CONFIDENTIAL

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT, dated as of June 26, 2006 (the “ Agreement ”), is by and between INTEL CORPORATION, a Delaware corporation (the “ Seller ”), and MARVELL TECHNOLOGY GROUP LTD., a Bermuda corporation (the “ Buyer ”).  Seller and Buyer are sometimes referred to as the “ Parties ” and each individually as a “ Party .”  All capitalized terms have the meanings ascribed to such terms in Article I or as otherwise defined herein.

RECITALS

A.            Seller desires to sell to Buyer, and Buyer desires to acquire from Seller, the Transferred Assets, and Buyer is willing to assume the Assumed Liabilities, all upon the terms and conditions set forth in this Agreement.

B.            In connection with the transactions contemplated by this Agreement, Buyer and Seller also are entering into, or intend to enter into, certain other Ancillary Agreements, including the Transition Services Agreement, the Intellectual Property Agreements and the Development Agreement.

C.            Seller’s Subsidiaries identified on Schedule 3.23 , (collectively, the “ Subsidiary Sellers ”) own 10,011 Ordinary Shares of DSPC Technologies Ltd., a corporation formed under the laws of Israel (the “ Transferred Sub ”), which represent all of the issued and outstanding shares of Transferred Sub (the “ Transferred Shares ”).

D.            Seller desires to cause the Subsidiary Sellers to sell to Buyer, and Buyer desires to acquire from the Subsidiary Sellers, the Transferred Shares, all upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises, the mutual representations, warranties, covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.01         Definitions .  The following terms, as used herein, have the following meanings:

“ Accounts Payable ” means all accounts payable owing by Seller or any of its Subsidiaries in connection with the Business for raw materials or supplies received by or services rendered to Seller or any of its Subsidiaries on or prior to the Closing Date.

“ Accounts Receivable ” means all accounts receivable, notes receivable and other current rights to payment of Seller or any of its Subsidiaries, together with any unpaid interest or fees accrued thereon or other amounts due with respect thereto, and any claim, remedy or other right related to any of the foregoing.

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“ Acquisition Documents ” means this Agreement, the Ancillary Agreements and any other document or agreement executed in connection with any of the foregoing, together with any exhibits and schedules thereto, and in each case as modified, amended, supplemented, restated or renewed from time to time.

“ Affiliate ” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under direct or indirect common control with such other Person.

“ Ancillary Agreements ” means the Assignment and Assumption Agreement, the Bill of Sale, the Intellectual Property Agreements, the Registration Rights Agreement, the Copyright Assignment, the Non-Compete Agreement, the Patent Assignment, the Development Agreement, the Supply Agreement, and the Transition Services Agreement, together with any exhibits and schedules thereto, and in each case as modified, amended, supplemented, restated or renewed from time to time.

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

“ Assignment and Assumption Agreement ” means the Assignment and Assumption Agreement to be entered into by Buyer and/or one or more Buyer Designees, on the one hand, and the applicable Selling Parties, on the other hand, as of the Closing Date in substantially the form attached hereto as Exhibit A .

“ Bill of Sale ” means the Bill of Sale to be executed by the applicable Selling Party in favor of Buyer and/or one or more Buyer Designees as of the Closing Date in substantially the form attached hereto as Exhibit B .

“ Business ” means the Selling Parties’ and Transferred Sub’s development, sale and support of the Products as of the date hereof.

“ Business Day ” means each day other than a Saturday, Sunday or other day on which commercial banks in San Francisco, California are authorized or required by law to close.

“ Buyer Designee ” means an Affiliate of Buyer to which specified Transferred Assets and/or Transferred Shares will be transferred as identified in Schedule 1.01(a) , as may be revised after the date hereof and prior to the Closing with the consent of Seller.

“ Buyer Common Stock ” means Buyer’s common stock, $0.002 par value per share.

“ Buyer Material Adverse Effect ” means, with respect to Buyer, any event, change or circumstance that, individually or in the aggregate with all other such events, changes or circumstances, results in a material adverse effect on, or material adverse change in, the operations, financial condition, earnings, results of operations, assets or Liabilities of Buyer or any event, change or circumstance that is materially adverse to the ability of Buyer and the Buyer Designees,

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collectively, to perform their obligations under this Agreement or the Ancillary Agreements to which Buyer or a Buyer Designee is or will be a Party or to consummate the transactions contemplated hereby or thereby other than such changes, effects or circumstances reasonably attributable to:  (a) economic, capital market or political conditions generally in the United States or foreign economies in any locations where Buyer has material operations or sales, provided the changes, effects or circumstances do not have a materially disproportionate effect (relative to other industry participants) on Buyer; (b) conditions generally affecting the industry in which Buyer operates, provided the changes, effects or circumstances do not have a materially disproportionate effect (relative to other industry participants) on Buyer; (c) the outbreak of hostilities or war, acts of terrorism or acts of God; or (d) any decrease in the market price or trading volume of Buyer Common Stock.

“ Buyer Stock Market Price ” means an amount equal to the average closing price of the Buyer Common Stock on Nasdaq for the ten (10) trading day period ending on the date which is the sixth (6th) trading day immediately prior to the Closing Date (with the closing price for each day being the last reported sales price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case on Nasdaq) or, if not listed and admitted to trading on Nasdaq, on the principal national securities exchange on which such securities are listed and admitted to trading, or if not quoted on a principal national securities exchange, the average of the closing bid and asked prices in the over-the-counter market as furnished by any exchange member firm selected from time to time by Buyer for that purpose, or if such Buyer Common Stock is no longer publicly-traded, the price as is determined to be the fair market value as determined reasonably and in good faith by the Board of Directors of Buyer following the principle of reasonable valuation methods consistently applied under the guidelines of Treas. Reg. §1.409A-1(b)(5)(iv)(B).

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

“ Cash Consideration ” means the cash consideration paid by Buyer pursuant to Section 2.07 subject to Section 5.09(j).

“ Change of Control ” of Buyer shall mean the occurrence of (or any public announcement of, or entry into any agreement by Buyer or any Buyer Subsidiary to engage in or effect, a transaction that would result in) any of the following events or circumstances, whether accomplished directly or indirectly, or in one or a series of related transactions:

(A)          any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule l3d-3 under the Exchange Act) of more than fifty percent (50%) of the total voting power of the outstanding capital stock of Buyer;

(B)           Buyer merges with or into, or consolidates with, or consummates any reorganization or similar transaction with, another Person and, immediately after giving

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effect to such transaction, less than fifty percent (50%) of the total voting power of the outstanding capital stock of the surviving or resulting Person is “beneficially owned” (within the meaning of Rule 13d-3 under the Exchange Act) in the aggregate by the shareholders of Buyer immediately prior to such transaction;

(C)           Buyer (including through one or more of its Subsidiaries and including through any liquidation or dissolution, other than a liquidation or dissolution in connection with a reorganization or similar transaction in which the holders of the voting stock of Buyer immediately prior to such transaction continue to represent more than fifty percent (50%) of the combined voting power of the surviving entity immediately after giving effect to such transaction) sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of the assets and properties (including capital stock of Subsidiaries) of Buyer, but excluding sales, assignments, conveyances, transfers, leases or other dispositions of assets and properties (including capital stock of Subsidiaries) by Buyer or any of its Subsidiaries to any direct or indirect Subsidiary of Buyer; or

(D)          Individuals who as of the date hereof constituted the members of the Board of Directors of Buyer (together with any new or replacement directors whose election by such Board of Directors or whose nomination for election by the shareholders of Buyer was approved by a vote of a majority of the members of the Board of Directors then in office who either were members of the Board of Directors as of the date hereof or whose election or nomination was previously so approved) cease for any reason to constitute a majority of the Board of Directors of Buyer then in office.

“ Closing Date ” means the date of the Closing.

