking indemnification
therefor.

     “Management Board” means the “Managing Board” as referenced in the Articles of
Association.

     “Managing Director” means any member of Holdings’ Management Board.

     “Master Agreement” has the meaning set forth in the introduction to this Agreement.

     “Master Agreement Disclosure Letter” means each of the Intel Master Agreement
Disclosure Letter and the ST Master Agreement Disclosure Letter.

     “Master Amendment Agreement” means the Master Amendment Agreement dated December 20,
2007 entered into among the Hynix JV, as borrower, DBS Bank Ltd. as the Phase I Junior Lender,
Phase I Junior Security Agent and Phase I Junior Facility Agent, the banks and financial
institutions acting as the lenders under the US $750,000,000 (Phase I) Loan Agreement dated August
11, 2006 and the other parties thereto, which amends and restates the Phase 1 loan documents.

     “Memory Device” shall mean an Integrated Circuit alone and not in combination with any
other product containing one or more memory cells, together with the circuit elements connected to
the memory cells that are functionally necessary for carrying out memory hierarchy functions in
association with the memory cells, including, by way of example, decoding circuits, control
circuits for memory sequencing, sensing circuits, input protection circuits, high speed interface
circuits, signal I/O amplification circuits, redundancy circuits, delay elements, test mode control
circuits, reliability stress algorithms, address transition detection circuits, user selectable
operating mode detection circuits, reference generators or voltage generator modules. Memory
Device does not include Processors or Intel Proprietary Products.

     “NAND Flash Memory Integrated Circuit” means a Flash Memory Integrated Circuit wherein
the memory cells included in the Flash Memory Integrated Circuit are arranged in groups of serially
connected memory cells (each such group of serially connected memory cells called a “string”) in
which the drain of each memory cell of a string (other than the first memory cell in the string) is
connected in series to the source of another memory cell in such string, the gate of each memory
cell in such string is directly accessible, and the drain of the uppermost bit of such string is
coupled to the bitline of the memory array.

A-15

 

     “NAND Flash Memory Product” means a NAND Flash Memory Integrated Circuit, in die,
wafer, or packaged form, that utilizes (i) electrically programmable and electrically erasable
utilizing floating gate to substrate Fowler-Nordheim charge transfer mechanism for both programming
and erase operations; (ii) electrically programmable and electrically erasable utilizing floating
gate to substrate Fowler-Nordheim charge transfer mechanism for programming and hot-hole injection
for erase operations; or (iii) memory cells arranged in groups of serially connect memory cells
(each such group of serially connect memory cells called a “string”) in which the drain of each
memory cell of a string (other than the first memory cell in the string) is connected in series to
the source of another memory cell in such string, the gate of each memory cell in such string is
directly accessible, and the drain of the uppermost bit of such string is coupled to the bitline of
the memory array.

     “NOR Flash Memory Integrated Circuit” means a Flash Memory Integrated Circuit wherein
the memory cells included in the Flash Memory Integrated Circuit are arranged in groups of
connected memory cells in which the gate, source and drain of each memory cell is directly
accessible.

     “NOR Flash Memory Product” means a NOR Flash Memory Integrated Circuit, in die, wafer
or packaged form, utilizing a hot carrier injection programming mechanism and one floating gate
charge storage region per transistor whereby the memory array is arranged so that the drain of one
memory cell is connected directly to a source line through at most one memory transistor.

     “Note Agreement” means the Note Agreement entered into by and among Holdings, Intel
Singapore, ST and FP dated as of the Closing Date.

     “Noteholder” means a holder of Intel Notes, ST Notes or the FP Notes, and each Person
(other than Holdings) that shall be a party to the Note Agreement and Securityholders’ Agreement as
a holder of Notes, whether in connection with the execution and delivery thereof as of the Closing
Date or otherwise, so long as such Person shall beneficially own, hold of record or be a registered
holder of any Notes.

     “Notes” means, collectively, the Intel Notes, ST Notes and FP Notes issued on the
Closing Date, in an aggregate amount of $320,230,000.

