Document:

execemploymentform.htm

EXHIBIT 10.2

    EXECUTION
COPY

     

     

    EXECUTIVE
EMPLOYMENT AGREEMENT

     

    This
Executive Employment Agreement (the “Agreement”) is made and entered on October
31, 2008, and is effective as of November 1, 2008 (the “Effective Date”), by and
between Express Scripts, Inc., a Delaware corporation (the “Company”), and
_________________ (“Executive”).

     

    WHEREAS,
Executive is now and has been employed by the Company as its
________________________ (or in a previous position) pursuant to the terms of
that certain Executive Employment Agreement (the “Original Agreement”) effective
as of ______________________ (the “Original Effective Date”); and

     

    WHEREAS,
the parties wish to amend and restate the Original Agreement by entering into
this Agreement, which shall supersede the Original Agreement as of the Effective
Date, to set forth the terms and conditions of Executive’s employment with the
Company.

     

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     

    ARTICLE
I

    DEFINITIONS

     

    As used
herein, the following terms shall have the following meanings:

     

    1.1           “Accrued Rights” has
the meaning set forth in Section 4.1.

     

    1.2           “Annual Base Salary”
means the base salary set forth in Section 3.1 hereof.

     

    1.3           “Annual Bonus” means
Executive’s annual bonus granted pursuant to the Annual Bonus Plan, as described
in Section 3.2 hereof.

     

    1.4           “Annual Bonus Plan”
means the annual bonus program established for senior executives by the Board of
Directors of the Company (the “Board”) or by the Committee, as adopted or
amended from time to time.

     

    1.5           “Bonus Potential”
means the maximum bonus amount Executive could receive pursuant to Section 3.2
hereof for achieving 100% of “base” or “targeted” performance goals established
by the Board or Committee under the Annual Bonus Plan with respect to the
applicable fiscal year; provided, however, in no event
shall Executive’s Bonus Potential for the year in which the Bonus Potential is
being determined (a) be less than _____% of Executive’s Annual Base Salary as in
effect on January 1 of such year or (b) take into account, or include in any
way, any increase in Executive’s bonus amount due to the Company exceeding its
“base” or “target” goals for such year (e.g., if Executive’s “base” or “target”
Bonus Potential is stated at $50,000, but Executive is eligible to receive more
than $50,000 if certain targets are exceeded then Executive’s Bonus Potential
for purposes of this definition is $50,000).

     

    1.6           “Cause”
means:

     

    
      	
               
      

            	
               (a)

            	
              any
      act or acts by Executive, whether or not in connection with his or her
      employment by the Company, constituting, or Executive’s conviction or plea
      of guilty or nolo contendere (no contest) to, (i) a felony under
      applicable law or (ii) a misdemeanor involving moral
      turpitude;

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      act or acts of gross dishonesty or gross misconduct in the performance of
      Executive’s duties hereunder;

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      willful malfeasance or willful misconduct by Executive in connection with
      Executive’s duties hereunder or any act or omission which is materially
      injurious to the financial condition or business reputation of the Company
      or its affiliates; or

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      breach by Executive of the provisions of Sections 5.1 through 5.3 of this
      Agreement, or of the terms and provisions of the Nondisclosure and
      Noncompetition Agreement (as defined in Section 1.24
    hereof).

            

    

     

    Notwithstanding
the foregoing, the event(s) described in clause (c) of this Section 1.6 shall
not be deemed to constitute “Cause” if such event is (i) primarily the result of
bad judgment or negligence on the part of Executive not rising to the level of
gross negligence; or (ii) primarily because of an act or omission believed by
Executive in good faith to have been in, or not opposed to, the interests of the
Company and its affiliates.

     

    1.7           “Change in Control”
means a Change in Control as that term is defined in the Incentive Plan (as
defined in Section 1.22 hereof).

     

    1.8           “Code” means the
Internal Revenue Code of 1986, as amended.

     

    1.9           “Committee” means the
Compensation and Development Committee of the Board.

     

    1.10           “Covered Equity
Awards” means the following awards granted to the Executive under the
Incentive Plan: any and all Options, Stock Appreciation Rights, Restricted Stock
Units or Performance Shares (as such terms are defined in the Incentive Plan)
granted after January 1, 2008, but during the term of this
Agreement.

     

    1.11           “Covered Payments”
means the amounts described in Section 6.12(a) hereof.

     

    1.12           “Deemed Retirement
Date means the later to occur of (a) the date six months after the
Executive properly delivers a Notice of Retirement, or (b) the Termination
Date.

     

    1.13           “Disability” has the
meaning ascribed to such term in the Incentive Plan.

     

    1.14           “Early Retirement”
means a voluntary termination of employment by Executive which is not a Tenured
Retirement and which meets all of the following requirements:

     

    (a)           Executive
shall have properly delivered a Notice of Retirement at least six (6) months
prior to the proposed effective date of the Retirement;

     

    (b)           as
of the date of proper delivery of the Notice of Retirement (i) Executive shall
be at least 54 1⁄2 years of age, (ii) Executive shall have served on Senior Staff
for a continuous period of at least 4 1⁄2 years up to and including the date such
Notice of Retirement is delivered, and (iii) the sum of Executive’s age plus
cumulative years of service on Senior Staff shall equal at least
64.

     

    1.15           “Early Retirement Option
Expiration Date” means, with respect to each applicable grant of Options
or Stock Appreciation Rights, the first to occur of (A) the expiration of such
grant’s respective term (as set forth in the applicable option or stock
appreciation right agreement or notice), or (B) the date twelve months, plus the
number of months in the Early Retirement Extension Period, after the Deemed
Retirement Date (e.g. if the Early Retirement Extension Period is 4 months, the
date referenced in this Subsection (B) would be 16 months after the Deemed
Retirement Date).

     

    1.16           “Early Retirement Extension
Period” means a number of months equal to the number of months from the
first day of the calendar month of Executive’s 55th
birthday to the Deemed Retirement Date, truncated to a whole number (e.g. if an
Executive’s 55th
birthday was February 11, 2009 and his or her Deemed Retirement Date was
November 5, 2009, the Early Retirement Extension Period would be nine months –
the truncated number of months from February 1, 2009 to November 5,
2009).

     

    1.17           “Early Retirement Vesting
Factor” means a fraction, the numerator of which is the number of whole
months in the Early Retirement Extension Period, and the denominator of which is
60; provided, however, that under no circumstances may the Early Retirement
Vesting Factor be greater than one (or, if expressed as a percentage,
100%).

     

    1.18           “Effective Date” means
the date specified in the recitals to this Agreement.

     

    1.19           “Employment Period”
means the Initial Employment Period (as defined in Section 1.23 hereof) plus any
additional Renewal Periods (as defined in Section 1.30 hereof).

     

    1.20           “Excise Tax” means the
excise tax imposed by Section 4999 of the Code or any similar state or local tax
that may be imposed.

     

    1.21           “Good Reason” means
the occurrence of any one or more of the following:

     

    (a)           Any
material breach by the Company of any of the provisions of this Agreement or any
material failure by the Company to carry out any of its obligations
hereunder;

     

    (b)           The
Company’s requiring Executive to be based at any office or location more than 50
miles from One Express Way, Saint Louis, Missouri (the “Current Headquarters”),
except for travel reasonably required in the performance of Executive’s
responsibilities to the extent substantially consistent with Executive’s
business travel obligations;

     

    (c)           Any
substantial and sustained diminution in Executive’s authority or
responsibilities from those described in Section 2.3 hereof; provided, however,
notwithstanding the foregoing, (i) in the event a Change in Control shall occur
which results in the Company becoming a subsidiary of another pharmacy benefit
management company (“PBM”), or which is in the form of a merger in which the
surviving corporation or entity is a PBM  (x) so long as Executive is
offered a position as an officer of the parent PBM (or surviving corporation or
entity) with duties and responsibilities which are not inconsistent in any
material adverse respect with his or her duties and responsibilities immediately
prior to such Change in Control, and such position is based at an office or
location not more than 50 miles from the Current Headquarters, such change in
position shall not constitute Good Reason, but (y) if Executive is not offered a
position as an officer of the parent PBM or surviving corporation or entity as
described in (x), a substantial and sustained diminution in Executive’s
authority or responsibility shall be deemed to have occurred; or (ii) in the
event a Change in Control shall occur which results in the Company becoming a
subsidiary of a non-PBM or is in the form of a merger in which the surviving
corporation or entity is not a PBM, failure to receive an offer to serve as an
officer of the non-PBM parent or surviving corporation or entity shall not
constitute Good Reason provided Executive’s duties subsequent to the Change in
Control are not inconsistent in any material adverse respect with his or her
duties immediately prior to the Change in Control, and such position is based at
an office or location not more than 50 miles from the Current
Headquarters;

     

    (d)           The
failure by the Company to continue to provide Executive with substantially
similar perquisites or benefits Executive enjoyed in the aggregate under the
Company’s benefit programs (other than long-term incentive compensation
programs), such as any of the Company’s pension, savings, vacation, life
insurance, medical, health and accident, or disability plans in which he or she
was participating at the time of any such discontinuation (or, alternatively, if
such plans are amended, modified or discontinued, substantially similar
equivalent benefits thereto in the aggregate), or the taking of any action by
the Company which would directly or indirectly cause such benefits to be no
longer substantially equivalent in the aggregate to the benefits in effect
immediately prior to taking such action; provided, that any
amendment, modification or discontinuation of any plans or benefits referred to
in this subsection (d) hereof that generally affect substantially all other
domestic salaried employees of the Company who were eligible to participate, and
participated, in the affected Company benefit program(s) shall not be deemed to
constitute Good Reason; and

     

    (e)           The
timely delivery by the Company to the Executive of notice under Section 2.2,
indicating that the Company does not desire to renew this Agreement for an
additional Renewal Period, unless the Employment Period during which such notice
is delivered is scheduled to end after the Executive has attained the age of
65;

     

    provided that the
events described in Section 1.21 (a), (b), (c) or (d) above shall only
constitute Good Reason if the Company fails to cure such event within 30 days
after receipt from Executive of written notice of the event which constitutes
Good Reason; and provided further that, “Good Reason” shall cease to exist for
an event on the 120th day following the later of its occurrence or Executive’s
knowledge thereof, unless Executive has given the Company written notice thereof
prior to such date.

     

    1.22           “Incentive Plan” means
the Express Scripts, Inc. 2000 Long-Term Incentive Plan, as amended from time to
time.

     

    1.23           “Initial Employment
Period” has the meaning set forth in Section 2.2 hereof.

     

    1.24           “Nondisclosure and
Noncompetition Agreement” means the Form of Nondisclosure and
Noncompetition Agreement entered into by and between Executive and the Company
dated as of __________________.

     

    1.25           “Notice of Retirement”
means a notice of any purported Retirement by Executive as further described in
Section 4.5(b) hereof.

     

    1.26           “Notice of
Termination” means a notice of any purported termination of Executive’s
employment by the Company or by Executive as further described in Section 4.5
hereof.

     

    1.27           “Original Effective
Date” means the date specified in the recitals to this
Agreement.

     

    1.28           “Payment Cap” means
the maximum amount described in Section 6.12(b) hereof.

     

    1.29           “Post-Retirement Performance
Share Factor” means a fraction determined as follows:

     

    (a)           The
numerator shall be the sum of (i) the number of calendar years in a Performance
Period (as such term is defined in the Incentive Plan) during which the
Executive was employed by the Company as of December 31 of such year, plus (ii)
an additional one year for the calendar year in which the Termination Date
occurs, provided that the Executive was employed by the Company during such year
for at least three full calendar months prior to the Termination Date, and
further provided that such additional year was not already included in
1.29(a)(i) above (e.g. for a Performance Period of January 1, 2008 through
January 1, 2011, and a Termination Date of March 31, 2009 or thereafter, the
numerator shall be two); and

     

    (b)           
The denominator shall be the number of full calendar years in a Performance
Period (e.g. for a Performance Period of January 1, 2008 through January 1,
2011, the denominator shall be three).

     

    1.30           “Renewal Period” has
the meaning set forth in Section 2.2 hereof.

     

    1.31           “Retirement” means an
Early Retirement, a Tenured Retirement or any other voluntary termination of
employment by Executive which becomes effective on or after Executive has
reached the age of 59 1⁄2.

     

    1.32           “Senior Staff” means
those members of the Company’s senior management team with a pay grade of M3 or
higher, or a similar level under any new or revised salary grading system
utilized by the Company.

     

    1.33           “Severance Benefit”
means a severance payment in an amount equal to:

     

    (a)           eighteen
(18) months of Executive’s Annual Base Salary as in effect immediately prior to
the Termination Date, plus

     

    (b)           an
amount equal to one hundred fifty percent (150%) of the product of (i)
Executive’s Bonus Potential for the year in which the Termination Date occurs
(the “Termination Year”), multiplied by (ii) the average percentage of the Bonus
Potential earned by the Executive for the three (3) full years immediately
preceding the Termination Year, (or such shorter period if Executive was
employed by the Company for less than three (3) full years and received, or was
eligible to receive, a bonus during such period), which product shall be
prorated for the portion of the Termination Year in which Executive was employed
by the Company; provided, however, that such product shall not be prorated if
the Termination Date occurs within one year following a Change in Control Date
(as defined in the Incentive Plan).  Notwithstanding anything to the
contrary herein, neither the three-year average percentage of Bonus Potential
described in (ii) above, nor the percentage of Bonus Potential for any single
year used to compute such three-year average, may exceed 100%; provided,
however, that there shall be no such 100% maximum for the three year average, or
for any single year, if the Termination Date occurs within one year following a
Change in Control Date.

     

    1.34           “Tax Reimbursement
Payment” means the payment described in Section 6.12(c)
hereof.

     

    1.35           “Tenured Retirement”
means a voluntary termination of employment by Executive which meets all of the
following requirements:

     

    (a)           Executive
shall have properly delivered a Notice of Retirement at least six (6) months
prior to the proposed effective date of the Retirement;

     

    (b)           as
of the date of proper delivery of the Notice of Retirement (i) Executive shall
be at least 59 1⁄2 years of age, and (ii) Executive shall have served on Senior
Staff for a continuous period of at least 4 1⁄2 years up to and including the date
such Notice of Retirement is delivered.

     

    1.36           “Termination Date”
means the effective date of termination of Executive’s employment as determined
in accordance with Section 4.5 hereof.

     

    1.37           “Welfare Benefit” has
the meaning set forth in Section 4.2.

     

    ARTICLE
II

    TERM/POSITION

     

    2.1           Employment; Effectiveness of
Agreement.  Effective as of the Original Effective Date, the
Company hereby employs Executive, and Executive hereby accepts such employment,
according to the terms and conditions set forth in this Agreement.

     

    2.2           Term.  Subject
to the provisions of Sections 4.1 through 4.5 of this Agreement, the term of
Executive’s employment hereunder shall commence on the Original Effective Date
and continue through March 31, 20___ (the “Initial Employment
Period”).  On April 1 of each year, commencing with April 1,
20___,  and on each subsequent April 1 thereafter (each, an
“Anniversary Date”), this Agreement shall be extended automatically at such time
for an additional twelve (12) month period (each, a “Renewal Period”) unless
either party hereto delivers written notice in accordance with Section 6.2
hereof to the other party hereto at least 90 days prior to such Anniversary Date
of his, her or its desire not to renew this Agreement for an additional Renewal
Period.  (e.g. Subject to the terms
hereof, assuming an April 1 Anniversary Date, and an employment period (Initial
or Renewal) of April 1, 2008 through March 31, 2009, if either party gives
proper notice at least 90 days prior to April 1, 2009 then the Agreement shall
terminate as of March 31, 2009, but if neither party gives proper notice at
least 90 days prior to April 1, 2009 then the Agreement shall automatically
renew for an additional Renewal Period of April 1, 2009 through March 31,
2010.)  The Initial Employment Period and any Renewal Periods, if any,
shall constitute the “Employment Period” for purposes of this
Agreement.  If there are no Renewal Periods, then the Employment
Period shall have the same meaning as Initial Employment
Period.  Except as set forth in Section 6.1 hereof, upon termination
of Executive’s employment with the Company in accordance with the terms hereof
or upon termination of the Initial Employment Period or the Employment Period
without extension thereof, this Agreement shall terminate and no longer be of
any force or effect.  Both Executive and the Company acknowledge that
as of the Effective Date neither party has delivered a proper notice of
non-renewal to the other, and, as such, the current employment period (Initial
or Renewal) shall continue through March 31, 2009, subject to earlier
termination in accordance with the terms of this Agreement.

    

    2.3           Position and
Duties.  Executive shall hold the position of
_______________________________ and shall report to, and at all times be subject
to the lawful direction of, the Chief Executive Officer or President of the
Company (as designated by the Chief Executive Officer of the
Company).  Additionally, Executive shall serve as a member of the
executive staff and participate in the strategic decision-making of the Company
from time to time. During the Employment Period, Executive shall devote his or
her best efforts and his or her full business time and attention (except for
permitted vacation periods and reasonable periods of illness or other
incapacity) to the business affairs of the Company. Executive shall perform his
or her duties and responsibilities to the best of his or her abilities in a
diligent, trustworthy, businesslike and efficient manner. Nothing herein shall
preclude Executive from, (a) subject to the prior written consent of the Board,
or an appropriate committee of the Board, serving on any for-profit corporate or
governmental board of directors (b) serving on the board of, or working for, any
charitable, not-for-profit or community organization, (c) pursuing his or her
personal, financial and legal affairs, or (d) pursuing any other activity; provided that
Executive shall not engage in any other business, profession, occupation or
other activity, for compensation or otherwise, which would violate the
provisions of Section 5.1 or would, in each case, and in the aggregate,
otherwise conflict or interfere with the performance of Executive’s duties and
responsibilities hereunder, either directly or indirectly, without the prior
written consent of the Board or an appropriate committee of the
Board.