“ Contract ” means each contract, agreement, option, lease, license, sale and purchase order, commitment and other instrument of any kind, whether written or oral, to which Seller or its Subsidiaries is a party or is otherwise bound.

“ Conveyance Documents ” means the Assignment and Assumption Agreement, Bill of Sale, the Copyright Assignment, and the Patent Assignment, each in the form as attached hereto, together with any exhibits and schedules thereto.

“ Copyright Assignment ” means the Copyright Assignment Agreement, dated as of the Closing Date, to be executed by Buyer and/or one or more Buyer Designees, on the one hand, and the applicable Selling Parties, on the other hand, in substantially the form attached hereto as Exhibit C .

“ Core Seller Products ” shall mean for any product other than the Products:  (a) any Seller Chipset, Seller Processor, or substantial portion thereof; and (b) any software or firmware capable of running on or interoperating with a Seller Chipset or Seller Processor; and (c) any product that is bus or pin compatible with an Seller Bus.

“ Development Agreement ” means the Development Agreement entered into by Buyer and/or a Buyer Designee and Seller simultaneously herewith.

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“ Dollars ” means United States Dollars.

“ Effective Time ” means, unless otherwise agreed by the Parties, 12:01 a.m., in each relevant location of the Selling Party and Transferred Assets or Transferred Sub, as applicable, on the Closing Date, or where conflicting, 12:01 a.m., Pacific Time.

“ Employee Agreement ” means each management, employment, severance, consulting, relocation, repatriation, expatriation or other agreement or Contract between Seller or any of its Subsidiaries and any Business Employee directly relating to such Business Employee’s terms or conditions of employment.

“ Employee Plan ” means any plan, program, policy, practice, agreement or other arrangements providing for compensation, severance, termination pay, pension benefits, retirement benefits, deferred compensation, performance awards, stock or stock-related awards, fringe benefits (including health, dental, vision, life, disability, sabbatical, accidental death and dismemberment benefits), or other employee benefits or remuneration of any kind, whether written, unwritten or otherwise, funded or unfunded, including each “employee benefit plan,” within the meaning of Section 3(3) of ERISA, excluding any Employee Agreement, which is or has been maintained by Seller or its Affiliates for the benefit of any Business Employee.

“ Environmental Laws ” mean any Applicable Laws of any Governmental Authority in effect as of the date hereof relating to pollution or protection of the environment, natural resources or public and occupational health and safety relating to hazardous or toxic substances.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ Excluded Employees ” means employees of Seller and its Subsidiaries who work with the Transferred Assets but will remain employees of Seller or one of its Subsidiaries (other than the Transferred Sub) after the Closing as set forth on Schedule 1.01(b) .

“ Excluded Equipment ” means all machinery, tools and other fixed assets of Seller and its Subsidiaries not included on Schedule 2.01(b) , including that manufacturing and technology development equipment used in connection with Seller’s development of the Products.

“ Excluded Seller Product ” shall mean (a) any product of Seller or any of its Subsidiaries (including revisions of such product) that is marketed or sold by Seller or any of its Subsidiaries as of the Closing Date other than the Products, (b) any product planned to be marketed or sold by Seller as of the Closing Date other than the Products, or (c) any product that contains substantially different functionality from any Product.  For purposes of clarification and not limitation, “ Excluded Seller Product ” shall include any product of Seller or any of its Subsidiaries implementing fixed or mobile wireless technology (including WiMAX, WiFi, RAN-LTE, or personal area network technologies) other than the Products.

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

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

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

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.

“ Indebtedness ” means all obligations of Seller and it Subsidiaries for borrowed money, including (a) any capital lease obligation, (b) any obligation (whether fixed or contingent) to reimburse any bank or other Person in respect of amounts paid or payable under a standby letter of credit, (c) any guarantee with respect to indebtedness for borrowed money (of the kind otherwise described in this definition) of another Person, and (d) any factored or sold receivables.

“ Intellectual Property ” means intellectual property rights arising from or in respect of the following, whether protected, created or arising under the laws of the United States or any other jurisdiction:  (a) copyrights and registrations and applications therefor (collectively, “ Copyrights ”); (b) know-how, inventions, discoveries, concepts, ideas, methods, processes, designs, formulae, technical data, source code, drawings, specifications, data bases and other proprietary and confidential information, including customer lists, in each case excluding any rights in respect of any of the foregoing that comprise or are protected by Copyrights, mask work rights or Patents (collectively, “ Trade Secrets ”); (c) patents and applications therefor, including continuation, divisional, continuation-in-part, reexamination, or reissue patent applications and patents issuing thereon (collectively, “ Patents ”); and (d) trademarks and registrations and applications therefor (collectively, “ Trademarks ”).

“ Intellectual Property Agreements ” means the Patent License Agreement and the Trade Secrets and Copyright License Agreement.

“ Inventory ” means all raw materials, work-in-progress, finished goods, supplies, packaging materials and other inventories owned by Seller or its Subsidiaries.

“ IRS ” means the Internal Revenue Service of the United States.

“ Knowledge ” means, with respect to any Person, the actual knowledge of such Person; provided, however, that with respect to Seller, actual knowledge shall be deemed to be solely the actual knowledge of the individuals identified on Schedule 1.01(c) and that with respect to Buyer, actual knowledge shall be deemed to be solely the actual knowledge of the individuals identified on Schedule 1.01(d) .

“ Liability ” means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, asserted or unasserted, accrued or unaccrued, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, absolute, contingent, executory, determined,

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determinable or otherwise and whether or not the same is required to be accrued on the financial statements of such Person.

“ Lien ” means, with respect to any asset, any mortgage, title defect or objection, lien, pledge, charge, security interest, encumbrance or hypothecation in respect of such asset; provided, however , that any license of Intellectual Property shall not be considered a Lien on such Intellectual Property.

“ Multiemployer Plan ” means any employee pension benefit plan within the meaning of Section 3(2) of ERISA that is a “multiemployer plan,” as defined in Section 3(37) of ERISA.

“ Nasdaq ” means the Nasdaq National Market.

“ Non-Compete Agreement ” means the Non-Competition and Non-Solicitation Agreement entered into by Buyer and Seller simultaneously herewith to become effective upon the Closing as of the Effective Time.

“ Patent Assignment ” means the Patent Assignment Agreement, dated as of the Closing Date, to be executed by Buyer and/or one or more Buyer Designees, on the one hand, and the applicable Selling Parties, on the other hand, in substantially the form attached hereto as Exhibit D .

“ Patent License Agreement ” means the Patent License Agreement in favor of Buyer or one or more Buyer Designees entered into by Buyer and/or one or more Buyer Designees, on the one hand, and the applicable Selling Parties, on the other hand, simultaneously herewith to become effective upon the Closing as of the Effective Time.

“ Permitted Liens ” means (a) Liens for Taxes or governmental assessments, charges or claims the payment of which is not yet due or which are being contested in good faith through appropriate proceedings and set forth in Schedule 3.12 , (b) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen, repairers and other similar Persons and other Liens imposed by Applicable Law incurred in the ordinary course of business which are either for sums not yet delinquent or are immaterial in amount or are being contested in good faith, (c) zoning, entitlement, conservation restriction and other land use and Environmental Laws and (d) other easements, charges, rights-of-way, imperfections of title or other encumbrances, if any, which imperfections or encumbrances do not in any material respect impair the ability to transfer the Transferred Shares or use the Transferred Assets in the manner in which they are currently used by the Selling Parties.

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

“ Post-Closing Tax Period ” means any Tax period beginning on or after the Closing Date and the portion of any other Tax period ending on or after the Closing Date beginning on the Closing Date.

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“ Pre-Closing Tax Period ” means any Tax period (or portion thereof) ending before the Closing Date.

“ Prepayments ” means all prepaid items and deposits paid by a Selling Party in connection with the Business, and any claim, remedy or other right related to any of the foregoing.

