Document:

EX-4.4

Exhibit 4.4

TELEFONAKTIEBOLAGET L.M. ERICSSON

and

STMICROELECTRONICS N.V.

 

FRAMEWORK AGREEMENT

relating to the establishment of a joint venture

 

Slaughter and May

One Bunhill Row

London, EC1Y 8YY

(JCXT/MJMC/RAWS)

TP082320055

 

 

 1 

THIS AGREEMENT is made on 19 August 2008 between:

	(1)	 	TELEFONAKTIEBOLAGET L.M. ERICSSON, a company incorporated in Sweden with
registered number 556016-0680 and its registered office at 164 83 Stockholm, Sweden
(“Ericsson”); and
	 
	(2)	 	STMICROELECTRONICS N.V., a public company with limited liability incorporated in
the Netherlands with corporate seat in Amsterdam and address at WTC Schiphol
Airport, Schiphol Boulevard 265, 1118 BH Schiphol Airport, Amsterdam, the Netherlands (“ST”),

(the “Parties”).

WHEREAS:

	(A)	 	The Parties have engaged in in-depth discussions concerning the establishment of a
joint venture (the “Joint Venture”) in order to combine their respective wireless
platform solution businesses and to record the basis of their mutual understandings and
intentions with respect to such a proposed joint venture.
	 
	(B)	 	The Joint Venture will have the objective of becoming a long-term, world-leading,
profitable provider of wireless platform solutions based on technology leadership in
2G, 3G, future cellular standards and multimedia. The Joint Venture will have a wide
portfolio of connectivity products to provide a competitive total platform offering and will
operate as a “fabless” semiconductor vendor.
	 
	(C)	 	The Joint Venture will be conducted through the medium of two companies to be
incorporated for that purpose, one of which (“JVD”) will initially be owned and
controlled as to 50% plus one share by Ericsson (and consolidated accordingly) and 50% minus
one share by ST and the other of which (“JVS”) will initially be owned and controlled
as to 50% plus one share by ST (and consolidated accordingly) and 50% minus one share
by Ericsson.
	 
	(D)	 	Within the Joint Venture, JVD will be responsible for the development of the 3G
cellular modem technology inherited from Ericsson, and its evolution. JVD will act as service centre to JVS and Ericsson.
	 
	(E)	 	JVS will be responsible for the other operations of the Joint Venture. JVS’s scope
will include the full commercial operation of the Joint Venture, namely sales, marketing,
supply and the full product responsibility, including product development activities
and industrial implementation of modem technologies developed by JVD. All R&D activities
not contained in JVD will be contained in JVS. JVS’s responsibility will be to ensure
the commercial success of the Joint Venture by addressing customer requirements and
ensuring that the Joint Venture continuously has a competitive product offering within
the scope of the Joint Venture.
	 
	(F)	 	The Parties share a commitment to the long term success of the Joint Venture and
each recognises both the important contributions that they can make to the Joint Venture
and the value to the Joint Venture of the current and ongoing relationships that the
Joint Venture will have with its parent companies.

 

2

	(G)	 	The Agreed Form Documents govern principally the continuing relationship between
the Parties as shareholders of and in relation to JVS and JVD.
	 
	(H)	 	The Term Sheets are intended to form the basis for definitive agreements to be
finalised and designated as Agreed Form Documents before Completion but are binding in the
absence of such definitive agreements.
	 
	(I)	 	The Parties recognise that this Agreement cannot regulate for every possible future
circumstance (whether foreseeable or unforeseeable) and that the appropriate way to deal with
these future circumstances will need to be determined by them in a reasonable manner.
	 
	(J)	 	Each of the Parties enters into this Agreement in consideration of the other
Party entering into this Agreement and accepting the obligations contained in it.

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1. INTERPRETATION AND PRELIMINARY

	1.1	 	In this Agreement, the following expressions have the meanings ascribed to them
hereunder and cognate expressions have corresponding meanings:

	 	 	 
	“Accounts Receivable”

	 	means the book debts, notes receivable and other
rights to payment arising from the operation of the
Ericsson Business or the ST Business, other than as
between those members of the ST Group which are
being transferred at Completion, or between those
members of the Ericsson Group which are being
transferred at Completion;
	 
	 	 
	“Acquired Rights Directive”

	 	means the Acquired Rights Directive 2001/23/EC of
12th March 2001;
	 
	 	 
	“Acquirors”

	 	means one or more wholly-owned subsidiaries of JVS
or JVD designated by ST or Ericsson (as the case
may be) as an acquiror;
	 
	 	 
	“Affiliate”

	 	in relation to Ericsson, means Members of the
Ericsson Group and in relation to ST, means Members
of the ST Group;
	 
	 	 
	“Agreed Exchange Rate”

	 	means USD 1.57 for EUR 1.00;
	 
	 	 
	“Agreed Form Documents”

	 	means the documents and agreements in the agreed
form specified in Schedule 1 (Agreed Form
Documents), and any other document or agreement
designated as such by agreement in writing between
the Parties, collectively or individually as the
context may require;

 

3

	 	 	 
	“Agreement”

	 	means this document together with its Schedules;
	 
	 	 
	“Benefit Plans”

	 	means any benefit arrangement, plan or scheme provided by a
Member of the ST Group or Member of the Ericsson Group, as
applicable, that provides or contingently provides
compensation or remuneration in any form including, without
limitation, profit sharing, stock option, share option, other
stock or share related rights, other forms of incentive or
deferred compensation, incentive plans, bonus plans or
arrangements, golden parachute arrangements or agreements,
change of control agreement or arrangements, severance pay,
disability arrangements, insurance coverage benefits or
employee assistance programmes but excluding Pension
Arrangements;
	 
	 	 
	“Business Assets”

	 	means the Ericsson Business Assets and/or, as the context may
require, the ST Business Assets;
	 
	 	 
	“Business Day”

	 	means any day other than a Saturday, Sunday or public holiday
in Stockholm or Geneva;
	 
	 	 
	“Cash”

	 	means cash in hand, cash in transit, cash at bank and any
other cash equivalents;
	 
	 	 
	“Cash Consideration”

	 	means USD 700 million as adjusted pursuant to Clause 7.6;
	 
	 	 
	“Closing Agreement”

	 	means the Closing and Amendment Agreement relating to the
Falcon Sale and Contribution Agreement between ST and NXP
B.V.;
	 
	 	 
	“Completion”

	 	means completion of this Agreement in accordance with Clause
10 (Completion);
	 
	 	 
	“Completion Assets”

	 	means any item of economic value to JVS (to the extent not
funding a liability being transferred on a Fully Funded Basis
or an ST Transferred Liability) of the ST Business that ST
transfers to the JVS under Clauses 7.3(A)(i) and 7.3(A)(ii)
of this Agreement including but not limited to cash (to the
extent not extracted), goodwill, patents, trademarks,
inventories, property, plant, equipment, equity investments
and deferred tax assets but excluding the ST Excluded Assets
(other than cash to the extent not extracted prior to
transfer);
	 
	 	 
	“Completion Asset Amount”

	 	means, in relation to the ST Business, the aggregate book
value of the Completion Assets of the ST

 

4

	 	 	 
	 

	 	Business as stated in the Completion Asset Statement stated
net of the ST Transferred Liabilities plus the aggregate
book value of the Ericsson Accrued Vacation/Bonus
Liabilities;
	 
	 	 
	“Completion Asset Statement”

	 	means the statement of the book values of the Completion
Assets of the ST Business and of the ST Transferred
Liabilities to be prepared pursuant to Clause 7.8(B);
	 
	 	 
	“Completion Businesses”

	 	means the Ericsson Business and the ST Business, the
transfer of which completes on the Completion Date and
“Completion Businesses” shall be construed accordingly;
	 
	 	 
	“Completion Date”

	 	means either the later of (i) the day that falls one day
after the NXP Sale occurs; and (ii) the day that falls one
month after the Conditions Precedent are fulfilled; or
(iii) such other date as the parties agree;
	 
	 	 
	“Conditions Precedent”

	 	means the conditions specified in Schedule 2 (Conditions
Precedent), collectively or individually as the context may
require;
	 
	 	 
	“Connected Dispute”

	 	means a Dispute which is referred to arbitration pursuant
to this Agreement after an Existing Dispute has already
been referred to arbitration pursuant to this Agreement;
	 
	 	 
	“Consolidation Notice”

	 	means a notice in writing pursuant to Clause 3 of Schedule
4 (Arbitration) or requesting pursuant to Clause 4 of
Schedule 4 (Arbitration) that a Connected Dispute and an
Existing Dispute shall be resolved in a single arbitral
proceeding;
	 
	 	 
	“Consolidation Order”

	 	means an order by an arbitral tribunal that an Existing
Dispute and a Connected Dispute be resolved in the same
arbitral proceedings;
	 
	 	 
	“Continuing Party”

	 	has the meaning given to it in the Shareholders’ Agreement;
	 
	 	 
	“Delayed Completion”

	 	has the meaning given to it in Clause 11.3;
	 
	 	 
	“Dispute”

	 	means any justiciable dispute, controversy or claim arising
out of or in connection with any Transaction Document or
any other agreement or arrangement in connection with the
subject matter of any of the same, or the breach,
termination or validity thereof;

 

5

	 	 	 
	“Employees”

	 	means the Ericsson Employees and the ST Employees;
	 
	 	 
	“Ericsson Accounting
Principles”

	 	has the meaning given to it in the Shareholders’
Agreement;
	 
	 	 
	“Ericsson Accrued
Vacation/Bonus Liabilities”

	 	means the accrued entitlements of the Ericsson
Employees to bonus payments and salary in lieu of
vacation as at the Completion Date, as calculated
in accordance with the Ericsson Accounting
Principles and as set out in the Ericsson
Completion Liability Statement;
	 
	 	 
	“Ericsson Assumed Liabilities”

	 	means any Liabilities arising in connection with
the carrying on of the Ericsson Business after the
Completion Date, the Ericsson IP Liabilities,
Ericsson Accrued Vacation/Bonus Liabilities,
purchase orders made and not fulfilled prior to
Completion and any other Liabilities for which the
JV Companies or the Acquirors are expressed to
assume liability or responsibility (whether
pursuant to this Agreement, the Transaction
Documents or any other arrangements), but shall not
include the Excluded Liabilities and any other
Liabilities for which Ericsson or, as the case may
be, any Member of the Ericsson Group, is expressed
to remain liable (whether pursuant to this
Agreement, the Transaction Documents or any other
arrangements);
	 
	 	 
	“Ericsson Business”

	 	means the business described in Part 2 of Schedule
11 (Businesses);
	 
	 	 
	“Ericsson Business Assets”

	 	means the Ericsson JVD Business Assets and the
Ericsson JVS Business Assets;
	 
	 	 
	“Ericsson Business Contracts”

	 	means the customer and supply contracts which
relate exclusively to the Ericsson Business;
	 
	 	 
	“Ericsson Cash Contribution”

	 	means USD 1.1 billion (of which it is anticipated
that after transfer of the Cash Consideration to ST
in accordance with Clause 7 the remaining amount
shall remain in or be transferred to JVS);
	 
	 	 
	“Ericsson Completion
Liability Statement”

	 	means the statement of the Ericsson Accrued
Vacation/Bonus Liabilities to be prepared pursuant
to clause 7.9;
	 
	 	 
	“Ericsson Completion Pension
Statement”

	 	means the statement of the pension liabilities of
the Ericsson Business to be prepared pursuant to
Clause 9.1 and in full accordance with Schedule 14

 

6

	 	 	 
	 

	 	(Pensions);
	 
	 	 
	“Ericsson Employees”

	 	means the employees
of a Member of the
Ericsson Group who,
immediately prior
to the Completion
Date, work
exclusively or
predominantly in
the Ericsson
Business;
	 
	 	 
	“Ericsson Excluded Liabilities”

	 	means those items
set out in Part 2
of Schedule 10
(Excluded
Liabilities);
	 
	 	 
	“Ericsson Group”

	 	means Ericsson and
its subsidiaries
from time to time
and the expression
“Member of the
Ericsson Group”
shall be construed
accordingly;
	 
	 	 
	“Ericsson Indemnified Parties”

	 	means Ericsson and
the other Members
of the Ericsson
Group and their
respective
directors,
officers,
employees, agents
and successors from
time to time;
	 
	 	 
	“Ericsson IP Liabilities”

	 	has the meaning
given in Part 2 of
Schedule 10
(Excluded
Liabilities);
	 
	 	 
	“Ericsson JVD Business Assets”

	 	means those items
set out in Part 2
of Schedule 13
(Business Assets)
and identified as
such;
	 
	 	 
	“Ericsson JVS Business Assets”

	 	means those items
set out in Part 2
of Schedule 13
(Business Assets)
and identified as
such;
	 
	 	 
	“Ericsson JVD Consideration
Shares”

	 	means the shares in
JVD representing
50% plus one share
in the capital of
JVD at Completion;
	 
	 	 
	“Ericsson JVS Consideration
Shares”

	 	means the shares in
JVS representing
50% minus one share
in the capital of
JVS at Completion;
	 
	 	 
	“Ericsson Schemes”

	 	means any
Retirement Benefit
Plan operated for
the benefit of
Ericsson Employees;
	 
	 	 
	“Ericsson Existing Third Party
Licences”

	 	means arrangements
or agreements
relating to or
licences of
Intellectual
Property granted by
third parties
existing as at the
date of this
agreement for use
in and by the
Ericsson Business;
	 
	 	 
	“Estimated Completion Assets
Amount”

	 	means the estimated
aggregate book
value of the
Completion Assets
of the ST Business
less of the ST
Transferred
Liabilities as
stated in the
Estimated
Completion Asset
Statement less of
the ST Transferred
Liabilities plus
the estimated
aggregate book
value of the
Ericsson Accrued
Vacation/Bonus
Liability as stated
in the Estimated
Ericsson

 

7

	 	 	 
	 

	 	Completion Liability Statement;
	 
	 	 
	“Estimated
Completion Asset
Statement”

	 	means the estimated statement of the book values of
the Completion Assets of the ST Business and of the
ST Transferred Liabilities to be prepared pursuant
to Clause 7.8(A);
	 
	 	 
	“Estimated Ericsson
Completion Liability
Statement”

	 	means the estimated statement of the book value of
the Ericsson Accrued Vacation/Bonus Liability to be
prepared pursuant to Clause 7.9;
	 
	 	 
	“Excluded Businesses”

	 	means any and all businesses carried on or to be
carried on from time to time by Members of Ericsson
Group or Members of the ST Group other than the
Ericsson Business or the ST Business;
	 
	 	 
	“Excluded Liabilities”

	 	means the Ericsson Excluded Liabilities and/or, as
the context requires, the ST Excluded Liabilities;
	 
	 	 
	“Existing Arbitration”

	 	means the arbitration concerning an Existing Dispute;
	 
	 	 
	“Existing Dispute”

	 	means a Dispute which has been referred to
arbitration pursuant to this Agreement;
	 
	 	 
	“Falcon Sale and
Contribution Agreement”

	 	means the sale and contribution agreement between ST
and NXP B.V. for the establishment of a joint
venture in the field of semiconductors for cellular
communication dated 10 April 2008 as amended and
supplemented by the Closing Agreement;
	 
	 	 
	“Fully Funded Basis”

	 	means that for any financial liabilities or pension
liabilities transferred to the JV Companies they are
to be cash collateralised on Completion or pursuant
to Clause 9 on the basis appropriate for the
relevant type of financial liability;
	 
	 	 
	“Governmental Authority”

	 	means, to the extent it has jurisdiction, any
supranational governmental commission, council,
directorate, court, trade agency, regulatory body or
other authority, or any national government, any
legislature, any political subdivision of a national
government or of any state, country, province or
local jurisdiction therein, or any agency or
instrumentality of any such government or political
subdivision;
	 
	 	 
	“ICC”

	 	means the International Chamber of Commerce;
	 
	 	 
	“Intellectual Property”

	 	means patents, trade marks, rights in designs,copyrights, database rights, rights in know how

 

8

	 	 	 
	 

	 	(whether or not any of those is registered and
including applications for registration of any
such thing) and all rights or forms of
protection of a similar nature having
equivalent or similar effect to any of these
which may subsist anywhere in the world;
	 