    

    ARTICLE
III

    COMPENSATION
AND BENEFITS

     

    3.1           Annual Base
Salary.  During the Employment Period, the Company shall pay
Executive a base salary (the “Annual Base Salary”) at the annual rate of
__________________________ Dollars ($ _________), which shall be payable in
regular installments in accordance with the Company’s usual payroll practices
and shall be subject to deductions for customary withholdings, including,
without limitation, federal, state and local withholding taxes, social security
taxes and Medicare taxes. Executive shall be eligible for such merit-based
increases in Executive’s Annual Base Salary, if any, as may be determined from
time to time in the sole discretion of the Board or the Committee; provided that any
such increase shall not serve to limit or reduce any other obligation to
Executive under this Agreement. The term “Annual Base Salary” as used in this
Agreement shall refer to the Annual Base Salary as in effect from time to time
during the Employment Period. Executive’s Annual Base Salary shall not be
reduced after any such increase without Executive’s express written
consent.

     

    3.2           Annual Incentive
Compensation.  Executive shall be eligible to participate in
the Company’s Annual Bonus Plan established for senior executives by the Board
or the Committee. The size of Executive’s bonus opportunity, which for any
calendar year shall be no less than ____% of Executive’s Annual Base Salary as
in effect on January 1 of such year, and the terms of Executive’s participation
in the Annual Bonus Plan shall be determined based on the terms and conditions
of the Annual Bonus Plan, subject to adjustment as described therein, and in
accordance with any bonus award agreement thereunder.  Executive’s
Annual Bonus shall be subject to deductions for customary withholdings,
including, without limitation, federal, state and local withholding taxes,
social security taxes and Medicare taxes

     

    3.3           Participation in Benefit
Plans.  During the Employment Period, Executive shall be
entitled to participate in the Company’s employee benefit plans (other than
bonus and incentive plans) as in effect from time to time, on the same basis as
those benefits are generally made available to similarly situated senior
executives of the Company.

     

    3.4           Restricted Stock, Stock
Options and Other Equity Awards and Deferred
Compensation.  Executive may receive restricted stock, stock
options and other equity awards and deferred compensation, to the extent
determined by the Company, Board or Committee, as applicable, from time to
time.  The terms of any such award shall be documented in a separate
award notice or agreement.

     

    3.5           Business
Expenses.  During the Employment Period, Executive shall be
reimbursed for all reasonable expenses incurred by him or her in performing his
or her duties hereunder provided that such expenses are incurred and accounted
for in accordance with the policies and procedures established by the
Company.

     

    3.6           Perquisites.  During
the Employment Period, Executive shall be entitled to receive such perquisites
and fringe benefits which similarly situated executives of the Company are
entitled to receive and such other perquisites which are suitable to the
character of Executive’s position with the Company and adequate for the
performance of Executive’s duties hereunder.

     

    ARTICLE
IV

    TERMINATION
OF EMPLOYMENT

     

    4.1           Termination by the Company
for Cause; Termination by Executive Other Than for Good Reason or
Retirement.  If the Employment Period and Executive’s
employment under this Agreement is terminated by the Company for Cause or by
Executive other than for Good Reason or Retirement, prior to the scheduled
expiration of the Employment Period, Executive shall be entitled to
receive:

     

    (a)           The
Annual Base Salary through the Termination Date;

     

    (b)           Reimbursement
for any unreimbursed business expenses properly incurred by Executive in
accordance with Company policy prior to the Termination Date; and

     

    (c)           Such
employee benefits, if any, to which Executive may be entitled under the employee
benefit plans of the Company, including rights with respect to any restricted
stock, stock option and other equity awards or any deferred compensation,
subject to the terms and conditions of the applicable plan, award, agreement or
notice, if relevant (the amounts described in clauses (a) through (c) hereof
being referred to as the “Accrued Rights”).

     

    Following
such termination of Executive’s employment hereunder pursuant to this Section
4.1, Executive shall have no further rights to any compensation or any other
benefits under this Agreement.  Notwithstanding the delivery of a
Notice of Termination or a Notice of Retirement (as applicable) with respect to
a termination other than a termination by the Company under this Section 4.1,
the Company may, at any time on or prior to the Termination Date, exercise its
right to terminate the Employment Period and Executive’s employment for Cause,
and, upon the proper exercise of such right, any other purported termination
(including a purported Retirement) shall be null and void, and the terms of this
Section 4.1 shall apply.  In addition, notwithstanding the delivery of
a Notice of Retirement by Executive, if the Employment Period and Executive’s
employment under this Agreement is terminated by Executive other than for Good
Reason prior to the proposed effective date set forth in such Notice of
Retirement, such purported Retirement (and the related Notice of Retirement)
shall be null and void, and the terms of this Section 4.1 shall
apply.

     

    4.2           Termination by the Company
Other Than for Cause or Disability; Termination by Executive for Good
Reason.

     

    (a)           If
the Employment Period and Executive’s employment under this Agreement is
terminated by the Company prior to the scheduled expiration of the Employment
Period other than for Cause or Disability, or Executive terminates his or her
employment prior to the end of the Employment Period for Good Reason, Executive
shall be entitled to receive:

     

    (i)       The
Accrued Rights;

     

    (ii)       Any
Annual Bonus earned for a previously completed fiscal year but unpaid as of the
Termination Date, which Annual Bonus shall be payable to the extent the
corporate bonus pool is approved by the Committee;

     

     (iii)  A
Severance Benefit pursuant to the terms and conditions set forth in Section
4.2(b) below; and

     

    (iv)  The
Company will reimburse the Executive for Executive’s cost of continuing medical
insurance under COBRA, or, following the expiration of the COBRA period,
equivalent medical insurance coverage, for Executive, Executive’s spouse and any
eligible dependents of Executive until the earlier of (A) eighteen (18) months
after the Termination Date, or (B) such time as Executive becomes eligible for
group insurance from another employer (the “Welfare Benefit”).

     

    (b)           The
Company shall pay the Severance Benefit, without interest thereon, in eighteen
(18) substantially equal monthly installments, which installments shall be
payable on the first day of each month, with the first installment payable in
the first full month commencing fifteen (15) days after the Termination
Date.  Notwithstanding the foregoing, in the event that Executive is
determined to be a specified employee in accordance with Section 409A of the
Code and the regulations and other guidance issued thereunder for purposes of
the Severance Benefit, the Severance Benefit shall begin on the first payroll
date which is more than six months following the date of his or her separation
from service; provided, that this sentence shall apply only to the extent
required to avoid Executive's incurrence of any additional tax or interest under
Section 409A of the Code or any regulations or Treasury guidance promulgated
thereunder.  Payment of the Severance Benefit is subject to deductions
for customary withholdings, including, without limitation, federal, state and
local withholding taxes, social security taxes and Medicare taxes. Executive
shall not be under any duty to mitigate damages in order to be eligible to
receive the Severance Benefit.

     

    (c)           Notwithstanding
the foregoing, Executive agrees that payment of the Severance Benefit is
contingent upon the following:

     

    (i)           In
the event of breach by Executive of Sections 5.1 through 5.3 hereof (or any
breach of any agreements in the release described in Section 4.2(c)(ii) below,
or in the Nondisclosure and Noncompetition Agreement, or in any other
nondisclosure or noncompetition agreement between Executive and the Company),
Executive shall reimburse the Company for all compensation or other amounts
previously paid, allocated, accrued, delivered or provided by the Company to
Executive pursuant to Section 4.2 (a)(ii) hereof and the Company shall be
entitled to discontinue the future payment, delivery, allocation, accrual or
provision of the Severance Benefit, the Welfare Benefit, and such other
compensation, including any deferred or equity compensation, as reflected in the
terms of any plan, notice or agreement evidencing such other compensation,
except to the extent prohibited by applicable law.

     

    (ii)           No
later than thirty (30) days after the Termination Date, Executive must execute
and deliver a general release releasing all claims against the Company (other
than those specifically described in the below proviso) in such form and
containing such terms as the Company may reasonably prescribe; provided, however, that it
shall not be a condition to the Executive’s receipt of the Severance Benefit
that the Executive release the Company from any of the following:

     

    (A)           the
obligations of the Company described in Article IV of the Agreement;
or

     

    (B)           any
vested rights that the Executive may have with respect to any benefits, rights
or entitlements under the terms of any employee benefit programs of the Company
to which the Executive is or will be entitled by virtue of his or her employment
with the Company or any of its subsidiaries, and nothing in the release will
prohibit or be deemed to restrict the Executive from enforcing his or her rights
to any such benefits, rights or entitlements; or

     

    (C)           the
Executive’s right to indemnification to the extent provided in the Company’s
Certificate of Incorporation and/or bylaws.

     

    Following
such termination of Executive’s employment hereunder pursuant to this Section
4.2, Executive shall have no further rights to any compensation or any other
benefits under this Agreement.

     

    4.3           Termination Due to Death,
Disability or Retirement.

    

    (a)           Rights Upon
Termination.  If the Employment Period and Executive’s
employment under this Agreement are terminated due to Executive’s death,
Disability or Retirement prior to the scheduled expiration of the Employment
Period, Executive or Executive’s estate, as applicable, will receive (a) the
Accrued Rights plus any Annual Bonus earned for a previously completed fiscal
year but unpaid as of the Termination Date which Annual Bonus shall be payable
to the extent the corporate bonus pool is approved by the Committee; provided,
however, that, in the event of Executive’s death, the Company agrees to abide by
previously received written instructions from the Executive directing the
Company to pay the Accrued Rights and/or the accrued but unpaid Annual Bonus to
a living trust or similar estate planning vehicle of Executive, provided such
trust or similar vehicle is still in existence at the time of Executive’s death,
except to the extent prohibited by law, and except as may otherwise be required
or directed by any applicable employee benefit plan; and (b) reimbursement for
the Welfare Benefit.  Following such termination of Executive’s
employment hereunder pursuant to this Section 4.3, Executive shall have no
further rights to any compensation or any other benefits under this
Agreement.  Further, notwithstanding the specific terms of the
Incentive Plan, with respect to any grants made to the Executive under the
Incentive Plan during the term of this Agreement, a proper Retirement by
Executive under this Agreement which is not also an Early Retirement or a
Tenured Retirement shall be deemed to be a Retirement under the Incentive
Plan.

    

    (b)           Tenured
Retirement.  Notwithstanding the specific terms of the
Incentive Plan, with respect to any Covered Equity Awards, upon a proper Tenured
Retirement, the following provisions shall apply:

    

    (i)           Vested Options and Stock
Appreciation Rights.  All Options or Stock Appreciation Rights
which have vested on or prior to the Termination Date, but which have not
expired, been exercised, or otherwise terminated, shall remain vested and
exercisable through the expiration of their respective terms (as set forth in
the applicable option or stock appreciation right agreements or
notices).

    

    (ii)           Unvested Options and Stock
Appreciation Rights.  All Options or Stock Appreciation Rights
which have not vested as of the Termination Date, and which have not expired or
otherwise terminated, shall continue to vest after the Termination Date in
accordance with their respective terms as if Executive were still employed by
the Company, and shall remain vested and exercisable through the expiration of
their respective terms (in each case as set forth in the applicable option or
stock appreciation right agreements or notices).

    

    (iii)           Restricted Stock
Units.  All grants of Restricted Stock Units which have not
vested as of the Termination Date, and which have not expired or otherwise
terminated, shall continue to vest after the Termination Date in accordance with
their respective terms as if Executive were still employed by the Company (as
set forth in the applicable restricted stock unit agreements or
notices).

    

    (iv)           Performance Shares. For each
award of Performance Shares, to the extent not already vested, terminated or
forfeited as of the Termination Date, Executive shall be considered vested in
such Performance Shares, but only to the
extent the Performance Criteria (as defined in the applicable Performance Share
award agreement) are achieved at the end of the applicable performance period
(subject to the limitations set forth below in this Section 4.3(b)(iv)), and any
payment of shares shall be made in accordance with the terms of the applicable
Performance Share agreement as if the Executive had remained as an employee of
the Company through the end of the performance period (i.e. generally shares
would not be distributed until after the end of the performance
period).  Notwithstanding the foregoing, certain Performance Shares
shall be subject to a reduction in the maximum number of shares which may be
delivered, as follows:

    

    (A)           For
each award of Performance Shares, if Executive’s Termination Date occurs on or
after the end of the third calendar month of the final full year of the
applicable Performance Period (as such term is defined in the Incentive
Plan)(e.g. for a Performance Period of January 1, 2007 through January 1, 2010,
on or after March 31, 2009), then such Performance Shares for shall be treated
as described in the preceding paragraph without any reduction in the maximum
number of shares which may be delivered.

    

    (B)           For
each award of Performance Shares, if Executive’s Termination Date occurs prior
to the end of the third calendar month of the final full year of the applicable
Performance Period (e.g. for a Performance Period of January 1, 2007 through
January 1, 2010, before March 31, 2009), then such Performance Shares shall be
multiplied by the Post-Retirement Performance Share Factor, and the product
shall be treated as described in the initial paragraph of this Section
4.3(b)(iv) without any reduction in the maximum number of shares which may be
delivered with respect to such portion of the Performance Shares.  The
remaining portion of the Performance Shares shall be treated as described in the
initial paragraph of this Section 4.3(b)(iv) with a maximum payout
of  100% (or “target” number) of such remaining portion of the
Performance Shares.

    

    EXAMPLE:
For an award of 150 Performance Shares, with a Post-Retirement Performance Share
Factor of two-thirds, assuming the achievement of the applicable Performance
Criteria results in a payment of 200% of the target number of Performance
Shares, the Executive would receive 250 shares determined as follows: 150
Performance Shares multiplied by the Post-Retirement Performance Share Factor
results in 100 Performance Shares which are not subject to the 100% maximum and
are thus paid out as 200 shares (100 Performance Shares * 200% payout factor);
the remaining 50 Performance Shares are capped at a 100% payout factor and are
thus paid out as 50 shares.

    

    With
respect to any Performance Shares granted between January 1, 2008 and the date
hereof, the terms of this of this paragraph shall apply to such grants
notwithstanding the terms of the applicable Performance Share
agreements.

    

    (c)           Early
Retirement.  Notwithstanding the specific terms of the
Incentive Plan, with respect to any Covered Equity Awards, upon a proper Early
Retirement, the following provisions shall apply:

    

    (i)           Vested Options and Stock
Appreciation Rights.  All Options or Stock Appreciation Rights
which have vested on or prior to the Termination, but which have not expired,
been exercised, or otherwise terminated, shall remain vested and exercisable
through the Early Retirement Option Expiration Date.

    

    (ii)           Unvested Options and Stock
Appreciation Rights.  Each grant, or portion thereof, of
Options or Stock Appreciation Rights which has not vested as of the Termination
Date, and which has not expired or otherwise terminated, shall vest or be
terminated and forfeited as follows: (A) any portion of such grant which is
scheduled (under its original terms) to vest after the Early Retirement Option
Expiration Date shall terminate and be forfeited on the Termination Date; (B)
for any portion of such grant which is scheduled (under its original terms) to
vest on or prior to the Early Retirement Option Expiration Date, each “tranche”
of such grant (meaning each portion scheduled to vest on the various vesting
dates under the grant) shall be multiplied by the Early Retirement Vesting
Factor, and a portion of such tranche equal to such product rounded to the
nearest whole number, shall continue to vest after the Termination Date in
accordance with its original terms as if Executive were still employed by the
Company, and shall remain vested and exercisable through the Early Retirement
Option Expiration Date; and (C) for each tranche to which  the Early
Retirement Vesting Factor is applied under the preceding Subsection B, any
remaining portion of such tranche that does not so vest shall terminate and be
forfeited on the Termination Date. (See example on Exhibit
A to this
Agreement).

    

    (iii)           Restricted Stock
Units.  Each grant, or portion thereof, of Restricted Stock
Units which has not vested as of the Termination Date, and which has not expired
or otherwise terminated, shall vest or be terminated and forfeited as follows:
(A) any portion of such grant which is scheduled (under its original terms) to
vest after the third anniversary of the Deemed Retirement Date shall terminate
and be forfeited on the Termination Date; (B) for any portion of such grant
which is scheduled (under its original terms) to vest on or prior to the third
anniversary of the Deemed Retirement Date, each “tranche” of such grant (meaning
each portion scheduled to vest on the various vesting dates under the grant)
shall be multiplied by the Early Retirement Vesting Factor, and a portion of
such tranche equal to such product rounded to the nearest whole number, shall
continue to vest after the Termination Date in accordance with its original
terms as if Executive were still employed by the Company; and (C) for each
tranche to which the Early Retirement Vesting Factor is applied under the
preceding Subsection B, any remaining portion of such tranche that does not so
vest shall terminate and be forfeited on the Termination Date.