“ Product Obligations ” means (a) obligations arising in respect of product support or maintenance obligations related to Products sold or licensed prior to the Closing and required to be performed after Closing, which obligations arise under any Assumed Contract or Transferred Sub Contract, provided that the cost of these obligations shall be borne by Seller as an Excluded Liability and (b) Liabilities relating to any product liability, warranty, refund or similar claims or returns, adjustments, allowances, repairs or returns made with respect to Products sold on or after the Closing Date.

“ Products ” means, collectively, all applications processors and communications processors, in each case, as described on Schedule 1.01(e) .

“ PTO ” means the United States Patent and Trademark Office.

“ Registration Rights Agreement ” means the Registration Rights Agreement, dated as of the Closing Date, to be entered into by Buyer on the one hand and Seller and/or Subsidiary Sellers on the other hand in the event Seller and/or Subsidiary Sellers receive any Stock Consideration in accordance with Section 2.07 hereof, in substantially the form to be agreed by the Parties.

“ Securities Act ” means the United States Securities Act of 1933, as amended.

“ Seller Bus ” shall mean a proprietary bus or other data path first introduced by Seller or any of its Subsidiaries that:  (a) is capable of transmitting and/or receiving information within an integrated circuit or between two or more integrated circuits, together with the set of protocols defining the electrical, physical, timing and functional characteristics, sequences and control procedures of such bus or data path; and (b) to which neither Seller nor its Subsidiaries (during any time such Subsidiary has met the requirements of being a Subsidiary of Seller) has granted a license or committed to grant a license through its participation in a government sponsored, industry sponsored, or contractually formed group or any similar organization that is dedicated to creating publicly available standards or specifications.

“ Seller Chipset ” means any single product, other than the Products, consisting of an integrated circuit(s), that alone or together are capable of electrically interfacing directly (with or without buffering or pin re-assignment) with any portion of a Seller Bus or a Seller Processor, to form the connection between such microprocessor and any other device (or group of devices) including microprocessors, input/output devices, networks, and memory.

“ Seller Material Adverse Effect ” means, with respect to the Transferred Assets or Transferred Sub, any event, change or circumstance that, individually or in the aggregate with all other such events, changes or circumstances, results in a material adverse effect on, or material adverse change in, the Transferred Assets and Transferred Sub, taken as a whole, or any event, change or circumstance that is materially adverse to the ability of the Selling Parties to perform

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their collective obligations under this Agreement or the Ancillary Agreements to which the Selling Parties and Transferred Sub are or will be a party or to consummate the transactions contemplated hereby or thereby other than such changes, effects or circumstances reasonably attributable to:  (a) economic, capital market or political conditions generally in the United States or foreign economies in any locations where the Business has material operations or sales, provided the changes, effects or circumstances do not have a materially disproportionate effect (relative to other industry participants) on Seller’s applications and communications processor business or the Business, respectively; (b) conditions generally affecting the industry in which Seller’s applications and communications processor business or the Business operate, provided the changes, effects or circumstances do not have a materially disproportionate effect (relative to other industry participants) on Seller’s applications and communications processor business or the Business, respectively; (c) the outbreak of hostilities or war, acts of terrorism or acts of God; (d) changes and effects attributable to the execution, announcement or performance of this Agreement; or (e) any action taken by a Selling Party with the prior written consent of Buyer.

“ Seller Processor ” shall mean a microprocessor first developed by, for or with substantial participation by Seller or any of its Subsidiaries, or the design of which has been purchased or otherwise acquired by Seller or any of its Subsidiaries, including the Seller® 8086, 80186, 80286, 80386, 80486, Celeron®, Pentium®, Xeon™, StrongARM, XScale®, Itanium®, MXP, IXP, 80860 and 80960 microprocessor families, and the 8087, 80287, and 80387 math coprocessor families.

“ Selling Party ” means Seller and any Subsidiary of Seller that owns or possesses any Transferred Asset and/or any of the Transferred Shares (collectively, the “ Selling Parties ”), and for purposes of clarification, excludes Transferred Sub.

“ Stock Consideration ” means the consideration paid by Buyer pursuant to Section 2.07 in the form of shares of Buyer Common Stock.

“ Subsidiary ” means, with respect to any Person, (a) any corporation, limited liability company or other similar entity as to which more than fifty percent (50%) of the outstanding capital stock or other securities having voting rights or power is owned or controlled, directly or indirectly, by such Person and/or by one or more of such Person’s direct or indirect subsidiaries and (b) any partnership, joint venture or other similar relationship between such Person and any other Person.

“ Supply Agreement ” means the Supply Agreement entered into by Buyer and/or a Buyer Designee and Seller simultaneously herewith to become effective upon the Closing as of the Effective Time.

“ Taxes ” means (a) all foreign, federal, state, local and other net income, gross income, gross receipts, sales, use, ad valorem , value added, intangible, unitary, capital gain, transfer, franchise, profits, license, lease, service, service use, withholding, backup withholding, payroll, employment, estimated, excise, severance, stamp, occupation, premium, property, prohibited transactions, windfall or excess profits or other taxes of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto, (b) any Liability for payment of amounts described in clause (a) whether as a result of transferee Liability,

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of being a member of an affiliated, consolidated, combined or unitary group for any period, or otherwise through operation of law and (c) any Liability for the payment of amounts described in clause (a) or (b) as a result of any tax sharing, tax indemnity or tax allocation agreement or any other express or implied agreement to indemnify any other Person for Taxes; and the term “ Tax ” means any one of the foregoing Taxes.

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

“ Trade Secrets and Copyright License Agreement ” means the Copyright and Trade Secrets License Agreement in favor of Buyer and/or one or more Buyer Designees entered into by Buyer and /or one or more Buyer Designees, on the one hand, and the applicable Selling Parties, on the other hand, simultaneously herewith to become effective upon the Closing as of the Effective Time.

“ Transferred Copyrights ” means the Copyrights owned by a Selling Party as of the Closing Date that are embodied in the Products and used exclusively in the Business and not embodied or used in or with any other current product or service or planned product or service of Seller or any of its Subsidiaries.

“ Transferred Employees ” means the Business Employees who (i) accept an offer of employment from Buyer and who begin their employment with Buyer immediately upon Closing as of the Effective Time or (ii) are employees of Transferred Sub as of the Effective Time.

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

“ Transferred Patents ” means those Patents identified on Schedule 1.01(f) .

“ Transferred Shares ” means all of the issued and outstanding share capital and any other outstanding equity interests of Transferred Sub.

“ Transferred Trade Secrets ” means any Trade Secrets owned by the Selling Parties as of the Closing Date that are embodied in the Products and used exclusively in the Business and not embodied or used in or with any other current product or service or planned product or service of Seller or its Subsidiaries; provided , however , that such term shall not include any rights in Trade Secrets that are described within a Patent issuing after the Closing Date related to a patent application that was filed prior to the Closing Date.

“ Transition Services Agreement ” means the Transition Services Agreement entered into by Buyer and/or a Buyer Designee and Seller simultaneously herewith to become effective upon the Closing as of the Effective Time.