     “Numonyx” means Numonyx B.V., a private company with limited liability organized under
the laws of The Netherlands, with its corporate seat in Amsterdam, The Netherlands.

     “Numonyx Allocated Positions” means those positions with Holdings or a Subsidiary of
Holdings for which an Intel Business Employee or an ST Business Employee is not allocated on
Schedule 3.12(c) to the Intel ATA Disclosure Letter or Schedule 3.12(c) to the ST
ACA Disclosure Letter.

     “Numonyx Approvals” means any Governmental Approval which Intel, ST and FP reasonably
agree Holdings or any of its Affiliates must obtain in order to consummate the transactions
contemplated by the Transaction Documents.

A-16

 

     “Numonyx Business” means the sale, manufacture, design and/or development of advanced
memory solutions, including Flash Memory Integrated Circuits, Phase Change Memory Products, Stacked
Memory Products and platform memory products which include data management memory components for
applications including without limitation cellular phones, memory cards, digital audio players,
data processing platform memory and embedded form factors.

     “Numonyx Deed of Incorporation” shall have the meaning set forth in Section
4.16(c) of this Agreement.

     “Numonyx Italy” means STMicroelectronics (M6) S.r.l., a company organized under the
laws of Italy.

     “Numonyx Transition Services Agreement” means the Numonyx Transition Services
Agreement entered into by and between ST and Numonyx dated as of the Closing Date.

     “Ordinary Shares” means ordinary shares of Holdings, par value one euro per share.

     “Original Master Agreement” has the meaning set forth in the Recitals to this
Agreement.

     “Party” has the meaning set forth in the introduction to this Agreement.

     “Patents” means patents and applications worldwide, including continuation,
divisional, continuation in part, reexamination, or reissue patent applications and patents issuing
thereon.

     “Permits” means all permits, licenses, franchises, approvals, certificates, consents,
waivers, concessions, exemptions, orders, registrations, notices or other authorizations of any
Governmental Authority necessary for a Party or its Subsidiaries to own, lease and operate such
Party’s Transferred Assets and to carry on such Party’s Business as currently conducted.

     “Permitted Liens” means (i) Liens for Taxes or governmental assessments, charges or
claims the payment of which is not yet due or which are both (A) being contested in good faith, and
(B) described in reasonable detail on a Schedule to the applicable Transaction Document, (ii)
statutory Liens of landlords and statutory Liens of carriers, warehousemen, mechanics or
materialmen incurred in the ordinary course of business which are either for sums not yet due or
are immaterial in amount, (iii) zoning, entitlement, and other land use laws, and (iv) easements
and other imperfections of title or encumbrances, in each case, that do not materially detract from
the value of the relevant Transferred Asset or materially interfere with any present or intended
use of such Transferred Asset.

     “Permitted Transferee” means with respect to a Shareholder or Noteholder, any direct
or indirect wholly owned subsidiary of such Shareholder or Noteholder, any parent company that
directly or indirectly wholly owns such Shareholder or Noteholder, or any direct or indirect wholly
owned subsidiary of such parent company.

     “Person” means an individual, corporation, partnership, association, limited liability
company, trust, estate or other similar business entity or organization, including a Governmental

A-17

 

Authority and any syndicate or group that would be deemed to be a person under Section
13(d)(3) of the Exchange Act.

     “Phase Change Memory” or “PCM” means a Memory Device in die, wafer or packaged
form, adjusting the phase of material, such as a chalcogenide, as a means to store one or more
different data states (including binary or multi-level cell structures) with or without any on-chip
control, I/O and other support circuitry.

     “Phase Change Memory Products” or “PCM Products” mean non-volatile memory
Integrated Circuits that contain memory cells that are electrically programmable and electrically
erasable whereby the memory cells consist of one or more structures that contain a chalcogenide or
any other functionally equivalent phase change material utilizing one or more different material
phases (including binary or multi-level cell structures), with or without any on-chip control, I/O
and other support circuitry.