    

    (iv)           Performance
Shares.  For each award of Performance Shares, to the extent
not already vested, terminated or forfeited as of the Termination Date,
Executive shall be considered vested in a portion of such Performance Shares
determined by multiplying the number of such Performance Shares
by  the Early Retirement Vesting Factor (the product being the
“Adjusted Performance Shares”), but only to the extent the Performance Criteria
are achieved at the end of the applicable performance period (e.g. if the target
number of Performance Shares is 150, the Early Retirement Vesting Factor is 0.24
the Adjusted Performance Shares would be 36, and if the achievement of the
Performance Criteria results in a payment of 75% of target shares, the number of
shares awarded would be 36 * 75%  or 27 shares), and any payment of
shares shall be made in accordance with the terms of the applicable Performance
Share agreement as if the Executive had remained as an employee of the Company
through the end of the performance period (i.e. generally shares would not be
distributed until after the end of the performance
period).  Notwithstanding the foregoing, certain Performance Shares
shall be subject to a reduction in the maximum number of shares which may be
delivered, as follows:

    

    (A)           For
each award of Performance Shares, if Executive’s Termination Date occurs on or
after the end of the third calendar month of the final full year of the
applicable Performance Period (as such term is defined in the Incentive
Plan)(e.g. for a Performance Period of January 1, 2007 through January 1, 2010,
on or after March 31, 2009), then the Adjusted Performance Shares for shall be
treated as described in the preceding paragraph without any reduction in the
maximum number of shares which may be delivered.

    

    (B)           For
each award of Performance Shares, if Executive’s Termination Date occurs prior
to the end of the third calendar month of the final full year of the applicable
Performance Period (e.g. for a Performance Period of January 1, 2007 through
January 1, 2010, before March 31, 2009), then the Adjusted Performance Shares
shall be multiplied by the Post-Retirement Performance Share Factor, and the
product shall be treated as described in the initial paragraph of this Section
4.3(b)(iv) without any reduction in the maximum number of shares which may be
delivered with respect to such portion of the Adjusted Performance
Shares.  The remaining portion of the Adjusted Performance Shares
shall be treated as described in the initial paragraph of this Section
4.3(b)(iv) with a maximum payout of  100% (or “target” number) of such
remaining portion of the Adjusted Performance Shares.

    

    EXAMPLE:
Assuming an award of 150 Performance Shares, and an Early Retirement Vesting
Factor is 0.24 the Adjusted Performance Shares would be 36.  Further
assuming a Post-Retirement Performance Share Factor of two-thirds , if the
achievement of the Performance Criteria results in a payment of 200% of the
target number of Performance Shares, the Executive would receive 60 shares
determined as follows: 36 Adjusted Performance Shares multiplied by the
Post-Retirement Performance Share Factor (two-thirds) results in 24 Adjusted
Performance Shares which are not subject to the 100% maximum and are thus paid
out as 48 shares (24 Adjusted Performance Shares * 200% payout factor); the
remaining 12 Performance Shares are capped at a 100% payout factor and are thus
paid out as 12 shares.

    

    With
respect to any Performance Shares granted between January 1, 2008 and the date
hereof, the terms of this of this paragraph shall apply to such grants
notwithstanding the terms of the applicable Performance Share
agreements.

    

    (d)           Notwithstanding
anything to the contrary set forth herein, if either (i) Executive breaches any
of the provisions of Sections 5.1 through 5.3 of this Agreement, or of the terms
and provisions of the Nondisclosure and Noncompetition Agreement (whether such
breach occurs during or after Executive’s employment with the Company), or (ii)
following the Termination Date the Committee becomes aware of acts or omissions
by the Executive during the term of Executive’s Employment with the Company
which would have constituted Cause, then, in either case, all Options, Stock
Appreciation Rights, Restricted Stock Units, Performance Shares or other Awards
(as defined in the Incentive Plan), to the extent not previously exercised or
paid out, shall immediately terminate and be forfeited, and the Executive shall
reimburse the Company for the value of any other Options, Stock Appreciation
Rights, Restricted Stock Units, Performance Shares or other Awards for which
vesting accelerated, or which Executive otherwise realized value, as a result of
a purported Retirement.

    

    (e)           In
the event the Employment Period and Executive’s employment under this Agreement
are terminated due to Executive’s death or Disability prior to the scheduled
expiration of the Employment Period, and, as of the Termination Date, Executive
would have been eligible for either Tenured Retirement or Early Retirement, then
Executive or Executive’s estate, as applicable, may elect to have Executive’s
termination treated as a Tenured Retirement or Early Retirement (as applicable)
with respect to the Covered Equity Awards only.  Such election shall
be made by delivery of written notice to the Company not less than ninety (90)
days following the Termination Date.  If proper election is made under
this paragraph, then (i) the provisions of either Section 4.3(b) or Section
4.3(c), as appropriate, shall apply to all, and not less than all, Covered
Equity Awards, (ii) the provisions of the Incentive Plan, and/or the agreements
or notices for the Covered Equity Awards, related to vesting, termination or
forfeiture, or exercise period, following a termination due to death or
Disability, shall not apply to the Covered Equity Awards (except to the extent
provided herein), and (iii) the Deemed Retirement Date shall be the date six (6)
months following the Termination Date.

    

    (f)           Any
payment of cash or stock to Executive is subject to all federal, state, and
local income and payroll tax withholding that, in the opinion of the Company, is
required by law.  Unless Executive satisfies any such tax withholding
obligation by paying the amount in cash (including by check or wire transfer) or
shares of the Company’s stock, the Company shall withhold cash and/or shares on
the date of withholding sufficient to cover the withholding obligation, with
shares valued in the same manner as used in computing the withholding
taxes.

    

    4.4           Expiration of the Employment
Period.

    

    (a)           In
the event either party elects not to extend the Employment Period pursuant to
Section 2.2, unless Executive’s employment is earlier terminated pursuant to
Sections 4.1 through 4.3, Executive’s term of employment hereunder (whether or
not Executive continues as an employee of the Company thereafter) shall be
deemed to close on the close of business on the day immediately preceding the
next scheduled Anniversary Date and Executive shall be entitled to receive the
Accrued Rights, plus any Annual Bonus earned for a previously completed fiscal
year  (including a fiscal year which ends on the on the Termination
Date) but unpaid as of the Termination Date, which Annual Bonus shall be payable
to the extent the corporate bonus pool is approved by the
Committee.

     

    (b)           Unless
the parties otherwise agree in writing executed subsequent to the Effective
Date, continuation of Executive’s employment with the Company beyond the
expiration of the Employment Period shall be deemed an employment at-will and,
subject only to Section 6.1, shall not be deemed to extend any of the provisions
of this Agreement and Executive’s employment may thereafter be terminated at
will by either Executive or the Company.

     

    Following
such termination of Executive’s employment hereunder pursuant to this Section
4.4, Executive shall have no further rights to any compensation or any other
benefits under this Agreement.

     

    4.5           Notice of Termination;
Notice of Retirement; Termination Date.

     

    (a)           For
purposes of this Agreement, any purported termination of Executive’s employment
by the Company or by Executive (other than a Retirement by Executive), shall be
communicated by written “Notice of Termination” to the other party hereto in
accordance with Section 6.2 hereof. Any Notice of Termination shall set forth
(i) the effective date of termination (for purposes of determining Executive’s
entitlement to benefits hereunder), which, in the case of a termination by
Executive pursuant to Section 4.1, or a termination by either party pursuant to
Section 4.2 shall not be less than fifteen (15) days after the date the Notice
of Termination is delivered; (ii) the specific provision in this Agreement
relied upon; and (iii) in reasonable detail, the facts and circumstances claimed
to provide a basis for such termination.

     

    (b)           For
purposes of this Agreement, any purported Retirement by Executive shall be
communicated by written “Notice of Retirement” to the Company in accordance with
Section 6.2 hereof.  Any Notice of Retirement shall include the
following (i) if Executive intends for the Retirement to qualify as either an
Early Retirement or a Tenured Retirement, the notice shall indicate such intent;
and (ii) the notice shall set forth the proposed effective date of the
Retirement, which, for either an Early Retirement or a Tenured Retirement shall
not be less than six (6) months after the date the Notice of Retirement is
delivered, or for any other Retirement shall not be less than fifteen (15) days
after the date the Notice of Retirement is delivered.

     

    Notwithstanding
anything to the contrary set forth herein, in order for a Notice of Retirement
to be proper and valid, Executive must, during the period from delivery of the
purported Notice of Retirement through the Termination Date, continue to
substantially perform his or her duties hereunder, to the extent required by the
Company.  Executive’s material neglect or willful and continuous
failure to perform such duties, which neglect or failure is not cured within
seven (7) days following written notice thereof from the Company to Executive,
shall (i) invalidate the Notice of Retirement ab initio, and (ii) deprive
Executive the right to deliver a subsequent Notice of
Retirement.  However, the foregoing shall not prevent the Company, in
its sole discretion, from agreeing to reduce or diminish Executive’s duties and
obligations to the Company during the period following delivery of the purported
Notice of Retirement through the Termination Date.

     

    (c)           If
the Company terminates Executive’s employment pursuant to Section 4.1 or due to
Executive’s Disability pursuant to Section 4.3 hereof, the Termination Date
shall be the date upon which the Company notifies Executive of such termination.
If the Company terminates Executive’s employment pursuant to Section 4.2, or if
Executive terminates employment pursuant to Section 4.1, 4.2 or 4.3 hereof, the
Termination Date shall be Executive’s last full day of work prior to the
effectiveness of such termination.  At any time following proper
delivery of a Notice of Retirement but prior to the effective date of such
Retirement, the Company may elect to terminate the Employment Period and
Executive’s employment under this Agreement in which case the Termination Date
shall be Executive’s last full day of work prior to the effectiveness of such
termination; provided, however, that, unless such termination is for Cause under
Section 4.1, such early termination by the Company shall not have any impact on
the Deemed Retirement Date.  If the Agreement is terminated pursuant
to Section 4.4, the Termination Date shall be the last day of the Initial
Employment Period or the last Renewal Period, as applicable. Notwithstanding the
foregoing, if within fifteen (15) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
good faith dispute exists concerning the termination, the “Termination Date” for
purposes of determining the Executive’s entitlement to benefits under this
Agreement shall be the date on which the dispute is finally determined by an
independent arbitrator selected by the American Arbitration
Association.

     

    4.6           Board/Committee
Resignation.  Upon termination of Executive’s employment for
any reason, Executive agrees to resign, as of the Termination Date and to the
extent applicable, from the Board (and any committees thereof) and the Board of
Directors (and any committees thereof) of any of the Company’s
affiliates.

     

    ARTICLE
V

    RESTRICTIVE
COVENANTS

     

    For the
purposes of this Article V, all references to the Company shall include the
Company and its affiliates.

     

    5.1           Non-Solicitation and
Non-Competition.

     

    (a)           Executive
acknowledges and recognizes the highly competitive nature of the businesses of
the Company and its affiliates and accordingly agrees as follows:

     

    (i)           During
the period of Executive’s employment with the Company and, for a period of two
(2) years  after termination of Executive’s employment (the
“Nonsolicit Period”), Executive will not, whether on Executive’s own behalf or
on behalf of or in conjunction with any person, firm, partnership, joint
venture, association, corporation or other business organization, entity or
enterprise whatsoever (“Person”), directly or indirectly solicit or assist in
soliciting in competition with the Company, the business of any client or
prospective client:

     

    (1)           with
whom Executive had personal contact or dealings on behalf of the Company during
the one (1) year period preceding Executive’s termination of
employment;

     

    (2)           with
whom employees reporting to Executive have had personal contact or dealings on
behalf of the Company during the one (1) year immediately preceding the
Executive’s termination of employment; or

     

    (3)           for
whom Executive had direct or indirect responsibility during the one (1) year
immediately preceding Executive’s termination of employment.

     

    (ii)           During
the Nonsolicit Period, Executive will not, whether on Executive’s own behalf or
on behalf of or in conjunction with any Person, directly or
indirectly:

     

    (1)           solicit
or encourage any employee of the Company or its affiliates to leave the
employment of the Company or its affiliates; or

     

    (2)           hire
any such employee who was employed by the Company or its affiliates as of the
date of Executive’s termination of employment with the Company or who left the
employment of the Company or its affiliates coincident with, or within one year
prior to or after, the termination of Executive’s employment with the
Company.

     

    (iii)          During
the Nonsolicit Period, Executive will not, directly or indirectly, solicit, or
encourage to cease to work with the Company or its affiliates, any consultant
then under contract with the Company or its affiliates.

     

    (iv)          During
the period of Executive’s employment with the Company and, for a period of (18)
months after termination of Executive’s employment for any reason (the
“Noncompete Period”), Executive will not directly or indirectly:

     

    (1)           engage
in any business that is, or will be, engaged wholly or primarily in the business
of manufacturing, purchasing, selling or supplying in the United States any
product or service manufactured, purchased, sold, supplied or provided by the
Company or its affiliates, and which is or will be directly in competition with
the business of the Company or its affiliates (including, without limitation,
businesses which the Company or its affiliates have specific plans to conduct in
the future and as to which Executive is aware of such planning) in the United
States (a “Competitive Business”);

     

    (2)           enter
the employ of, or render any services to, any Person (or any division or
controlled or controlling affiliate of any Person) who or which engages in a
Competitive Business;

     

    (3)           acquire
a financial interest in, or otherwise become actively involved with, any
Competitive Business, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or consultant;
or

     

    (4)           interfere
with, or attempt to interfere with, business relationships (whether formed
before, on or after the date of this Agreement) between the Company or any of
its affiliates and customers, clients, suppliers, partners, members or investors
of the Company or its affiliates.

     

    (v)          Notwithstanding
anything to the contrary herein, Executive may, directly or indirectly own,
solely as an investment, securities of any Person engaged in the business of the
Company or its affiliates which are publicly traded on a national or regional
stock exchange or on the over-the-counter market if Executive (i) is not a
controlling person of, or a member of a group which controls, such Person and
(ii) does not, directly or indirectly, own 5% or more of any class of
securities of such Person.

     

    5.2           Confidentiality.

     

    (a)           Executive
acknowledges that the identity of the clients and customers of the Company, the
prices, terms and conditions at, or upon which, the Company sells its products
or provides its services and other non-public, proprietary or confidential
information relating to the business, financial and other affairs of the Company
(including, without limitation, any idea, product, trade secret, know-how,
research and development, software, databases, inventions, processes, formulae,
technology, designs and other intellectual property; creative or conceptual
business or marketing plan, strategy or other material developed for the Company
by Executive; or information concerning finances, investments, profits, pricing,
costs, products, services, vendors, customers, clients, partners, investors,
personnel, compensation, recruiting, training, advertising, sales, marketing,
promotions, government and regulatory activities and approvals -- concerning the
past, current or future business, activities and operations of the Company or
its affiliates and/or any third party that has disclosed or provided any of same
to the Company on a confidential basis) (hereinafter collectively referred to as
“Confidential Information”) are valuable, special unique assets of the Company
and that such Confidential Information, if disclosed to others, may result in
loss of business or other irreparable and consequential damage to the
Company.

     

    (b)           Executive
shall hold in fiduciary capacity, for the benefit of the Company, all
Confidential Information and shall not, at any time during the Employment Period
or thereafter (i) retain or use for the benefit, purposes or account of
Executive of any other Person, or (ii) disclose, divulge, reveal, communicate,
share, transfer or provide access to any Person outside the Company (other than
its professional advisers who are bound by confidentiality obligations), any
Confidential Information, without the prior written authorization of the
Company.

     

    (c)           Notwithstanding
the foregoing, the term Confidential Information shall not include information
(i) generally known to the public or the trade other than as a result of
Executive’s breach of this covenant or any breach of other confidentiality
obligations by third parties, (ii) made legitimately available to Executive by a
third party without breach of any confidentiality obligation, (iii) the release
of which is deemed by the Board to be in the best interest of the Company, or
(iv) the disclosure of which is required by applicable law; provided that
Executive shall give prompt written notice to the Company of such legal
requirement, disclose no more information than is so required, and cooperate
with any attempts by the Company to obtain a protective order or similar
treatment.

     

    (d)           Notwithstanding
anything herein to the contrary, any party to this Agreement (and any employee,
representative, or other agent of any party to this Agreement) may disclose to
any and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure.  However, any such
information relating to the tax treatment or tax structure is required to be
kept confidential to the extent necessary to comply with any applicable federal
or state securities laws.

     

    (e)           Upon
termination of Executive’s employment with the Company for any reason, Executive
shall (i) cease and not thereafter commence use of any Confidential Information
or intellectual property (including without limitation, any patent, invention,
copyright, trade secret, trademark, trade name, logo, domain name or other
source indicator) owned or used by the Company or its affiliates, (ii)
immediately destroy, delete, or return to the Company, at the Company’s option,
all originals and copies in any form or medium (including memoranda, books,
papers, plans, computer files, letters and other data) in Executive’s possession
or control (including any of the foregoing stored or located in Executive’s
office, home, laptop or other computer, whether or not Company property) that
contain Confidential Information or otherwise relate to the business of the
Company or its affiliates, except that Executive may retain only those portions
of any personal notes, notebooks and diaries that do not contain any
Confidential Information, and (iii) notify and fully cooperate with the Company
regarding the delivery or destruction of any other Confidential Information of
which Executive is or becomes aware.

