ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT

between:

CONEXANT SYSTEMS, INC.,
a Delaware corporation;

and

IKANOS COMMUNICATIONS, INC.,
a Delaware corporation

Dated as of April 21, 2009

TABLE OF CONTENTS

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10.3

Governing Law; Submission to Jurisdiction; Selection of Forum; Waiver of Trial By Jury 49

 

 

Schedule C Severance Policies THIS ASSET PURCHASE AGREEMENT is being entered into as of April 21, 2009, by and between: CONEXANT SYSTEMS, INC. , a Delaware corporation (the “ Seller ”), and IKANOS COMMUNICATIONS, INC. , a Delaware corporation (the “ Purchaser ”). The Seller and the Purchaser are sometimes referred to in this Agreement individually as a “ Party ” and collectively as the “ Parties .” Certain other capitalized terms used in this Agreement are defined in Section 10.18 .

RECITALS

WHEREAS, the Seller is engaged in the business of designing, developing and selling DSL Products (the “ Business ”);

WHEREAS, the Seller desires to sell to the Purchaser and the Purchaser desires to purchase and assume from the Seller certain of the assets and liabilities of the Business, as more particularly set forth herein;

WHEREAS, on the Closing Date, the Seller and the Purchaser will enter into (or, as applicable, will cause one or more of their respective Affiliates to enter into) an IP License Agreement in the form of Exhibit A (the “ IP License Agreement ”), one or more Assignment and Assumption Agreements substantially in the form of Exhibit B (the “ Assignment and Assumption Agreements ”), one or more Intellectual Property Assignment Agreements in the form of Exhibit C (the “ Intellectual Property Assignment Agreements ”), and the Transition Services Agreement;

WHEREAS, on the Closing Date, the Seller and the Purchaser will enter into an Escrow Agreement, substantially in the form of Exhibit D , pursuant to which a portion of the Purchase Price will be deposited into and held in escrow to offset in part potential indemnification claims of the Purchaser under this Agreement; and

WHEREAS, certain of the purchase and sale transactions provided for in this Agreement shall be effected through one or more Local Purchase Agreements which will be subject to the terms, provisions and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and undertakings contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

1.

SALE AND PURCHASE OF ASSETS; RELATED TRANSACTIONS.

1.1 Sale and Purchase of Assets. On the terms and subject to the conditions and other provisions set forth in this Agreement, at the Closing, the Seller will and will cause each of its Affiliates to, sell, convey, transfer, assign and deliver to the Purchaser, and the Purchaser will purchase from the Seller or such Affiliates, all of the rights, title and interests of the Seller and each of its Affiliates into and under the following (which, subject to Section 1.2 , are referred to in this Agreement as the “ Transferred Assets ”), free and clear of all Encumbrances, other than Permitted Encumbrances:

(a)  (i) the patents and patent applications identified on Schedule 1.1(a)(i) , as well as any foreign or multinational counterparts (including Patents, statutory invention registrations, patent registrations industrial designs and industrial models) thereof, whether or not identified on Schedule 1.1(a)(i) , including all rights therein provided by multinational treaties or conventions and all inventions and improvements covered by the claims in such applications and registrations (collectively, the “ Transferred Patents ”); (ii) the patents and patent applications identified on Schedule 1.1(a)(ii) , including all rights therein provided by multinational treaties or conventions and all inventions and improvements covered by the claims in such applications and registrations (collectively, the “ Other Transferred Patents ”); and (iii) the invention disclosures identified on Schedule 1.1(a)(iii) and including all rights therein as well as all inventions and improvements disclosed therein made by the Seller;

(b)  the Intellectual Property Rights (other than Patent rights) in and to or associated with the items identified on Schedule 1.1(b) (the “ Transferred Non-Patent IP ”);

(c)  the Inventory (the “ Transferred Inventory ”);

(d)  (i) the contracts identified on Schedule 1.1(d) , and (ii) any other contract primarily related to the Business, entered into by the Seller or any of its Affiliates after the date of this Agreement but prior to the Closing without violating Section 4.2 of this Agreement (the contracts described in this Section 1.1(d) shall be collectively referred to as the “ Transferred Contracts ”);