	 	 
	“JV Auditors”

	 	means PricewaterhouseCoopers;
	 
	 	 
	“JV Companies”

	 	means JVD and JVS or either one of them as the
context requires;
	 
	 	 
	“JV Group”

	 	means together the JVS Group and the JVD Group;
	 
	 	 
	“JV Indemnified Parties”

	 	means together the JVS Indemnified Parties and
the JVD Indemnified Parties;
	 
	 	 
	“JVD Consideration Shares”

	 	means the ST JVD Consideration Shares and the
Ericsson JVD Consideration Shares;
	 
	 	 
	“JVD Group”

	 	means JVD and its subsidiaries from time to
time and the expression “Member of the JVD
Group”
shall be construed accordingly;
	 
	 	 
	“JVD Indemnified Parties”

	 	means JVD and other Members of the JVD Group
and their respective directors, officers,
employees, agents and successors from time to
time;
	 
	 	 
	“JVS Consideration Shares”

	 	means the ST JVS Consideration Shares and the
Ericsson JVS Consideration Shares;
	 
	 	 
	“JVS Group”

	 	means JVS and its subsidiaries from time to
time and the expression “Member of the JVS
Group” shall be construed accordingly;
	 
	 	 
	“JVS Indemnified Parties”

	 	means JVS and other Members of the JVS Group
and their respective directors, officers,
employees, agents and successors from time to
time;
	 
	 	 
	“Liabilities”

	 	means all and any proceedings, costs, demands,
damages, losses, Taxes, liabilities, fines,
penalties, obligations and expenses of any kind
whatsoever whether actual or contingent,
primary or secondary, known or unknown or
accrued;
	 
	 	 
	“Longstop Date”

	 	means 5:00 p.m. on 31 May 2009;
	 
	 	 
	“Minimum Completion
Assets Amount”

	 	means the USD 1.080 million;

 

9

	 	 	 
	“Maximum
Adjustment Cash Payment”

	 	means USD 75 million;
	 
	 	 
	“Merger Regulation”

	 	means Council Regulation (EC) No.139/2004;
	 
	 	 
	“NXP Business”

	 	has the meaning given to it in Part 1 of
Schedule 11 (Businesses);
	 
	 	 
	“NXP Condition Precedent”

	 	means the transfer of all shares held by
NXP B.V. in ST-NXP Wireless to ST or a
Member of the ST Group;
	 
	 	 
	“NXP Longstop Date”

	 	has the meaning given to it in Clause 3.3;
	 
	 	 
	“NXP Sale”

	 	means the transfer of all shares held by
NXP B.V. in ST-NXP Wireless to ST or a
Member of the ST Group;
	 
	 	 
	“Non-NXP Business”

	 	has the meaning given to it in Part 1 of
Schedule 11 (Businesses);
	 
	 	 
	“Non-NXP Employees”

	 	means the employees of a Member of the ST
Group who, immediately prior to the
Completion Date, work exclusively or
predominantly in the Non-NXP Business;
	 
	 	 
	“Parties”

	 	means the parties to this Agreement and
“Party” means any one of them;
	 
	 	 
	“Pension Arrangements”

	 	means all lump sum, pension or similar
plans, schemes or arrangements with respect
to which an employer has any obligation to
pay or otherwise to provide benefits on or
after retirement (whether early retirement
or otherwise) or death or in recognition of
the attainment of a certain period of
service;
	 
	 	 
	“Reference Completion
Assets Amount”

	 	means USD 1200 million;
	 
	 	 
	“Regulatory Authorities”

	 	means the European Commission and the
competition authorities of China, South
Korea, Japan and Israel;
	 
	 	 
	“Representative Entity”

	 	means any trade or labour union, employee
representative body, works or staff council
or other standing employees’ consultative
committee or organisation;
	 
	 	 
	“Retirement Benefit Plan”

	 	means any plan, scheme or arrangement,
whether or not funded, for the provision of
Retirement

 

10

	 	 	 
	 

	 	Benefits;
	 
	 	 
	“Retirement Benefits”

	 	means all or any pension, lump sum, gratuity, payment
of costs (including, without limitation, medical,
dental or other healthcare costs), or other like
benefit provided or to be provided:
	 
	 	 
	 

	 	• on or after retirement;

	 
	 	 
	 

	 	• on death;

	 
	 	 
	 

	 	• on or after termination of employment;

	 
	 	 
	 

	 	• on or in connection with disability;

	 
	 	 
	 

	 	• on achievement of certain in service;
milestones
(jubilee or long service awards),

	 
	 	 
	 

	 	but excluding any benefit provided under an
arrangement the sole purpose of which is to provide
benefits on injury or death by accident occurring
whilst an employee;
	 
	 	 
	“Rules”

	 	means the rules of conciliation and arbitration of
the ICC in force at the time a Dispute is referred
under Schedule 4;
	 
	 	 
	“SEMC”

	 	means Sony Ericsson Mobile Communications;
	 
	 	 
	“Significant Jurisdiction”

	 	means Sweden, France, Netherlands, United Kingdom,
Switzerland, Norway, Israel, South Korea, Germany and
the United States;
	 
	 	 
	“Shares”

	 	means the Ericsson JVD Consideration Shares, the
Ericsson JVS Consideration Shares, ST JVS
Consideration Shares and the ST JVD Consideration
Shares;
	 
	 	 
	“Share Schemes”

	 	means any stock or stock based incentive schemes
operated by the JV Partners (or Members of their
Groups) under which any Ericsson or ST Employees (as
the case may be) have benefits or awards granted
prior to Completion;
	 
	 	 
	“Shareholders’ Agreement”

	 	means the shareholders’ agreement to be dated the
Completion Date and made between Ericsson, ST, JVS
and JVD governing the terms upon which JVS and JVD
will be operated as joint ventures for the purposes,
and on the terms, set out in such

 

11

	 	 	 
	 

	 	agreement;
	 
	 	 
	“ST Accounting Principles”

	 	has the meaning set out in the Shareholders’ Agreement;
	 
	 	 
	“Start-Up Costs”

	 	means the cost of setting up the various new companies
that will form the JV Group (excluding those companies
transferred to the JV Companies by the JV Partners at
Completion) and any filing fees in relation to
Conditions Precedent required to be made in any
jurisdiction in connection with the Joint Venture,
including all costs, penalties and fines resulting from
not filing in any jurisdiction where it is determined
that an anti-trust filing should have taken place;
	 
	 	 
	“ST Accrued
Vacation/Bonus
Liabilities”

	 	means the accrued entitlements of ST Employees to bonus
payments and salary in lieu of vacation as at the
Completion Date, as calculated in accordance with the
ST Accounting Principles and as set out in the
Completion Asset Statement;
	 
	 	 
	“ST Assumed Liabilities”

	 	means any Liabilities arising in connection with the
carrying on of the ST Business after the Completion
Date, the ST IP Liabilities, the ST Transferred
Liabilities, the ST Collateralised Financial
Liabilities, purchase orders made and not fulfilled
prior to Completion, the ST-NXP Group Pension
Liabilities and any other Liabilities for which JVS or
the Acquirors are expressed to assume liability or
responsibility (whether pursuant to this Agreement, the
Transaction Documents or any other arrangements), but
shall not include the Excluded Liabilities and any
other Liabilities for which ST or, as the case may be,
any Member of the ST Group, is expressed to remain
liable (whether pursuant to this Agreement, the
Transaction Documents or any other arrangements);
	 
	 	 
	“ST Business”

	 	means the business described in Part 1 of Schedule 11
(Business) comprising the NXP Business and the Non-NXP
Business;
	 
	 	 
	“ST Business Assets”

	 	means those items set out in Part 1 of Schedule 13
(Business Assets);
	 
	 	 
	“ST Business Contracts”

	 	means the customer and supply contracts which relate
exclusively to the ST Business;

 

12

	 	 	 
	“ST Collateralised Financial Liabilities”

	 	means:
	 
	 	 
	 

	 	(i) any indebtedness,
bank loans, bank
overdrafts, bonds,
finance leases or other
borrowings held by any
entities transferred by
ST or a Member of the ST
Group to the JV
Companies at Completion;
and
	 
	 	 
	 

	 	(ii) which cannot be
satisfied or cannot be
satisfied in terms
satisfactory to ST,
prior to Completion; and
	 
	 	 
	 

	 	(iii) which are assumed
by the JV Companies on
Completion on a Fully
Funded Basis.
	 
	 	 
	“ST Completion Pension Statement”

	 	means the statement of
the pension liabilities
of the ST Business to be
prepared pursuant to
Clause 9.1 and in full
accordance with Schedule
14 (Pensions);
	 
	 	 
	“ST Employees”

	 	means the employees of a
Member of the ST Group
who, immediately prior
to the Completion Date,
work exclusively or
predominantly in the ST
Business;
	 
	 	 
	“ST Excluded Assets”

	 	means those items sets
out in Schedule 9
(Excluded Assets);
	 
	 	 
	“ST Excluded Liabilities”

	 	means those items sets
out in Part 1 of
Schedule 10 (Excluded
Liabilities);
	 
	 	 
	“ST IP Liabilities”

	 	has the meaning given in
Part 1 of Schedule 10
(Excluded Liabilities);
	 
	 	 
	“ST Group”

	 	means ST and its
subsidiaries from time
to time and the
expression “Member of
the ST Group” shall be
construed accordingly;
	 
	 	 
	“ST JVD Consideration Shares”

	 	means the shares in JVD
representing 50% minus
one share in the capital
of JVD at Completion;
	 
	 	 
	“ST JVS Consideration Shares”

	 	means the shares in JVS
representing 50% plus
one share in the capital
of JVS at Completion;
	 
	 	 
	“ST Indemnified Parties”

	 	means ST and the other
Members of the ST Group
and their respective
directors, officers,
employees, agents and
successors from time to
time;
	 
	 	 
	“ST-NXP Group Pension Liabilities”

	 	means the pension
liabilities which have
been assumed by ST-NXP
Wireless or the ST-NXP
Group on the ST-NXP
Wireless Closing, or
which have been accrued
since the ST-NXP
Closing, or which must
be assumed by the JV
Companies by law (all

 

13

	 	 	 
	 

	 	of which shall be assumed on a Fully Funded Basis);
	 
	 	 
	“ST-NXP Wireless Warranties”

	 	means the warranties as set out in Schedule 14 of
the Falcon Sale and Contribution Agreement;
	 
	 	 
	“ST-NXP Wireless”

	 	means ST-NXP Wireless (Holding) AG;
	 
	 	 
	“ST-NXP Wireless Closing”

	 	means the completion of the Falcon Sale and
Contribution Agreement between ST and NXP B.V. dated
10 April 2008 by ST and NXP B.V. which occurred on
28 July 2008;
	 
	 	 
	“ST-NXP Group”

	 	means ST-NXP Wireless and its subsidiaries from time
to time and the expression “Member of the ST-NXP
Group” shall be construed accordingly;
	 
	 	 
	“ST Schemes”

	 	means any Retirement Benefit Plan operated for the
benefit of ST Employees, and includes those
Retirement Benefit Plans set up (or transferred to)
ST-NXP Wireless as a result of agreements between ST
and NXP;
	 
	 	 
	“ST Ship and Debit Liability”

	 	means the liabilities (actual or accrued) as at the
Completion Date in respect of authorisations granted
by the ST Business to distributors to sell products
at an agreed discounted price and other credits
granted to distributors, calculated in accordance
with ST Accounting Principles and as set out in the
Completion Assets Statement;
	 
	 	 
	“ST Transferred Liabilities”

	 	means the ST Accrued Vacation/Bonus Liabilities and
the ST Ship and Debit Liability;
	 
	 	 
	“Subsidiary”

	 	shall have the meaning ascribed to it in the
Companies Act 2006;
	 
	 	 
	“Surviving Provisions”

	 	has the meaning ascribed to it by Clause 3.1.2(A);
	 
	 	 
	“Tax”

	 	means all taxes, levies, duties, imposts, charges
and withholdings of any nature whatsoever in any
jurisdiction, including (without limitation) taxes
on gross or net income, profits or gains and taxes
on revenues, turnover, purchases, consumption,
receipts, sales, use, occupation, franchise, value
added and personal property, customs, import and
export duties, stamp duty and other transaction or
documentary taxes, social security, state pension
contributions, taxes arising through the ownership
and occupation of land or premises, taxes levied by
reference to ownership, wealth or the use of any

 

14

	 	 	 
	 

	 	property or assets, payroll and
employment taxes, training levies,
taxes arising on the sale, hire,
gift or other disposal of any real
or personal assets or property,
taxes on the change of the control
of any company, together with all
penalties, charges and interest
relating to any of them,
regardless of whether any such
taxes, levies, duties, imposts,
charges, withholdings, penalties
and interest are chargeable
directly or primarily against or
attributable directly or primarily
to any member of the JV Group or
any other person and of whether
any amount in respect of any of
them is recoverable from any other
person;
	 
	 	 
	“Term Sheets”

	 	means the term sheets in the
agreed form specified in Schedule
3 (Term Sheets) and any other term
sheet designated as such by
agreement in writing between the
Parties, collectively or
individually as the context may
require;
	 
	 	 
	“Transaction Documents”

	 	means this Agreement, the Agreed
Form Documents, the Term Sheets
and any other document or
agreement designated as such by
agreement in writing between the
Parties from time to time
(including any agreements so
designated to which their
respective subsidiaries or Members
of the JV Group are parties);
	 
	 	 
	“Unfunded Liability”

	 	means a financial liability or a
pension liability which is
transferred to a JV Company upon
Completion but without the
appropriate level of cash
collateral required for that
financial liability to be on a
Fully Funded Basis; and
	 
	 	 
	“Wrongly Transferred Employee”

	 	means any person who is (i) not an
Employee and whose contract of
employment is found or alleged to
have effect on or after the
Completion Date as if made with a
Member of the JV Group, or (ii)
whom the Parties agree shall be
treated as not an Employee.

	1.2	 	Expressions defined elsewhere in this Agreement have the meanings ascribed to
them for all purposes in this Agreement, notwithstanding that they have not been defined in
this Clause 1 (Interpretation and Preliminary).
	 
	1.3	 	References in this Agreement to Recitals, Clauses, paragraphs and Schedules are to
clauses and paragraphs in and recitals and schedules to this Agreement. The
Recitals and Schedules to this Agreement shall be deemed to form part of this Agreement.

 

15

	1.4	 	A reference in this Agreement to a particular time or date are to that time or date in
Geneva, Switzerland.
	 
	1.5	 	The headings of the clauses, paragraphs and schedules in this Agreement are for ease
of reference only and must not affect its interpretation.
	 
	1.6	 	A document or agreement is in “agreed form” if it has been designated as such by
agreement in writing between the Parties and initialled on their behalf for purposes of identification.
	 
	1.7	 	The rule known as the ejusdem generis rule does not apply and, accordingly, words
introduced by the word “other” or followed by the word “including” must not be given a
restrictive meaning by reason of the fact that they are preceded or followed by words
indicating a particular class of acts, matters or things.
	 
	1.8	 	References to statutes or statutory provisions shall be construed as references to those
statutes or provisions as respectively amended or re-enacted or as their application is
modified from time to time by other provisions (whether before or after the date hereof)
and shall include any statutes or provisions of which they are re-enactments (whether
with or without modification) and any orders, regulations, instruments or other
subordinate legislation under the relevant statute or statutory provision. References to
sections of consolidating legislation shall wherever necessary or appropriate in the
context be construed as including references to the sections of the previous legislation
from which the consolidating legislation has been prepared.
	 
	1.9	 	References to any document (including this Agreement) are references to that
document as amended, consolidated, supplemented, novated or replaced from time to
time.
	 
	1.10	 	References in this Agreement to the term “JVS shall” or “JVD shall”, shall be
interpreted as meaning that ST and Members of the ST Group and Ericsson and
Members of the Ericsson Group shall procure that JVS or JVD as the case may be
perform the relevant obligation.
	 
	1.11	 	References to ST and to Ericsson include their respective successors and permitted
assigns.
	 
	1.12	 	References to persons shall include any individual, any form of body corporate,
unincorporated association, firm, partnership, joint venture, consortium, association,
organisation or trust (in each case whether or not having a separate legal personality).
	 