     “Pledge Agreements” means those certain pledge agreements entered into by Holdings and
Numonyx in favor of the Guarantors, as security for satisfaction of the Reimbursement Obligations.

     “Proceeding” means any action, suit, claim, charge, hearing, arbitration, audit, or
proceeding (public or private).

     “Processor” means any Integrated Circuit or combination of Integrated Circuits capable
of processing digital data, such as a microprocessor or coprocessor (including a math coprocessor,
graphics coprocessor, or digital signal processor).

     “Prohibited Transaction” shall have the meaning set forth in Section 4.2 of
this Agreement.

     “Receiving Party” shall (i) for purposes of the Intel Asset Transfer Agreement, have
the meaning set forth in Section 5.1(b) of the Intel Asset Transfer Agreement, (ii) for
purposes of the ST Asset Contribution Agreement, have the meaning set forth in Section
5.1(b) of the ST Asset Contribution Agreement and (iii) for purposes of the Intel Intellectual
Property Agreement and the ST Intellectual Property Agreement, with respect to Confidential
Information of a Party, mean another Party that is not a Licensing Affiliate of such Party and that
receives (or receives access to) such Confidential Information pursuant to or in connection with
the Intel Intellectual Property Agreement or the ST Intellectual Property Agreement.

     “Release” means (i) any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing, or other release of any Hazardous
Substance at, in, on, into, or onto the environment; (ii) the abandonment or discard of barrels,
containers, tanks, or other receptacles containing or previously containing any Hazardous
Substance; or (iii) any release, emission, or discharge, as those terms are defined in any
applicable Environmental Laws.

     “Reimbursement Obligations” means the obligations of Holdings and Numonyx and their
respective Subsidiaries pursuant to the Contribution Agreement, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter incurred.

A-18

 

     “Remedial Action” means investigation, evaluation, risk assessment, monitoring,
response, removal, clean-up, remediation, corrective action or other terms of similar import and
any related closure, post-closure, operations and maintenance or engineering control activities.

     “Restricted Employee” means any ST Restricted Employee, any Intel Restricted Employee
and any Numonyx Restricted Employee.

     “Securityholders’ Agreement” means the Securityholders’ Agreement entered to by and
among Intel (as used in this definition, “Intel” has the meaning ascribed to such term in the
Securityholders’ Agreement), ST, the FP Parties, Holdings, the Noteholders, and the Guarantors,
dated as of the Closing Date.

     “Series A Preferred Shares” means Series A convertible preferred shares of Holdings,
par value one euro per share.

     “Series A-1 Preferred Shares” means Series A-1 non-convertible preferred shares of
Holdings, par value one eurocent per share.

     “Share Encumbrances” means Liens, claims, options, rights of other parties, voting
trusts, proxies, shareholder or similar agreements, encumbrances or other restrictions (other than
restrictions imposed by applicable securities laws).

     “Shareholder” means each Person (other than Holdings) that shall be a party to the
Securityholders’ Agreement as a holder of Shares, whether in connection with the execution and
delivery thereof as of the Closing Date or otherwise, so long as such Person shall beneficially
own, hold of record or be a registered holder of any Shares.

     “Shares” means the Ordinary Shares, the Preferred Shares and any other shares of the
share capital of Holdings issued on or after the date of the Securityholders’ Agreement.

     “Signing Date” means May 22, 2007.

     “Specified Intel Representations” means any representation or warranty made by Intel
in Sections 3.1 through 3.24 (other than Section 3.17) of the Intel Asset
Transfer Agreement or Sections 3.1(a) through 3.1(g) of this Agreement (other than
Section 3.17 of the Intel Asset Transfer Agreement).

     “Specified Intel Schedules” means Schedule 3.1 through 3.24 (other
than Schedule 3.17) of the Intel ATA Disclosure Letter or Schedules 3.1(a) through
3.1(g) of the Intel Master Agreement Disclosure Letter.

     “Specified Holdings Representations” means any representation or warranty made by
Holdings or Numonyx in Sections 4.1 through 4.8 of either of the Intel Asset
Transfer Agreement or the ST Asset Contribution Agreement.