1.02         Index of Other Defined Terms .  In addition to those terms defined in Section 1.01, the following terms shall have the respective meanings given thereto in the sections indicated below:

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Defined Terms		Section
Agreement		Preamble
Annual Financial Information Date		Section 3.15(a)
Assumed Contracts		Section
Assumed Liabilities		Section 2.03
Basket		Section 7.02(e)
Business Employees		Section 3.14(c)
Buyer		Preamble
Buyer Approvals		Section 4.03
Buyer Disclosure Schedules		Article IV
Buyer Indemnitees		Section 7.02(a)
Buyer Preferred Stock		Section 4.11(a)
Buyer Sales Tax		Section 5.09(f)
Buyer SEC Documents		Section 4.05(a)
Bye-Laws		Section 4.01
Claims		Section 2.01(l)
Closing		Section 2.08
Confidentiality Agreement		Section 5.01(a)
Consideration		Section 2.06(c)
Copyrights		Section 1.01
Covenant Contract		Section 5.13(f)
Customer Data		Section 5.16
Equipment		Section 2.01(b)
Exchange Act		Section 4.05(a)
Excluded Assets		Section 2.02
Excluded Claims		Section 2.02(i)
Excluded Liabilities		Section 2.04
Excluded Seller Product		Section 1.01
Financial Statements		Section 3.15(a)
Include		Section 9.13
Including		Section 9.13
Indemnification Cap		Section 7.05
Indemnitee		Section 7.02(c)
Indemnitor		Section 7.02(c)
Investment Center		Section 5.03
Israeli Tax Ruling		Section 5.09(l)
Leased Real Property		Section 3.06
Losses		Section 7.02(d)
Material Contract Consents		Section 3.09
Material Contracts		Section 3.08
Notice of Claim		Section 7.03(b)
Parties		Preamble
Party		Preamble
Patents		Section 1.01
Permits		Section 2.01(i)

 

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Permitted Post-Signing Supplement		Section 5.02(b)
Possessing Party		Section 5.01(c)
Proceedings		Section 3.07
Quarter Financial Information Date		Section 3.15(a)
Receiving Party		Section 5.01(c)
Retained Marks		Section 5.04
Sale		Section 5.20
Sales Tax		Section 5.09(f)
Sarbanes-Oxley Act		Section 4.05(d)
SEC		Section 4.05(a)
Seller		Preamble
Seller Approvals		Section 3.03
Seller Cash Consideration		Section 2.06(b)
Seller Disclosure Schedules		Article III
Seller Indemnitees		Section 7.02(b)
Seller Stock Consideration		Section 2.06(b)
Selling Parties		Section 1.01
Share Encumbrances		Section 3.23(a)(iii)
Specially Designated Intellectual Property		Section 5.01(a)
Subsidiary Sellers		Recitals
Subsidiary Sellers Cash Consideration		Section 2.06(a)
Subsidiary Sellers Stock Consideration		Section 2.06(a)
Termination Date		Section 8.01(b)(i)
Trade Secrets		Section 1.01
Trademarks		Section 1.01
Transferred Assets		Section 2.01
Transferred Shares		Recitals
Transferred Sub		Recitals
Transferred Sub Contracts		Section 3.08

 

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ARTICLE II

TRANSFER OF ASSETS

2.01         Transferred Assets .  Upon the terms and subject to the conditions of this Agreement, at the Closing, Buyer agrees to purchase and acquire (or cause one or more Buyer Designees to purchase and acquire) from the Selling Parties, and Seller agrees to sell, transfer, assign, deliver and convey to Buyer (or one or more Buyer Designees), or cause to be sold, transferred, assigned, delivered and conveyed to Buyer (or one or more Buyer Designees), free and clear of all Liens and Share Encumbrances other than Permitted Liens, all of the Selling Parties’ right, title and interest in, to and under:  (i) the Transferred Shares and (ii) the following assets, as the same shall exist on the Closing Date, that are owned, lawfully held or possessed by the Selling Parties as the case may be (the assets identified in subsections (a) through (l) below as may be updated pursuant to Section 5.02, collectively, the “ Transferred Assets ”):

(a)   the collateral materials, brochures, manuals, promotional materials, sales materials, display materials and product information materials exclusively related to the Products;

(b)   all of the fixed assets, machinery, equipment, tools and other tangible personal property that are described or listed on Schedule 2.01(b) (the “ Equipment ”);

(c)   subject to the need to obtain any required consent from any third party, the Contracts that are listed on Schedule 2.01(c) , and any Prepayments paid by Seller or its Subsidiaries prior to the Closing with respect to such Contracts;

(d)   subject to the need to obtain any required consent from any third party, the Contracts, including the leasehold improvements therein and all rights appurtenant thereto, for Leased Real Property that are listed on Schedule 2.01(d) (such Contracts, together with the Contracts listed on Schedule 2.01(c) , the “ Assumed Contracts ”), and any Prepayments paid by Seller or its Subsidiaries prior to the Closing with respect to such Contracts;

(e)   the Transferred Patents;

(f)    the Transferred Trade Secrets;

(g)   the Transferred Copyrights;

(h)   a list of current customers and suppliers of the Business;

(i)    all licenses and permits issued by a Governmental Authority necessary for the ownership, lease or use of the Transferred Assets, Transferred Sub and Transferred Shares and used exclusively in the Business to the extent that such licenses and permits are transferable (the “ Permits ”);

(j)    documents related exclusively to the Transferred Intellectual Property which are reasonably accessible to Seller;

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(k)   such documents not otherwise recited in Section 2.01 that were exclusively developed for use in the design and development of the Products as are reasonably accessible to Seller; and

(l)       all causes of action, claims, demands, rights and privileges against third parties, whether liquidated or unliquidated, fixed or contingent, choate or inchoate (“ Claims ”) that relate to the Transferred Assets or Transferred Shares other than Excluded Claims.

The Transferred Intellectual Property (including the assets identified in clauses (e) through (g) above) and Intellectual Property assets of Transferred Sub shall be subject to any (i) licenses retained by Seller or granted to Seller pursuant to any Ancillary Agreement, (ii) licenses and Contracts with use restrictions existing on the date hereof granted to or by Seller or its Subsidiaries (other than those licenses, if any, which Seller was required to disclose hereunder as an Assumed Contract or Transferred Sub Contract or Contracts with use restrictions that Seller was required to disclose hereunder but failed to so disclose as of the date hereof or as provided in Section 5.02) and (iii) licenses or Contracts with use restrictions entered into by a Seller or its Subsidiaries in the ordinary course of the Business not in violation of this Agreement prior to the Closing Date.

2.02         Excluded Assets .  Buyer and Seller expressly understand and agree that all assets of Seller and its Subsidiaries, other than the Transferred Assets (the “ Excluded Assets ”), shall be excluded from the Transferred Assets, including, but not limited to:

(a)      all assets, tangible or intangible, real or personal that are not specifically identified in Section 2.01;

(b)      all Contracts that are not Assumed Contracts, including all purchase and sales orders under which Products remain to be delivered to customers of the Business as of the Closing Date;

(c)      all Prepayments associated with Contracts that are not Assumed Contracts or other obligations not assumed by Buyer;

(d)      any amounts owed by or to Seller and/or Subsidiary of Seller, to or from a Subsidiary of Seller, under any Liability, including but not limited to all Accounts Receivable;

(e)      all Cash and Cash Equivalents;

(f)       all Inventory as of the Closing Date;

(g)      subject to Section 2.05, all Employee Plans;

(h)      all causes of action, claims, demands, rights and privileges against third parties, whether liquidated or unliquidated, fixed or contingent, choate or inchoate that relate to any of the other Excluded Assets or any of the Excluded Liabilities;

(i)       all Claims to the extent that such claims relate to (i) any Excluded Assets or Excluded Liabilities or (ii) events or breaches or violations occurring on or prior to the Closing Date that relate to the Transferred Assets (the “ Excluded Claims ”);

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(j)       all rights to or claims for refunds of Taxes (including penalties) paid by Seller or its Subsidiaries, or any member of any consolidated, affiliated, combined or unitary group of which Seller is or has been a member, including those imposed on property, income or payrolls, to the extent such refunds are of amounts paid with respect to the Pre-Closing Tax Period;

(k)      all rights, properties, and assets which have been used in the Business and which shall have been transferred (including transfers by way of sale), licensed or otherwise disposed of in the ordinary course of the Business prior to the Closing and not in violation of the terms of this Agreement;

(l)       all enterprise software, databases and networks of Seller or its Subsidiaries, including all sales management, engineering, materials, business planning, manufacturing, logistics, finance and accounting systems utilized by the Business;

(m)     all Intellectual Property licensed by Seller to Buyer pursuant to any Intellectual Property Agreement; and

(n)      without limiting the generality of the foregoing, all Excluded Equipment, Excluded Seller Products, Core Seller Products, and all of the assets specifically identified on Schedule 2.02(n) .