	1.13	 	The masculine gender shall include the feminine and neuter and the singular number
shall include the plural and vice versa.
	 
	1.14	 	If there is any conflict between the terms of this Agreement or any Transaction
Document, then the terms of this Agreement shall prevail, except insofar as any
Transaction Document states that a provision or provisions of that Transaction
Document shall prevail including, for the avoidance of doubt, where a provision or
provisions in that Transaction Document is or are stated to be in substitution for a
provision or provisions in this Agreement. For the avoidance of doubt, the provisions
of

 

16

	 	 this Clause 1.14 shall apply to any Transaction Document whether or not this
Agreement is referred to therein.
	 
	1.15	 	The Parties acknowledge and agree that the Schedules to this Agreement represent the
best information relating to their subject matter which exists as at the date of this
Agreement and that they may require amendment or updating by the Parties from time
to time prior to Completion to reflect better information as it comes available in
accordance with the principles set out in this Agreement. The parties undertake to
discuss in good faith any amendments required to the Schedules.

	 
	1.16	 (a)	 	All sums payable under this Agreement shall be paid free and clear of all
deductions or withholdings whatsoever, save only as may be required by law.

	 	(b)	 	If any deductions or withholdings are required by law to be made from any of
the sums payable as mentioned in sub-clause [(a)], the payer shall be obliged to
pay to the payee such sum as will, after the deduction or withholding has been
made, leave the payee with the same amount as it would have been entitled to
receive in the absence of any such requirement to make a deduction or
withholding.
	 
	 	(c)	 	If any sum payable under this Agreement (other than interest on such sum)
shall be subject to Tax in the hands of the payee, the payer shall be under the
same obligation to make an increased payment in relation to that Tax as if the
liability were a deduction or withholding required by law.
	 
	 	(d)	 	Where one of the parties to this Agreement pays an additional amount in
accordance with sub-clause [(b) or (c)] to the payee, and the payee has obtained a
credit against, relief or remission for, or repayment of, any Tax (a “Tax Credit”)
attributable to that payment the payee shall pay an amount to the payer which will
leave it (after making that payment) in the same after-Tax position it would have
been in had the circumstances giving rise to the payment not arisen.

	2.	 	INCORPORATION OF THE JV COMPANIES

	1.1	 	ST shall procure that JVS is incorporated as a company under the laws of Switzerland
(or such other jurisdiction as agreed between the Parties) with such number of
subsidiaries as may be determined by ST prior to the Completion Date.
	 
	1.2	 	Ericsson shall procure that JVD is incorporated as a company under the laws of
Switzerland (or such other jurisdiction as agreed between the Parties) with such number
of subsidiaries as may be determined by Ericsson prior to the Completion Date.

	3.	 	CONDITIONS PRECEDENT

	1.1	 	The obligations of the Parties in terms of Clause 10 (Completion) are subject to the
fulfilment of the Conditions Precedent.
	 
	1.2	 	If the Conditions Precedent are not fulfilled by the Longstop Date, then:

 

17

	 	(A)	 	this Agreement ipso facto terminates, save for the provisions of this Clause 3
(Conditions Precedent) and Clauses 13 (Announcements), 14 (Confidentiality),
15 (Costs and Expenses), 17 (Governing Law), 18 (Notices), 19 and 20 (Miscellaneous) (the “Surviving Provisions”), which must continue to
be effective; and
	 
	 	(B)	 	save in respect of any antecedent breach of this Agreement, neither Party nor
its Affiliates (at whose instance this sub-clause (B) is enforceable) has any claim
against the other Party or any of its Affiliates of any nature whatsoever,
howsoever and whensoever arising under or in connection with this Agreement.

	1.3	 	If the NXP Sale does not occur by the day that falls 6 months after the Longstop Date
(the “NXP Longstop Date”), then:

	 	(A)	 	this Agreement ipso facto terminates, save for the Surviving Provisions,
which must continue to be effective; and
	 
	 	(B)	 	save in respect of any antecedent breach of this Agreement, neither Party nor
its Affiliates (at whose instance this sub-clause 3.1.3(B) is enforceable) has any
claim against the other Party or any of its Affiliates of any nature whatsoever,
howsoever and whensoever arising under or in connection with this Agreement.

	1.4	 	Ericsson must use all reasonable endeavours to procure fulfilment of the Conditions
Precedent numbered 2 in Schedule 2 (Conditions Precedent) as soon as practicable
after the date of this Agreement.
	 
	1.5	 	ST must use all reasonable endeavours to procure fulfilment of the Conditions
Precedent numbered 1 and 6 in Schedule 2 (Conditions Precedent) as soon as
practicable after the date of this Agreement.
	 
	1.6	 	ST must use all reasonable endeavours to procure that the NXP Sale occurs as soon as
practicable after the Conditions Precedent are fulfilled.
	 
	1.7	 	As regards the Conditions Precedent numbered 3, 4 and 5 in Schedule 2 (Conditions Precedent):

	 	(A)	 	the Parties must use all reasonable endeavours to ensure that those
Conditions Precedent are satisfied as soon as is reasonably practicable save that neither
Party shall be required to propose or agree to modifications to the Joint Venture
or their other activities that are material in the context of the Joint Venture as
a whole;
	 
	 	(B)	 	the Parties must prepare and (acting reasonably) agree the notifications to
be submitted to each of the Regulatory Authorities;
	 
	 	(C)	 	throughout the period during which the Joint Venture is being considered by
the Regulatory Authorities:

	 	(i)	 	the Parties and their advisers must disclose to one another all
material correspondence received from the Regulatory Authorities in connection

 

18

with the approval of the Joint Venture and keep each other
informed of any other material communications in whatever form
with the Regulatory Authorities;

	 	(ii)	 	in the event of receipt of requests for
information from the Regulatory Authorities, the Parties must agree
the response to such requests. Any response must be submitted by
the Party receiving such request;
	 
	 	(iii)	 	the Parties must, from time to time,
discuss and, acting reasonably, agree whether it may be appropriate
to submit further evidence to the Regulatory Authorities and, if
so, must agree the form of the additional evidence to be submitted;
	 
	 	(iv)	 	in the event that a Regulatory Authority
requests a meeting with one or both of the parties, the Parties and
their advisers must discuss and, acting reasonably, agree in
advance of such meeting how best to present to the Regulatory
Authority the case for clearance of the Joint Venture. The Parties
must jointly attend any meetings with any Regulatory Authority and
must adhere to the agreed case for clearance at such meetings; and
	 
	 	(v)	 	each Party must co-operate in any
consultation process undertaken by any of the Regulatory
Authorities.

	1.8	 	As regards the Conditions Precedent numbered 3, 4, 5 and 6 in Schedule 2 (Conditions
Precedent) the Parties agree to instruct legal counsel jointly and to share the
costs (including, but not limited to, legal and administrative costs) associated with
preparing and submitting a notification in any jurisdiction equally between them.
	 
	1.9	 	Each Party acknowledges that a breach of this Agreement by that Party would cause
significant damage to the other Party. Each party recognises that such damage may
include increased costs, loss of market share, prejudice to the existing business
and loss of opportunity strategically and financially resulting in consequential loss
of potential profit and the parties agree that such damages are within the reasonable
contemplation of the Parties. Accordingly the other Party may be entitled to
specific performance or to recover substantial damages from that Party for such breach of this
Agreement.
	 
	1.10	 	The Parties acknowledge that damages may not be an adequate remedy for breach of
this Agreement or the agreements in the Agreed Form and accordingly the Parties may
be entitled to injunctive relief for any actual, anticipated or threatened breach
of this Agreement or the agreements in the Agreed Form.

	4.	 	CHANGE IN CONTROL

	1.1	 	If any of the events set out in Clause 12 of the Shareholders Agreement occurs prior
to Completion and ST is the Continuing Shareholder, then ST may within 14 Business Days of its
first becoming aware thereof notify Ericsson of its intention to invoke this clause, in which
case this Agreement shall terminate and Clause 3.1.2 shall apply mutatis mutandis. Ericsson
shall notify ST within 10 Business Days of any of the events

 

19

in Clause 12 of the Shareholders Agreement occurring, specifying with
reasonable details the facts, matters and circumstances giving rise to
the event.

	1.2	 	If any of the events set out in Clause 12 of the Shareholders Agreement
occurs prior to Completion and Ericsson is the Continuing Shareholder, then
Ericsson may within 14 Business Days of its first becoming aware thereof notify
ST of its intention to invoke this clause, in which case this Agreement shall
terminate and Clause 3.1.2 shall apply mutatis mutandis. ST shall notify Ericsson
within 10 Business Days of any of the events in Clause 12 of the Shareholders
Agreement occurring, specifying with reasonable details the facts, matters and
circumstances giving rise to the event.

	5.	 	TERM SHEETS

	1.1	 	The Parties must agree the definitive form of the agreements contemplated under
or in connection with the Term Sheets as soon as practicable after the date of this
Agreement, but in any event before the Completion Date. When their definitive
form is agreed, the parties must designate them as Agreed Form Documents by agreement
in writing, for the purpose of Clause 10 (Completion).
	 
	1.2	 	If the definitive agreements contemplated under or in connection with the Term
Sheets are not agreed before the Completion Date, the Term Sheets are nevertheless
binding themselves on the Parties with effect from Completion.

	6.	 	INTERIM PERIOD

	1.1	 	From the date of this Agreement until Completion, Ericsson must or must
procure that save as may be necessary or desirable in order to prepare the
Ericsson Business for transfer pursuant to this Agreement or otherwise
contemplated under the Transaction Documents:

	 	(A)	 	the Ericsson Business is carried on as a going concern in the normal course;
	 
	 	(B)	 	it and its Affiliates use all reasonable endeavours
consistent with the normal practice of the Ericsson Business to maintain the goodwill and
trade connections of the Ericsson Business with customers and suppliers
and to retain the services of their employees;
	 
	 	(C)	 	it promptly notifies to ST, in writing, full details of any
material changes in the Ericsson Business, its financial position and/or assets;
	 
	 	(D)	 	consult with ST in relation to any material alteration to
any agreement or arrangement between the Ericsson Business and the remainder of the
Ericsson Group or SEMC (including as to prices or royalties paid and
services provided); and
	 
	 	(E)	 	neither it nor any of its Affiliates, with respect to the
Ericsson Business without the prior written consent of ST:

	 	(i)	 	alters materially, or agrees to alter materially, the terms and
conditions of employment (including benefits) of any of its employees or
directors.

 

20

	 	(ii)	 	takes any action which may materially and adversely affect the ability of the JV
Companies to perform and operate their businesses in accordance with the Business Plans;
	 
	 	(iii)	 	pays any bonuses or grants stock options other than in the normal course of
business consistent with past practice;
	 
	 	(iv)	 	makes or announces to any person any proposal to make, any change or addition to any
Retirement Benefits, bonus scheme or redundancy policies of or in respect of any of its
directors, employees, former directors or former employees (or any dependant of such person)
or to the Ericsson Schemes other than any change required by law;
	 
	 	(v)	 	grants or creates, or announces to any person any proposal to grant or create, any
additional Retirement Benefits or take any action or allow any action to be taken in relation
to the Ericsson Schemes other than in the ordinary course of administering the Ericsson
Schemes or omits to take any action necessary or prudent for the ordinary proper operation of
the Ericsson Schemes;
	 
	 	(vi)	 	alter materially any agreement or arrangement between Ericsson and any Member of the
Ericsson Group or any agreement or arrangement with SEMC other than where the agreement or
arrangement expires or is renegotiated in the ordinary course of business;
	 
	 	(vii)	 	creates any encumbrance over the assets or undertakings of the
Ericsson Business otherwise than in the ordinary course of the Ericsson Business;
	 
	 	(viii)	 	disposes of any material assets or rights used in the Ericsson Business other than in
the ordinary course of business;
	 
	 	(ix)	 	unusually increase or decrease levels of trading stock other than in the ordinary
course of business;
	 
	 	(x)	 	offer price reductions or discounts or allowances on sales of trading stock other than
in the ordinary course of business and to an extent which does not materially decrease the
profitability of the Ericsson Business;
	 
	 	(xi)	 	institutes any legal proceedings which are material in the context of the Ericsson
Business (which for the avoidance of doubt does not include debt collection proceedings in the
ordinary course of business or legal proceedings for the purposes of preserving the
Intellectual Property, goodwill, business and assets of the Ericsson Business);
	 
	 	(xii)	 	grants or modifies in any material respect or agrees to terminate any rights or enter
into any agreements relating to any Intellectual Property that is material to the Ericsson
Business or otherwise fails to use its best endeavours in accordance with the practice in
relation to the

 

21

Ericsson Business to protect any of its rights relating to such material
Intellectual Property other than those rights which expire by operation
of law and cannot be renewed; or

	 	(xiii)	 	agrees to do any of the above conditionally or otherwise.

	1.2	 	From the date of this Agreement until Completion, ST must or must procure that save
as may be necessary or desirable in order to prepare the ST Business for transfer
pursuant to this Agreement or otherwise contemplated under the Transaction Documents:

	 	(A)	 	the ST Business is carried on as a going concern in the normal course;
	 
	 	(B)	 	it and its Affiliates use all reasonable endeavours consistent with the
normal practice of the ST Business to maintain the goodwill and trade connections of
the ST Business with customers and suppliers and to retain the services of
their employees;
	 
	 	(C)	 	it promptly notifies to ST, in writing, full details of any material
changes in the ST Business, its financial position and/or assets;
	 
	 	(D)	 	consult with Ericsson in relation to any material alteration to any
agreement or arrangement between the ST Business and the remainder of the ST Group or
NXP (including as to prices or royalties paid and services provided); and
	 
	 	(E)	 	neither it nor any of its Affiliates, with respect to the ST Business,
without the prior written consent of Ericsson:

	 	(i)	 	alters materially, or agrees to alter materially,
the terms and conditions of employment (including benefits) of any of its
employees or directors;
	 
	 	(ii)	 	takes any action which may materially and adversely
affect the ability of the JV Companies to perform and operate their
businesses in accordance with the Business Plans;
	 
	 	(iii)	 	pays any bonuses or grants any stock options other
than in the normal course of business consistent with past practice;
	 
	 	(iv)	 	makes or announces to any person any proposal to
make, any change or addition to any Retirement Benefits, bonus scheme or
redundancy policies of or in respect of any of its directors, employees,
former directors or former employees (or any dependant of such person) or
to the ST Schemes other than any change required by law;
	 
	 	(v)	 	grants or creates, or announces to any person any
proposal to grant or create, any additional Retirement Benefits or take
any action or allow any action to be taken in relation to the ST Schemes
other than in the ordinary course of administering the ST Schemes or omits
to take any action necessary or prudent for the ordinary proper operation
of the ST Schemes;

 

22

	 	(vi)	 	alter materially any agreement or arrangement between ST and any
Member of the ST Group or NXP Group other than where the agreement or
arrangement expires or is renegotiated in the ordinary course of business;
	 
	 	(vii)	 	creates any encumbrance over the assets or
undertakings of the ST Business otherwise than in the ordinary course of the
ST Business;
	 
	 	(viii)	 	disposes of any material assets or rights used in the ST Business other
than in the ordinary course of business;
	 
	 	(ix)	 	unusually increase or decrease levels of trading stock
other than in the ordinary course of business;
	 
	 	(x)	 	offer price reductions or discounts or allowances on sales of
trading stock other than in the ordinary course of business and to an extent
which does not materially decrease the profitability of the ST Business;
	 
	 	(xi)	 	institutes any legal proceedings which are material in
the context of the ST Business (which for the avoidance of doubt does not
include debt collection proceedings in the ordinary course of business or legal
proceedings for the purposes of preserving the Intellectual Property, goodwill,
business and assets of the ST Business);
	 
	 	(xii)	 	grants or modifies in any material respect or agrees to
terminate any rights or enter into any agreements relating to the Intellectual
Property that is material to the ST Business or otherwise fails to use its best
endeavours in accordance with the practice in relation to the ST Business to
protect any of its rights relating to such material Intellectual Property other
than those rights which expire by operation of law and cannot be renewed; or
	 
	 	(xiii)	 	agrees to do any of the above conditionally or otherwise.