     

    5.3           Non-Disparagement.  Executive
agrees that Executive will not disparage the Company or its affiliates, or its
or their current or former officers, directors, and employees in any way;
further, Executive will not make or solicit any comments, statements, or the
like to the media or to others that would be considered derogatory or
detrimental to the good name or business reputation of any of the aforementioned
entities or individuals; provided, that this Section does not prohibit
statements which Executive is required to make under oath or which are otherwise
required by law, provided that such statements are truthful and made in a
professional manner; further provided that this Section does not prohibit
Executive from making statements which would otherwise be in violation of this
Section, provided such statements are made by Executive in response to public
statements made by the Company, or its authorized representatives, which are
derogatory or detrimental to the good name or business reputation of the
Executive.

     

    5.4           Acknowledgment of Reasonable
Covenants.  It is expressly understood and agreed that
Executive and the Company consider the restrictions and covenants contained
herein to be reasonable and enforceable, because, among other things, (a)
Executive will be receiving compensation under this Agreement or otherwise, (b)
there are many other areas in which, and companies for which, Executive could
work in view of Executive’s background, (c) the restrictions and covenants set
forth herein do not impose any undue hardship on Executive, (d) the Company
would not have entered into this Agreement but for the restrictions and
covenants of Executive contained herein, and (e) the restrictions and covenants
contained herein have been made in order to induce the Company to enter into
this Agreement.

     

    5.5           Modification of the
Restrictive Covenants.  If, at the time of enforcement of the
restrictive covenants set forth herein, a final judicial determination is made
by a court or arbiter of competent jurisdiction that the time or territory or
any other restriction contained in this Agreement is an unenforceable
restriction against Executive, the provisions of this Agreement shall not be
rendered void but shall be deemed amended to apply as to such maximum time and
territory and to such maximum extent as such court may judicially determine or
indicate to be enforceable.  Alternatively, if any court of competent
jurisdiction finds that any restriction contained in this Agreement is
unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

     

    ARTICLE
VI

    MISCELLANEOUS

     

    6.1           Survival.  Sections
4.1 through 4.6 inclusive (as applicable to the relevant circumstance of
termination only), 5.1 through 5.5 inclusive and 6.1 through 6.14 inclusive
shall survive and continue in full force in accordance with their terms
notwithstanding any termination of Executive’s employment hereunder or
termination of the Initial Employment Period or the Employment
Period.

     

    6.2           Notices.  All
notices, demands or other communications to be given or delivered under or by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given when delivered personally, mailed by certified or
registered mail, return receipt requested and postage prepaid, or sent via a
nationally recognized overnight courier, or sent via facsimile to the recipient.
Such notices, demands and other communications shall be sent to the address
indicated below:

     

    To the
Company:

     

    Express
Scripts, Inc.

    One
Express Way

    Saint
Louis, MO 63121

    Attention:
Chief Executive Officer

     

    To
Executive:

    

    

    

    

    

    or such
other address or to the attention of such other person as the recipient party
shall have specified by prior written notice to the sending party.

     

    6.3           Severability.  Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

     

    6.4           Complete
Agreement.  This Agreement constitutes the complete agreement
and understanding between the parties regarding the subject matter hereof and
supersedes and preempts any prior understandings, agreements or representations
by and between the parties, written or oral, including, without limitation, the
Prior Agreement, which shall automatically terminate upon the effectiveness of
this Agreement; provided, however, that this
Agreement shall not supersede or modify the terms of the Nondisclosure and
Noncompetition Agreement or any other nondisclosure or noncompetition agreement
between Executive and the Company, and any restricted stock, stock options or
other equity awards or deferred compensation shall be subject to the terms of
the applicable notices or agreements; and provided further,
however that
this Agreement shall not supersede or modify the terms of any equity awards or
special bonus awards (i.e. bonuses other than the Annual Bonus) specifically
granted under prior to January 1, 2008 under the Prior Agreement.  The
applicable provisions of this Agreement amend the terms and provisions of the
Incentive Plan to the extent addressed by this Agreement, as the same may have
been amended prior to the date hereof, with respect to awards covered by this
Agreement and made to Executive hereunder.

     

    6.5           Counterparts.  This
Agreement may be executed in separate counterparts, each of which is deemed to
be an original and all of which taken together constitute one and the same
agreement.

     

    6.6           Successors and
Assigns.  Except as otherwise provided herein, all covenants
and agreements contained in this Agreement shall bind and inure to the benefit
of and be enforceable by the Company and its respective successors and assigns.
Except as otherwise specifically provided herein, this Agreement, including the
obligations and benefits hereunder, may not be assigned to any party by
Executive.

     

    6.7           No Strict
Construction.  The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied to this
Agreement.

     

    6.8           Descriptive
Headings.  The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this
Agreement.

     

    6.9           Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri, without regard to conflicts
of laws principles thereof; provided, however, that issues
related to the Incentive Plan or any grants thereunder shall be resolved in
accordance with the laws of the State of Delaware.

     

    6.10           Specific
Performance.  The Company shall be entitled to enforce its
rights under this Agreement specifically, to recover damages and costs
(including reasonable attorneys’ fees) caused by any breach of any provision of
this Agreement and to exercise all other rights existing in its favor. The
Executive agrees and acknowledges that money damages are an inadequate remedy
for any breach of the provisions of this Agreement, including, without
limitation, Sections 5.1 through 5.3 hereof, and that the Company shall be
entitled to apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement. Further, Executive acknowledges that the
forfeiture provision set forth in the termination provisions hereof shall not be
construed to limit or otherwise affect the Company’s right to seek legal or
equitable remedies it may otherwise have, or the amount of damages for which it
may seek recovery, resulting from breach of this Agreement.

     

    6.11           Amendment and
Waiver.  The provisions of this Agreement may be amended and
waived only with the prior written consent of the Company and
Executive.

     

    6.12           Tax
Matters.

     

    (a)           Notwithstanding
anything to the contrary herein (or any other agreement entered into by and
between Executive and the Company or any incentive arrangement or plan offered
by the Company), in the event that any amount or benefit paid or distributed to
Executive pursuant to this Agreement, taken together with any amounts or
benefits otherwise paid or distributed to Executive by the Company or any of its
subsidiaries (collectively, the “Covered Payments”), would constitute an “excess
parachute payment” as defined in Section 280G of the Code, and would thereby
subject Executive to an Excise Tax, the provisions of this Section 6.12 shall
apply.

     

    (b)           If
the aggregate present value (as determined for purposes of Section 280G of the
Code) of the Covered Payments exceeds the amount which can be paid to Executive
without Executive incurring an Excise Tax, but is less than 125% of such amount,
then the amounts payable to Executive under this Agreement (or any other
agreement by and between Executive and the Company or pursuant to any incentive
arrangement or plan offered by the Company) may, in the discretion of the
Company, be reduced (but not below zero) to the maximum amount which may be paid
hereunder without Executive becoming subject to the Excise Tax (such reduced
payments to be referred to as the “Payment Cap”). In the event Executive
receives reduced payments and benefits as a result of application of this
Section 6.12, Executive shall have the right to designate which of the payments
and benefits otherwise set forth herein (or any other agreement between
Executive and the Company or any incentive arrangement or plan offered by the
Company) will be received in connection with the application of the Payment Cap,
subject to the following sentence.  Reduction shall first be made from
payments and benefits which are determined not to be nonqualified deferred
compensation for purposes of Section 409A of the Code, and then shall be made
(to the extent necessary) out of payments and benefits which are subject to
Section 409A of the Code and which are due at the latest future
date.

     

    (c)           If
the aggregate present value of all Covered Payments is equal to or exceeds 125%
of the amount which can be paid to Executive without Executive incurring an
Excise Tax, Executive shall be entitled to receive an additional amount (the
“Tax Reimbursement Payment”) such that the net amount retained by Executive with
respect to such Covered Payments, after deduction of any Excise Tax on the
Covered Payments and any federal, state and local income tax and Excise Tax on
the Tax Reimbursement Payment provided for by this Section 6.12, but before
deduction for any federal, state or local income or employment tax withholding
on such Covered Payments, shall be equal to the amount of the Covered
Payments.  Such additional amount may be paid by the Company directly
to the applicable taxing authority.  The Tax Reimbursement Payment
shall be paid in the calendar year following the date of the Change in
Control.

     

    (d)           Immediately
upon a Change in Control, the Company shall notify Executive of any modification
or reduction as a result of the application of this Section 6.12. In the event
Executive and the Company disagree as to the application of this Section 6.12,
the Company shall select a law firm or accounting firm from among those
regularly consulted (during the twelve-month period immediately prior to the
Change in Control that resulted in the characterization of the Covered Payments
as parachute payments) by the Company, and such law firm or accounting firm
shall determine, at the Company’s expense, the amount to which Executive shall
be entitled hereunder (and pursuant to any other agreements, incentive
arrangements or plans), taking into consideration the application of this
Section 6.12, and such determination shall be final and binding upon Executive
and the Company.

     

    6.13           Executive
Representation.  Executive hereby represents to the Company
that the execution and delivery of this Agreement by Executive and the Company
and the performance by Executive of Executive’s duties hereunder shall not
constitute a breach of, or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which Executive is a party or
otherwise bound.

     

    6.14           Cooperation.  Each
party shall provide reasonable cooperation in connection with any action or
proceeding (or any appeal from any action or proceeding) which relates to events
occurring during Executive’s employment hereunder.

     

    6.15           Section 409A of the
Code.  Notwithstanding anything to the contrary in this
Agreement, the parties mutually desire to avoid adverse tax consequences
associated with the application of Section 409A of the Code to this Agreement
and this Agreement shall be interpreted in a manner consistent with the
provisions of Section 409A of the Code and the regulations
thereunder.  The Company reserves the right (but is not required) to
provide compensation and benefits under any plan or arrangement in amounts, at
times and in a manner that minimizes taxes, interest or penalties as a result of
Section 409A. In addition, in the event any benefits or amounts paid hereunder
are deemed to be subject to Section 409A, Executive consents to the Company
adopting such conforming amendments as the Company deems necessary, in its
reasonable discretion, to comply with, or avoid the imposition of any additional
taxes under, Section 409A (including, but not limited to, delaying payments,
realization of any rights or benefits until six (6) months following termination
of employment).

     

    6.16           Arbitration.  Executive
and the Company agree that any and all disputes between the parties hereto
arising from or relating to this Agreement, and/or any release executed by
Executive pursuant to the terms of this Agreement, shall be submitted and
decided by binding arbitration before a single arbitrator in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (“AAA”)
then in effect.  Venue for the arbitration shall be in St. Louis
County, Missouri and the laws of the State of Missouri will
apply.  Any demand for arbitration shall be made within a reasonable
time after the claim, dispute, or other matter in question has arisen, and in no
event shall any such demand be made after the date when institution of legal of
equitable proceedings based on such claim, dispute or other matter in question
would be barred by the applicable statute of limitations. Under no circumstances
will either party be subject to punitive damages.  Each party hereto
shall bear its costs of the arbitration proceeding. However, the prevailing
party in the arbitration, as designated by the arbitrator, shall be entitled to
recover its reasonable cost of the arbitration, including, without limitation,
its reasonable attorneys’ fees, from the other party as determined by the
arbitrator.

     

    * * * *
*

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Executive Employment
Agreement as of the date first above written.

     

    THIS
CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.

     

     

     

    
      
        	 	EXPRESS SCRIPTS,
      INC.	 
	 	 	 
	 	 	 
	 	 	 	 
	
                 

              	
                By:

              	 	 
	 	Name: 
      George Paz	 
	 	Title: 
      Chairman, President and Chief Executive Officer
	 	 	 	 
	 	 	 	 
	 	EXECUTIVE	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 
	 	Name:	 

      

    

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
A

    Sample
Calculation under Section 4.3(c)(ii)

    

    

    The
following is an example of the methodology to be used to calculate the impact of
Early Retirement on Unvested Options or Stock Appreciation Rights:

    

    Option
Grant:         375 options
granted on May 1, 2009, vesting in 3 tranches as follows:

    Tranche 1 -- 100
options vesting May 1, 2010

    Tranche 2 -- 125
options vesting May 1, 2011

    Tranche 3 -- 150
options vesting May 1, 2012

    Expiration Date: May 1,
2016

    

    Executive’s 55th Birthday:  March
11, 2009

    

    Deemed Retirement
Date:  November 1, 2009

    

    Termination
Date:  October 1, 2009

    

    Early Retirement Extension
Period:  8 months (whole months between 3/1/09 and
11/1/09)

    

    
      	
               
      

            	
              Early Retirement
      Option Expiration Date:  July 1, 2011 (20 months after
      the Deemed Retirement Date.  Note: For any Options or Stock
      Appreciation Rights with an Expiration Date prior to 7/1/11, the Early
      Retirement Option Expiration Date would be such Expiration
      Date.)

            

    

    

    Early Retirement Vesting
Factor:  0.133 or 13.3% (8 ÷ 60)

    

    Calculations
as of the Termination Date based on the foregoing:

    

    
      	
               
      

            	
              Tranche
      1 – 13 options (100 * 0.133, rounded to the nearest whole option) would
      remain scheduled to vest on May 1, 2010, and following vesting would
      remain exercisable until July 1, 2011; the remaining 87 options in Tranche
      1 would terminate and be forfeited as of the Termination
    Date.

            

    

    

    
      	
               
      

            	
              Tranche
      2 – 17 options (125 * 0.133, rounded to the nearest whole option) would
      remain scheduled to vest on May 1, 2011, and following vesting would
      remain exercisable until July 1, 2011; the remaining 108 options in
      Tranche 2 would terminate and be forfeited as of the Termination
      Date.

            

    

    

    
      	
               
      

            	
              Tranche
      3 – Because Tranche 3 is not scheduled to vest until after July, 1, 2011
      (the Early Retirement Option Expiration Date), all 150 options in Tranche
      3 would terminate and be forfeited as of the Termination
    Date.

            

    

    

     

    

    

    The
foregoing is for illustrative purposes only and does not reflect any actual
grants to the Executive.exv10w60

Exhibit 10.60

*** Text Omitted and Filed Separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80(b)(4)

and 240.24b-2

PATENT PURCHASE AGREEMENT

     THIS PATENT PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of the Effective
Date (defined below) by and between Applied Micro Circuits Corporation, a Delaware corporation
(“Seller”), and QUALCOMM Incorporated, a Delaware corporation (“Purchaser”).

RECITALS:

     WHEREAS, Seller desires to sell, convey, transfer, assign and deliver to Purchaser, and
Purchaser desires to purchase and acquire from Seller, all right, title and interest in and to the
Purchased Assets (defined below) in accordance with the terms and subject to the conditions set
forth below.

     NOW, THEREFORE, in consideration of these premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly acknowledged, the Parties
hereto, intending to be legally bound, hereby agree as follows:

AGREEMENT:

SECTION 1

DEFINITIONS AND INTERPRETATION

1.1 Certain Defined Terms. Unless otherwise expressly defined herein, the following
capitalized terms used in this Agreement shall be defined as follows:

     “Affiliate” of a Person means any other Person that, at any time, directly or indirectly, is
in Control of, is Controlled by or is under common Control with the first Person, but only as long
as such Control exists.

     “Assert” and its derivatives, including “Assertion,” “Asserts” and “Asserted”, means to
commence or prosecute any patent infringement litigation (including any past claim of infringement)
or procedure for the resolution of any controversy (or to indicate or convey, either expressly, by
implication or otherwise, any intention to do so), whether arising or created by any claim,
counterclaim or otherwise (as determined in the broadest sense and in whatever form whatsoever),
and whether administrative, judicial, arbitral or otherwise, including without limitation, any
proceeding before the United States International Trade Commission (“ITC”) or jurisdiction
throughout the world.

     “Change in Control” of an Entity means any transaction or series of related transactions in
which: (i) any Person becomes the “beneficial owner” (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of securities of such Entity
representing more than fifty percent (50%) of the combined voting power of such Entity’s
then-outstanding securities; (ii) there is consummated a merger or similar transaction involving
such Entity and, immediately after the consummation of such transaction, the stockholders of such
Entity immediately prior to the consummation of such transaction do not “beneficially own” (within
the meaning of Rule 13d-3 of the
Exchange Act) outstanding voting securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving Entity (or the parent of such surviving Entity)
in such transaction; or (iii) there is consummated a sale of all or substantially all of the assets
of such Entity.

Confidential and Proprietary to Purchaser and Seller

1

 

     “Component” means an application specific integrated circuit (ASIC), a multi-chip module,
electronic device, an integrated circuit, a circuit board, a system in package (SiP), a system on a
chip (SoC), firmware on any of the foregoing, and software accompanying or associated with any of
the foregoing.

     “Consent” means any approval, consent, ratification, permission, waiver or authorization
(including any Governmental Authorization).

     “Contract” means any written, oral, implied-in-fact or other agreement, contract,
understanding, arrangement, instrument, note, guaranty, indemnity, representation, warranty, deed,
assignment, power of attorney, certificate, purchase order, work order, insurance policy, benefit
plan, commitment, covenant, assurance or undertaking of any nature.