     “Specified ST Representations” means any representation or warranty made by ST in
Sections 3.1 through 3.24 (other than Section 3.17) of the ST Asset
Contribution Agreement or

A-19

 

Sections 3.2(a) through 3.2(g) of this Agreement (other than Section
3.17 of the ST Asset Contribution Agreement).

     “Specified ST Schedules” means Schedule 3.1 through 3.24 (other than
Schedule 3.17) of the ST ACA Disclosure Letter or Schedules 3.2(a) through
3.2(g) of the ST Master Agreement Disclosure Letter.

     “ST” has the meaning set forth in the introduction to this Agreement.

     “ST ACA Disclosure Letter” means the disclosure letter, as agreed to between the
Parties as of the Signing Date (with such amendments as have been subsequently made in accordance
with Section 4.12 of this Agreement), containing the Schedules required by the provisions
of the ST Asset Contribution Agreement.

     “ST Ancillary Agreements” means the ST Assignment and Assumption Agreement, ST Bill of
Sale, ST Intellectual Property Agreement, ST Transition Services Agreements, ST Facility Transfer
Agreements, ST Joint Development Agreement, ST (EWS) Supply Agreement, ST Back-End Supply
Agreement, ST M5 Consortium Agreement, ST R2 Consortium Agreement, TFR Indemnification Agreement,
Bank Guarantee, ST Assignment and Assumption of Excluded Assets and Excluded Liabilities
Agreements, ST Patent Assignment, ST Trademark Assignment, the Numonyx Transition Services
Agreement, ST Secondment Agreement and ST Entity Capitalization and Assignment Agreement.

     “ST Approvals” means the required consents, waivers and approvals of ST set forth on
Schedule 3.3 of the ST ACA Disclosure Letter and Schedule 3.2(c) of the ST Master
Agreement Disclosure Letter.

     “ST Asset Contribution Agreement” means that certain Asset Contribution Agreement
entered into by and among ST, Holdings and Numonyx dated as of the Closing Date.

     “ST Assignment and Assumption Agreement” means, collectively, the Assignment and
Assumption Agreements to be entered into by Numonyx or its Affiliates, on one hand, and ST or its
Affiliates, on the other hand, as of the Closing Date.

     “ST Assignment and Assumption of Excluded Assets and Excluded Liabilities Agreement”
shall have the meaning set forth in Section 2.4 of the ST Asset Contribution Agreement.

     “ST Back-End Supply Agreement” means the ST Back-End Supply Agreement entered into by
and between ST and Numonyx dated as of the Closing Date.

     “ST Bill of Sale” means any bill of sale, deed of contribution or other similar
document reasonably requested by any Party and reasonably necessary to transfer any ST Transferred
Asset in accordance with applicable law to be executed by one or more ST Transferors in favor of
Holdings or a Subsidiary of Holdings as of the Closing Date.

     “ST Books and Records” means all of the books of account, general and financial
records, invoices, shipping records, customer records, supplier lists, correspondence and other

A-20

 

documents, records and files of ST and its Subsidiaries whether in hard copy or computer
format which relate exclusively to the ST Business and are necessary for the conduct of such ST
Business after the Closing (excluding all personnel records or any employee information for ST
Business Employees who are not ST Transferred Employees employed by an ST Transferred Entity as of
the Closing Date).

     “ST Business” means the sale, manufacture, design and or development of NOR Flash
Memory Products, NAND Flash Memory Products, Phase Change Memory Products and Stacked Memory
Products.

     “ST Business Audited Financial Statements” shall have the meaning set forth in
Section 5.1(h) of this Agreement.

     “ST Business Capital Expenditures Plan” means the plan set forth on Schedule
3.14(e) of the ST ACA Disclosure Letter setting forth (i) the actual capital expenditures of ST
with respect to the ST Business for its first fiscal quarter of 2007; and (ii) the budgeted capital
expenditures of ST with respect to the ST Business for the second, third and fourth fiscal quarters
of 2007 and the first fiscal quarter of 2008.