	7.	 	BUSINESS TRANSFERS

	1.1	 	Transfer of the Businesses

	 	(A)	 	Upon the Completion Date, (i) ST shall transfer or procure the transfer by the
relevant Members of the ST Group of the ST Business Assets and (ii) ST and
Ericsson shall procure that JVS shall accept the transfer or procure the
acceptance of the transfer by the Acquirors of the ST Business Assets and the
Ericsson JVS Business Assets.
	 
	 	(B)	 	Upon the Completion Date, Ericsson shall (i) transfer or procure the transfer
by the relevant Members of the Ericsson Group of the Ericsson JVS Business Assets; and (ii) transfer to JVS the Ericsson Cash Contribution.
	 
	 	(C)	 	Upon the Completion Date, (i) Ericsson shall transfer or procure the transfer
by the relevant Members of the Ericsson Group of the Ericsson JVD Business

 

23

	 	 	 	Assets, and (ii) Ericsson and ST shall procure that JVD shall accept the
transfer or procure the acceptance of the transfer by the Acquirors of the
Ericsson JVD Business Assets.
	 
	 	(D)	 	The Parties expressly reserve the right to make any changes they
both agree are necessary to any of the transfer steps set out in clause 7.2, 7.3, 7.4 and 7.5
due to any tax or legal requirement.

	1.2	 	Ericsson Structure of Transfer

	 	(A)	 	Subject to Clauses 7.2(B), 7.2(C) and 7.2(E), the structure of the
transfer of the Ericsson Business Assets shall be determined by Ericsson who will provide
details of such structure to ST in draft at least 40 Business Days prior to
Completion and in final form at least 10 Business Days prior to Completion. In
particular Ericsson may:

	 	(i)	 	effect the transfer of Business Assets by
transferring one or more legal entities holding such Business Assets;
	 
	 	(ii)	 	transfer the Business Assets or an entity holding
Business Assets to JVS, JVD or a subsidiary of JVD or JVS, as applicable;
and
	 
	 	(iii)	 	allocate the Ericsson Consideration, as applicable,
between separate transfers as it determines.

	 	(B)	 	The provisions of Schedule 12 (Asset Transfer) shall apply to
any Ericsson Business Assets which are transferred directly to the JV Companies or
the Acquirors rather than by transfer of an entity holding such assets.
	 
	 	(C)	 	Ericsson shall not transfer any legal entity other than a legal entity
incorporated between the date of execution and Completion of this Agreement for the
purpose of transfer of the Ericsson Business pursuant to this Agreement unless
otherwise agreed between the Parties.
	 
	 	(D)	 	Ericsson, so far as possible, shall structure the transfer of the Ericsson
Business Assets so that, except where required by law, Excluded Liabilities are
not transferred to the JV Companies or the Acquirors.
	 
	 	(E)	 	The division of the Ericsson Business Assets between those transferred to
JVS and those transferred to JVD shall be agreed between the Parties prior to
Completion.

	1.3	 	ST Structure of Transfer

	 	(A)	 	Subject to Clauses 7.3(B) and 7.3(C), the structure of the transfer
of the ST Business Assets shall be determined by ST who will provide details of
such structure to Ericsson in draft form at least 40 Business Days prior to
Completion and in final form at least 10 Business Days prior to Completion. In
particular ST may:

 

24

	 	(i)	 	effect the transfer of ST Business Assets by transferring one
or more legal entities holding such ST Business Assets (such as ST-NXP
Wireless or any other member of the ST-NXP Group);
	 
	 	(ii)	 	transfer the Business Assets or an entity holding ST
Business Assets to JVS or a subsidiary of JVS; and
	 
	 	(iii)	 	allocate the ST Consideration, as applicable,
between separate transfers as it determines.

	 	(B)	 	The provisions of Schedule 12 (Asset Transfer) shall apply to any ST Business
Assets which are transferred directly to JVS or the Acquirors rather than by
transfer of an entity holding such assets.
	 
	 	(C)	 	ST shall not transfer any legal entity other a legal entity that is already
part of the ST-NXP Group, as set out in Schedule 5, or will become part of the ST-NXP
Group before Completion or is incorporated between execution and Completion
of this Agreement for the purpose of the transfer of the ST Business pursuant to
this Agreement, unless otherwise agreed between the Parties.
	 
	 	(D)	 	ST shall, so far as possible, structure the transfer of the ST Business
Assets so that, except where required by law, Excluded Liabilities (other than those arising
after ST-NXP Wireless Closing) are not transferred to the JV Companies or the
Acquirors.
	 
	 	(E)	 	ST shall procure that the ST Excluded Assets are extracted from the ST Business Assets to the extent practicable prior to Completion on terms of
extraction which do not leave JVS or any Purchaser with any material residual
liabilities in connection with the ST Excluded Assets and are otherwise
reasonable.
	 
	 	(F)	 	The Parties will work together to procure the most efficient method of the allotment and issue by JVD and the delivery to ST of the ST JVD Consideration
Shares as part of the consideration for ST transferring the ST Business Assets
to JVS.

	1.4	 	ST Consideration
	 
	 	 	ST agrees to transfer the ST Business Assets to the JV Companies on the terms of this
Agreement in consideration for:

	 	(A)	 	the allotment and issue by JVS to ST of the ST JVS Consideration Shares;
	 
	 	(B)	 	the allotment and issue by JVD and the delivery to ST of the ST
JVD Consideration Shares; and
	 
	 	(C)	 	the payment by the JVS Group to ST of the Cash Consideration, (which may be adjusted pursuant to the terms of Clause 7.6),

 

25

(together the “ST Consideration”).

	1.5	 	Ericsson Consideration
	 
	 	 	Ericsson agrees to transfer the Ericsson Business Assets to the JV Companies and transfer
to JVS the Ericsson Cash Contribution on the terms of this Agreement in consideration for:

	 	(A)	 	the allotment and issue by JVD to Ericsson of the Ericsson JVD Consideration Shares; and
	 
	 	(B)	 	the allotment and issue by JVS to Ericsson of the Ericsson JVS Consideration Shares,

(together, the “Ericsson Consideration”).

	1.6	 	Adjustment of the ST Consideration

	 	(A)	 	If the Completion Asset Amount is greater than the Reference Completion
Assets Amount, then the Cash Consideration shall be increased by the excess
subject to a maximum upwards adjustment of the Maximum Adjustment Cash
Payment.
	 
	 	(B)	 	If the Completion Asset Amount is less than the Minimum Completion Assets
Amount, then the Cash Consideration shall be decreased by the deficit to the
Minimum Completion Assets Amount.
	 
	 	(C)	 	If the Completion Asset Amount is greater than the Reference Completion
Assets Amount by an amount greater than the Maximum Adjustment Cash
Payment then ST shall be entitled to have transferred to it from the JVS Group,
ST Business Assets of a type which is not necessary for the effective
continuation of the ST Business, such as inventory, of a value equal to the
excess as a refund of the excess contribution made.

	1.7	 	Payments

	 	(A)	 	The payment to be made to ST on Completion shall be an estimate by
reference to the Estimated Completion Assets Statement of the Cash Consideration
following adjustment in accordance with Clauses 7.6(A) and 7.6(B) except that
references to the Completion Assets Amount shall be deemed to be references to the
Estimated Completion Assets Amount and the right of ST to have ST Business Assets
transferred to it under Clause 7.6(C) shall be deemed to be a right not to transfer
those Business Assets to the JVS Group.

 

 

26

	 	(B)	 	Any payments due from ST or JVS pursuant to Clause 7.6 (after taking
into account any estimated payments made under Clause 7.7(A)) shall be paid within 10
Business Days of agreement or determination of the Completion Asset Amount.

	1.8	 	Preparation of Completion Asset Statement and Estimated Completion Asset
Statement

	 	(A)	 	ST shall prepare or procure the preparation of Estimated Completion Asset
Statement in accordance with the ST Accounting Principles and, to the extent
not covered by these, US GAAP, and shall provide the Estimated Completion
Asset Statement to Ericsson not less than 10 Business Days prior to the
Completion Date.
	 
	 	(B)	 	Within 30 Business Days of the Completion Date, ST shall prepare the draft
Completion Asset Statement in accordance with the ST Accounting Principles
and, to the extent not covered by these, US GAAP.
	 
	 	(C)	 	ST shall deliver the draft Completion Asset Statement to the JV Auditors who
shall be instructed to review the draft Completion Asset Statement and, within
30 Business Days, propose such adjustments to the draft Completion Asset
Statement as they believe are required for them to confirm that the draft
Completion Asset Statement has been prepared on the basis set out in Clause
7.8(A) giving reasons in reasonable detail for each adjustment.
	 
	 	(D)	 	Within 10 Business Days of delivery to the Parties by the JV Auditors of the
draft Completion Asset Statement prepared in accordance with Clause 7.8(B),
either or both of ST and Ericsson may give notice to the other of any item or
items it wishes to dispute together with the reasons in reasonable detail for such
dispute and a list of proposed adjustments. If by the expiry of such period of 10
Business Days, no such notice is given by either of ST or Ericsson the draft
Completion Asset Statement as adjusted in accordance with Clause 7.8(C) shall
be final and binding on the Parties.
	 
	 	(E)	 	If, in accordance with Clause 7.8(D), notice is given to either or both of ST
and
Ericsson as to any item or items in dispute:

	 	(i)	 	ST and Ericsson shall attempt to agree in
writing the item or items disputed;
	 
	 	(ii)	 	if any such item or items are not agreed in writing within 20 Business
Days of receipt of notice of dispute, the item or items in dispute shall be
determined by the JV Auditors in accordance with Schedule 6 (JV Auditors);
and
	 
	 	(iii)	 	the Completion Asset Statement adjusted to take
account of each item in dispute (of which notice is given in accordance with
Clause 7.8(D)) as agreed in writing or as determined by the JV Auditors (as
the case may be), shall constitute the Completion Asset Statement for the
purposes of this Agreement.

 

27

	1.9	 	Preparation of Ericsson Completion Liability Statement and Estimated Ericsson
Completion Liability Statement

	 	(A)	 	Ericsson shall prepare or procure the preparation of Estimated Ericsson Completion Liability Statement in accordance with the Ericsson Accounting
Principles and, to the extent not covered by these, IFRS, and shall provide the
Estimated Ericsson Completion Liability Statement to ST not less than 10
Business Days prior to the Completion Date.
	 
	 	(B)	 	Within 30 Business Days of the Completion Date, Ericsson shall prepare the
draft Ericsson Completion Liability Statement in accordance with the Ericsson
Accounting Principles and, to the extent not covered by these, IFRS.
	 
	 	(C)	 	Ericsson shall deliver the draft Ericsson Completion Liability Statement to
the JV
Auditors who shall be instructed to review the draft Ericsson Completion Liability
Statement and, within 30 Business Days, propose such adjustments to the draft
Ericsson Completion Liability Statement as they believe are required for them to
confirm that it has been prepared on the basis set out in Clause 7.9(A) giving
reasons in reasonable detail for each adjustment.
	 
	 	(D)	 	Within 10 Business Days of delivery to the Parties by the JV Auditors of the
draft Ericsson Completion Liability Statement prepared in accordance with
Clause 7.9(B), either or both of ST and Ericsson may give notice to the other of
any item or items it wishes to dispute together with the reasons in reasonable
detail for such dispute and a list of proposed adjustments. If by the expiry of
such period of 10 Business Days, no such notice is given by either of ST or
Ericsson the draft Ericsson Completion Liability Statement as adjusted in
accordance with Clause 7.9(C) shall be final and binding on the Parties.
	 
	 	(E)	 	If, in accordance with Clause 7.8(D), notice is given to either or both of ST
and
Ericsson as to any item or items in dispute:

	 	(i)	 	ST and Ericsson shall attempt to agree in
writing the item or items disputed;
	 
	 	(ii)	 	if any such item or items are not agreed in writing within 20 Business
Days of receipt of notice of dispute, the item or items in dispute shall be
determined by the JV Auditors in accordance with Schedule 6 (JV Auditors);
and
	 
	 	(iii)	 	the Ericsson Completion Liability Statement adjusted
to take account of each item in dispute (of which notice is given in
accordance with Clause 7.8(D)) as agreed in writing or as determined by the JV
Auditors (as the case may be), shall constitute the Ericsson Completion
Liability Statement for the purposes of this Agreement.

	 	(F)	 	If, in accordance with Clause 7.9(D), notice is given to either or both of ST
and
Ericsson as to any item or items in dispute:

 

28

	 	(i)	 	ST and Ericsson shall attempt to agree in writing the
item or items disputed;
	 
	 	(ii)	 	if any such item or items are not agreed in writing within 20 Business
Days of receipt of notice of dispute, the item or items in dispute shall
be determined by the JV Auditors in accordance with Schedule 6 (JV
Auditors); and
	 
	 	(iii)	 	the Ericsson Completion Liability Statement adjusted
to take account of each item in dispute (of which notice is given in
accordance with Clause 7.9(D)) as agreed in writing or as determined by the JV
Auditors (as the case may be), shall constitute the Ericsson Completion
Liability Statement for the purposes of this Agreement.

	1.10	 	Responsibility for Liabilities
	 
	 	 	With effect from Completion, each of the Parties shall comply with its obligations in
Schedule 7 (Responsibility for Liabilities).
	 
	1.11	 	Responsibility for Tax Liabilities
	 
	 	 	With effect from Completion, each of the Parties shall comply with its obligations in
Schedule 8 (Tax Indemnity).
	 
	1.12	 	Pensions
	 
	 	 	With effect from Completion, each of the Parties shall comply with its obligations in
Schedule 14 (Pensions).
	 
	1.13	 	Exchange Rate
	 
	 	 	For the purposes of Clauses 7.6, 7.7 and 7.8 any amounts expressed in Euros shall be
converted into US Dollars at the Agreed Exchange Rate.
	 
	7.14	 	Adjustments to Ericsson Consideration/ST Consideration
	 
	 	 	Unless otherwise agreed, any payment made by Ericsson under this Agreement shall (so far as
possible) be treated as an adjustment to the Ericsson Consideration to the extent of the
payment; and any payment made by ST under this Agreement shall (so far as possible) be
treated as an adjustment to the ST Consideration to the extent of the payment.
	 
	8.	 	EMPLOYEES
	 
	1.1	 	Informing and Consulting

	 	(A)	 	ST shall, or shall procure that the relevant ST Business shall in the
case of ST Employees, and Ericsson shall, or shall procure that the relevant Ericsson
Business shall in the case of Ericsson Employees comply with all applicable statutory
and/or contractual obligations in connection with the transfer of

 

29

	 	 	 	Employees, including, without limitation, obligations to inform and/or consult with
or obtain advice from any Representative Entities or employees and shall
successfully resolve any outstanding issues in relation thereto and unless there is
such compliance by the Parties neither of them will have any obligation to proceed
with Completion (without limiting their other rights, powers or remedies at law or
under this Agreement).
	 
	 	(B)	 	Each Party shall provide the other, upon request, all information and
assistance
reasonably required to satisfy that parties consultation obligations in Clause
8.1 (A) above.
	 
	 	(C)	 	At least 7 Business Days prior to Completion, Ericsson shall provide ST with a
list of all the Ericsson Employees, clearly indicating their job title, material
terms
and conditions of employment, whether each Ericsson Employee works on a
full, time, part time or temporary basis and whether any such employee is on
leave of absence for any reason.
	 
	 	(D)	 	At least 7 Business Days prior to Completion, ST shall provide Ericsson with a
list of all the ST Employees, clearly indicating their job title, material terms and
conditions of employment, whether each ST Employee works on a full, time,
part time or temporary basis and whether any such employee is on leave of
absence for any reason.

	1.2	 	Wrong pocket — right employees do not transfer
	 
	 	 	If the contract of employment of any Employee is found or alleged not to have effect as
if originally made with the relevant JV Company or relevant Member of the JV Group with
effect from the Completion Date, the relevant Member of the JV Group shall make or shall
procure that there is made, in consultation with the relevant Party, to that Employee an
offer in writing to employ him under a new contract of employment on terms and
conditions which, unless otherwise agreed by the Parties, will not differ from the
corresponding provisions of the Employee’s then existing contract of employment.
	 