     “Control” of a Person means direct or indirect ownership of more than fifty percent (50%) of
the outstanding shares or securities representing the right to vote the election of directors or
other governing authority of such Person, and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

     “Customer” means any third party that is not [...***...] and to whom Seller distributes any Future
Product, pursuant to a Contract that is executed by Seller and the third party in good faith for a
legitimate business purpose and not, in any case, for the primary purpose of giving the third party
any rights under the Patents.

     “Effective Date” means the date of execution of this Agreement by Seller and Purchaser. If
Seller and Purchaser do not execute this Agreement on the same day, the Effective Date will be the
date of execution by the last Party to execute this Agreement.

     “Encumbrance” means any lien, pledge, hypothecation, security interest, encumbrance, equitable
interest, claim, license, covenant, Order, option, exception, reservation, limitation, impairment,
condition or restriction of any nature (including any restriction on the transfer of any asset, any
restriction on the receipt of any income derived from any assets, any restriction on the use of any
asset and any restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).

     “Entity” means any corporation (including any non-profit corporation), general partnership,
limited partnership, limited liability partnership, joint venture, estate, trust, cooperative,
foundation, society, political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or entity.

     “Existing Product” means a Component of Seller or its Affiliates that has been released to
Seller’s or Seller’s Affiliates’ mask-making facilities prior to the Effective Date and those
derivatives of such Component which incorporate only minor enhancements made thereto, the
manufacture, use, or sale of which would (without a valid license or other grant of rights from
Purchaser or the proper exercise of the Retained Rights by Seller) infringe any Patent. Upon
request by Purchaser, Seller shall confirm promptly
in writing to Purchaser as to whether a Component is an Existing Product of Seller or any of
its Affiliates for the purpose of this Agreement.

     “Governmental Authorization” means any: (a) permit, license, certificate, franchise,
concession, approval, consent, ratification, permission, clearance, confirmation, endorsement,
waiver, certification, designation, rating, registration, qualification or authorization issued,
granted, given or otherwise made

 

			
	*	 	Confidential Treatment Requested

Confidential and Proprietary to Purchaser and Seller

2

 

available by or under the authority of any Governmental Body or pursuant to any Legal Requirement;
or (b) right under any Contract with any Governmental Body.

     “Governmental Body” means any: (a) nation, principality, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state,
local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of
any nature (including any governmental division, subdivision, department, agency, bureau, branch,
office, commission, council, board, instrumentality, officer, official, representative,
organization, unit, body or Entity and any court or other tribunal); (d) multi-national
organization or body; or (e) entity or body exercising, or entitled to exercise, any executive,
legislative, judicial, administrative, regulatory, police, military or taxing authority or power of
any nature. The term “Governmental Body” shall not, however, include any Standards Organization.

     “Future Product” means:

          (i) any Component that meets all of the following requirements: (x) it is developed by or for
Seller or its Affiliates based on a design (A) owned by and created by or for Seller or its
Affiliates or (B) jointly owned and created by Seller or its Affiliates with a third party (other
than [...***...]) (y) it does not incorporate or contain, in whole or in part, any Component which is
primarily or entirely developed by or for, designed by or for, or otherwise obtained from [...***...]
and which would (without a valid license or other grant of rights from Purchaser or the proper
exercise of the Retained Rights by Seller) directly or indirectly infringe any of the Patents; and
(z) it does not, to Seller’s and each of Seller’s Affiliates’ knowledge, incorporate or contain, in
whole or in part, any Supplier Items; or

          (ii) any finished and complete application specific integrated circuit or circuit board that
meets all of the following requirements: (w) it is developed by one or more third parties (other
than [...***...]) based exclusively on a design of such one or more third parties (other than [...***...]),
(x) it is marketed, resold and distributed on a stand-alone basis by Seller or its Affiliates to a
Customer under a brand of Seller or its Affiliates; (y) it does not incorporate or contain, in
whole or in part, any Supplier Items; and (z) it complements product portfolio of Seller or its
Affiliates and the decision of Seller or its Affiliates to market, resell, and distribute such
application specific integrated circuit or circuit board is based on a legitimate business purpose,
and not to assist any third party in engaging in any patent laundering activities as described in
Section 6 of Schedule 2.5.

If, at any time, Seller’s or any of Seller’s Affiliates becomes aware that a Component described in
Subsection (i) of the definition of “Future Product” either incorporates or contains any Supplier
Items, then such specific Component shall not be deemed to be a “Future Product,” solely for the
purpose of Subsection (i)(z) of the definition of “Future Product” with respect to such specific
Supplier Items, until after the expiration of a twenty (20)-month period after Seller or any of
Seller’s Affiliates first becomes aware of any such fact. Upon request by Purchaser, Seller shall
provide promptly to Purchaser a description of all Supplier Items included in any Future Product
which Seller or any of its Affiliates becomes aware of, together with all relevant information as
to which individuals became aware of, and when they became aware of, each of such Supplier Items.

Notwithstanding the foregoing, the term “Future Product” shall exclude any Existing Product.

     “Instrument of Assignment” means a document in the form attached hereto as Schedule
1.1(A).

 

* Confidential Treatment Requested

Confidential and Proprietary to Purchaser and Seller

3

 

     “Legal Requirement” means any federal, state, local, municipal, foreign or other law, statute,
legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement,
specification, determination, decision, opinion or interpretation issued, enacted, adopted, passed,
approved, promulgated, made, implemented or otherwise put into effect by or under the authority of
any Governmental Body.

     “Order” means any: (a) order, judgment, injunction, edict, decree, ruling, pronouncement,
determination, decision, opinion, verdict, sentence, subpoena, writ or award issued, made, entered,
rendered or otherwise put into effect by or under the authority of any court, administrative agency
or other Governmental Body or any arbitrator or arbitration panel; or (b) Contract with any
Governmental Body entered into in connection with any Proceeding.

     “Party” individually means Seller or Purchaser, and the term “Parties” collectively means
Seller and Purchaser.

     “Pass-Through Rights” means those implied license and patent exhaustion rights that a
purchaser of a product has (with respect to such product) as a matter of law under patents as a
result of the sale or license of such product to such purchaser. Any reference in this Agreement
to a “license” shall not include Pass-Through Rights, except as provided in Schedule 2.5.

     “Patent” or “Patents” shall have the meaning specified in Section 2.1 of the main body of this
Agreement.

     “Person” means any individual, Entity or Governmental Body.

     “Proceeding” means any action, suit, litigation, arbitration, proceeding (including any civil,
criminal, administrative, investigative or appellate proceeding), prosecution, contest, hearing,
inquiry, inquest, audit, examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental Body or any arbitrator or arbitration panel.

     “Prosecution File” means the names, addresses, email addresses, and phone numbers of
prosecution counsel and agents, and all files, documents and tangible things, as those terms have
been interpreted pursuant to rules and laws governing the production of documents and things,
constituting, comprising or relating to the investigation, evaluation, preparation, prosecution,
maintenance, defense, filing, issuance, registration, Assertion or enforcement of certain patents,
excluding any attorney-client privileged materials or documents and attorney work product that
Seller is prohibited from delivering to Purchaser under Section 2.4.

     “Purchase Price” shall have the meaning set out in Section 2.2 of the main body of this
Agreement.

     “Purchased Assets” shall have the meaning specified in Section 2.1 of the main body of this
Agreement.

     “Purchaser” means QUALCOMM Incorporated, a Delaware corporation.

Confidential and Proprietary to Purchaser and Seller

4

 

     “Representatives” means, with respect to any Entity, such Entity’s officers, directors or
members of its board of managers, employees, contractors, and attorneys who prosecuted the Patents.

     [...***...]

     “Retained Rights” shall have the meaning set out in Section 2.5 of the main body of this
Agreement.

     “Seller” means Applied Micro Circuits Corporation, a Delaware corporation.

     “Seller’s Existing Licenses” means the Contracts of Seller, its Affiliates and any predecessor
entities under which any license rights to the Patents have been granted, or non-assertion
obligations with respect to the Patents have been assumed, as such Contracts exist on the Effective
Date. For purposes of this Agreement, any modifications, amendments or changes made after the
Effective Date to the provisions of such Contracts will not be considered part of Seller’s Existing
Licenses.

     “Standards Organization” means any and all associations, industry groups or other
organizations established for the purpose of developing, coordinating, promulgating, revising,
amending, reissuing, interpreting, or otherwise maintaining standards, protocols or specifications.

     “Subsidiary” means an Entity that is, at any time, directly or indirectly Controlled by
another Entity, but only as long as such Control exists.

     “Supplier Items” means any materials (including software, algorithm, code or other technology)
developed by or for, designed by or for, licensed by or otherwise obtained from [...***...] and which
would (without a valid license or other grant of rights from Purchaser or the proper exercise of
the Retained Rights by Seller) directly or indirectly infringe any of the Patents.

     “Tax” means any tax (including any income tax, franchise tax, capital gains tax, estimated
tax, gross receipts tax, value-added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp
tax, sales tax, use tax, property tax, business tax, occupation tax, inventory tax., occupancy tax,
withholding tax or payroll tax), levy, assessment, tariff, impost, imposition, toll, duty
(including any customs duty), deficiency or fee, and any related charge or amount (including any
fine, penalty or interest), that is, has been or may in the future be (a) imposed, assessed or
collected by or under the authority of any Governmental Body, or (b) payable pursuant to any
tax-sharing agreement or similar Contract.

     “Transactional Agreements” mean this Agreement and all other agreements that are referred to
in this Agreement or that are executed and delivered by a Party to the other Party in connection
with or pursuant to this Agreement.

     “Transactions” mean, collectively, all of the transactions contemplated by this Agreement and
the other Transactional Agreements, including: (a) the sale, assignment, conveyance, transfer and
delivery of the Patents by Seller to Purchaser in accordance with this Agreement; and (b) the
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by Seller and Purchaser of their respective obligations under the Transactional Agreements,
and the exercise by Seller and Purchaser of their respective rights under the Transactional
Agreements.

1.2 Interpretation

     For the purpose of interpretation of this Agreement (including the exhibits and schedules that
are part of this Agreement), (a) the words “include,” “includes” and “including” mean “including
without limitation” and the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to
this Agreement as a whole, and (b) a Person shall be deemed to have “knowledge” of a particular
fact or other matter if any Representative of such Person is (i) actually aware of such fact or
other matter, or (ii) should have been aware of such fact after conducting reasonable investigation
concerning the truth or existence of such fact or other matter. As used herein, “Seller’s
knowledge” shall mean the knowledge of the employees of the Legal Department of Seller on the
Effective Date.

     Unless the context otherwise requires, references herein to sections, exhibits and schedules
mean the sections of, and the exhibits and schedules attached to, this Agreement. Titles to
Sections are inserted for convenience of reference only and shall not be deemed a part of or to
affect the meaning or interpretation of this Agreement. The schedules and exhibits referred to
herein shall be construed with and as an integral part of this Agreement to the same extent as if
they were set forth verbatim herein. Unless the context otherwise requires, references herein (y)
to an agreement, instrument or other document means such agreement, instrument or other document as
amended, supplemented and modified from time to time to the extent permitted by the provisions
thereof and by this Agreement, and (z) to a statute means such statute as amended from time to time
and includes any successor legislation thereto and any regulations promulgated thereunder.

     Each of the Parties to this Agreement represents and agrees that it has had the benefit of
counsel in connection with its review and negotiation of this Agreement. The Parties confirm that
this Agreement shall not be construed on the basis of any presumption or rule requiring
construction or interpretation against the Party drafting an agreement or instrument or causing any
agreement or instrument to be drafted.

SECTION 2

SALE OF PATENTS

2.1 Sale of Patents to Purchaser. Seller hereby sells, assigns, transfers, conveys and
delivers to the Purchaser, all right, title and interests in and to all of the following
properties, rights, interests and tangible and intangible assets:

     (a) The patents and patent applications identified on Schedule 2.1(A) and Schedule
2.1(B), respectively, and all reissues, reexaminations, extensions, divisions, continuations,
continuations-in-part and counterparts (whether foreign or domestic) of such patents and patent
applications (collectively, the “Patents”);

     (b) All past, present and future causes of action (whether known or unknown or whether
currently pending, filed, or otherwise) and other enforcement rights, including any past, current,
and future claims of infringement, relating to the Patents; and

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     (c) All Prosecution Files, related to any one or more of the items described in clauses (a)
and (b) above. For the purpose of the interpretation and construction of this Agreement, the items
in Subsections 2.1(a), 2.1(b) and 2.1(c) shall be collectively referred to as the “Purchased
Assets.”

2.2 Purchase Price. As consideration for the sale, assignment, transfer, conveyance and
delivery to Purchaser of all right, title and interest in and to the Purchased Assets, Purchaser
shall pay to Seller (subject to Section 6) a total sum of Thirty Three Million U.S. Dollars (U.S.
$33,000,000) (the “Purchase Price”). Subject to Section 6 below, the Purchase Price will be
payable by Purchaser to Seller as follows:

     (a) a total amount of [...***...] U.S. Dollars (U.S. $[...***...]) to be paid on the Effective Date;
and

     (b) a payment in the amount of [...***...] U.S. Dollars (U.S. $[...***...]), payable [...***...]:

(i)     [...***...];

(ii)    [...***...];

(iii)   [...***...];

(iv)   [...***...];

(v)    [...***...];

(vi)   [...***...];

(vii)  [...***...];

(viii) [...***...];

(ix)   [...***...]; and

(x)    [...***...].

Purchaser will pay to Seller, when due in accordance with the foregoing provision, each installment
of the Purchase Price set forth above by wire transfer to the account specified below:

Bank:
[...***...]

ABN routing number: [...***...]

Swift code: [...***...]

Account number: [...***...]

Account name: [...***...]

2.3 No Assumed Liabilities. Seller acknowledges and agrees that Purchaser is not assuming,
and is not required to perform or discharge, any obligations or liabilities of Seller of any kind
or nature (whether or not related to the Patents), including any obligations or liabilities of
Seller under any Contracts, unless expressly stated in this Agreement.

2.4 Documents. Contemporaneously with the execution and delivery of this Agreement, Seller
shall: (a) cause to be executed and delivered to Purchaser an Instrument of Assignment and such
other documents as may be necessary or appropriate (in the reasonable judgment of Purchaser) to
assign, convey, transfer and deliver to Purchaser all right, title and interests in and to the
Purchased Assets; and (b) cause to be delivered to Purchaser all
Prosecution Files relating to the Patents that are within the
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Notwithstanding the foregoing paragraph, Seller shall not be obligated to deliver to Purchaser any
items of Prosecution Files that may be in Seller’s legal counsel’s reasonable opinion deemed to be
covered under the doctrines of the attorney-client privilege, the attorney’s work-product
protection and all similar applicable privileges (collectively, the “Privileged Items”) except for
those Privileged Items relating to pending patent applications that are part of the Patents
(collectively, the “Privileged Prosecution Items”).

As to the delivery by Seller of the Privileged Prosecution Items to Purchaser, such delivery will
occur immediately after the Parties have entered into a common interest agreement to protect the
privileged nature of such Privileged Prosecution Items. Upon request by Purchaser, Purchaser and
Seller shall negotiate in good faith and promptly enter into such common interest agreement.
Neither Party shall unreasonably withhold its agreement to terms that are either necessary or
appropriate for use in such common interest agreement to continue to maintain privilege with
respect to such Privileged Prosecution Files.

In addition, Seller shall not be obligated to deliver any Prosecution Files that are in the public
domain and available through the U.S. or any foreign patent office.

Upon request by Purchaser, Seller will conduct reasonable searches to identify and deliver, if
available, to Purchaser any and all Prosecution Files that may be necessary or appropriate for
proper Assertion of the Patents. Seller may retain copies of the documents in the Prosecution
Files for archival and evidentiary purposes. All such copies (except for copies of documents in
the Prosecution Files that are publicly available) and the information contained therein will be
considered “Confidential Information” of Purchaser. Seller shall not disclose any such
Confidential Information to any Person other than its Representatives or attorneys, except as
necessary to comply with a valid court order or subpoena (provided that Seller has notified
Purchaser of such court order or subpoena and cooperated with Purchaser if Purchaser seeks
confidential treatment or to oppose or limit the scope thereof). Seller shall restrict access to
Confidential Information to those of its Representatives or attorneys who have a need to know, and
shall otherwise protect the Confidential Information from unauthorized disclosure or use in the
same manner that it protects its own confidential information of a similar nature.

Seller shall not, without first obtaining the prior written consent of Purchaser (which consent may
be withheld by Purchaser at its sole discretion), seek or otherwise attempt to waive any privilege
that Seller could assert exists in the Privileged Items. This provision shall, however, not
restrict Seller from disclosing certain Privileged Items to the extent that a disclosure thereof is
compelled or otherwise required by a valid order of a court of competent jurisdiction or other
governmental body, but only to the extent of and for the sole purpose of meeting a disclosure
required under such order, and provided, however, that Seller first notifies Purchaser in writing
of any such request for disclosure and Seller uses all commercially reasonable efforts to prevent
and otherwise limit any such required disclosure, including seeking and obtaining an appropriate
protective order (or an equivalent mechanism for protecting each of such Privileged Items at issue)
to prevent and otherwise limit such disclosure.