2.03         Assumed Liabilities .  Upon the terms and subject to the conditions of this Agreement and the Transition Services Agreement, effective at the Effective Time, Buyer agrees to assume or cause one or more Buyer Designees to assume, and agrees to pay, perform, fulfill and discharge or cause one or more Buyer Designees to pay, perform, fulfill and discharge, the following Liabilities of Seller or its Subsidiaries (collectively and as may be updated pursuant to Section 5.02, the “ Assumed Liabilities ”):

(a)   all Liabilities arising after the Effective Time under the Assumed Contracts that relate to the period from and after the Closing, provided that the Assumed Liabilities shall not include any Liability arising from breaches by a Selling Party of such Assumed Contracts occurring prior to the Effective Time;

(b)   all Liabilities with respect to Taxes that are the responsibility of Buyer pursuant to Section 5.09;

(c)   all Liabilities arising out of Buyer’s operation and ownership of the Transferred Assets, the Transferred Shares and Transferred Sub on and after the Effective Time;

(d)   all Liabilities that are assumed by operation of Applicable Law related to those Business Employees whose primary place of employment is outside the United States including those Business Employees specified on Schedule 2.03(d) ; and

(e)   the Product Obligations.

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2.04         Excluded Liabilities .  Except for those Liabilities expressly assumed by Buyer pursuant to Section 2.03, Buyer shall not assume and shall not be liable for, and Seller shall retain and remain, as between Seller and Buyer, solely liable for and obligated to discharge, all of the debts, expenses, contracts, agreements, commitments, obligations and other Liabilities of any nature with respect to the Transferred Assets incurred on or prior to the Closing Date (the “ Excluded Liabilities ”), including the following:

(a)   any Liability for breaches by Seller or its Subsidiaries prior to the Closing Date of any Contract or Applicable Law or arising out of any Contract of Seller or its Subsidiaries not identified in the Schedules (as may be updated pursuant to Section 5.02) as an Assumed Contract and any Liability for payments or amounts due under any Contract on or prior to the Closing Date;

(b)   any Liability for Taxes that are the responsibility of Seller pursuant to Section 5.09;

(c)   all Accounts Payable;

(d)   subject to Section 2.03(d) and Section 2.05, any Liabilities under Employee Plans and Employee Agreements;

(e)   any Liability of Seller and/or any Subsidiary of Seller owed to any Subsidiary of Seller and/or Seller;

(f)    any Liability for or in respect of Indebtedness of Seller or its Subsidiaries;

(g)   any Liability under, or in connection with or arising out of the Excluded Assets;

(h)   any Liability for any actual or alleged infringement of any Intellectual Property that arises from Seller’s or its Subsidiaries’ sales or shipments of Products prior to the Closing Date;

(i)    any Liability for or in respect of a violation by Seller or any of its Subsidiaries of any Environmental Law prior to the Closing Date;

(j)    any Liability for warranty claims or claims arising in respect of Products shipped or sold prior to the Closing (including for those with respect to which Buyer will assume Product Obligations);

(k)   any Liability arising from any transfers of assets or employees out of the Transferred Sub to Seller or its Subsidiaries prior to the Closing unless permitted by Section 5.13, other than any Buyer Sales Tax;

(l)    any Liability arising out of any third-party charge, complaint, suit, action (including regulatory action), hearing, investigation, claim, demand, proceeding (including under any alternative dispute resolution procedure) or other litigation pending as of the Closing; and

(m)     any Liability arising out of any third-party charge, complaint, suit, action (including regulatory action), hearing, investigation, claim, demand, proceeding (including under any alternative dispute resolution procedure) or other litigation filed or otherwise asserted after the

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Closing to the extent based upon or arising out of the ownership prior to the Closing of the Transferred Assets, Excluded Assets and/or the conduct of the Business prior to the Closing.

2.05         Transferred Sub .  As clarification of the foregoing Sections 2.01, 2.02, 2.03 and 2.04, and notwithstanding any provision of this Agreement to the contrary, the Parties hereby agree and acknowledge that:

(a)   Assets and Liabilities of the Transferred Sub set forth on Schedule 2.05(a) , and any assets and Liabilities of Transferred Sub not listed on Schedule 2.05(a) that do not relate exclusively to the Business, shall be transferred from the Transferred Sub and assumed by Seller or its Subsidiaries on or before the day preceding the Closing Date, and shall be treated in a manner consistent with the Excluded Assets and Excluded Liabilities for purposes of this Agreement; provided that all Liabilities related to such assets transferred pursuant to this Section 2.05(a) shall be fully paid or otherwise satisfied (or, if not, shall be transferred from Transferred Sub such that Transferred Sub has no further obligation or liability with respect thereto).

(b)   Any and all assets and Liabilities of Transferred Sub not set forth on Schedule 2.05(a) that relate exclusively to the Business, subject to Section 2.05(d) below, shall remain assets and Liabilities of the Transferred Sub upon and after the Closing.

(c)   Any assets and Liabilities relating to employee benefits of the nature described on Schedule 3.14(d) that the Parties may mutually agree will be transferred or subcontracted by Seller or its Subsidiaries and assumed by Buyer or its Buyer Designee or Transferred Sub shall be assumed assets or Liabilities of Buyer, a Buyer Designee or Transferred Sub, as applicable.

(d)   Liabilities of Transferred Sub with respect to any Transferred Sub employees who do not become Transferred Employees shall be fully paid or otherwise satisfied (or, if not, shall be transferred from Transferred Sub such that Transferred Sub has no further obligation or liability with respect thereto) on or before the Closing.

(e)   Buyer or its Buyer Designee shall acquire the Transferred Shares at the Closing, at which time the Transferred Sub shall become a wholly owned Subsidiary of Buyer or such Buyer Designee.

2.06         Assignment of Contracts and Rights .

(a)   Anything in this Agreement or any other Acquisition Document to the contrary notwithstanding, this Agreement shall not constitute an agreement to assign any Transferred Asset or any claim or right or any benefit arising thereunder or resulting therefrom if an attempted assignment thereof, without the consent of a party thereto or the receipt of any Government Approvals or the satisfaction of any other requirement thereof, would constitute a breach or other contravention thereof or in any way adversely affect the rights of Buyer, Seller or any of Seller’s Subsidiaries thereunder.  Seller and Buyer will use commercially reasonable efforts (but without any payment of money by Seller or Buyer except as provided in Section 5.07) to obtain the consent of the other parties to any such Transferred Asset or any claim or right or any benefit arising thereunder for the assignment thereof to Buyer as Buyer may reasonably request; provided, however , that Seller shall have no obligation to assign or transfer Contracts, including any licenses

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of Intellectual Property or any licenses granted by Seller in connection with the sale, distribution and license of Products in the ordinary course of business, that are not Assumed Contracts.  If such consent or Government Approval is not obtained, or if an attempted assignment thereof would be ineffective or would adversely affect the rights of Seller thereunder so that Buyer would not in fact receive all such rights, for the Assumed Contracts set forth on Schedule 2.06 , Seller and Buyer will cooperate to discuss and determine feasible arrangements under which Buyer would obtain the benefits and assume the obligations thereunder in accordance with this Agreement to the extent of Seller’s rights thereunder, including potential sub-contracting, sub-licensing, or sub-leasing to Buyer (but no more extensive than Seller’s existing rights with respect to the Business), or under which Seller would enforce for the benefit of Buyer, with Buyer assuming Seller’s obligations, any and all rights of Seller against a third party thereto.