	1.3	 	Wrong pocket — wrong employees transfer

	 	(A)	 	For the purposes of Clauses 8.3(B) and 8.3(C), the “Transferee Employer”
shall
be the person to whom the Wrongly Transferred Employee alleges he has
transferred and the “Transferor Employer” shall be the relevant Member of
Ericsson Group or of the ST Group, as the case may be.
	 
	 	(B)	 	If for any reason any person is found, alleged or agreed to be a
Wrongly
Transferred Employee, the Parties may agree that either:

	 	(i)	 	the Transferor Employer shall (and each Party shall ensure
that the relevant Transferor Employer that is a member of its Group shall), in
consultation with the Transferee Employer, make to the Wrongly Transferred
Employee an offer in writing to employ him under a new contract of employment,
to take effect upon the termination of his employment by the Transferee
Employer, on terms and conditions which, unless otherwise agreed by the
Parties, will not differ from the

 

30

	 	 	 	corresponding provisions of the Wrongly Transferred Employee’s
contract of employment immediately before the Completion Date, or
	 
	 	(ii)	 	the Transferee Employer may terminate the employment of
such Wrongly Transferred Employee.

	 	(C)	 	The Transferor Employer shall (and each Party shall ensure that the relevant
Transferor Employer that is a member of its Group shall) indemnify the
Transferee Employer on an after Tax basis against the costs of the Wrongly
Transferred Employee’s employment, the termination of that employment and
any liabilities or costs relating to the Wrongly Transferred Employee which
transfer to the Transferee Employer under the Acquired Rights Directive.
	 
	 	(D)	 	Clauses 8.3(A) to (C) do not apply to any back end personnel as described in
Schedule 9 (Excluded Assets) to this Agreement.

	1.4	 	Allocation of Liabilities

	 	(A)	 	Notwithstanding Schedule 10 (Excluded Liabilities), each Party shall keep each
JV Company and each member thereof indemnified on an after Tax basis
against any Liability (other than the Ericsson Accrued Vacation/Bonus Liability
and the ST Accrued Vacation/Bonus Liability) in respect of the employment of
any Employee at any time prior to Completion by that Party or any member of
that Party’s Group (including, with respect to ST Employees, the period prior to
the 
ST-NXP Wireless Closing), including, without limitation, (i) in respect of
change of control and/or termination entitlements to or for the benefit of such an
Employee under or in connection with the transactions contemplated by this
Agreement, (ii) in respect of that Party’s failure to comply with any obligations
(imposed by statute, regulation, collective labour agreement, contract or
otherwise) in relation to the informing and consulting of such an Employee
and/or Representative Entities applicable to him and (iii) in respect of any such
Employee objecting to the transfer of his employment to a JV Company.
	 
	 	(B)	 	All costs and liabilities (including Tax) suffered or incurred by any Member of
the
JV Group as a result of the award or grant of benefits under the Share Schemes
on or prior to the Completion Date shall be indemnified on an after-Tax basis by
the JV Partner making the award or grant.

	1.5	 	Terms and conditions
	 
	 	 	Except to the extent agreed otherwise by the Parties, it is the intention of the
Parties that the Joint Venture shall not offer any Employee terms and conditions of
employment that, when considered overall, are less favourable than the corresponding
provisions as existing immediately prior to Completion, but without prejudice to the
right or ability of any JV Company to amend or terminate any term and condition of
employment or benefit of any Employee at any time.
	 
	 	 	Each of JVD and JVS shall procure that service with either of ST or Ericsson (as the
case may be) shall be included for the purposes of determining severance liabilities and

 

31

	 	 	vesting and eligibility for benefits and pre Completion conditions shall not be used to
exclude coverage.
	 
	9.	 	Adjustment of Pension Liability
	 
	1.1	 	ST Adjustment

	 	(A)	 	If the ST Completion Pension Statement identifies that a Pension Deficit
exists then the ST shall transfer an amount in USD equal to that Pension Deficit as
directed in writing by the relevant JV Company.
	 
	 	(B)	 	Any payments due from ST pursuant to Clause 9.1(A) shall be paid within 10
Business Days of agreement or determination of the ST Completion Pension
Statement.
	 
	 	(C)	 	Within twelve weeks of the Completion Date, ST shall prepare the draft ST
Completion Pension Statement in accordance with the ST Accounting Principles
and Schedule 8 and, to the extent not covered by these, US GAAP.
	 
	 	(D)	 	ST shall deliver the draft ST Completion Pension Statement to the JV Auditors
who shall be instructed to review the draft ST Completion Pension Statement
and, within six weeks, propose such adjustments to the draft ST Completion
Pension Statement as they believe are required for them to confirm that the
draft ST Completion Pension Statement has been prepared on the basis set out
in Clause 9.1(C) giving reasons in reasonable detail for each adjustment.
	 
	 	(E)	 	Within two weeks of delivery to the Parties by the JV Auditors of the draft
ST
Completion Pension Statement reviewed in accordance with Clause 9.1(C),
either or both of ST and Ericsson may give notice to the other of any item or
items it wishes to dispute together with the reasons in reasonable detail for such
dispute and a list of proposed adjustments. If by the expiry of such period of ten
Business Days, no such notice is given by either of ST or Ericsson the draft ST
Completion Pension Statement as adjusted in accordance with Clause 9.1(D)
shall be final and binding on the Parties.
	 
	 	(F)	 	If, in accordance with Clause 9.1 (E), notice is given to either or both of
ST and Ericsson as to any item or items in dispute:

	 	(i)	 	ST and Ericsson shall attempt to agree in
writing the item or items disputed;
	 
	 	(ii)	 	if any such item or items are not agreed in writing within 20 Business
Days of receipt of notice of dispute, the item or items in dispute shall be
referred to an independent actuary, in accordance with Clause 9.3; and
	 
	 	(iii)	 	the ST Completion Pension Statement adjusted to take
account of each item in dispute (of which notice is given in accordance with
Clause 9.1(E)) as agreed in writing or as determined by the independent
actuary (as the case may be), shall constitute the ST Completion Pension
Statement for the purposes of this Agreement.

 

32

	1.2	 	Ericsson Adjustment

	 	(A)	 	Clause 9.1 shall apply to Ericsson mutatis mutandis so that
references to ST shall be deemed to be references to Ericsson.

	1.3	 	Referral to an independent Actuary

	 	(A)	 	ST and Ericsson may each appoint their own actuary to review, in the case of
ST the Ericsson Completion Pension Statement and in the case of Ericsson the
ST Completion Pension Statement.
	 
	 	(B)	 	Any dispute between the actuary appointed by ST and the actuary appointed by
Ericsson concerning the Completion Pension Statements or the calculation of
any Pension Liability or of any other matters to be determined or agreed by
them shall, in the absence of agreement between them, be referred to an
independent actuary.
	 
	 	(C)	 	The independent actuary shall be nominated jointly by ST and Ericsson or,
failing such nomination, shall be nominated by the President for the time being
of The Institute of Actuaries in England and Wales at the instance of the party
first applying to him on such terms as such President shall determine. In any
such case, the independent actuary shall be a person who possesses
appropriate expertise in relation to the jurisdiction in respect of which the matter
has arisen.
	 
	 	(D)	 	The independent actuary so appointed shall act as an expert and not as an
arbitrator. His decision shall be final and binding. His costs shall be borne
between ST of the one part and Ericsson of the other part as the independent
Actuary may direct.

	10.	 	COMPLETION
	 
	1.1	 	On the Completion Date, representatives of the Parties shall meet at a time and place to
be agreed by the Parties.
	 
	1.2	 	At Completion:

	 	(A)	 	Ericsson shall:

	 	(i)	 	subject to Clause 11, take such action and execute
such documents (and procure that the relevant Members of the Ericsson Group
take such action and execute such documents), so far as is within their power
to do so, as are required to transfer to the JV Companies or the Acquirors the
ownership of the Ericsson Business Assets in accordance with the structure
determined under Clause 7;
	 
	 	(ii)	 	procure that JVD allot and issue the JVD Consideration Shares and
deliver the ST JVD Consideration Shares to ST (or a Member of the ST Group)
and the Ericsson JVD Consideration Shares to Ericsson (or a Member of the
Ericsson Group), each credited as fully paid and ranking

 

33

	 	 	 	pari passu in all respects with the existing fully paid shares in the
capital of JVD;
	 
	 	(iii)	 	transfer to JVS by way of telegraphic transfer
(using the CHAPS system), the Ericsson Cash Contribution;
	 
	 	(iv)	 	execute and deliver all the Agreed Form Documents
to which it is a party;
	 
	 	(v)	 	procure that its Affiliates execute and deliver
all the Agreed Form Documents to which they are parties; and

	 	(B)	 	ST shall:

	 	(i)	 	subject to Clause 11, take such action and execute
such documents (and procure that the relevant Members of the ST Group take
such action and execute such documents), so far as is within their power to do
so, as are required to transfer to JVS or the Acquirors the ownership of the
ST Business Assets in accordance with the structure determine under Clause 7;
	 
	 	(ii)	 	procure that JVS allot and issue the JVS Consideration Shares and
deliver the ST JVS Consideration Shares to ST (or a Member of the ST
Group) and the Ericsson JVS Consideration Shares to Ericsson (or a Member
of the Ericsson Group), each credited as fully paid and ranking pari passu
in all respects with the existing fully paid shares in the capital of JVS;
	 
	 	(iii)	 	procure that JVS transfer the Cash Consideration (on
its own behalf and on behalf of the Acquirors) by transfer of the relevant
amount into the account of ST notified to JVS or Ericsson prior to Completion;
	 
	 	(iv)	 	execute and deliver all the Agreed Form Documents
to which it is a party;
	 
	 	(v)	 	procure that its Affiliates execute and deliver
all the Agreed Form Documents to which they are parties; and

	1.3	 	The Shares shall be issued free from all mortgages, pledges, claims, liens, charges,
encumbrances and equities or other third party rights or claims of any nature
whatsoever.
	 
	1.4	 	If a Party breaches any of its obligations in terms of Clause 10.1.2, then the other Party
is entitled:

	 	(A)	 	to defer Completion (so that this Clause 10 (Completion) applies to
Completion
so deferred);
	 
	 	(B)	 	to proceed with Completion so far as practicable (without limiting its other
rights,
powers or remedies at law or under this Agreement); or

 

34

	 	(C)	 	(for a breach of any of the obligations in terms of Clause 10.1.2 other
than 10.1.2(A)(i) or 10.1.2(B)(i)) to terminate this Agreement (other than the
Surviving Provisions) by notice in writing to the other Party (without limiting its
other rights, powers or remedies at law or under this Agreement).

	1.5	 	If any ST Excluded Assets have not been extracted from the ST Business Assets prior
to Completion, other than any which are not material, then Ericsson is entitled:

	 	(A)	 	to defer Completion (so that this Clause 10 (Completion) applies to
Completion
so deferred); or
	 
	 	(B)	 	to proceed with Completion so far as practicable (without limiting its other
rights,
powers or remedies at law or under this Agreement).

	11.	 	DELAYED COMPLETION
	 
	1.1	 	The Parties acknowledge that not all of the Business Assets may be capable of being
transferred to the JV Companies at Completion.
	 
	1.2	 	Provided the Conditions Precedent have been fulfilled and the Business Assets in the
Significant Jurisdictions are capable of being transferred to the JV Companies then
Completion may occur notwithstanding that the Business Assets in the remaining
jurisdictions may not be transferred at Completion
	 
	1.3	 	The Parties shall use all reasonable endeavours to procure that any Business Assets
not transferred at Completion are transferred to the relevant JV Company as soon as
practicable following Completion and in any event prior to the NXP Longstop Date
(“Delayed Completion”).
	 
	1.4	 	In respect of any Business Assets subject to Delayed Completion:

	 	(A)	 	Clauses 10.1.2(A)(i) or 10.1.2(B)(i) shall not apply at Completion but shall
apply
at Delayed Completion;
	 
	 	(B)	 	Clause 6 shall continue to apply to the Business Assets pending Delayed
Completion; and
	 
	 	(C)	 	so far as lawful, the Business Assets shall be held on trust for the relevant
JV Company.

	12.	 	WARRANTIES
	 
	1.1	 	Each Party warrants to and in favour of the other that save as contemplated in
this Agreement, as of the date of this Agreement:

	 	(A)	 	it and its Affiliates have and will have full power and authority to enter into,
exercise their rights and perform their obligations under and in connection with
the Transaction Documents to which any of them is or will be a party;

 

35

	 	(B)	 	all actions, conditions and things required to be taken, fulfilled and done
(including but not limited to the obtaining of necessary consents, approvals,
authorisations, exemptions, filings, licences, orders, permissions, recordings or
registrations anywhere in the world) in order:

	 	(i)	 	to enable it and its Affiliates lawfully to enter
into, exercise their rights and perform their obligations under and in
connection with the Transaction Documents to which any of them is or will be a
party; and
	 
	 	(ii)	 	to ensure that it and its Affiliates’ obligations
under and in connection with the Transaction Documents to which any of them is
or will be a party are valid, legally binding and enforceable,

	 
	 	have or at Completion will have been taken, fulfilled and done;

	 	(C)	 	the execution and delivery of, and the performance by it and its Affiliates
of their obligations under and in connection with the Transaction Documents to which
any of them is or will be a party, does not and will not result in a breach of:

	 	(i)	 	any provision of their constitutional documents; or
	 
	 	(ii)	 	any law, contract, agreement, order, judgement or
decree of any court or governmental agency to which any of them is or will be
a party or by which any of them is bound which could have a material adverse
effect on the Joint Venture or the ability of any of the parties to the
Transaction Documents to perform their obligations thereunder; and

	 	(D)	 	no order has been made or petition presented or resolution passed for the
winding up of it or any of its Affiliates which will be a party to, or execute and
deliver, any of the Transaction Documents or for an administration order in
respect of any of them or for the appointment of an administrative receiver or
receiver or receiver and manager over all or part of the assets of any of them
and no distress, execution or other process has been levied on any of their
assets (nor has any of them become subject to proceedings analogous to any
of the foregoing under the laws of any jurisdiction). Neither it nor any of its
Affiliates is insolvent or unable to pay its debts for the purposes of Section 123
of the Insolvency Act 1986 or any similar applicable law in any other jurisdiction
and no administrative receiver or receiver or receiver and manager has been
appointed by any person of its business or assets or any part thereof and no
power to make any such appointment has arisen (nor has any of them become
subject to proceedings analogous to any of the foregoing under the laws of any
jurisdiction).

	1.2	 	Ericsson warrants to and in favour of ST as of the date of this Agreement:

	 	(A)	 	After the Completion Date, JVS will have assigned to it the benefit of
Ericsson’s agreement with SEMC dated 30 September 2001 (together with the commercial
terms then current thereunder).

 

36

	 	(B)	 	Other than in respect of the Ericsson IP Liabilities, Ericsson or the relevant
Member of the Ericsson Group has or will, as at Completion, have full title, free
from all mortgages, pledges, claims, liens, charges, encumbrances and equities
or other third party rights or claims of any nature whatsoever, to, or a valid right
to use, the Ericsson Business Assets to be transferred to the JV Companies
pursuant to this Agreement.
	 
	 	(C)	 	Except to the extent that assets and contracts will be provided or made
available to the JV Companies pursuant to the terms of any of the Transaction
Documents, the Ericsson Business Assets constitute all of the assets necessary
to enable the JV Companies to properly carry on the Ericsson Business after
Completion as currently being carried on in each jurisdiction and are not
materially in excess of the JV Companies’ requirements in order to properly
carry on the Ericsson Business after Completion.
	 
	 	(D)	 	The Ericsson Business Contracts include all of the material contracts made with
customers and suppliers which relate exclusively to the Ericsson Business as
carried on by Members of the Ericsson Group at the Completion Date.
	 
	 	(E)	 	The contracts and arrangements between the Ericsson Business and Members
of the Ericsson Group, taken as a whole, are and will be at the Completion Date
on arms’ length terms and reflect competitive market terms of trade for the type
of services provided pursuant to such contracts or arrangements.
	 