2.5 Retained Rights. Upon and after the sale, transfer, assignment, conveyance and
delivery by Seller of the Purchased Assets to Purchaser pursuant to this Agreement, Seller shall
retain, in accordance with the terms and subject to the conditions in Schedule 2.5, a
worldwide, non-exclusive rights under the Patents expressly set forth in Section 2.1 of
Schedule 2.5 attached hereto (the “Retained Rights”). Seller acknowledges and agrees that,
on and after such sale, transfer, assignment, conveyance and delivery, Seller shall not have (a)
any right to Assert any claims of infringement (including any past claims of infringement) of any
of the Patents or (b) any right or interest under any of the Patents to exclude any

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Person (including Purchaser or any of its Affiliates) from making, having made, using, selling,
offering to sell, importing or otherwise disposing of any products or services, or from practicing
or having practiced any of the inventions claimed in any of the Patents.

2.6 Patent Rights to Seller’s Customers to Remain in Force. Purchaser acknowledges that
certain non-exclusive rights under the Patents have been licensed by Seller pursuant to Seller’s
Existing Licenses. Notwithstanding the closing of the Transactions, the nonexclusive licenses
granted pursuant to Seller’s Existing Licenses disclosed to Purchaser shall remain in force and
effect after the Effective Date in accordance with their terms which exist on the Effective Date.

SECTION 3

REPRESENTATIONS AND WARRANTIES OF THE SELLER

Seller represents and warrants to and for the benefit of Purchaser, at the Effective Date, as
follows:

3.1 Due Organization. Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware. Seller has the requisite corporate power
and authority to own its properties and carry on its business and is duly qualified to do business
and is in good standing in each jurisdiction in which the failure to be so qualified and in good
standing would reasonably be expected to materially and adversely affect Seller’s ability to
perform this Agreement.

3.2 Title and Ownership Rights to Purchased Assets. Seller owns all right, title and
interests in and to each of the Purchased Assets. All of the Purchased Assets are owned by Seller
free and clear of any Encumbrances, other than those (i) Seller’s Existing Licenses disclosed to
Purchaser, (ii) commitments made by Seller to any Standards Organizations set forth in Schedule
3.9 for the Patents, (iii) Pass-Through Rights resulting from those sales of units of products
made by Seller prior to the Effective Date; and (iv) rights under the Patents provided by Seller
prior to the Effective Date to contractors and suppliers (that are not [...***...]) solely to (A)
perform service, (B) have made Existing Products, and (C)  provide products that existed prior to
the Effective Date, all for Seller or its Affiliates (subsections (i) through (iv), collectively
referred to “Prior Commitments”). Without limiting the generality of the foregoing: (a) except as
provided on Schedule 3.2, no Person has any joint ownership interest (along with Seller) in
or to any of the Patents; (b) no current or former officer, manager, director, stockholder, member,
employee, consultant, or independent contractor of Seller has any right, title, or interest in or
to any of the Purchased Assets; (c) no Person has challenged (or to Seller’s knowledge, threatened
to challenge) Seller’s exclusive ownership of all right, title and interests in and to any of the
Purchased Assets or has claimed (or to Seller’s knowledge, threatened to claim) to have any
ownership right, title or interests in or to any of the Purchased Assets, and to Seller’s
knowledge, no Person has any valid basis for any such challenge or claim.

3.3 Compliance with Legal Requirements. All of the Patents have been duly filed or
registered (as applicable) with the applicable Governmental Body, and properly maintained,
including the timely submission of all necessary filings and fees in accordance with the legal and
administrative requirements of each appropriate Governmental Body. None of the Patents has lapsed,
expired, or been abandoned. Seller has not received, at any time, any notice or other
communication (in writing or otherwise) from any Governmental Body or any other Person regarding
any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal
Requirement that is applicable to Seller’s ownership right, title or interest or the use or other
exploitation of any of the Patents.

3.4 Proceedings; Orders. There is not pending, and there has not been, any Proceeding
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and to Seller’s knowledge, no Person has threatened to commence any Proceeding that: (a) could have
a material adverse effect on any of the Purchased Assets, Seller’s exclusive ownership of any of
the Purchased Assets, or the validity or enforceability of any Contract under which Seller obtained
or holds any right, title, or interest in or to any of the Purchased Assets; or (b) challenges, or
that may have the effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the Transactions. To Seller’s knowledge, no event has occurred and no claim, dispute, or
other condition or circumstance exists, that might directly or indirectly give rise to or serve as
a basis for the commencement of any such Proceeding. Seller is not subject to any Order relating
to any of the Purchased Assets (including any Order that restricts, or could restrict, in any
manner the use, transfer or licensing of the Patents or that affects, or could affect, the validity
or enforceability of any of the Patents).

3.5 Authority; Binding Nature of Agreements. Seller has the absolute and unrestricted
right, corporate power, and authority to enter into and to perform its obligations under each of
the Transactional Agreements, and the execution, delivery and performance by Seller of the
Transactional Agreements have been duly authorized by all necessary corporate action of the Seller.
All corporate proceedings or action on the part of the Seller or any holders of the Seller’s
capital stock, or other security holders, that are necessary to authorize the Transactional
Agreements or to consummate the Transactions contemplated by the Transactional Agreements have been
obtained. Each of the Transactional Agreements constitutes the legal, valid, and binding
obligation of Seller, and is enforceable against Seller in accordance with its terms.

3.6 Non-Contravention; Consents. Neither the execution nor the delivery of any of the
Transactional Agreements, nor the consummation or performance of any of the Transactions, does or
will directly or indirectly (with or without notice or lapse of time):

     (a) contravene in, conflict with or result in a violation of, Seller’s organizational
documents;

     (b) contravene in, conflict with or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which Seller, or any of the Patents, is
subject;

     (c) contravene in, conflict with or result in a violation or breach of, or result in a default
under, any provision of any Contract to which Seller is a party or by which Seller or any of the
Patents is bound; or

     (d) result in the imposition or creation of any Encumbrance upon or with respect to any of the
Patents.

Seller is not and will not be required to make any filing with or give any notice to, or to obtain
any Consent from, any Person in connection with the execution and delivery of any of the
Transactional Agreements or the consummation or performance of any of the Transactions, except any
filing with the U.S. Securities and Exchange Commission.

3.7 [Reserved]

3.8 Existing Contracts. Each of Seller, its Affiliates and all predecessor entities
thereto has not granted any Person (other than the limited sublicense rights to any Affiliates of
any licensees provided under all Prior Commitments) any right to license or to sublicense any
rights, or to provide any non-assertion obligations, under any of the Patents. No rights under the
Purchased Assets have been

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provided or non-assertion obligation assumed by Seller with respect to [...***...] for any Future
Products. No Person (other than the Seller) has been granted any exclusive rights in any of the
Patents. Any rights under the Patents provided by Seller or any of its Affiliates prior to the
Effective Date to contractors and suppliers (that are not [...***...]) described in Section 3.2 of
this Agreement is limited solely to (A) perform service, (B) have made Existing Products, and (C)
provide products that existed prior to the Effective Date and no other rights to the Patents have
been provided to such contractor or supplier (“Contractor Contracts”). Except as expressly set
forth in Seller’s Existing Licenses or Contractor Contracts, no Person has the right to assign, in
whole or in part, any license or covenant not to assert which has been granted by Seller, its
Affiliates or any predecessor entities under any of the Patents. Other than Pass-Through Rights
and Contractor Contracts, Seller has disclosed existence of all of Seller’s Existing Licenses and
has delivered to Purchaser or to Purchaser’s Representatives complete and accurate copies of all
non-confidential provisions relating to all license grants, sublicense provisions and non-assertion
obligations (with respect to each of the Patents), and all provisions relating to the assignment or
transferability of any of Seller’s Existing Licenses (including change in control provisions), in
each of Seller’s Existing Licenses.

3.9 Obligations to Standards Organizations. Seller and each of its Affiliates (after
becoming an Affiliate of Seller) has not made and is not obligated to make any disclosures of any
claims in, or any commitment to license or provide any rights under, any of the Patents with
respect to its or any of its Affiliates’ participation (after becoming an Affiliate of Seller) in
any Standards Organizations listed on Schedule 3.9 and under the policies of such Standards
Organizations and/or any membership agreements associated therewith. To Seller’s knowledge, Seller
and each of its Affiliates (after becoming an Affiliate of Seller) has not made and is not
obligated to make any disclosures of any claims in, or any commitment to license or provide any
rights under, any of the Patents with respect to its or any of its Affiliates’ participation (after
becoming an Affiliate of Seller) in any other Standards Organizations under the policies of such
Standards Organizations and/or any membership agreements associated therewith.

3.10 No Government Funding. To Seller’s knowledge, no funding, facilities, or personnel of
any Governmental Body were used, directly or indirectly, to develop or create, in whole or in part,
any of the inventions or technology claimed or described in any of the Patents.

3.11 Validity and Enforceability. To Seller’s knowledge, all of the issued Patents
disclose patentable subject matter, have been prosecuted in good faith, and are subsisting and in
good standing. To Seller’s knowledge, all of the issued Patents are valid and enforceable. Seller
has no knowledge of any fact that could lead to a finding of invalidity or unenforceability of any
of the issued Patents. Without limiting the generality of the foregoing, to Seller’s knowledge,
neither Seller nor any of its Representatives has engaged in any inequitable conduct, fraud, or
patent misuse with respect to any of the issued Patents or other conduct that could render any of
the issued Patents invalid or unenforceable.

3.12 [Reserved]

3.13 [Reserved]

3.14 Full Disclosure. None of the Transactional Agreements contains any untrue statement
of material fact, or to Seller’s knowledge, omits or fails to state any material fact the absence
of which would make any of the representations, warranties or other statements or information
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3.15 Disclaimer. EXCEPT AS EXPRESSLY STATED ABOVE IN SECTION 3, SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES REGARDING THE PATENTS OR PURCHASED ASSETS AND EXPRESSLY DISCLAIMS ALL
IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS. EXCEPT AS EXPRESSLY SET FORTH IN
SECTION 3, SELLER GIVES PURCHASER NO ASSURANCE (A) REGARDING THE PATENTABILITY OF ANY CLAIMED
INVENTION IN, OR THE VALIDITY OR ENFORCEABILITY, OF ANY PATENT OR (B) THAT MANUFACTURE, USE, SALE,
OFFERING FOR SALE, IMPORTATION, EXPORTATION OR OTHER DISTRIBUTION OF ANY PRODUCT OR METHOD
DISCLOSED AND CLAIMED IN ANY PATENT WILL NOT CONSTITUTE AN INFRINGEMENT OF THE INTELLECTUAL
PROPERTY RIGHTS OF OTHER PERSONS.

SECTION 4

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

Purchaser represents and warrants to and for the benefit of Seller, at the Effective Date, as
follows:

4.1 Due Organization. Purchaser is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware. Purchaser has the requisite corporate power
to own its properties and carry on its business and is duly qualified to do business and is in good
standing in each jurisdiction in which the failure to be so qualified and in good standing would
reasonably be expected to materially and adversely affect Purchaser’s ability to perform this
Agreement.

4.2 Authority; Binding Nature of Agreements. Purchaser has the absolute and unrestricted
right, power, and authority to enter into and to perform its obligations under each of the
Transactional Agreements, and the execution, delivery, and performance by Purchaser of the
Transactional Agreements have been duly authorized by all necessary corporate action on the part of
Purchaser and no corporate proceedings or action on the part of Purchaser or any holder of
Purchaser’s capital stock, or other security holders, are necessary to authorize the Transactional
Agreements. Each of the Transactional Agreements constitutes the legal, valid, and binding
obligation of Purchaser, and is enforceable against Purchaser in accordance with its terms.

4.3 Non-Contravention; Consents. Neither the execution nor the delivery of any of the
Transactional Agreements, nor the consummation or performance of any of the Transactions, does or
will directly or indirectly (with or without notice or lapse of time):

     (a) contravene in, conflict with or result in a violation of, Purchaser’s organizational
documents; or

     (b) contravene, conflict with or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which Purchaser is subject.

4.4 Disclaimer. EXCEPT AS EXPRESSLY STATED ABOVE IN SECTION 4, PURCHASER MAKES NO
REPRESENTATIONS OR WARRANTIES IMPLIED OR OTHERWISE.

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SECTION 5

CERTAIN COVENANTS

5.1 Further Cooperation. From and after the Effective Date, Seller shall reasonably
cooperate with Purchaser and Purchaser’s Affiliates and Representatives, and shall (a) execute and
deliver such documents and (b) take all other actions that are necessary as Purchaser may
reasonably request, in each case for the purpose of evidencing the Transactions and putting
Purchaser in possession and control of all of the Purchased Assets, provided that Purchaser shall
reimburse Seller for its reasonable out of pocket fees, costs, and expenses incurred in connection
with undertaking the actions described in subsection (b) of this Section 5.1. The Parties
acknowledge their mutual intent and desire that Purchaser have the sole right to Assert claims of
infringement based on the Patents in any enforcement proceeding without Seller being a party to any
Proceeding in which such claims are Asserted. If any other party to such a Proceeding files a
motion asserting that Seller or any its Affiliates is a necessary or indispensable party to the
Proceeding with respect to such infringement claims, Purchaser and Seller shall cooperate, and
Seller shall cause each of its Affiliates to cooperate, in opposing such motion. If a judge, panel
of judges, or other Governmental Body nevertheless concludes or rules that (as a result of the
Retained Rights or otherwise) Seller is a “necessary party” or an “indispensable party” or is
otherwise required under the laws of the relevant jurisdiction to be joined in any such Proceeding
and Purchaser seeks to join Seller as a party to such Proceeding, Seller shall cooperate, and
Seller shall cause each of its Affiliates to cooperate, with Purchaser to take all lawfully
permitted acts to assert, enforce, defend and/or sue for past, present and future infringement on
the Patents solely for the benefit of Purchaser, and also to recover, collect and retain solely for
the benefit of Purchaser all past, present and future damages with respect thereto, all with the
same legal force and effect as if asserted, enforced, defended and/or sued upon by Seller and its
Affiliates. Purchaser will have sole control of the prosecution of any claims of infringement of
the Patents (and any related claims or causes of action) it has Asserted in such a Proceeding and
the sole right to recover, collect, and retain all damages attributable to such claims that are
awarded to Purchaser or Seller. Subject to the preceding sentence, Seller may participate in any
such Proceeding (to which it has been joined as a party) with its own counsel and at its own
expense. Except with respect to fees associated with the retention of separate counsel for Seller,
if any, Purchaser shall be responsible for any and all costs, fees and expenses relating to such
Proceeding.

5.2 Taxes. Seller shall deliver electronically to Purchaser, at one or more
Purchaser-designated email, ftp or other electronic addresses, all of the prosecution files and
other documents and materials which are required to be transferred or otherwise provided by Seller
to Purchaser as part of or in connection with the sale of the Patents. Notwithstanding the
foregoing, originals of signed assignment or other documents that (i) transfer, assign or convey
the Patents to Purchaser and/or (ii) show the assignment of any inventions or patent applications
from the inventor to Seller or its Affiliates, will not be delivered electronically by Seller to
Purchaser under this Agreement, but instead delivered by Seller to Purchaser in hard copy form.
Seller shall pay and bear the expense of all local, state and/or U.S. or non-U.S. government
license, sales and use, property and ad valorem taxes which may be imposed or assessed with respect
to payments required to be made by Purchaser to Seller under this Agreement. Seller represents
that it has allocated a value of [...***...] to the value of the tangible materials included in the
Patents which are to be assigned, sold, transferred and conveyed to Purchaser under this Agreement.
Nothing in this Agreement shall impose any liability upon either Party to indemnify the other
Party or otherwise to pay any Tax assessed by reference to such other Party’s income, including any
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5.3 Publicity and Confidentiality. The Parties agree that, on and at all times after the
Effective Date:

     (a) No press release or other publicity concerning any of the Transactions shall be issued or
otherwise disseminated by or on behalf of a Party without the other Party’s prior written consent,
except for (a) a press release as mutually agreed to by the Parties; and (b) a Current Report on
Form 8-K of Seller, in the form attached to this Agreement as Schedule 5.3 (the “Form
8-K”), which Seller shall be entitled to file with the U.S. Securities and Exchange Commission (the
“SEC”) following the execution of this Agreement.

     (b) The Parties shall keep the terms of this Agreement strictly confidential and shall not
divulge these terms to any third party except:

          (i) with the prior written consent of the other Party;

          (ii) if such terms are otherwise disclosed within an approved press release or Form 8-K in
accordance with Section 5.3(a) hereof, then a Party may disclose such terms contained in such
approved press release or Form 8-K;

          (iii) to any Governmental Body or any stock exchange on which a Party lists securities (an
“Exchange”) that has jurisdiction over a Party, solely to the extent required by law, legal process
or the rules, regulations or orders of such Governmental Body or Exchange, including a validly
issued Order, as long as the disclosing Party informs the other Party in writing at least the
lesser of (X) ten (10) business days in advance of the required disclosure, (Y) three (3) business
days in advance of the required disclosure if the disclosure will be made by the disclosing Party
pursuant to a filing with the SEC, or (Z) in the case of disclosure to an Exchange or a
Governmental Body other than the SEC, the period required, in writing, by such Exchange or
Governmental Body, in each case provided that the disclosing Party cooperates with the other Party
in seeking a protective order or otherwise contesting, or seeking to limit the scope of, the
disclosure;

          (iv) to their legal counsel, independent certified public accountants, and other professional
advisors having a duty and which are bound by such duty to maintain the confidentiality thereof; or

          (v) in confidence to a third party that is or would be a party to, and solely in connection
with, any actual or potential merger, acquisition, reorganization, divestiture, spin-off, or sale
of all or substantially all of the assets of the disclosing Party or an Affiliate or business unit
of the disclosing Party, and which third party has agreed in writing to maintain the
confidentiality thereof.