(b)   After the Closing:  (i) if Seller or any of its Subsidiaries receives any payment, refund or other amount that is a Transferred Asset or is otherwise properly due and owing to Buyer in accordance with the terms of this Agreement, Seller promptly shall remit, or shall cause to be remitted, such amount to Buyer and (ii) if Buyer or any of its Subsidiaries receive any payment, refund or other amount that is an Excluded Asset or is otherwise properly due and owing to Seller or any of its Subsidiaries in accordance with the terms of this Agreement, Buyer promptly shall remit, or shall cause to be remitted, such amount to Seller, in each case subject to Section 5.11.

2.07         Consideration .  The consideration payable by Buyer to Seller and Subsidiary Sellers for the Transferred Assets and Transferred Shares shall reflect an aggregate purchase price of Six Hundred Million Dollars ($600,000,000) plus the assumption of the Assumed Liabilities, and shall consist of:

(a)   to Subsidiary Sellers, an aggregate amount equal to the value of the Transferred Sub immediately prior to the Closing as determined by Seller in good faith by written notice to Buyer, payable in cash and/or shares of Buyer Common Stock as elected by Seller in its sole discretion by written notice provided to Buyer no less than three (3) Business Days prior to Closing, and each such Subsidiary Seller shall receive the percentage of such aggregate amount set forth on Schedule 3.23 (to the extent in cash, collectively, the “ Subsidiary Sellers Cash Consideration ” and, to the extent in Buyer Common Stock, collectively, the “ Subsidiary Sellers Stock Consideration ”);

(b)   to Seller, an aggregate amount equal to Six Hundred Million Dollars ($600,000,000) less the aggregate amount paid with respect to the Transferred Sub in Section 2.07(a), payable either in cash or in a combination of cash and/or shares of Buyer Common Stock as elected by Seller in its sole discretion by written notice provided to Buyer no less than three (3) Business Days prior to Closing; provided, however , that in no event shall the aggregate value of the Stock Consideration issued pursuant to Section 2.07(a) and (b) exceed One Hundred Million Dollars ($100,000,000) (to the extent in cash, the “ Seller Cash Consideration ”, and to the extent in Buyer Common Stock, the “ Seller Stock Consideration ”); and

(c)   the assumption of the Assumed Liabilities by Buyer (together with the Cash Consideration and the Stock Consideration, the “ Consideration ”).

For purposes of this Section 2.07, each determination with respect to Buyer Common Stock shall be based upon the Buyer Stock Market Price.

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2.08         Closing .  The closing of the purchase and sale of the Transferred Assets and Transferred Shares hereunder (the “ Closing ”) shall take place at the offices of Gibson, Dunn & Crutcher LLP, 1881 Page Mill Road, Palo Alto, CA 94304 on the date that is five (5) days after satisfaction of the conditions set forth in Article VI or at such other place or in such manner as the Parties may agree.  At the Closing:

(a)   Seller shall deliver to Buyer the Bill of Sale and, simultaneously with the consummation of the transactions contemplated hereby, Seller, through its officers, agents and employees, will put Buyer in possession of all tangible Transferred Assets at the facilities where they are located as of the Effective Time;

(b)   To the extent not previously executed and delivered by the Parties to become effective upon Closing, Seller and Buyer each shall execute and deliver (or cause their applicable Affiliates or Subsidiaries to execute and deliver) each of the Acquisition Documents to which it is (or they are) a party;

(c)   Buyer shall pay to Seller (for the account of all Selling Parties) the Seller Cash Consideration and Subsidiary Sellers Cash Consideration, if any, by wire transfer of immediately available funds;

(d)   Buyer shall deliver the certificates representing any Seller Stock Consideration to Seller;

(e)   Buyer shall deliver the certificates representing any Subsidiary Sellers Stock Consideration to Subsidiary Sellers;

(f)    Buyer and Seller shall execute and deliver a delivery protocol relating to the manner for delivery of any software that is a Transferred Asset;

(g)   Subsidiary Sellers shall deliver all certificates or instruments representing the Transferred Shares duly endorsed and accompanied by necessary documentation for transfer; and

(h)   Seller shall furnish Buyer with the following documents regarding the Transferred Sub:

(i)            the Memorandum and Articles of Association of Transferred Sub and all amendments thereto, duly certified by the proper officials of the State of Israel;

(ii)           resignations, effective on the Closing Date, of those officers and directors of the Transferred Sub; and

(iii)          the complete and correct corporate minute books and reports filed with the Registrar of Companies (including registration of stock transfers) of Transferred Sub.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Subject to such exceptions that are (i) disclosed in the disclosure schedules dated as of the date hereof and delivered with this Agreement (“ Seller Disclosure Schedules ”) or (ii) disclosed

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pursuant to Section 5.02 (but without limiting Buyer’s indemnification rights with respect to such supplements or amendments as provided in Section 5.02(a)), Seller hereby represents and warrants to Buyer as follows:

3.01         Existence and Good Standing .  Each Selling Party and Transferred Sub is a corporation, limited liability company, partnership or other entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all corporate power and authority required to carry on its business as now conducted and to own and operate the Business as now owned and operated by it.  Each Selling Party and Transferred Sub is qualified to conduct business and is in good standing in each jurisdiction in which it conducts the Business other than such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Seller Material Adverse Effect.

3.02         Authorization and Enforceability .  The execution and delivery by Seller, and the performance by each Selling Party of this Agreement and the other Acquisition Documents, and the consummation of the transactions contemplated hereby and thereby, are within the Selling Party’s corporate powers and have been, or will have been prior to Closing, duly authorized by all necessary corporate action on such Selling Party’s part.  This Agreement has been and, when executed prior to or at the Closing, the other Acquisition Documents will have been, duly and validly executed by the Selling Party who is party thereto and, assuming the due execution and delivery of this Agreement and the other Acquisition Documents to which it is a party by Buyer and/or a Buyer Designee (as applicable), will constitute the legal, valid and binding agreement of such Selling Party, enforceable against it in accordance with their respective terms, subject to any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally or to general principles of equity.

3.03         Governmental or Other Authorization .  Other than notification pursuant to the HSR Act and applications or other submissions or filings under similar merger notification laws or regulations of foreign Governmental Authorities, and other than as set forth on Schedule 3.03 , the execution, delivery and performance by each Selling Party of this Agreement and the other Acquisition Documents, and the consummation by it of the transactions contemplated hereby and thereby, require no Governmental Approval from any Governmental Authority (such required consents, waivers and approvals, the “ Seller Approvals ”).

3.04         Non-Contravention .  Except for matters that would not reasonably be expected to have a Seller Material Adverse Effect, the execution, delivery and performance of this Agreement and the other Acquisition Documents by the Selling Parties, and the consummation of the transactions contemplated hereby and thereby, do not and will not (a) contravene or conflict with the certificate of incorporation, bylaws or other charter documents of the Selling Parties or Transferred Sub, (b) assuming receipt of the Seller Approvals that are Governmental Approvals, contravene or conflict with or constitute a violation of any Applicable Law binding upon or applicable to any Selling Party, the Transferred Assets or the Transferred Shares or (c) assuming receipt of any other required approvals that are not Governmental Approvals and of the Material Contract Consents, (i) constitute a default under, give rise to any right of termination, cancellation, modification, or acceleration of, or a loss of any material benefit under any Material Contract, (ii) result in the creation or imposition of any material Lien (other than Permitted Liens) on the

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Transferred Assets or the Transferred Shares, or (iii) constitute a breach, default or violation of any commitment, judgment, injunction or decree.

3.05         Personal Property . The Selling Parties and Transferred Sub have good and marketable title to all of the tangible personal property that is a Transferred Asset or the tangible personal property of the Transferred Sub, respectively.  None of such personal property is subject to any Lien other than (a) Permitted Liens, (b) Liens that would not reasonably be expected to have a Seller Material Adverse Effect and (c) any restriction contemplated by this Agreement or any of the other Acquisition Documents.