     “ST Business Employees” means the employees who are identified on Schedule
3.12(c) of the ST ACA Disclosure Letter.

     “ST Consideration” has the meaning set forth in Section 2.6(b) of the ST Asset
Contribution Agreement.

     “ST Contract” means any Contract of ST or its Subsidiaries.

     “ST Contractual Consents” shall have the meaning set forth in Section 3.8(b)
of the ST Asset Contribution Agreement.

     “ST Designated Employees” means those ST Business Employees who are identified as ST
Designated Employees on Schedule 4.11(a) of the ST Master Disclosure Letter.

     “ST Entity Capitalization and Assignment Agreement” means the ST Entity Capitalization
and Assignment Agreement entered into by and between ST and Numonyx, dated as of the Closing Date
and effective immediately prior to the Closing.

     “ST Environmental Reports” means reports or audits prepared by the Environmental
Consultants summarizing the results of Phase I, Phase II and environmental compliance audits
regarding the Owned ST Real Property, the Leased ST Real Property and any property that is the
subject of an ST Lease, which shall be reasonably satisfactory to FP and Intel in form and
substance, and paid for by Intel. At the request of Holdings or a Subsidiary of Holdings, ST shall
review the ST Environmental Reports and confirm that all Environmental Liabilities identified in
such reports are sufficiently identified as to scope as that term is used in clause (iii) of the
definition of ST Pre-Closing Environmental Liability. If ST believes the issues are not
sufficiently identified, ST must pay for the additional investigation to further characterize the
Environmental Liability sufficient to meet the criteria in clause (iii) of the definition of ST
Pre-Closing Environmental Liability.

A-21

 

     “ST (EWS) Supply Agreement” means the ST (EWS) Supply Agreement entered into by and
between ST and Numonyx dated as of the Closing Date.

     “ST Excluded Employees” shall have the meaning set forth in Section 4.11(b) of
this Agreement.

     “ST Facility Transfer Agreements” means the agreements and other documents used to
consummate or implement the transfer by ST and its Subsidiaries to Numonyx and its Subsidiaries of
the assets described therein which shall be substantially based on the ST Facility Transfer Term
Sheets.

     “ST Facility Transfer Term Sheets” means the term sheets attached to Schedule
4.22(a) to the ST Master Agreement Disclosure Letter reflecting the terms and conditions upon
which the agreements and other related documents effecting the transfer by ST and its Subsidiaries
of the assets described therein to Numonyx and its Subsidiaries shall be substantially based.

     “ST Intellectual Property Agreement” means the Intellectual Property Agreement entered
into by and between ST, Holdings and Numonyx dated as of the Closing Date.

     “ST Joint Development Agreement” means the Joint Development Agreement entered into by
and between ST and Numonyx dated as of the Closing Date.

     “ST Leases” means all leases or other occupancy agreements pursuant to which Intel or
its Subsidiaries lease or occupy the ST Transferred Leased Real Property.

     “ST M5 Consortium Agreement” means the ST M5 Consortium Agreement by and between
Numonyx Italy and STMicroelectronics S.r.l. dated October 24, 2007, as amended.

     “ST Master Agreement Disclosure Letter” means the disclosure letter, as delivered by
ST to Intel and the FP Parties as of the Signing Date (with such amendments as have been
subsequently made in accordance with Section 4.12 of this Agreement), containing the
Schedules required by the provisions of this Agreement.

     “ST Material Adverse Effect” means any event, change or circumstance that,
individually or in the aggregate with all other such events, changes or circumstances, (a) results
in a material adverse effect on, or material adverse change in, the ST Transferred Assets, taken as
a whole, or (b) any event, change or circumstance that is materially adverse to the ability of ST
to perform its obligations under any Transaction Document to which it is or will be a party or to
consummate the transactions contemplated thereby, other than, in the case of clause (a) above, such
changes, effects or circumstances reasonably attributable to: (i) economic, capital market or
political conditions generally in the United States or foreign economies in any locations where the
ST Business has material operations or sales, provided the changes, effects or circumstances do not
have a materially disproportionate effect (relative to other industry participants) on the ST
Business, (ii) conditions generally affecting the industry in which the ST Business operates,
provided that the changes, effects or circumstances do not have a materially disproportionate
effect (relative to other industry participants) on the ST Business; (iii) the announcement or
pendency of the transactions contemplated by the Transaction Documents; (iv) outbreak of
hostilities or war, acts of terrorism or acts of God; or (v) compliance with ST’s obligations or
the

A-22

 

satisfaction of the conditions to the closing of the transactions contemplated by the
Transaction Documents.