     (c) Nothing in this Agreement shall obligate Purchaser to maintain in confidence any
information contained or to be contained in the Instrument of Assignment or any other document that
is necessary in order to secure or perfect the Purchaser’s rights in any of the Purchased Assets.
Nothing in this Agreement shall also prevent Purchaser from filing such Instrument of Assignment or
any other document with any applicable Government Authority once the first installment payment of
the Purchase Price is paid by Purchaser to Seller.

     (d) Except as permitted under Subsection 5.3(a) or Subsection 5.3(b), Seller shall keep
strictly confidential, and not use or disclose to any other Person, any non-public document or
other non-public
information that relates directly or indirectly to any of the Purchased Assets, provided, however,
that

Confidential and Proprietary to Purchaser and Seller

14

 

Seller may (upon prior written notice to Purchaser) disclose the existence of this Agreement and
transfer of the ownership of the Patents to the Purchaser.

     (e) In connection with any future required filing by Seller of this Agreement with the SEC,
the Parties will work together in good faith to redact or omit provisions of the Agreement which
the Parties reasonably believe will qualify for confidential treatment (i) beginning at least ten
(10) business days prior to Seller’s contemplated filing deadline with the SEC, provided that
Seller is aware of such required filing at least ten (10) business days in advance of such
deadline, and (ii) if not, then beginning at least three (3) business days prior to Seller’s
contemplated filing deadline with the SEC. Seller shall take all necessary and appropriate
actions to seek confidential treatment with the SEC for all such redacted and omitted provisions
which the Parties agreed to redact or omit. Except as permitted in accordance with Subsection
5.3(b) above, Seller shall not be permitted to disclose any of the redacted or omitted provisions
of the Agreement. Seller may disclose to third parties the provisions of the Agreement that have
not been redacted or omitted that the Parties agreed to redact or omit in such redacted and omitted
version of the Agreement filed with the SEC, provided that, as part of such disclosure, Seller does
not disclose any of the redacted or omitted provisions in the redacted and omitted version of the
Agreement filed by Seller with the SEC.

5.4 Maintenance of Patents. Once the entire Purchase Price has been paid in full,
Purchaser shall not be required to maintain any Patent. Prior to the payment of the entire
Purchase Price, Purchaser will not abandon any issued patent or pending application included in the
Patents without the prior written consent of Seller, which consent shall not be unreasonably
withheld, delayed, or conditioned and [...***...]. Seller shall cooperate with Purchaser, at
Purchaser’s expense, to facilitate payment of any maintenance fees, costs and expenses for any of
the Patents that become due within one hundred eighty (180) days after the Effective Date.

5.5 Third Party Transfers. Seller shall not give its Consent, where such Consent is
required by law, contract or otherwise, to (i) the assignment or transfer, in whole or in part, of
any rights under the Patents to [...***...] or (ii) any Change in Control in which [...***...]
acquires, merges or consolidates with, or otherwise gains Control of any Entity that has a license
or non-assertion obligation granted by Seller (or any of its Affiliates) under any of the Patents,
including any Entity that is a party to one of Seller’s Existing Licenses . If any such
assignment, transfer, or transaction is attempted or made or occurs without Seller’s consent,
Seller shall, at Purchaser’s request, to the extent permitted by law or contract, either (a) assign
and otherwise transfer to Purchaser all of Seller’s rights and remedies with respect thereto, or
(b) if such assignment and transfer to Purchaser cannot be made without a third party’s consent and
such consent cannot be obtained, take reasonable measures (including the initiation of Proceedings,
if necessary) to prevent such assignment, transfer, or transaction from taking place or, if it is
has already taken place, to have it rescinded, declared null, void and ineffective, or otherwise
negated from the date it has taken place, or to terminate any rights under the Patents held or
controlled by [...***...] as a result of such assignment, transfer, or transaction. For purposes
of this Section 5.5, “Consent” means consent, approval, acceptance, or any other form of permission
or agreement.

 

			
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15

 

SECTION 6

SURVIVAL OF REPRESENTATIONS AND COVENANTS

6.1 Survival of Representations and Covenants

     (a) Except as set forth in Subsection 6.1(c), the representations, warranties, covenants and
obligations of each Party to this Agreement shall survive: (i) the execution and delivery of this
Agreement and the sale of the Patents to Purchaser; (ii) any subsequent permitted sale or other
disposition of any or all of the Patents by Purchaser; and (iii) the dissolution or liquidation of
any Party to this Agreement.

     (b) The representations, warranties, covenants and obligations of Seller, and the rights and
remedies that may be exercised by Purchaser, shall not be limited or otherwise affected by or as a
result of any information furnished to, or any investigation made by or any knowledge of, Purchaser
or any of its Representatives.

     (c) Except with respect to any willful misrepresentation or fraud by Seller in connection with
this Agreement, in which case all of such applicable representations and warranties in this
Agreement shall survive until the fifth annual anniversary of the Effective Date, the
representations and warranties set forth in Section 3 and Section 4 shall expire on the third
annual anniversary of the Effective Date; provided, however, that if a Claim Notice (as defined in
Subsection 6.1(d) below) relating to any material breach or violation of any representation or
warranty set forth in Section 3 is given to Seller on or prior to the third annual anniversary of
the Effective Date, then, notwithstanding anything to the contrary contained in this Subsection
6.1(c), such representation or warranty shall not so expire, but rather shall remain in full force
and effect until each and every claim has been fully and finally resolved, either by means of a
written settlement agreement executed on behalf of Seller and Purchaser or by means of a final,
non-appealable judgment issued by a court of competent jurisdiction.

     (d) For purposes of this Agreement, a “Claim Notice” relating to a particular representation,
warranty or covenant shall be deemed to have been given if a Party, acting in good faith, delivers
to the other Party a written notice stating that the notifying Party believes that there is or has
been a possible breach or violation of any representations, warranties or covenants of the other
Party and containing (i) a brief description of the circumstances supporting the notifying Party’s
belief that there is or has been such a possible breach or violation and (ii) a non-binding,
preliminary estimate of the aggregate dollar amount of the actual and potential damages that have
arisen and may arise as a result of such possible breach or violation (the “Estimated Damages”).

     (e) If Purchaser delivers a Claim Notice to Seller regarding a material breach or violation of
any representation or warranty set forth in Section 3 at any time before the last payment of the
Purchase Price has been paid in accordance with Section 2.2, then Purchaser will be entitled to
withhold [...***...] an amount equal to the Estimated Damages (“Holdback Amount”) until such claim
has been fully and finally resolved, either by means of a written settlement agreement executed on
behalf of Seller and Purchaser or by means of a final, non-appealable judgment issued by a court of
competent jurisdiction. To clarify the Holdback Amount shall not exceed [...***...]. The amount
of damages that Purchaser is entitled to receive as a result of the final resolution of such claims
is referred to as the “Award Amount.” If the Award Amount is less than the Holdback Amount,
Purchaser will be entitled to retain, and shall have no further obligation to pay to Seller the
Award Amount, and Purchaser will pay to Seller the difference between the Holdback Amount and the
Award Amount

 

			
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16

 

promptly after the resolution. If the Award Amount equals or exceeds the Holdback Amount,
Purchaser will be entitled to retain, and shall have no further obligation to pay to Seller, the
Holdback Amount.

SECTION 7

LIMITATION OF LIABILITY

IN NO EVENT SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY
FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS OR LOSS OF
REVENUE, SUFFERED OR OTHERWISE INCURRED BY THE OTHER PARTY, EVEN IF INFORMED IN ADVANCE BY THE
OTHER PARTY OF THE POSSIBILITY OF SUCH DAMAGES. SELLER’S AGGREGATE AND COLLECTIVE TOTAL MAXIMUM
LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT SHALL NOT EXCEED THE [...***...].
PURCHASER’S AGGREGATE AND COLLECTIVE TOTAL MAXIMUM LIABILITY ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL NOT EXCEED THE TOTAL PURCHASE PRICE OWED.

SECTION 8

MISCELLANEOUS PROVISIONS

8.1 Fees and Expenses. Each Party shall be responsible for the payment of its own fees,
costs and expenses (including fees of any brokers or counsel hired or otherwise used by such Party)
that are incurred or to be incurred in connection with the negotiation, preparation and review of
this Agreement, any other Transactional Agreements and all other documents delivered or to be
delivered in connection with the Transactions.

8.2 Attorneys’ Fees. If any legal action or other legal proceeding relating to any of the
Transactional Agreements, or the enforcement of any provision of any of the Transactional
Agreements, is brought by a Party against the other Party to this Agreement, the prevailing Party
in any such legal action or other legal proceeding shall be entitled to recover its reasonable
attorneys fees, costs and disbursements (in addition to any other relief to which the prevailing
Party may be entitled) associated therewith.

8.3 Notices. Any notice or other communication required or permitted to be delivered to
either Party under this Agreement shall be in writing and shall be deemed properly delivered, given
and received (a) when delivered by hand, or (b) two business days after sent by registered mail, by
courier or express delivery service, in each case to the business address set forth beneath the
name of such Party below:

	 	 	 	 	 
	 

	 	If to Seller:
	 	If to Purchaser:
	 
	 	 	 	 
	 

	 	Applied Micro Circuits Corporation
	 	QUALCOMM Incorporated
	 

	 	215 Moffett Park Drive
	 	5775 Morehouse Drive
	 

	 	Sunnyvale, CA 94089
	 	San Diego, CA 92121
	 

	 	Attention: General Counsel
	 	Attention: General Counsel
	 

	 	Facsimile: (408) 542-8601
	 	Facsimile: (858) 658-2503

All notices that are to be delivered by a Party to the other in accordance with preceding terms
shall also be faxed to such other Party’s facsimile number specified above. A Party may change its
business address and facsimile number above by written notice to the other Party in accordance with the
preceding terms.

 

			
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17

 

8.4 Counterparts. This Agreement may be executed in multiple counterparts, each of which
shall constitute an original and all of which, when taken together, shall constitute one agreement.

8.5 Governing Law; Venue

     (a) This Agreement shall be construed in accordance with, and governed and enforced in all
respects by, the laws of the State of California (without giving effect to any principles of
conflicts of laws that would result in the application of the laws of a different state).

     (b) Any legal action, suit, claim or other legal proceeding arising out of or relating to this
Agreement or the enforcement of any provision of this Agreement shall be brought or otherwise
commenced exclusively in a state or federal court of proper jurisdiction located in the county of
San Diego, California. Purchaser and Seller hereby consent to the in personam jurisdiction and
venue of such courts, and waive all objections they may raise as to jurisdiction, venue and/or
service of process for such courts, including, without limitation, any objection as to forum non
conveniens.

8.6 Successors and Assigns; Parties in Interest. This Agreement shall be binding upon, and
shall inure to the benefit of Seller and Purchaser and their respective successors-in-interest and
permitted assigns (if any). Provided that Purchaser guarantees the payment of any remaining
portion of the Purchase Price that has not been paid to Seller, Purchaser may assign, without
obtaining the consent or approval of Seller, this Agreement or any of its rights under this
Agreement, in whole or in part, to any Affiliate of Purchaser (or any successor-in-interest to all
or a portion of Purchaser’s Component business) that has agreed in writing to be bound by the terms
of this Agreement. Seller may not assign this Agreement, or any of its rights or delegate any of
its duties under this Agreement, without first obtaining Purchaser’s prior written consent, except
solely as set forth in Section 5 of Schedule 2.5. Any attempted assignment, transfer or
delegation made in contravention of this Section 8.6 shall be null, void and ineffective ab initio.

8.7 Remedies Cumulative; Specific Performance. The rights and remedies of the Parties
hereto shall be cumulative (and not alternative). Each Party agrees that: (a) in the event of any
breach or threatened breach by the other Party of any covenant, obligation, or other provision set
forth in this Agreement (including the provisions set forth in Schedule 2.5), the injured
Party shall be entitled (in addition to any other remedy that may be available to it) to (i) a
decree or order of specific performance or mandamus to enforce the observance and performance of
such covenant, obligation or other provision, and (ii) an injunction restraining such breach or
threatened breach; and (b) the injured Party shall not be required to provide any bond or other
security in connection with any such decree, order or injunction or in connection with any related
action or Proceeding.

8.8 Waiver. No failure on the part of any Person to exercise any power, right, privilege
or remedy under this Agreement, and no delay on the part of any Person in exercising any power,
right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right,
privilege or remedy, and no single or partial exercise of any such power, right, privilege or
remedy shall preclude any other or further exercise thereof or of any other power, right, privilege
or remedy. No Person shall be deemed to have waived any claim arising out of this Agreement, or
any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power,
right, privilege or remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of such Person; and any such waiver shall not be applicable or have any effect
except in the specific instance in which it is given.

Confidential and Proprietary to Purchaser and Seller

18

 

8.9 Amendments. This Agreement may not be amended, modified, altered or supplemented other
than by means of a written instrument duly executed and delivered on behalf of Purchaser and
Seller.

8.10 Severability. In the event that any provision of this Agreement, or the application
of any such provision to any Person or set of circumstances, shall be determined to be invalid,
unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application
of such provision to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise affected and shall
continue to be valid and enforceable to the fullest extent permitted by law.

8.11 No Joint Venture. The relationship between Seller and Purchaser is solely is that of
independent contractors. Nothing in this Agreement or any of the Transaction Documents shall be
construed to create any relationship of agency, partnership, joint venture, employment, or
franchise between the parties. No authority or right is granted to any Party to assume or create
any obligation or responsibility, express or implied, on behalf of or in the name of any other
party.

8.12 Entire Agreement. This Agreement and the other Transactional Agreements set forth the
entire understanding of the Parties relating to the subject matter thereof and supersede all prior
agreements and understandings between the Parties relating to the subject matter thereof.

     IN WITNESS WHEREOF, each Party to this Agreement has caused this Agreement to be executed by
its duly authorized representatives and delivered to the other Party hereto to become effective as
of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	QUALCOMM Incorporated	 	Applied Micro Circuits Corporation
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ David Wise
 

	 	By:
	 	/s/ Robert G. Gargus
 

	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Printed Name:
David Wise

	 	Printed Name: Robert G. Gargus	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:
Senior Vice President

	 	Title:
CFO	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: 7/9/08

	 	Date:
7/9/08	 	 	 	 

Confidential and Proprietary to Purchaser and Seller

19

 

Schedule 1.1(A)

Instrument of Assignment

ASSIGNMENT OF PATENTS AND PATENT APPLICATIONS

     WHEREAS, Applied Micro Circuits Corporation, a corporation organized under the laws of
Delaware, is the owner of certain patents and patent applications, as more particularly described
on Attachment 1 and Attachment 2, respectively, hereto; and

     WHEREAS, Applied Micro Circuits Corporation has agreed to assign all of its right, title and
interest in and to such patents and patent applications listed on Attachment 1 and
Attachment 2, respectively, attached hereto and all reissues, reexaminations, extensions,
divisions, continuations, continuations-in-part and foreign counterparts of such patents and patent
applications arising from or related thereto, to QUALCOMM Incorporated, a corporation organized
under the laws of Delaware, pursuant to a certain Patent Purchase Agreement of even date herewith
and further evidence such assignment in this Assignment.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged:

     Applied Micro Circuits Corporation hereby sells, assigns, transfers and conveys to QUALCOMM
Incorporated, and its successors and assigns, all right, title, and interest in and to each of the
patents and patent applications listed on Attachment 1 and Attachment 2,
respectively, attached hereto and all reissues, reexaminations, extensions, divisions,
continuations, continuations-in-part and foreign counterparts of such patents and patent
applications arising from or related thereto.

     This sale, assignment, transfer and conveyance to QUALCOMM Incorporated, and its successors
and assigns, is made subject to certain nonexclusive retained rights in favor of Applied Micro
Circuits Corporation and certain pre-existing nonexclusive patent licenses granted by Applied Micro
Circuits Corporation for the patents and patent applications listed on Attachment 1 and
Attachment 2, respectively, attached hereto and all reissues, reexaminations, extensions,
divisions, continuations, continuations-in-part and foreign counterparts of such patents and patent
applications arising from or related thereto, all as are set forth in that certain Patent Purchase
Agreement by and between QUALCOMM Incorporated and Applied Micro Circuits Corporation effective as
of July 11, 2008 (the “Agreement”). As to such nonexclusive retained rights, Applied Micro
Circuits Corporation hereby acknowledges and agrees that, on and after this sale, assignment,
transfer and conveyance, Applied Micro Circuits Corporation shall not retain any right under such
patents and patent applications listed on Attachment 1 and Attachment 2,
respectively, attached hereto and all reissues, reexaminations, extensions, divisions,
continuations, continuations-in-part and foreign counterparts of such patents and patent
applications arising from or related thereto: (i) to commence or prosecute any patent infringement
litigation (including, but not limited to, any past claim of infringement) or procedure for
resolution of a controversy (or to indicate or convey, either expressly, by implication or
otherwise, any intention to do so), whether arising or created by any claim, counterclaim or
otherwise (as determined in the broadest sense and in whatever form), and whether administrative,
judicial, arbitral or otherwise, including, but not limited to, any proceeding before the U.S.
International Trade Commission or in any jurisdiction throughout the world; or (ii) to exclude
others (including, but not limited to, QUALCOMM Incorporated) from making, having made, selling,
offering to sell, using, importing or otherwise disposing of any products or services, or from
practicing or having practiced any of the inventions claimed therein.