	 	(F)	 	In relation to the Ericsson Business, no member of the Ericsson Group is the
subject of any official investigation or inquiry or proceedings brought by any
Governmental Authority or other administrative authority which have had, or is
likely to have, a material adverse effect on the carrying on of the Ericsson
Business and Ericsson is not aware of any facts which are likely to give rise to
any such investigation or inquiry.
	 
	 	(G)	 	So far as Ericsson is aware, there is no existing, pending or threatened material
dispute or potential material dispute relating to Employees between any
Member of the Ericsson Group and any Representative Entity, or any material
number of Employees in any Significant Jurisdiction.
	 
	 	(H)	 	Copies of all agreements or arrangements in relation to collective bargaining or
co-determination with any Representative Entity in relation to the Significant Jurisdiction
save for such agreements or arrangements which are applicable industry-wide, have been or
will, prior to Completion, be made available to ST. None of Ericsson nor any member of the
Ericsson Group has, in relation to any Significant Jurisdiction, received any request for any
agreement or arrangement from any Representative Entity for the purpose of collective
bargaining or co-determination and so far as Ericsson is aware, no such request is pending in
relation to any Significant Jurisdiction. Ericsson and the relevant Members of the Ericsson
Group are, in relation to each Significant Jurisdiction, in all material respects fully in
compliance with each such agreement or arrangement with any Representative Entity.

 

37

	 	(I)	 	Ericsson has provided, or prior to Completion, will provide to ST
full material information in respect of all material Benefit Plans relating to
the Employees in the Significant Jurisdictions and in relation to all other
relevant jurisdictions the information provided by Ericsson to ST in respect
of all material Benefit Plans relating to the Employees has been provided in
good faith and all factual information relating to the Employees in such other
relevant jurisdictions which has been provided is accurate in all material
respects.
	 
	 	(J)	 	No announcement or undertaking has been made to any of the Employees by
or on behalf of any Member of the Ericsson Group regarding any material improvement,
reduction or introduction of any employment benefit (other than a pension or death
benefit) for or in respect of any such person in connection with the transactions
contemplated by this Agreement taking effect before, on or after Completion.
	 
	 	(K)	 	Each member of the Ericsson Group has in relation to the Ericsson
Business materially complied with any relevant environmental and health and safety laws
and regulations (insofar as these protect the environment and prevent contamination)
save to the extent that non-compliance will not result in a material adverse effect on
the Ericsson Business.

	1.3	 	Except to the extent that the contracts will be provided or made available to JVD
pursuant to the terms of any Transaction Documents, Ericsson undertakes to ST and
the JV Companies that JVD will, for so long as Ericsson owns more than 50 per cent. of
JVD, have the benefit of all contracts between Ericsson or Members of the Ericsson
Group and third parties that provide any benefit for the Ericsson Business as carried on
by Ericsson or Members of the Ericsson Group prior to the Completion Date
PROVIDED THAT:

	 	(A)	 	this undertaking shall apply only to those contracts which permit Ericsson
(or a
Member of the Ericsson Group) to provide or make available to JVD the benefit
of such contracts and without the prior consent of, or compensation to, any
third party;
	 
	 	(B)	 	ST agrees that Ericsson (or a Member of the Ericsson Group) shall be
entitled
to provide such benefits directly to JVD instead of by way of a contract with
a
third party; and
	 
	 	(C)	 	Ericsson (or the relevant Member of the Ericsson Group) shall be
entitled to
terminate and/or shall not be required to renew or extend any contract with a
third party which does not or ceases to provide a benefit to any Member of the
Ericsson Group (other than JVD). In respect of the Non-NXP Business, ST
warrants to and in favour of Ericsson as of the date of this Agreement.

	1.4	 	In respect of the Non-NXP Business, ST warrants to and in favour of Ericsson as of the
date of this Agreement:

	 	(A)	 	Except to the extent that the contracts will be provided or made
available to JVS pursuant to the terms of any Transaction Documents, ST undertakes to
Ericsson and the JV Companies that JVS will, for so long as ST owns more than

 

38

	 	 	 	50 per cent. of JVS, have the benefit of all contracts between ST or Members of the ST
Group and third parties that provide any benefit for the ST Business as carried on by ST
or Members of the ST prior to the Completion Date PROVIDED THAT:

	 	(i)	 	this undertaking shall apply only to those contracts which permit ST
(or a Member of the ST Group) to provide or make available to JVS the benefit of such
contracts and without the prior consent of, or compensation to, any third party;
	 
	 	(ii)	 	Ericsson agrees that ST (or a Member of the ST Group) shall be
entitled to provide such benefits directly to JVS instead of by way of a contract
with a third party; and
	 
	 	(iii)	 	ST (or the relevant Member of the ST Group) shall be entitled to
terminate and/or shall not be required to renew or extend any contract with a
third party which does not or ceases to provide a benefit to any Member of the
ST Group (other than JVS).

	 	(B)	 	Other than in respect of the ST IP Liabilities, ST or the relevant Member of the
ST Group has or will, as at Completion, have full title, free from all mortgages,
pledges, claims, liens, charges, encumbrances and equities or other third party
rights or claims of any nature whatsoever, to, or a valid right to use, the ST
Business Assets comprised within the Non-NXP Business to be transferred to
the JV Companies pursuant to this Agreement.
	 
	 	(C)	 	Except to the extent that assets and contracts will be provided or made
available to the JV Companies pursuant to the terms of any of the Transaction
Documents, the ST Business Assets comprised within the Non-NXP Business
constitute all of the assets necessary to enable the JV Companies to properly
carry on the Non-NXP Business after Completion as currently being carried on
in each jurisdiction and are not materially in excess of the JV Companies’
requirements in order to properly carry on the Non-NXP Business after
Completion.
	 
	 	(D)	 	The ST Business Contracts comprised within the Non-NXP Business include all
of the material contracts made with customers and suppliers which relate
exclusively to the Non-NXP Business as carried on by Members of the ST
Group at the Completion Date.
	 
	 	(E)	 	The contracts and arrangements between the Non-NXP Business and Members
of the ST Group, taken as a whole, are and will be at the Completion Date on
arms’ length terms and reflect competitive market terms of trade for the type of
services provided pursuant to such contracts or arrangements.
	 
	 	(F)	 	In relation to the Non-NXP Business, no member of the ST Group is the subject
of any official investigation or inquiry or proceedings brought by any
Governmental Authority or other administrative authority which have had, or is
likely to have, a material adverse effect on the carrying on of the Non-NXP 

 

39

	 	 	 	Business and ST is not aware of any facts which are likely to give rise to any such
investigation or inquiry.
	 
	 	(G)	 	So far as ST is aware, there is no existing, pending or threatened material
dispute or potential material dispute relating to Non-NXP Employees between any
Member of the ST Group and any Representative Entity, or any material number of
Non-NXP Employees in any Significant Jurisdiction.
	 
	 	(H)	 	Copies of all agreements or arrangements in relation to collective
bargaining or co-determination with any Representative Entity in relation to the
Significant Jurisdictions save for such agreements or arrangements which are
applicable industry-wide, have been or will, prior to Completion, be made available to
Ericsson. None of ST nor any member of the ST Group has, in relation to any
Significant Jurisdiction, received any request for any agreement or arrangement from
any Representative Entity for the purpose of collective bargaining or co-determination
and so far as ST is aware, no such request is pending in relation to any Significant
Jurisdiction. ST and the relevant Members of the ST Group are, in relation to each
Significant Jurisdiction, in all material respects fully in compliance with each such
agreement or arrangement with any Representative Entity.
	 
	 	(I)	 	ST has provided, or prior to Completion, will provide to Ericsson
full material information in respect of all material Benefit Plans relating to the
Non-NXP Employees in the Significant Jurisdictions and in relation to all other
relevant jurisdictions the information provided by ST to Ericsson in respect of all
material Benefit Plans relating to the Non-NXP Employees has been provided in good
faith and all factual information relating to the Non-NXP Employees in such other
relevant jurisdictions which has been provided is accurate in all material respects.
	 
	 	(J)	 	No announcement or undertaking has been made to any of the Non-NXP
Employees by or on behalf of any Member of the ST Group regarding any material
improvement, reduction or introduction of any employment benefit (other than a pension
or death benefit) for or in respect of any such person in connection with the
transactions contemplated by this Agreement taking effect before, on or after
Completion.
	 
	 	(K)	 	Each member of the ST Group has in relation to the Non-NXP Business
materially complied with any relevant environmental and health and safety laws and
regulations (insofar as these protect the environment and prevent contamination)
save to the extent that non-compliance will not result in a material adverse effect
on the Non-NXP Business.

	1.5	 	In respect of the NXP Business, to the extent that any matter, fact or circumstance
gives rise to a claim by ST under the NXP Warranties (an “NXP Claim”), ST agrees and
undertakes to Ericsson to immediately inform Ericsson of the NXP Claim and, as soon as
reasonably practicable, to take all steps as JVS may reasonably require to pursue such claim
against NXP B.V. pursuant to the Falcon Sale and Contribution Agreement. JVS with the
assistance of Ericsson if required shall take such action and give such information and access
to personnel, premises, documents and records as well as

 

40

	 	 	procure, such reasonable action, and give (or procure the giving of) such reasonable
information and assistance, in order to make, pursue, appeal and enforce the NXP Claim.
The risks and benefits of any NXP Claim brought by ST shall be for the benefit of JVS
and accordingly ST shall have no liability to Ericsson or JVS in relation to the NXP
Business other than to the extent it recovers pursuant to an NXP Claim and any amount
recovered under an NXP Claim shall be paid to JVS. JVS shall indemnify and secure and
keep indemnified and secure ST against all direct and indirect loss, liability, damage
and expense suffered or incurred by it that arises out of or in connection with taking
any such action as JVS may reasonably require which for the avoidance of doubt
includes, without limitation, the reasonable costs and reasonable expenses of an
independent firm monitoring and representing ST in the claim, any losses for which ST
may be liable and the reasonable costs and reasonable expenses of ST in taking the
actions required by JVS and any such reasonable costs and reasonable expenses of the
independent firm are to be paid by JVS as they fall due.
	 
	1.6	 	Each Party must indemnify the other Party and keep it indemnified against all direct and
indirect loss, liability, damage and expense suffered or incurred by it that arises out of or
in connection with any breach by the first-mentioned Party of any of the warranties
given by it in terms of Clause 12.1.1 to Clause 12.1.3.
	 
	1.7	 	Neither Party shall be liable in respect of any claim under this Clause 12 to the extent
the matter or circumstance giving rise to that claim:

	 	(A)	 	is the subject of a claim under Clause 8;
	 
	 	(B)	 	is the subject of a claim under Schedule 7;
	 
	 	(C)	 	is the subject of a claim under Schedule 8;
	 
	 	(D)	 	is the subject of a claim under Schedule 14;
	 
	 	(E)	 	has been or is made good or is otherwise compensated for without cost to
the
JV Companies and the other party; or
	 
	 	(F)	 	is the subject of a claim providing for specific indemnification under any
other
clause of this Agreement.

	1.8	 	The liability of a Party under this Clause shall terminate in respect of Business Assets or
liabilities relating to a JV Company at the time that its liability to that JV Company
terminates under Part 3 of Schedule 7.
	 
	13.	 	ANNOUNCEMENTS
	 
	1.1	 	Subject to Clause 1.2 and except for the press release(s) in the Agreed Form, no
announcement concerning the subject matter of this Agreement may be made by either
Party without the prior written approval of the other, provided that such approval must
not be unreasonably withheld or delayed.
	 
	1.2	 	Either Party may, after consultation with the other party, make an announcement
concerning the subject matter of this Agreement if required by:

 

41

	 	(A)	 	law;
	 
	 	(B)	 	existing contractual obligations; or
	 
	 	(C)	 	any securities exchange or regulatory or governmental body to which that
Party
is subject or submits, wherever situated, whether or not the requirement has the
force of law,
	 
	 	in which case the Party concerned must take all such steps as may be reasonable and
practicable in the circumstances to agree the contents of such announcement with the
other Party before making such announcement.

	 
	14.	 	CONFIDENTIALITY
	 
	1.1	 	Each Party must treat as confidential all information obtained by it as a result of entering
into or performing this Agreement which relates to:

	 	(A)	 	the provisions of this Agreement;
	 
	 	(B)	 	the negotiations relating to this Agreement;
	 
	 	(C)	 	the subject matter of this Agreement; or
	 
	 	(D)	 	the other Party.

	1.2	 	Notwithstanding the other provisions of Clause 1.1, either Party may disclose
confidential information:

	 	(A)	 	if and to the extent required by law or for the purpose of any
judicial
proceedings;
	 
	 	(B)	 	if and to the extent required by existing contractual obligations;
	 
	 	(C)	 	if and to the extent required by any securities exchange or regulatory or
governmental body to which that party is subject or submits, wherever situated,
whether or not the requirement for information has the force of law;
	 
	 	(D)	 	if and to the extent required for the purposes of any arbitration
pursuant to
Clause 19 (Arbitration);
	 
	 	(E)	 	if and to the extent required to vest the full benefit of this
Agreement in that
Party;
	 
	 	(F)	 	to its professional advisers, auditors and bankers;
	 
	 	(G)	 	if and to the extent the information has come into the public domain through
no
fault of that Party; or
	 
	 	(H)	 	if and to the extent the other Party has given prior written
consent to the disclosure, such consent not to be unreasonably withheld or
delayed.

 

42

	1.3	 	Any information to be disclosed pursuant to Clauses 1.2(A) to 1.2(D)
(inclusive) may be disclosed only after consultation with the other Party.
	 
	15.	 	COSTS AND EXPENSES
	 
	1.1	 	Except as otherwise stated in this Agreement, each Party must pay its own costs and
expenses incurred or to be incurred in negotiating, preparing, concluding or performing
this Agreement.
	 
	1.2	 	Start-Up Costs will be shared equally between the parties or paid by the JV Companies.
	 
	1.3	 	Ericsson will pay any costs and expenses required to restructure or reorganise the
Ericsson Business in preparation for transfer or in implementing the transfer.
	 
	1.4	 	ST will pay any costs and expenses required to restructure or reorganise the ST
Business in preparation for transfer or in implementing the transfer.
	 
	16.	 	FURTHER ASSURANCE AND WRONG POCKETING
	 
	1.1	 	Upon and after Completion the Parties shall, and will procure that the relevant Member
of the ST Group or Ericsson Group, as applicable, shall, do and execute and deliver or
procure to be done and executed and delivered all such further acts, deeds, documents,
instruments of conveyance, assignment and transfer and things as may be necessary to
give effect to the terms of this Agreement to place control of the Businesses in the
hands of the JV Companies in order effectively to convey, transfer, vest and record title
in the Business Assets to the Acquirors and pending the doing of such acts, deeds,
documents and things, the Parties shall and will procure that the relevant Member of the
ST Group or Ericsson Group, as applicable, shall as from the Completion Date hold the
legal estate in the Business Assets in trust for the Acquirors and the JV Companies (as
applicable and as the case may be) to the extent that it shall not have transferred the
same to the Acquirors and JV Companies (as applicable and as the case may be).
	 
	1.2	 	To the extent that it is determined, following Completion, that the Acquirors or JV
Companies have not been transferred any asset that should have been transferred to it,
the Parties shall, and shall procure that the relevant Member of the ST Group or
Ericsson Group, as applicable, shall, effect the transfer of that asset to the Acquiror,
where relevant, against payment of such consideration therefor as would have been
payable had the relevant asset been transferred.
	 
	1.3	 	To the extent that it is determined, following Completion, that the Acquirors or JV
Companies have been transferred any asset that should not have been transferred to it,
the Parties shall, and shall procure that asset shall be transferred from the relevant
Acquiror or JV Company to the relevant Member of the ST Group or Ericsson Group, as
applicable, for no consideration.
	 
	1.4	 	If for any legal, regulatory or Tax reason it is not practicable to give full effect to this
Agreement and securing to the JV Companies or the Acquirors the full benefit of the
rights, powers and remedies conferred on, or obligations undertaken by, it without a
material adverse effect on any Member of the Ericsson Group or any Member of the ST
Group, the Parties agree to discuss in good faith alternative arrangements which as

 

43

	 	 	nearly as practicable reflect, and give the same benefits or transfer responsibilities for
the same obligations as, the provisions of this Agreement which is the subject of such
legal, regulatory or Tax constraint.
	 