     “ST Notes” means the 9.5% Subordinated Notes due 2038 to be issued by Holdings to ST,
in substantially the form attached as Exhibit A to the Note Agreement.

     “ST Numonyx Shares” shall have the meaning set forth in Section 2.6(a) of the
ST Asset Contribution Agreement.

     “ST Patent Assignment” means any agreement for the assignment of ST Transferred
Patents by an ST Transferor to Numonyx dated as of the Closing Date.

     “ST Post-Closing Environmental Liability” shall mean any Environmental Liability,
including a worsening of existing conditions, to the extent arising out of or relating to (i) acts
of Holdings or any of its Affiliates occurring on or after the Effective Time, (ii) inaction by
Holdings or any of its Affiliates occurring one year or later after the Effective Time, or (iii)
inaction by Holdings or any of its Affiliates occurring within one year after the Effective Time if
Holdings or any of its Affiliates knew about the existing condition and its inaction worsened the
existing condition; and in connection with the Numonyx Business or the ST Business, the ST
Transferred Owned Real Property, the ST Transferred Leased Real Property, the ST Transferred Assets
or the ST Transferred Entities or the ownership or operation of a Numonyx Business or the ST
Business, the ST Transferred Owned Real Property, the ST Transferred Leased Real Property or the ST
Transferred Assets, the ST Transferred Entities by, or the disposal or treatment of Hazardous
Substances generated by, Holdings or an Affiliate of Holdings (including an ST Transferred Entity)
after the Effective Time.

     “ST Pre-Closing Environmental Liability” shall mean any Environmental Liability which
(i) relates to the ownership or operation of the ST Business (as now or previously conducted), the
ST Transferred Owned Real Property, the ST Transferred Leased Real Property, the ST Transferred
Assets, the ST Transferred Entities or any other real property or facility owned, leased, operated
or used in connection with the ST Business (as now or previously conducted) or for the disposal or
treatment of Hazardous Substances generated in connection with the ST Business, the ST Transferred
Owned Real Property, the ST Transferred Leased Real Property, the ST Transferred Assets, or the ST
Transferred Entities, (ii) arises out of or relates to acts occurring or conditions existing prior
to the Effective Time, but only to the extent that the Environmental Liability arising out of or
relating to acts occurring or conditions existing prior to the Effective Time can be identified
from (A) the ST Environmental Reports so long as such reports are issued not later than one (1)
year subsequent to the Closing or (B) documents or data generated prior to the Effective Time and
in the possession of ST prior to the Effective Time, and (iii) is identified in the foregoing
documents and/or data with sufficient specificity so as to clearly identify the scope of the
Environmental Liability that is attributable to the ST Business, the ST Transferred Owned Real
Property, the ST Transferred Leased Real Property, the ST Transferred Assets, or the ST Transferred
Entities. Notwithstanding the foregoing, ST Pre-Closing Environmental Liability shall not include
any ST Post-Closing Environmental Liability.

A-23

 

     “ST Products” means NOR Flash Memory Products, NAND Flash Memory Products, and Stacked
Memory Products, including those listed on Schedule 1.1(c) of the ST ACA Disclosure Letter.

     “ST R2 Consortium Agreement” means the ST R2 Consortium Agreement by and between
Numonyx Italy and STMicroelectronics S.r.l., dated October 24, 2007, as amended.