Confidential and Proprietary to Purchaser and Seller

20

 

     This sale, assignment, transfer and conveyance to QUALCOMM Incorporated, and its successors
and assigns, also includes, without limitation, the right to enforce, assert and sue for past,
present and future infringement on each of the foregoing items, including without limitation the
right to seek injunctive relief, and the right to recover and collect for past, present and future
damages with respect thereto.

     IN WITNESS WHEREOF, the undersigned has caused this Assignment of Patents and Patent
Applications to be executed on 

July 11, 2008.

	 	 	 	 	 	 	 
	 	 	Applied Micro Circuits Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Cynthia J. Moreland	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Cynthia J. Moreland	 	 
	 

	 	Title:
	 	VP, General Counsel	 	 

Confidential and Proprietary to Purchaser and Seller

21

 

Attachment 1

List of Patents

	 	 	 	 	 	 	 	 	 
	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	1.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	2.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	3.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	4.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	5.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	6.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	7.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	8.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	9.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	10.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	11.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	12.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	13.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	14.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	15.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	16.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	17.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	18.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	19.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	20.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]

 

			
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	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	21.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	22.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	23.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	24.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	25.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	26.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	27.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	28.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	29.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	30.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	31.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	32.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	33.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	34.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	35.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	36.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	37.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	38.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	39.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	40.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	41.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]

 

			
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	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	42.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	43.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	44.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	45.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	46.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	47.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	48.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	49.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	50.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	51.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	52.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	53.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	54.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	55.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	56.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	57.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	58.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	59.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	60.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	61.

	 	[...***...]
	 	[...***...]
	 	[...***...]
	 	[...***...]
	62.

	 	[...***...]
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	63.

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	64.

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	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	65.

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	66.

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	67.

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	68.

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	69.

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	70.

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	71.

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	72.

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	73.

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	74.

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	75.

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	76.

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	77.

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	78.

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	79.

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	80.

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	81.

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	82.

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	83.

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	84.

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	85.

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	86.

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	87.

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25

 

	 	 	 	 	 	 	 	 	 
	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	88.

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	89.

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	90.

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	91.

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	92.

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	93.

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	94.

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	95.

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	96.

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	97.

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	98.

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	99.

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	100.

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	101.

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	102.

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	103.

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	104.

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	105.

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	106.

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	107.

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	108.

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	109.

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	110.

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	*	 	Confidential Treatment Requested

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26

 

	 	 	 	 	 	 	 	 	 
	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	111.

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	112.

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	113.

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	114.

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	115.

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	116.

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	117.

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	118.

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	119.

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	120.

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	121.

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	122.

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	123.

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	124.

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	125.

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	126.

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	127.

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	128.

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	129.

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	130.

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	131.

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	132.

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	*	 	Confidential Treatment Requested

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	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	133

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	134

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	*	 	Confidential Treatment Requested

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28

 

Attachment 2

List of Patent Applications

	 	 	 	 	 	 	 
	No.	 	Publication No.	 	Description	 	Application Date
	1.
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	2.
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	3.
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	4.
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	5.
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	6.
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	7.
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	8.
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	9.
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	10.
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	11.
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	12.
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	13.
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	14.
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	15.
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	16.
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	17.
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	*	 	Confidential Treatment Requested

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29

 

Schedule 1.1(B)

[...***...]

 

			
	*	 	Confidential Treatment Requested

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30

 

Schedule 2.1(A)

List of Patents

	 	 	 	 	 	 	 	 	 
	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	1.

	 	[...***...]
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	2.

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	6.

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	7.

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	8.

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	9.

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	10.

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	11.

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	12.

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	13.

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	14.

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	15.

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	16.

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	17.

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	18.

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	19.

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	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	20.

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	21.

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	23.

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	24.

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	25.

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	26.

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	27.

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	28.

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	30.

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	31.

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	32.

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	33.

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	34.

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	36.

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	37.

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	38.

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	39.

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	40.

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	*	 	Confidential Treatment Requested

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32

 

	 	 	 	 	 	 	 	 	 
	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	41.

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	42.

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	43.

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	44.

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	45.

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	46.

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	47.

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	48.

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	49.

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	50.

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	51.

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	52.

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	53.

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	54.

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	55.

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	56.

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	57.

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	58.

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	59.

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	60.

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	61.

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	62.

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	63.

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	*	 	Confidential Treatment Requested

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33

 

	 	 	 	 	 	 	 	 	 
	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	64.
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	65.
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	66.
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	67.
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	68.
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	69.
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	70.
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	71.
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	72.
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	73.
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	74.
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	75.
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	76.
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	77.
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	78.
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	79.
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	80.
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	81.
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	82.
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	83.
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	84.
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	85.
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	86.
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	*	 	Confidential Treatment Requested

Confidential and Proprietary to Purchaser and Seller

34

 

	 	 	 	 	 	 	 	 	 
	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	87.
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	88.
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	89.
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	90.
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	91.
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	92.
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	93.
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	94.
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	95.
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	96.
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	97.
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	98.
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	99.
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	100.
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	101.
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	102.
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	103.
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	104.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	105.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	106.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	107.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	108.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]

 

			
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	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	109.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	110.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	111.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	112.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	113.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	114.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	115.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	116.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	117.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	118.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	119.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	120.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	121.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	122.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	123.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	124.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	125.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	126.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	127.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	128.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	129.
	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	130.
	 	[...***...]	 	 	 	[...***...]	 	[...***...]
	131.
	 	[...***...]	 	 	 	[...***...]	 	[...***...]

 

			
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	No.	 	Patent No.	 	Issue Date	 	Filing Date	 	Description
	132.
	 	[...***...]	 	 	 	 	 	[...***...]
	133
	 	[...***...]	 	 	 	 	 	[...***...]
	134
	 	[...***...]	 	 	 	[...***...]	 	[...***...]

 

			
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Schedule 2.1(B)

Patent Applications

	 	 	 	 	 	 	 
	No.	 	Publication No.	 	Description	 	Application Date
	1.
	 	[...***...]	 	[...***...]	 	[...***...]
	2.
	 	[...***...]	 	[...***...]	 	[...***...]
	3.
	 	[...***...]	 	[...***...]	 	[...***...]
	4.
	 	[...***...]	 	[...***...]	 	[...***...]
	5.
	 	[...***...]	 	[...***...]	 	[...***...]
	6.
	 	[...***...]	 	[...***...]	 	[...***...]
	7.
	 	[...***...]	 	[...***...]	 	[...***...]
	8.
	 	[...***...]	 	[...***...]	 	[...***...]
	9.
	 	[...***...]	 	[...***...]	 	[...***...]
	10.
	 	[...***...]	 	[...***...]	 	[...***...]
	11.
	 	[...***...]	 	[...***...]	 	[...***...]
	12.
	 	[...***...]	 	[...***...]	 	[...***...]
	13.
	 	[...***...]	 	[...***...]	 	[...***...]
	14.
	 	[...***...]	 	[...***...]	 	[...***...]
	15.
	 	[...***...]	 	[...***...]	 	[...***...]
	16.
	 	[...***...]	 	[...***...]	 	[...***...]
	17.
	 	[...***...]	 	[...***...]	 	[...***...]

 

			
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Schedule 2.5

Retained Rights

1. HEADINGS AND DEFINITIONS. All headings used in this Schedule 2.5 are inserted for convenience
only and are not intended to affect the meaning or interpretation of this schedule or any clause.
Reference to “third party” or “third parties” in this schedule shall not mean Purchaser, Seller or
any of their respective Affiliates. For the purpose of this schedule, the following definitions
shall apply and, unless otherwise defined in this schedule, all capitalized terms used in this
schedule shall have the same meanings ascribed to them in the Agreement. As used herein,
“Agreement” means the Patent Purchase Agreement entered into by and between Seller and Purchaser to
which this schedule is attached.

     “Affiliate” of a Person means any other Person that, at any time, directly or indirectly, is
in Control of, is Controlled by or is under common Control with the first Person, but only as long
as such Control exists.

     “Assert” and its derivatives, including “Assertion,” “Asserts” and “Asserted”, means to
commence or prosecute any patent infringement litigation (including any past claim of infringement)
or procedure for the resolution of any controversy (or to indicate or convey, either expressly, by
implication or otherwise, any intention to do so), whether arising or created by any claim,
counterclaim or otherwise (as determined in the broadest sense and in whatever form whatsoever),
and whether administrative, judicial, arbitral or otherwise, including without limitation, any
proceeding before the United States International Trade Commission (“ITC”) or jurisdiction
throughout the world.

     “Change in Control” of an Entity means any transaction or series of related transactions in
which: (i) any Person becomes the “beneficial owner” (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of securities of such Entity
representing more than fifty percent (50%) of the combined voting power of such Entity’s
then-outstanding securities; (ii) there is consummated a merger or similar transaction involving
such Entity and, immediately after the consummation of such transaction, the stockholders of such
Entity immediately prior to the consummation of such transaction do not “beneficially own” (within
the meaning of Rule 13d-3 of the Exchange Act) outstanding voting securities representing more than
fifty percent (50%) of the combined outstanding voting power of the surviving Entity (or the parent
of such surviving Entity) in such transaction; or (iii) there is consummated a sale of all or
substantially all of the assets of such Entity.

     “Component” means an application specific integrated circuit (ASIC), a multi-chip module,
electronic device, an integrated circuit, a circuit board, a system in package (SiP), a system on a
chip (SoC), firmware on any of the foregoing, and software accompanying or associated with any of
the foregoing.

     “Contract” means any written, oral, implied-in-fact or other agreement, contract,
understanding, arrangement, instrument, note, guaranty, indemnity, representation, warranty, deed,
assignment, power of attorney, certificate, purchase order, work order, insurance policy, benefit
plan, commitment, covenant, assurance or undertaking of any nature.

     “Control” of a Person means direct or indirect ownership of more than fifty percent (50%) of
the outstanding shares or securities representing the right to vote the election of directors or
other governing authority of such Person, and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

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     “Customer” means any third party that is not [...***...] and to whom Seller distributes any Future
Product, pursuant to a Contract that is executed by Seller and the third party in good faith for a
legitimate business purpose and not, in any case, for the primary purpose of giving the third party
any rights under the Patents.

     “Effective Date” means the date of execution of this Agreement by Seller and Purchaser. If
Seller and Purchaser do not execute this Agreement on the same day, the Effective Date will be the
date of execution by the last Party to execute this Agreement.

     “Entity” means any corporation (including any non-profit corporation), general partnership,
limited partnership, limited liability partnership, joint venture, estate, trust, cooperative,
foundation, society, political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or entity.

     “Existing Product” means a Component of Seller or its Affiliates that has been released to
Seller’s or Seller’s Affiliates’ mask-making facilities prior to the Effective Date and those
derivatives of such Component which incorporate only minor enhancements made thereto, the
manufacture, use, or sale of which would (without a valid license or other grant of rights from
Purchaser or the proper exercise of the Retained Rights by Seller) infringe any Patent. Upon
request by Purchaser, Seller shall confirm promptly in writing to Purchaser as to whether a
Component is an Existing Product of Seller or any of its Affiliates for the purpose of this
Agreement.

     “Future Product” means:

          (i) any Component that meets all of the following requirements: (x) it is developed by or for
Seller or its Affiliates based on a design (A) owned by and created by or for Seller or its
Affiliates or (B) jointly owned and created by Seller or its Affiliates with a third party (other
than [...***...]) (y) it does not incorporate or contain, in whole or in part, any Component which is
primarily or entirely developed by or for, designed by or for, or otherwise obtained from [...***...]
and which would (without a valid license or other grant of rights from Purchaser or the proper
exercise of the Retained Rights by Seller) directly or indirectly infringe any of the Patents; and
(z) it does not, to Seller’s and each of Seller’s Affiliates’ knowledge, incorporate or contain, in
whole or in part, any Supplier Items; or

          (ii) any finished and complete application specific integrated circuit or circuit board that
meets all of the following requirements: (w) it is developed by one or more third parties (other
than [...***...]) based exclusively on a design of such one or more third parties (other than [...***...]),
(x) it is marketed, resold and distributed on a stand-alone basis by Seller or its Affiliates to a
Customer under a brand of Seller or its Affiliates; (y) it does not incorporate or contain, in
whole or in part, any Supplier Items; and (z) it complements product portfolio of Seller or its
Affiliates and the decision of Seller or its Affiliates to market, resell, and distribute such
application specific integrated circuit or circuit board is based on a legitimate business purpose,
and not to assist any third party in engaging in any patent laundering activities as described in
Section 6 of this Schedule 2.5.

If, at any time, Seller’s or any of Seller’s Affiliates becomes aware that a Component described in
Subsection (i) of the definition of “Future Product” either incorporates or contains any Supplier
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then such specific Component shall not be deemed to be a “Future Product,” solely for the purpose
of Subsection (i)(z) of the definition of “Future Product” with respect to such specific Supplier
Items, until after the expiration of a twenty (20)-month period after Seller or any of Seller’s
Affiliates first becomes aware of any such fact. Upon request by Purchaser, Seller shall provide
promptly to Purchaser a description of all Supplier Items included in any Future Product which
Seller or any of its Affiliates becomes aware of, together with all relevant information as to
which individuals became aware of, and when they became aware of, each of such Supplier Items.

Notwithstanding the foregoing, the term “Future Product” shall exclude any Existing Product.

     “Party” individually means Seller or Purchaser, and the term “Parties” collectively means
Seller and Purchaser.

     “Pass-Through Rights” means those implied license and patent exhaustion rights that a
purchaser of a product has (with respect to such product) as a matter of law under patents as a
result of the sale or license of such product to such purchaser. Any reference in this Agreement
to a “license” shall not include Pass-Through Rights, except as provided in this Schedule 2.5.

     “Patent” or “Patents” shall have the meaning specified in Section 2.1 of the main body of the
Agreement.

     “Person” means any individual, Entity or Governmental Body.

     “Purchaser” means QUALCOMM Incorporated, a Delaware corporation.

     [...***...]

     “Retained Rights” shall have the meaning set out in Section 2.5 of the main body of this
Agreement.

     “Seller” means Applied Micro Circuits Corporation, a Delaware corporation.

     “Supplier Items” means any materials (including software, algorithm, code or other technology)
developed by or for, designed by or for, licensed by or otherwise obtained from [...***...] and which
would (without a valid license or other grant of rights from Purchaser or the proper exercise of
the Retained Rights by Seller) directly or indirectly infringe any of the Patents.

 

			
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2. RETAINED RIGHTS; RESTRICTIONS

     2.1 Retained Rights. [...***...]

 

			
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[...***...]

 

			
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[...***...]

 

			
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[...***...]

 

			
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[...***...]

 

			
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Schedule 3.2

List of Jointly Owned Patents

[...***...]

 

			
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Schedule 3.9

List of Standards Organizations

Optical Internetworking Forum (“OIF”)

IEEE

ATM Forum

ITU-T

Metro Ethernet Forum

Ethernet Alliance

Full Service Access Networks (“FSAN”)

Network Processor Forum (“NPF”)

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Schedule 5.3

Form of 8-K

A Current Report on Form 8-K in substantially the following form:

Item 1.01. Entry into a Material Definitive Agreement.

On July ___, 2008, Applied Micro Circuits Corporation (“AMCC”) entered into a patent purchase
agreement (the “Patent Purchase Agreement”) with QUALCOMM Incorporated (“Qualcomm”). Pursuant to
the agreement, AMCC has agreed to sell to Qualcomm a series of AMCC’s patents, patent applications
and associated rights related to certain AMCC technologies (collectively, the “Assigned Patent
Rights”) in consideration for an aggregate purchase price of $33 million. The purchase price will
be paid by Qualcomm over the next three years.

Under the Patent Purchase Agreement, AMCC and its affiliates have retained a worldwide and
non-exclusive right to manufacture and sell existing AMCC products that utilize technology covered
by the patents. 

The Patent Purchase Agreement includes customary representations, warranties and covenants by AMCC.
Prior to the due date of the final purchase price payment, Qualcomm is permitted to withhold a
portion of the total purchase price from its payment in the event of a breach by AMCC of the
representations or warranties that have been made by AMCC under the Patent Purchase Agreement.

Item 8.01 Other Events.

AMCC intends to provide non-confidential details regarding the Patent Purchase Agreement in its
regularly scheduled conference call to announce its unaudited financial results for the quarter
ended June 30, 2008.

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