3.06         Real Property . Schedule 3.06 lists the real property leased by the Selling Parties and/or Transferred Sub to be assigned to Buyer or a Buyer Designee in connection herewith (the “ Leased Real Property ”).  The applicable Selling Party lessee has a valid leasehold estate in all Leased Real Property, free and clear of all Liens, other than (a) Permitted Liens and (b) any Liens that would not reasonably be expected to have a Seller Material Adverse Effect.  The Transferred Sub does not own and has never owned any real property.

3.07         Litigation . Except as set forth on Schedule 3.07 , (a) there are no actions, suits, claims, charges, hearings, arbitrations, audits, proceedings (public or private) or, to the Knowledge of Seller, investigations (collectively, “ Proceedings ”) pending or, to the Knowledge of Seller, threatened by or against any Selling Party relating to any of the Transferred Assets or Transferred Shares that seeks to prevent, enjoin, alter or delay the transactions contemplated by this Agreement or any of the other Acquisition Documents or encumber the Transferred Shares, except as would not reasonably be expected to have a Seller Material Adverse Effect;  (b) there are no material Proceedings pending or, to the Knowledge of Seller, threatened by or against the Transferred Sub, except as would not reasonably be expected to have a Seller Material Adverse Effect; and (c) to Seller’s Knowledge, neither any Selling Party nor the Transferred Sub is a party or subject to any judgment relating to the Transferred Shares, the Products, any other Transferred Assets or Assumed Liabilities.

3.08         Assumed Contracts . Schedule 3.08 sets forth the Contracts to which the Transferred Sub is a party that relate exclusively, and are material, to the Business (the “ Transferred Sub Contracts ”) and the Assumed Contracts that are material to the Transferred Assets and the conduct of the Business as currently conducted (collectively with the Transferred Sub Contracts, the “ Material Contracts ”).  Each Material Contract is a valid and binding obligation of the Transferred Sub or Selling Party thereto and, to the Knowledge of Seller, each other Person who is a party thereto, in accordance with its terms, subject to any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally or to general principles of equity.  Except for breaches or defaults that would not reasonably be expected to have a Seller Material Adverse Effect, none of Seller, any of its Subsidiaries or, to the Knowledge of Seller, any other party thereto is in breach, violation or default (in each case, which is material) thereunder.

3.09         Material Contract Consents . Schedule 3.09 lists each Material Contract that requires the consent of the other party or parties thereto in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby (the “ Material Contract Consents ”).

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3.10         Compliance with Applicable Laws . Seller and its Subsidiaries have complied in all material respects with any Applicable Laws relating to the Transferred Assets (including, in the case of the Transferred Sub, Applicable Laws relating to its business operations and employees) and the Transferred Shares, except where the failure to comply would not reasonably be expected to have a Seller Material Adverse Effect.  To the Knowledge of Seller, no Selling Party is subject to any order, writ, injunction or decree of any Governmental Authority directly relating to the Transferred Assets or Transferred Shares.  The Transferred Sub is not subject to any material order, writ, injunction or decree of any Governmental Authority.

3.11         Advisory Fees . There is no investment banker, broker, finder or other intermediary or advisor that has been retained by or is authorized to act on behalf of Seller, who will be entitled to any fee, commission or reimbursement of expenses from Seller, or any Affiliate of Seller, upon consummation of the transactions contemplated by this Agreement, the nonpayment of which could result in a Lien on the Transferred Assets or Transferred Shares or a claim against Buyer.

3.12         Tax Matters . With respect to Seller and its Subsidiaries other than Transferred Sub, except to the extent that the failure to do so would not have a Seller Material Adverse Effect, since January 1, 2003, each of Seller and its Subsidiaries has filed all Tax Returns required to have been filed by it with respect to the Transferred Assets since Seller or one of its Subsidiaries, as the case may be, has owned such Transferred Assets, and has paid on a timely basis all Taxes due and payable with respect to the Transferred Assets and incurred in or attributable to the Pre-Closing Tax Period, the non-payment of which would (x) result in a Lien on any Transferred Asset or (y)  result in Buyer being liable or responsible therefor.  Except as set forth in Schedule 3.12 , (i) with respect to those Taxes described in the preceding sentence of this Section 3.12, neither Seller nor any of its Subsidiaries has received any written notice from any Governmental Authority that it is or may be subject to additional Tax with respect to the Transferred Assets and (ii) there are no Liens for Taxes (other than Permitted Liens) upon any of the Transferred Assets.  The representations and warranties contained in this Section 3.12 or Section 3.23(e) are the only representations and warranties being made with respect to compliance with or liability under laws related to Taxes related to the Business, Transferred Assets or the ownership or operation thereof by Seller or its Subsidiaries.

3.13         Intellectual Property .

(a)   All of the Transferred Intellectual Property other than Transferred Trade Secrets is free and clear of any Liens other than Permitted Liens.  Except as set forth on Schedule 3.13(a) , Seller, Transferred Sub or one of the other Selling Parties is the exclusive owner (or joint owner, including those items set forth on Schedule 3.13(c) or otherwise pursuant to joint development and other collaboration agreements entered into prior to the date hereof by a Selling Party or prior to the Closing Date in compliance with the terms of this Agreement) of all right, title, and interest in and to all of the Transferred Intellectual Property, subject in each case, to licenses granted by Seller and its Subsidiaries to third parties and licenses granted to, and use restrictions binding upon, Seller and its Subsidiaries by third parties.

(b)   To the Knowledge of Seller, neither (x) the current use of the Transferred Intellectual Property or the other Transferred Assets by Seller or any of its Subsidiaries nor (y) the current manufacture, marketing, distribution or sale of any of the Products by Seller or its Subsidiaries

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infringes on any Trade Secrets or Copyright of any third party.  Except as set forth on Schedule 3.13(b) , Seller, to its Knowledge, has not received any written claims currently pending from any Person claiming that the Products infringe or misappropriate the Intellectual Property of any Person.

(c)   Except as set forth on Schedule 3.13(c) , Seller has taken commercially reasonable steps to protect its rights in the Transferred Trade Secrets including taking commercially reasonable steps to have all of its respective current and former employees, consultants and contractors employed in the Business execute and deliver to Seller a proprietary information and assignment agreement.  To the Knowledge of Seller, it has not received written notice of any violation of or non-compliance with such agreements related to the Transferred Trade Secrets.

(d)   To Seller’s Knowledge, except as set forth on Schedule 3.13(d) , neither Seller nor any of its Subsidiaries is a party to any proceeding, settlement agreement or stipulation or is subject to any outstanding decree, order, or judgment, that restricts in any manner the use, transfer or licensing of the Transferred Intellectual Property or the Products.

(e)   All registered Transferred Patents are currently in material compliance with all formal legal requirements (including payment of filing, examination and maintenance fees and proofs of use) and are not subject to any unpaid maintenance fees or taxes or any actions falling due within ninety (90) days after the Closing Date.  To the Knowledge of Seller, there are no proceedings or actions pending before any court or tribunal (including the PTO or equivalent authority anywhere in the world) to which Seller or Transferred Sub has been named as a party and served with process that involve the validity, scope, or priority of the Transferred Intellectual Property.  None of the Transferred Copyrights are registered Copyrights.

(f)    Except as set forth on Schedule 3.13(f) , no government funding, facilities of a university, college, other educational institution or research center or funding from third parties was used in the development of the Transferred Intellectual Property or Transferred Sub Intellectual Property that is exclusively related to the Business and not set forth on Schedule 2.05(a) , as a result of which any such educational institution, research center or third party would have any material claim of ownership of the Transferred Intellectual Property or such Transferred Sub Intellectual Property.

(g)   Except for the items listed in Schedule 3.13(g) , no software covered by a Transferred Copyright is subject to any open source license (as that term is defined by the Open Source Initiative).