     “ST Real Property” means all real property, leaseholds and other interests in real
property owned or leased by ST or its Subsidiaries and used or held for use exclusively in the ST
Business, including all real property identified in Schedule 3.6 of the ST ACA Disclosure
Letter, together in each case with ST’s or its Subsidiary’s right, title and interest in and to all
structures, facilities or improvements currently or as of the Closing Date located thereon and all
easements, licenses, rights and appurtenances relating to the foregoing.

     “ST Restricted Employees” shall have the meaning set forth in Section 4.7(b)
of this Agreement.

     “ST Retained Trade Secrets” means trade secrets, know-how and other proprietary
information owned by ST or any Licensed Subsidiary thereof as of the Effective Date and not
included in the ST Transferred Trade Secrets that are or have been used by ST in connection with
the ST Business.

     “ST Secondment Agreement” means the ST Personnel Secondment Agreement entered into by
and between ST and Numonyx dated as of the Closing Date.

     “ST Trademark Assignment” means any agreement for the assignment of ST Transferred
Trademarks by ST to Numonyx dated as of the Closing Date.

     “ST Transferors” shall have the meaning set forth in the Recitals of the ST Asset
Contribution Agreement.

     “ST Transferred Assets” shall have the meaning set forth in Section 2.1 of the
ST Asset Contribution Agreement.

     “ST Transferred Contracts” means all unexpired contracts set forth on Schedule
2.1(e) of the ST ACA Disclosure Letter, together with the ST Transferred Purchase Orders, the
ST Transferred Sales Orders and the ST Leases.

     “ST Transferred Employees” means the ST Business Employees and ST Designated Employees
who accept an offer of employment from Numonyx or a Subsidiary of Numonyx and who begin their
employment with Numonyx or such Subsidiary at the Closing or the ST Employee Transfer Date (or, to
the extent permitted by Applicable Law with respect to inactive employees on short-term, medical or
other leave of absence, at the time such employee returns to active status) or such other date as
the parties may reasonably agree; provided, however, that ST Business Employees must begin their
employment with Numonyx or a Subsidiary of Numonyx no later than June 30, 2008, or such other date
as required by Applicable Law or as otherwise mutually agreed upon by the Parties, to be considered
an ST Transferred Employee.

A-24

 

     “ST Transferred Entities” means the entities set forth on Schedule 1.1(a) of
the ST ACA Disclosure Letter.

     “ST Transferred Intellectual Property” means, collectively, the ST Transferred
Copyrights, ST Transferred Patents, ST Transferred Trademarks and ST Transferred Trade Secrets.

     “ST Transferred Interests” means 100% of the outstanding equity, voting and profit
interests in the ST Transferred Entities.

     “ST Transferred Leased Real Property” means the real property leased by ST or its
Subsidiaries identified in Schedule 3.6(b) of the ST ACA Disclosure Letter.

     “ST Transferred Liabilities” shall have the meaning set forth in Section 2.3
of the ST Asset Contribution Agreement.

     “ST Transferred Owned Real Property” means the real property owned by ST or its
Subsidiaries identified in Schedule 3.6(a) of the ST ACA Disclosure Letter.

     “ST Transferred Purchase Orders” means each purchase order or portion thereof issued
by ST or a Subsidiary of ST to the extent relating to the ST Business.

     “ST Transferred Real Property” means the ST Transferred Owned Real Property and the ST
Transferred Leased Real Property transferred to Numonyx or one of its Subsidiaries pursuant to the
terms of the ST Facility Transfer Agreements.

     “ST Transferred Sales Orders” means all pending and unfulfilled sales orders or
portions thereof for ST Products.

     “ST Transferred Trademarks” means those Trademarks identified on Schedule
2.1(k) of the ST ACA Disclosure Letter.

     “ST Transferred Trade Secrets” means any Trade Secrets owned by ST or any of its
Subsidiaries as of the Closing Date (including any such Trade Secrets that consist of technical
documentation of the nature of the files and other documentation identified on Schedule
2.1(h) to the ST ACA Disclosure Letter) that are used exclusively in the ST Business and not
materially embodied or used in or with any other current product or service of ST or any of its
Subsidiaries.