	17.	 	GOVERNING LAW
	 
	 	 	This Agreement shall be governed by and construed in accordance with Swiss law.
	 
	18.	 	NOTICES
	 
	1.1	 	A notice under this Agreement is only be effective if it is in writing. Faxes are permitted
but e-mail is not permitted.
	 
	1.2	 	Notices under this Agreement must be sent to a Party at its address or fax number and
for the attention of the individual set out below:

	 	(A)	 	Ericsson:

	 	(i)	 	Address: its registered office from time to time

	 
	 	(ii)	 	Fax number: +46 8 719 95 27
	 
	 	(iii)	 	For attention of: General Counsel

	 	(B)	 	ST:

	 	(i)	 	Address: its registered office from time to
time
	 
	 	(ii)	 	Fax number: +41 22 929 5906
	 
	 	(iii)	 	For attention of: General Counsel

	1.3	 	Either Party may change its notice details on giving notice to the other Party of the
change in accordance with this clause. That notice is only be effective on the day falling
5 clear Business Days after the notification has been received or such later date as may
be specified in the notice.
	 
	1.4	 	Any notice given under this Agreement must, in the absence of earlier receipt, be
deemed to have been duly given as follows:

	 	(A)	 	if delivered personally, on delivery;
	 
	 	(B)	 	if sent by first class post, 3 clear Business Days after the date of posting; or
	 
	 	(C)	 	if sent by facsimile, when despatched.

	1.5	 	Any notice given under this Agreement outside 9:30 a.m. and 5:00 p.m. (“Working
Hours”) in the place to which it is addressed must be deemed not to have been given
until the start of the next period of Working Hours in such place.

 

44

	1.6	 	The provisions of this Clause 18 (Notices) do not apply in relation to the
service of court process.
	 
	19.	 	ARBITRATION
	 
	 	 	The JV Partners agree and shall procure that any Dispute arising under or in connection
with this Agreement or the Transaction Documents shall be resolved under and in accordance
with Schedule 4 (Arbitration). Where any Transaction Documents are entered into by Members
of the Ericsson Group and/or Members of the ST-NXP Group and/or Members of the JV Group,
the JV Partners shall ensure that members of their respective groups and the JV Companies
shall ensure that members of their respective groups, submit any such Dispute for
resolution in accordance with Schedule 4, mutatis mutandis.
	 
	20.	 	MISCELLANEOUS
	 
	
1.1	 	Entire Agreement

	 	(A)	 	This Agreement constitutes the whole and only agreement between the Parties
relating to its subject matter.
	 
	 	(B)	 	Except in the case of fraud, no Party has any right of action against any
other Party arising out of or in connection with any draft, agreement, undertaking,
representation, warranty, promise, assurance or arrangement of any nature
whatsoever, whether or not in writing, relating to the subject matter of this
Agreement made or given by any person at any time prior to the date of this
Agreement, except to the extent that it is repeated in this Agreement.
	 
	 	(C)	 	This Agreement may only be varied by a written instrument or instruments duly
executed by or on behalf of each of the Parties.

	1.2	 	Remedies and Waivers

	 	(A)	 	No delay or omission by any Party in exercising any right, power or remedy
provided by law or under this Agreement must:

	 	(i)	 	affect that right, power or
remedy; or
	 
	 	(ii)	 	operate as a waiver of
it.

	 	(B)	 	The single or partial exercise of any right, power or remedy provided by law
or
under this Agreement does not preclude any other or further exercise of it or the

exercise of any other right, power or remedy.
	 
	 	(C)	 	The rights, powers and remedies provided in this Agreement are cumulative and
not exclusive of any rights, powers and remedies provided by law.

 

45

	1.3	 	No Assignment
	 
	 	 	Neither Party is entitled to assign its rights or benefits under this Agreement without the
prior written consent of the other. No declaration of trust is permitted in respect of any
Party’s rights or benefits under this Agreement.
	 
	1.4	 	Counterparts
	 
	 	 	This Agreement may be executed in any number of counterparts, and by the Parties on
separate counterparts, but is not effective until each Party has executed at least one
counterpart. Each counterpart constitutes an original of this Agreement, but all the
counterparts together constitute but one and the same instrument.
	 
	1.5	 	Effect of Completion
	 
	 	 	Any term of this Agreement which is capable of being performed after but which has not been
performed at or before Completion (including but not limited to the Surviving Provisions
and all the warranties given in terms of Clause 12 (Warranties)) remains in full force and
effect notwithstanding Completion.
	 
	1.6	 	No Partnership
	 
	 	 	Nothing in this Agreement constitutes a partnership between the Parties and none of the
Parties has authority to bind or commit the other Party.
	 
	1.7	 	Conflict with Other Transaction Documents
	 
	 	 	If there is any conflict or inconsistency between this Agreement and any other Transaction
Document, then the terms of this Agreement shall prevail, except insofar any other
Transaction Document states that a provision or provisions of that Transaction Document
must prevail.
	 
	1.8	 	Severability
	 
	 	 	If at any time any term of this Agreement is or becomes illegal, invalid or unenforceable
in any respect under the law of any jurisdiction, that does not affect or impair the
legality, validity or enforceability in that jurisdiction of any other provision of this
Agreement or the legality, validity or enforceability under the law of any other
jurisdiction of that or any other provision of this Agreement.
	 
	1.9	 	Limitations on Indemnity Claims

	 	(A)	 	Subject to Clause 20.9(B) no party shall not be liable in respect of any
claim under any indemnity contained in this Agreement unless the amount of any
claim to which the other party would, but for this Clause 20.9(A), be entitled as a
result of that claim is at least USD$100,000.
	 
	 	(B)	 	If more than one claim under any indemnity contained in this Agreement by a
party arises from, or is caused by, the same or substantially the same matter,
matters, circumstances or circumstances and the aggregate amount of any 

 

46

	 	 	 	damages to which that party would be entitled as a result of those claims is equal
to or exceeds the sum specified in Clause 20.9(A), then Clause 20.9(A) shall not
apply to any of those claims.
	 
	 	(C)	 	No party shall be liable in respect of any claim under any indemnity
contained in this Agreement unless the amount of all claims by a party exceeds USD$2.5
million in which case the party making the claim shall be entitled to all amounts
resulting from those claims (and not just the excess over that sum).

	1.10	 	Rights of Third Parties

	 	(A)	 	Except as provided in Clause 20.9(B), the parties to this Agreement do not
intend that any term of this Agreement should be enforceable by any person
who is not a party to this Agreement.
	 
	 	(B)	 	Schedule 7 (Responsibility for Liabilities), Clauses 3.2(B) and 3.3(B) confer
a benefit on the JVD Indemnified Parties and the JVS Indemnified Parties (each
a “Third Party”) and, subject to the remaining provisions of this clause, is
intended to be enforceable by each Third Party.
	 
	 	(C)	 	Notwithstanding the provisions of Clause 20.9(B), this Agreement may be
rescinded or varied in any way and at any time by the parties to this agreement
without the consent of any Third Party.

Executed as a an agreement by

TELEFONAKTIEBOLAGET L.M. ERICSSON (publ)

acting by its duly authorised representatives

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	 

	 	 

Executed as a an agreement by

STMICROELECTRONICS N.V.

acting by its duly authorised representativesEX-4.1

Exhibit 4.1

FORM OF NOTE

     Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”), to the Company (as defined below) or its agent for
registration of transfer, exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL, since the registered owner hereof, Cede & Co., has an interest herein.

     This Security is a global Security within the meaning of the Indenture (as defined below) and
is registered in the name of the Depositary or a nominee of the Depositary. This Security is
exchangeable for Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture. Unless and until this
certificate is exchanged in whole or in part for Securities in definitive registered form in
accordance with the provisions of the Indenture applicable to such exchange, this certificate may
not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

 

 

CBS CORPORATION

8.200% Senior Notes due 2014

Unconditionally guaranteed as to payment of

principal of and interest by

CBS OPERATIONS INC.

(a wholly owned subsidiary of CBS Corporation)

$[               ]

CUSIP: 124857AB9

          CBS Corporation, a Delaware corporation (herein called the “Company”, which term
includes any successor Person under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal sum of $[               ] on
May 15, 2014 at the office or agency of the Company referred to below, and to pay interest thereon
on November 15, 2009 and semiannually in arrears thereafter, on May 15 and November 15 of each year
(each, an “Interest Payment Date”), from May 13, 2009, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate of 8.200% per annum,
until the principal hereof is paid or duly provided for.

          The interest so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid, in immediately available funds, to the Person in
whose name this Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the May 1 or November 1, as
the case may be, preceding such Interest Payment Date. Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date,
and such Defaulted Interest, may be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities not less than 10 days prior to such Special Record Date, or may be paid at
any time in any other lawful manner, all as more fully provided in said Indenture.

          Payment of the principal of and interest on this Security will be made at the Corporate Trust
Office of the Trustee or such other office or agency of the Company as may be designated for such
purpose, in such coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided however, that each installment of
interest and principal on this Security may at the Company’s option be paid by check to the payee
or in immediately available funds by transfer to an account maintained by the payee located in the
United States.

          Any payment of principal or interest required to be made on a day that is not a Business Day
need not be made on such day, but may be made on the next succeeding Business Day and no interest
shall accrue as a result of such delayed payment. For purposes of this Security, “Business Day”
means any day that is not a Saturday or Sunday and that, in The City of New York, is not a day on
which banking institutions are generally authorized or obligated by law or executive order to
close.

          General. This Security is one of a duly authorized issue of securities of the Company
(herein called the “Securities”), unlimited in aggregate principal amount, issued and to be
issued in one or more series under an amended and restated indenture dated as of November 3, 2008
among the Company, CBS Operations Inc., as guarantor (the “Guarantor”) and The Bank of New
York Mellon, as trustee (herein

 

 

called the “Trustee”, which term includes any successor trustee under the Indenture)
(the “Indenture”), to which Indenture and the respective resolutions of the Company’s board
of directors or resolutions pursuant to the authority of the board of directors, an Officer’s
Certificate and/or indentures supplemental thereto, as the case may be, reference is hereby made
for a statement of the respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This Security is one of a
series designated as 8.200% Senior Notes due 2014, initially limited in aggregate principal amount
to $400,000,000. This Security is a global Security representing $[               ] of the Securities.

          Authorized Denominations. The Securities of this series are issuable only in
registered form without coupons in denominations of $2,000 and in integral multiples of $1,000.

          Book-Entry Security. This Security is a “book-entry” Security and is being registered
in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). Subject to the
terms of the Indenture, this Security will be held by DTC or its nominee, and beneficial interests
will be held by beneficial owners through the book-entry facilities of DTC or its nominee in
minimum denominations of $2,000 and in integral multiples of $1,000. As long as this Security is
registered in the name of DTC or its nominee, the Trustee will make payments of principal of and
interest on this Security by wire transfer of immediately available funds to DTC or its nominee.
Notwithstanding the above, upon the maturity of this Security, the principal, together with accrued
interest thereon, will be paid in immediately available funds upon surrender of this Security at
the Corporate Trust Office of the Trustee or such other offices or agencies appointed by the
Trustee for that purpose or such other locations provided in the Indenture.

          Event of Default. If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.

          Interest Rate Adjustment. The interest rate payable on the Securities of this series
will be subject to adjustment from time to time if either Moody’s or S&P or, in either case, any
Substitute rating agency (as defined below) downgrades (or downgrades and subsequently upgrades)
the debt rating assigned to the Securities of this series, in the manner described below.

               “Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation,
and its successors.

               “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors.

               “Substitute rating agency” means a “nationally recognized statistical rating
organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the
Company (as certified by a resolution of the Company’s board of directors or a committee designated
by the Company’s board of directors) as a replacement agency for Moody’s or S&P, or both of them,
as the case may be.

 

 

               If the rating from Moody’s (or any Substitute rating agency) of the Securities of this series
is decreased to a rating set forth in the immediately following table, the interest rate on the
Securities of this series will increase such that it will equal the interest rate payable on the
Securities of this series on the date of their issuance plus the percentage set forth opposite the
ratings from the table below:

	 	 	 	 	 
	Moody’s Rating*	 	Percentage Points
	 
	 	 	 	 
	Ba1
	 	 	0.25	 
	Ba2
	 	 	0.50	 
	Ba3
	 	 	0.75	 
	B1 or below
	 	 	1.00	 

 

			
	*	 	Including the equivalent rating of any Substitute rating agency.

               If the rating from S&P (or any Substitute rating agency) of the Securities of this series is
decreased to a rating set forth in the immediately following table, the interest rate on the
Securities of this series will increase such that it will equal the interest rate payable on the
Securities of this series on the date of their issuance plus the percentage set forth opposite the
ratings from the table below:

	 	 	 	 	 
	S&P’s Rating*	 	Percentage Points
	 
	 	 	 	 
	BB+
	 	 	0.25	 
	BB
	 	 	0.50	 
	BB-
	 	 	0.75	 
	B+ or below
	 	 	1.00	 

 

			
	*	 	Including the equivalent rating of any Substitute rating agency.

               If at any time the interest rate on the Securities of this series has been adjusted upward as
a result of a decrease in a rating by either Moody’s or S&P (or, in either case, a Substitute
rating agency), as the case may be, and subsequently such rating agency increases its rating of the
Securities of this series to any of the threshold ratings set forth above, the interest rate on the
Securities of this series will be decreased such that the interest rate for the Securities of this
series will equal the interest rate payable on the Securities of this series on the date of their
issuance plus the percentages set forth opposite the ratings from the tables above in effect
immediately following the increase in rating. If the rating by Moody’s (or any Substitute rating
agency) of the Securities of this series is or becomes Baa3 (or its equivalent, in the case of a
Substitute rating agency) or higher, and the rating by S&P (or any Substitute rating agency
thereof) is or becomes BBB- (or its equivalent, in the case of a Substitute rating agency) or
higher, the interest rate on the Securities of this series will be decreased to the interest rate
payable on the Securities of this series on the date of their issuance. In addition, the interest
rates on the Securities of this series will permanently cease to be subject to any adjustment
described above (notwithstanding any subsequent decrease in the ratings by either or both rating
agencies) if the Securities of this series become rated A3 and A- (or the equivalent of either such
rating, in the case of a Substitute rating agency) or higher by Moody’s and S&P (or, in either
case, a Substitute rating agency thereof), respectively (or one of these ratings if the Securities
of this series are only rated by one rating agency).

               Each adjustment required by any decrease or increase in a rating set forth above, whether
occasioned by the action of Moody’s or S&P (or, in either case, a Substitute rating agency), shall
be made independent of (and in addition to) any and all other adjustments. In no event shall (a)
the

 

 

interest rate for the Securities of this series be reduced to below the interest rate payable
on the Securities of this series on the date of their issuance or (b) the total increase in the
interest rate on the Securities of this series exceed 2.00% above the interest rate payable on the
Securities of this series on the date of their issuance.

               No adjustments in the interest rate of the Securities of this series shall be made solely as a
result of a rating agency ceasing to provide a rating of the Securities of this series. If at any
time Moody’s or S&P ceases to provide a rating of the Securities of this series, the Company will
use its commercially reasonable efforts to obtain a rating of the Securities of this series from a
Substitute rating agency, to the extent one exists, and if a Substitute rating agency exists, for
purposes of determining any increase or decrease in the interest rate on the Securities of this
series pursuant to the tables above (a) such Substitute rating agency will be substituted for the
last rating agency to provide a rating of the Securities of this series but which has since ceased
to provide such rating, (b) the relative rating scale used by such Substitute rating agency to
assign ratings to senior unsecured debt will be determined in good faith by an independent
investment banking institution of national standing appointed by the Company and, for purposes of
determining the applicable ratings included in the applicable table above with respect to such
Substitute rating agency, such ratings will be deemed to be the equivalent ratings used by Moody’s
or S&P, as applicable, in such table and (c) the interest rate on the Securities of this series
will increase or decrease, as the case may be, such that the interest rate equals the interest rate
payable on the Securities of this series on the date of their issuance plus the appropriate
percentage, if any, set forth opposite the rating from such Substitute rating agency in the
applicable table above (taking into account the provisions of clause (b) above) (plus any
applicable percentage resulting from a decreased rating by the other rating agency). For so long
as only one of Moody’s or S&P provides a rating of the Securities of this series and no Substitute
rating agency is offered to replace the other rating agency, any subsequent increase or decrease in
the interest rate of the Securities of this series necessitated by a reduction or increase in the
rating by the agency providing the rating shall be twice the percentage set forth in the applicable
table above. For so long as none of Moody’s, S&P or a Substitute rating agency provides a rating
of the Securities of this series, the interest rate on the Securities of this series will increase
to, or remain at, as the case may be, 2.00% above the interest rate payable on the Securities of
this series on the date of their issuance.