3.14         Employee Matters .

(a)   Multiemployer Plans .  At no time has Seller or any other Person under common control with Seller within the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986 and the regulations issued thereunder, contributed to or been obligated to contribute to any Multiemployer Plan or any plan maintained pursuant to a collective bargaining agreement or any plan subject to Title IV of ERISA, in any case with respect to Business Employees or former Business Employees.

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(b)   Labor .  No work stoppage or labor strike against Seller or any of its Subsidiaries is pending or, to Seller’s Knowledge, threatened or reasonably anticipated with respect to the Business Employees.  Seller has no Knowledge of any activities or proceedings of any labor union to organize any Business Employees.  There are no actions, suits, claims, labor disputes or grievances pending, or, to the Knowledge of Seller, threatened or reasonably anticipated relating to any labor, safety or discrimination matters involving any Business Employee, including charges of unfair labor practices or discrimination complaints, which, if adversely determined, would reasonably be expected to have a Seller Material Adverse Effect.  Neither Seller nor any of its Subsidiaries is presently, nor has it been in the past, a party to, or bound by, any collective bargaining agreement or extension order (other than extension orders applicable to all employees or to all electronics employees in Israel) or union contract with respect to Business Employees and no collective bargaining agreement is being negotiated by Seller with respect to the Business Employees.

(c)   Business Employee List .  All of the employees of Seller and its Subsidiaries who work directly and primarily with the Transferred Assets or who are employees of Transferred Sub as of the date hereof, other than the Excluded Employees (including (i) those on military leave and family and medical leave, (ii) those on approved leaves of absence, but only to the extent they have reemployment rights guaranteed under Applicable Law, under any applicable collective bargaining agreement or under any leave of absence policy of Seller or its Subsidiaries and (iii) those on short-term disability under the short-term disability program of Seller or its Subsidiaries) regardless of the company payroll on which such individuals appear (the “ Business Employees ”), together with the country in which each such Business Employee is based, are listed on Schedule 3.14(c) .

(d)   Transferred Sub .  Except as set forth on Schedule 3.14(d) , all of the Liabilities of Transferred Sub under Employee Plans or Employee Agreements with respect to Transferred Employees will survive the Closing pursuant to Applicable Law.  The Transferred Sub has complied in all material respects with any material Applicable Laws relating to employment matters.

(e)   Nature of Representations and Warranties .  The representations and warranties contained in this Section 3.14 are the only representations and warranties being made with respect to compliance with or liability under Applicable Laws relating to the employment matters contemplated by this Section 3.14.

3.15         Financial Information .

(a)   Seller has delivered to Buyer copies of the estimated unaudited pro forma consolidated statement of operations of the Business at December 31, 2005 (the “ Annual Financial Information Date ”) and an estimated unaudited pro forma consolidated statement of operations and statement of net book value of assets at April 1, 2006 (the “ Quarter Financial Information Date ”), respectively (collectively, the “ Financial Statements ”).  The Financial Statements have been prepared internally by Seller for management reporting purposes only and have not been audited by any independent certified public accountants or auditors.

(b)   The Financial Statements have been derived from the books and records of Seller and have not been separately audited.  The Financial Statements do not contain all adjustments

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necessary to comply with GAAP.  The Financial Statements do not reflect the assets, liabilities, revenues and expenses that would have resulted if the Business had operated as an unaffiliated independent company; provided further , that the Financial Statements include estimations for allocation of various revenues, costs and expenses on a reasonable basis.

3.16         Absence of Certain Changes . Since the Quarter Financial Information Date other than with respect to the transactions contemplated by the Acquisition Documents, the Business has been conducted in the ordinary course of business consistent with past practice, and there has not been:

(a)   any creation, assumption or sufferance of (whether by action or omission) the existence of any Lien or Share Encumbrance on any of the Transferred Assets or Transferred Shares, other than (i) Permitted Liens and (ii) Liens that would not reasonably be expected to have a Seller Material Adverse Effect;

(b)   any waiver, amendment, termination or cancellation of any Material Contract or any relinquishment of any material rights thereunder by Seller, or to the Knowledge of Seller any other party, other than, in each such case, actions taken in the ordinary course of business or that are not material with respect to any such Material Contract;

(c)   any material change by Seller or Transferred Sub in its accounting principles, methods or practices or in the manner it keeps its accounting books and records relating to the Business, except any such change required by a change in GAAP or except any change that results from the audit contemplated in Section 6.01(f);

(d)   any material damage, destruction or other casualty loss with respect to any Transferred Asset;

(e)   any Contract for any Selling Party to take any of the actions specified in paragraphs (a) through (d) above; or

(f)    any event, occurrence, development or state of circumstances or facts that has had or has a Seller Material Adverse Effect.

3.17         Environmental Matters . Except as would not reasonably be expected to have a Seller Material Adverse Effect, to the Knowledge of Seller:  (a) Seller and each of its Subsidiaries is in compliance with all applicable Environmental Laws and (b) there are no written claims pursuant to any Environmental Law pending or threatened against Seller or any of its Subsidiaries, in each case in connection with the conduct or operation of the Business or the ownership or use of the Transferred Assets.  The representations and warranties contained in this Section 3.17 are the only representations and warranties being made with respect to compliance with or Liability under Environmental Laws or with respect to any environmental, health or safety matter, including natural resources, related to the Business, the Transferred Assets or the Selling Parties’ ownership or operation thereof.

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3.18         Product Warranties . Seller has delivered copies of Seller’s standard product warranties with respect to the Products set forth in its order acknowledgement forms for the Products.  To the Knowledge of Seller, no outstanding material claims with respect to product warranties relating to the Products exist.

3.19         Transferred Assets . Except for the Excluded Assets (including the Intellectual Property licensed pursuant to the Intellectual Property Agreements), the Excluded Employees and the benefits received by the Business by virtue of it being operated by Seller or one of its Subsidiaries, and as set forth on Schedule 3.19 , the Transferred Sub, Transferred Assets and the assets and services temporarily made available to Buyer pursuant to the Transition Services Agreement and the Supply Agreement constitute all of the material assets of this type (other than any Intellectual Property) used in the conduct of the Business as of the date hereof.

3.20         Customers . Schedule 3.20 lists the names of the ten (10) largest customers to whom the Business has sold Products during the year ended December 31, 2005 (based on dollar amount of revenue recognized in connection with the sale of such Products during such year).  To Seller’s Knowledge, none of the Selling Parties has received any written statement from any customer whose name appears on Schedule 3.20 that such customer will not continue as a customer of the Business after the Closing.

3.21         Investor Representations .

(a)   Economic Risk .  Each of Seller and the Subsidiary Sellers is an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act.  Seller acknowledges that it and the Subsidiary Sellers are able to fend for themselves in the issuance of the Stock Consideration as contemplated by this Agreement and have the ability to bear the economic risks of their investment and ownership of Buyer Common Stock pursuant to this Agreement, and have had the opportunity to ask questions and receive answers of Buyer concerning Buyer and its business and financial condition.

(b)   Purchase for Own Account .  The Stock Consideration will be acquired for Seller’s and Subsidiary Sellers’ own accounts, not as a nominee or agent, and not with a view to or in connection with the sale or distribution of any part thereof.

(c)   Exempt from Registration; Restricted Securities .  Seller and the Subsidiary Sellers understand that the Stock Consideration will not be registered under the Securities Act, on the grounds that the sale provided for in this Agreement is exempt from registration under the Securities Act, and that the reliance of Buyer on such exemption is predicated in part on Seller’s representations set forth in this Agreement.  Seller and the Subsidiary Sellers understand that the shares of Stock Consideration being acquired hereunder are restricted securities within the meaning of Rule 144 under the Securities Act; that the shares of Stock Consideration are not registered and must be held indefinitely unless they are subsequently registered or an exemption from such registration is available.

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(d)   Restrictive Legends .  It is under