     “ST Transition Services Agreement” means the ST Transition Services Agreement entered
into by and between ST and Numonyx dated as of the Closing Date.

     “Stacked Memory Products” means the assembly of multiple Memory Devices packaged
together as a single product unit which fits within the footprint associated with a single Memory
Device socket. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to include
within the Intel Transferred Assets or ST Transferred Assets any Intellectual Property for non-NOR
Flash Memory Integrated Circuits that may be components of Stacked Memory Products.

A-25

 

     “Subsidiary” means, with respect to any Person, (i) any corporation, limited liability
company or other similar entity as to which more than 50% of the outstanding capital stock or other
securities having voting rights or power is owned or controlled, directly or indirectly, by such
Person and/or by one or more of such Person’s direct or indirect subsidiaries and (ii) any Person
with a partnership, joint venture or other similar relationship between such Persons and any other
Person; provided, however, that with respect to Intel, Silicon Philippines, Inc., a corporation
organized and existing under Philippines law (“SPI”), shall be deemed to be a Subsidiary of
Intel for purposes of the Transaction Documents and for convenience only, and such inclusion of SPI
within this definition shall not imply that such entity is a subsidiary or affiliate of Intel for
any purpose independent of the Transaction Documents.

     “Tax Returns” means all returns, declarations, reports, statements, information
statements, forms or other documents filed or required to be filed with respect to any Tax.

     “Taxes” means (i) all foreign, federal, state, local and other net income, gross
income, gross receipts, sales, use, ad valorem, value added, intangible, unitary, capital gain,
transfer, franchise, profits, license, lease, service, service use, withholding, backup
withholding, payroll, employment, estimated, excise, severance, stamp, occupation, premium,
property, prohibited transactions, windfall or excess profits, value added tax, goods and services
tax, social service tax, import tax, export tax, or other taxes of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts with respect thereto,
(ii) any Liability for payment of amounts described in clause (i) whether as a result of transferee
Liability, of being a member of an affiliated, consolidated, combined or unitary group for any
period, or otherwise through operation of law, and (iii) any Liability for the payment of amounts
described in clause (i) or (ii) as a result of any tax sharing, tax indemnity or tax allocation
agreement or any other express or implied agreement to indemnify any other Person for Taxes; and
the term “Tax” means any one of the foregoing Taxes.

     “Termination Date” means April 1, 2008, subject to extension as provided in Article VI
of this Agreement.

     “TFR Indemnification Agreement” means the TFR Indemnification Agreement entered into
by and between Numonyx and ST dated as of the Closing Date.

     “Third Party” means, with respect to any Shareholder, any other Person other than any
Permitted Transferee of such Shareholder and, with respect to Holdings, any other Person other than
its Subsidiaries.

     “Third Party Appraisal Firm” shall have the meaning set forth in Section 4.13
of this Agreement.

     “Trade Secrets” means confidential know how, inventions, discoveries, concepts, ideas,
methods, processes, designs, formulae, technical data, source code, drawings, specifications
(including logic specifications), data bases, data sheets, customer lists, Customer Data and other
confidential information that constitute trade secrets under Applicable Law, in each case excluding
any rights in respect of any of the foregoing that comprise Copyrights, mask work rights or
Patents.

A-26

 

     “Trademarks” means trademarks and registrations and applications therefor.

     “Transaction Documents” means the Master Agreement, the Intel Asset Transfer
Agreement, the ST Asset Contribution Agreement, the FP Purchase Agreement, the Intel Ancillary
Agreements, the ST Ancillary Agreements, the Securityholders’ Agreement, the Note Agreement, the
Notes, the Guarantees, the Contribution Agreement, Pledge Agreement, Infrastructure Procurement
Agreement, the Confidentiality Agreements, and all of the documents contemplated by any such
agreement or entered into by any of the Parties thereto or their Subsidiaries in connection with
the transactions contemplated by such agreements.

     “Unicredit” means Unicredit Banca D’Impresa S.p.A.

A-27

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