               Any interest rate increase or decrease described above will take effect on the next Business
Day after the rating change has occurred.

               If the interest rate payable on the Securities of this series is increased as described in
this “Interest Rate Adjustment” Section, the term “interest,” as used with respect to the
Securities of this series, will be deemed to include any such additional interest unless the
context otherwise requires.

          Redemption and Maturity. The Securities of this series are not subject to any sinking
fund and are subject to redemption prior to maturity as set forth below.

               Optional Redemption. Prior to maturity, the Securities of this series may be redeemed, at the
option of the Company, in whole or in part, at any time and from time to time, on not less than 30
nor more than 60 days’ prior notice, at a redemption price equal to the sum of 100% of the
principal amount redeemed, the Make-Whole Amount (as defined below) and any accrued and unpaid
interest to the date of redemption. Holders of record on a record date that is on or prior to a
redemption date will be entitled to receive interest due on the interest payment date. In the
event of a deposit or withdrawal of an interest in this Security, including an exchange, transfer,
redemption or conversion of this Security in part only, the Trustee, as custodian of the
Depositary, shall make an adjustment on its

 

 

records to reflect such deposit or withdrawal in accordance with the rules and procedures of
the Depositary.

               “Make-Whole Amount” means, the excess, if any, of (a) the aggregate present value as
of the date of the redemption of the principal being redeemed and the amount of interest (exclusive
of interest accrued to the date of redemption) that would have been payable if redemption had not
been made, determined by discounting, on a semiannual basis, the remaining principal and interest
at the Reinvestment Rate described below (determined on the third business day preceding the date
notice of redemption is given) from the dates on which the principal and interest would have been
payable if the redemption had not been made, to the date of redemption, over (b) the aggregate
principal amount of the Securities of this series.

               “Reinvestment Rate” means 0.75% for the Securities of this series plus the arithmetic
mean of the yields under the heading “Week Ending” published in the most recent Federal Reserve
Statistical Release H.15 under the caption “Treasury Constant Maturities” for the maturity (rounded
to the nearest month) corresponding to the remaining life to maturity, as of the payment date of
the principal being redeemed or paid. If no maturity exactly corresponds to the maturity, yields
for the two published maturities most closely corresponding to the maturity would be so calculated
and the Reinvestment Rate would be interpolated or extrapolated on a straight-line basis, rounding
to the nearest month. The most recent Federal Reserve Statistical Release H.15 published prior to
the date of determination of the Make-Whole Amount will be used for purposes of calculating the
Reinvestment Rate.

               The Make-Whole Amount will be calculated by an independent investment banking institution of
national standing appointed by the Company. If the Company fails to make the appointment at least
45 business days prior to the date of redemption, or if the institution is unwilling or unable to
make the calculation, the calculation will be made by an independent investment banking institution
of national standing appointed by the Trustee.

               If the Reinvestment Rate is not available as described above, the Reinvestment Rate will be
calculated by interpolation or extrapolation of comparable rates selected by the independent
investment banking institution.

               In the case of any partial redemption, selection of the Securities of this series for
redemption will be made by the Trustee in compliance with the requirements of the principal U.S.
national securities exchange, if any, on which the Securities of this series are listed or, if they
are not listed on a U.S. national securities exchange, by lot or by such other method as the
Trustee in its sole discretion deems to be fair and appropriate.

          Offers to Repurchase. Upon the occurrence of a Change of Control Repurchase Event (as
defined below) in respect of the Securities of this series, unless the Company has exercised its
right to redeem the Securities of this series as described in the “Optional Redemption” Section,
each Holder will have the right to require that the Company repurchase all or a portion (equal to
$2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Securities of this
series pursuant to the offer described below (the “Change of Control Offer”), at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest to
the date of purchase.

               (a) Within 30 days following any Change of Control Repurchase Event, or, at the Company’s
option, prior to any Change of Control (as defined below), but after the public announcement of
such Change of Control, the Company shall send, or cause the Trustee to send, by first class mail,
a notice to each Holder, with a copy to the Trustee stating:

 

 

                    (i) that a Change of Control Change Repurchase Event has occurred or may occur and that such
Holder has the right to require the Company to repurchase such Holder’s Securities of this series
at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued
and unpaid interest to the date of purchase;

                    (ii) the repurchase date (which shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed, other than as required by law) (the “Change of Control
Repurchase Event Payment Date”);

                    (iii) the procedures determined by the Company that a Holder must follow in order to have its
Securities of this series purchased;

                    (iv) the purchase price (including the amount of accrued and unpaid interest, if any) for
each Security and the date on which the Change of Control Offer expires;

                    (v) that, unless the Company shall default in the payment of the purchase price, any Security
accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after
the Change of Control Repurchase Event Payment Date; and

                    (vi) a description of the transaction or transactions that constitute or may constitute the
Change of Control Repurchase Event.

               If such notice is mailed prior to the date of consummation of the Change of Control, the
notice shall also state that the Change of Control Offer is conditioned on the Change of Control
Repurchase Event occurring on or prior to the Change of Control Repurchase Event Payment Date.

               (b) On the Change of Control Repurchase Event Payment Date, the Company shall, to the extent
lawful, (i) accept for payment all Securities of this series or portions thereof properly tendered
and not withdrawn pursuant to the Change of Control Offer, (ii) deposit with the paying agent
money, in immediately available funds, sufficient to pay the aggregate purchase price of all
Securities of this series or portions thereof properly tendered and accepted and (iii) deliver, or
cause to be delivered, to the Trustee the Securities so accepted together with an officers’
certificate setting forth the aggregate principal amount of the Securities of this series or
portions thereof tendered to and accepted for payment by the Company.

               The paying agent shall promptly mail or deliver to each Holder of Securities of this series so
accepted payment in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail or cause to be transferred by book-entry to each such Holder a new Security
of like tenor equal in principal amount to any unpurchased portion of the Security surrendered.
Any Securities of this series not so accepted shall be promptly mailed or delivered by the Company
to the Holder thereof. Upon the payment of the purchase price for the Securities of this series
accepted for repurchase, the Trustee shall cancel the Securities of this series repurchased by the
Company. Any monies remaining after the repurchase of all Securities of this series validly
tendered pursuant to a Change of Control Offer shall be returned within three (3) Business Days by
the paying agent to the Company.

               (c) The Company is not required to make a Change of Control Offer upon a Change of Control
Repurchase Event if a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements of this Security applicable to a Change of Control
Offer made by the Company and purchases all Securities of this series properly tendered and not
withdrawn under such Change of Control Offer.

 

 

               (d) The Company will comply with the requirements of Rule 14e-1 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection with the repurchase
of Securities of this series as a result of a Change of Control Repurchase Event. To the extent
that the provisions of any securities laws or regulations conflict with the terms of the Change of
Control Repurchase Event provisions of the Securities of this series the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have breached its
obligations under the Change of Control Repurchase Event provisions of the Securities of this
series by virtue thereof.

               (e) Definitions.

               An “Affiliate” of the Company means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with the Company, or directly or
indirectly controlled by a Redstone Family Member.

               “Below Investment Grade Rating Event”, with respect to the Securities of this series,
means that such Securities become rated below Investment Grade by all of the Rating Agencies on any
date from the date of the public notice of an arrangement that results in a Change of Control until
the end of the 60-day period following public notice of the occurrence of a Change of Control
(which period shall be extended so long as the rating of such Securities is under publicly
announced consideration for possible downgrade by any of the Rating Agencies); provided that a
Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in rating
shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall
not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of
Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which
this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in
writing at its request that the reduction was the result, in whole or in part, of any event or
circumstance comprised of or arising as a result of, or in respect of, the applicable Change of
Control (whether or not the applicable Change of Control shall have occurred at the time of the
Below Investment Grade Rating Event).

               “Change of Control” means the occurrence of any of the following:

                    (i) the direct or indirect sale, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of all or substantially
all of the Company’s properties or assets and those of the Company’s subsidiaries, taken as a
whole, to any “person” (individually and as that term is used in Section 13(d)(3) and Section
14(d)(2) of the Exchange Act), other than the Company or one of its Affiliates;

                    (ii) the first day on which a majority of the members of the Company’s board of directors are
not Continuing Directors;

                    (iii) the consummation of any transaction or series of related transactions (including,
without limitation, any merger or consolidation) the result of which is that any “person”
(individually and as that term is used in Section 13(d)(3) and Section 14(d)(2) of the Exchange
Act), other than the Company, one of the Company’s subsidiaries or Redstone Family Members, becomes
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the Company’s Voting Stock, and following such transaction or
transactions, Redstone Family Members beneficially own less than 50% of the Company’s Voting Stock,
in each case, measured by voting power rather than number of shares; or

                    (iv) the consummation of a so-called “going private/Rule 13e-3 Transaction” that results in
any of the effects described in paragraph (a)(3)(ii) of Rule 13e-3 under the

 

 

Exchange Act (or any successor provision) with respect to each class of the Company’s common
stock, following which Redstone Family Members beneficially own, directly or indirectly, more than
50% of the Company’s Voting Stock, measured by voting power rather than number of shares.

               “Change of Control Repurchase Event” in respect of the Securities of this series means
the occurrence of both a Change of Control and a Below Investment Grade Rating Event in respect of
the Securities of this series.

               “Continuing Directors” means, as of any date of determination, any member of the
Company’s board of directors who:

                    (i) was a member of such board of directors on the first date that any of the Securities of
this series were issued; or

                    (ii) was nominated for election or elected to the Company’s board of directors (1) with the
approval of Redstone Family Members representing not less than 50% of the Company’s Voting Stock,
measured by voting power rather than number of shares, or (2) with the approval of a majority of
the Continuing Directors who were members of the Company’s board at the time of such nomination or
election.

               “Fitch” means Fitch Ratings, Ltd. and its successors.

               “Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent
under any successor rating categories of Moody’s), BBB- or better by S&P (or its equivalent under
any successor rating categories of S&P) or BBB- or better by Fitch (or its equivalent under any
successor rating categories of Fitch) (or, in each case, if such Rating Agency ceases to rate the
Securities of this series, for reasons outside of the Company’s control, the equivalent investment
grade credit rating from any Rating Agency selected by the Company as a replacement Rating Agency).

               “Rating Agency” means:

                    (i) each of Moody’s, S&P and Fitch; and

                    (ii) if any of Moody’s, S&P or Fitch ceases to rate the Securities of this series or fails to
make a rating of the Securities of this series publicly available for reasons outside of the
Company’s control, a “nationally recognized statistical rating organization” within the meaning of
Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a replacement agency for
any or all of Moody’s, S&P or Fitch, as the case may be.

               “Redstone Family Members” includes only the following persons: (i) Mr. Sumner
Redstone, (ii) the estate of Mr. Redstone; (iii) each descendant of Mr. Redstone or spouse or
former spouse of Mr. Redstone and their respective estates, guardians, conservators or committees;
(iv) any spouse or former spouse of Mr. Redstone; (v) each Family Controlled Entity (as defined
below); and (vi) the trustees, in their respective capacities as such, of each Family Controlled
Trust (as defined below). The term “Family Controlled Entity” means (i) any not for-profit
corporation if more than 50% of its board of directors is composed of Redstone Family Members; (ii)
any other corporation if more than 50% of the value of its outstanding equity is owned by Redstone
Family Members; (iii) any partnership if more than 50% of the value of its partnership interests
are owned by Redstone Family Members; and (iv) any limited liability or similar company if more
than 50% of the value of the company is owned by Redstone Family Members. The term “Family
Controlled Trust” includes certain trusts existing on May 13, 2009 and any other trusts the primary
beneficiaries of which are Redstone Family Members,

 

 

spouses
of Redstone Family Members and/or charitable organizations, provided that if the trust is a
wholly charitable trust, more than 50% of the trustees of such trust consist of Redstone Family
Members.

               “Voting Stock” means stock of the class or classes having general voting power under
ordinary circumstances to elect at least a majority of the board of directors, managers or trustees
of a corporation (irrespective of whether or not at the time stock of any other class or classes
shall have or might have voting power by reason of the happening of any contingency).

          Defeasance and Covenant Defeasance. The Indenture contains provisions for defeasance
at any time of (a) the entire indebtedness of the Company on this Security and (b) certain
restrictive covenants and the related Defaults and Events of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to this Security.

          Modification and Waivers; Obligations of the Company Absolute. The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the Holders of the Securities of each
series. Such amendment may be effected under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of each series affected thereby. The Indenture also
contains provisions permitting the Holders of not less than specified percentages in aggregate
principal amount of the Outstanding Securities of each series, on behalf of the Holders of all the
Securities of such series, to waive compliance by the Company and the Guarantor with certain
provisions of the Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver shall be conclusive and binding upon the Holders of this Security and
upon all future Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Security.

          As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of
this series will have any right to institute any proceeding with respect to the Indenture or for
any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice
of a continuing Event of Default with respect to this series, the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the
Trustee shall not have received from the Holders of a majority in principal amount of the
Outstanding Securities of this series a direction inconsistent with such request and shall have
failed to institute such proceeding within 60 days; provided, however, that such limitations do not
apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal of
or interest on this Security on or after the respective due dates expressed herein.

          No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of and interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.

          Registration of Transfer or Exchange. As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this Security will be registered on the
Security Register of the Company upon surrender of this Security for registration of transfer at
the office or agency of the Company maintained for such purpose in New York, New York or at such
other office or agency as the Company may designate, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series of authorized

 

 

denominations and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

          As provided in the Indenture and subject to certain limitations therein set forth, the
Securities of this series are exchangeable for a like aggregate principal amount of Securities of
this series and of a different authorized denomination, as requested by the Holder surrendering the
same.

          No service charge shall be made for any registration of transfer or exchange of Securities of
this series, but the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

          Prior to the time of due presentment of this Security for registration of transfer, the
Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may
treat the Person in whose name this Security is registered as the absolute owner hereof for all
purposes, whether or not this Security be overdue, and none of the Company, the Guarantor, the
Trustee or any agent of the Company, the Guarantor or the Trustee shall be affected by notice to
the contrary.

          This Security is a global Security. If at any time, a Depositary is at any time unwilling or
unable to continue as Depositary and a successor Depositary is not appointed by the Company within
90 days, then the Company will execute and the Trustee will authenticate and deliver Securities of
this series in definitive registered form, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of this Security in exchange for this Security.
Such Securities in definitive registered form shall be registered in such names and issued in such
authorized denominations as the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities
of this series to the Persons in whose names such Securities are so registered.

          Defined Terms. All terms used in this Security that are defined in the Indenture and
are not otherwise defined herein shall have the meanings assigned to them in the Indenture.

          Governing Law. This Security shall be governed by, and construed in accordance with,
the laws of the State of New York.

          Unless the certificate of authentication hereon has been duly executed by or on behalf of The
Bank of New York, as Trustee under the Indenture, or its successor thereunder, by the manual
signature of one of its authorized officers, this Security shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.

 

 

          IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	 	 	 	 	 
	Dated: [               ]	CBS CORPORATION,
as Issuer

 	 
	 	By:  	
 	 
	 
	Attest: 	 	 	 
	 
	 	 	 	 
	Authorized Signature 	 	 	 
	 

     

     

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of a series referred to in the within-mentioned Indenture.

	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON,

as Trustee

 	 
	 	By:  	
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

Dated: [               ]

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