(e)  the prototypes, systems, equipment, furniture, fixtures, computer equipment, masks and other fixed assets that are identified on Schedule 1.1(e) (the “ Transferred Fixed Assets ”);

(f)  all causes of action, lawsuits, judgments, claims and demands of any nature available from time to time to or being pursued by the Seller or any of its Affiliates in each case to the extent related to the Business, the Transferred Assets, the Assumed Liabilities or the ownership, operation, use, function or value of any Transferred Asset, whether known or unknown, suspected or unsuspected and whether arising by way of counterclaim or otherwise including the right of the Seller or any of its Affiliates to pursue claims and enforce the obligations of any party to any proprietary/confidential information agreements and non-competition agreements to which any current or former employee, consultant, contractor and actual or potential business partner, counterparty or investor of or in the Seller or any of its Affiliates is a party, in each case to the extent related to the Business or any of the Transferred Assets, except in each case to the extent (i) included in the Excluded Assets or (ii) related to Intellectual Property Rights that are not Transferred Assets;

(g)  all credits, prepaid expenses, deferred charges, advance payments, security deposits, prepaid items and duties to the extent related to any Transferred Asset;

(h)  all Books and Records (except for a reasonable number of copies of embodiments of the Transferred IP, which will be retained by the Seller for use under, and in a manner consistent with, the IP License Agreement); and

(i)  all guaranties, warranties, indemnities and similar rights in favor of the Seller or any of its Affiliates to the extent related to any Transferred Asset.

1.2 Excluded Assets. The Seller will not be required to sell, convey, assign or transfer to the Purchaser, and the Transferred Assets will not include any assets other than the Transferred Assets (collectively, the assets of the Seller not included in the Transferred Assets are referred to herein as the “ Excluded Assets ”); notwithstanding anything to the contrary contained in Section 1.1 , the Seller will not be required to sell or transfer to the Purchaser, and the Transferred Assets will not be deemed to include any of the following or any right or interest in, to or under any of the following:

(a)  any cash, cash equivalents or Accounts Receivable;

(b)  any asset or contract identified on Schedule 1.2(b) ;

(c)  all rights and interests in connection with, and assets of, any “employee benefit plan” within the meaning of Section 3(3) of ERISA and any other employee benefit plan, program, arrangement or agreement established, maintained, sponsored or contributed to by the Seller or any ERISA Affiliate, including the Seller Plans;

(d)  all Intracompany Receivables;

(e)  subject to Section 1.14 , any Transferred Contract if: (i) a Consent is required to be obtained from any Person in order to permit the sale or transfer to the Purchaser of the Seller’s rights under such Transferred Contract and (ii) such Consent shall not have been obtained prior to the Closing;

(f)  all guaranties, warranties, indemnities and similar rights in favor of the Seller or any of its Affiliates to the extent exclusively related to any Seller Product sold prior to the Closing Date; and

(g)  all personnel records of employees that are not Hired Employees and personnel records of any Hired Employees whose consent to such transfer is required under Legal Requirement to the extent such Hired Employee has not consented to such transfer.

1.3 Purchase Price.

(a)  Subject to the terms and conditions of this Agreement, in consideration for the sale of the Transferred Assets to the Purchaser, at the Closing, in addition to the Assumed Liabilities, the Purchaser will pay to the Seller, by wire transfer of immediately available funds, the sum of $47,250,000 less any amounts being paid pursuant to the Local Purchase Agreements (collectively, the “ Cash Closing Payment ”).

(b)  Subject to the terms and conditions of this Agreement, at the Closing, the Purchaser will pay to US Bank National Association, as escrow agent (the “ Escrow Agent ”), by wire transfer of immediately available funds, $6,750,000 (the “ Escrow Amount ” and collectively with the Cash Closing Payment, the “ Purchase Price ”).

(c)  To the extent that the Allocation (as defined in Section 1.9 ) allocates a portion of the Purchase Price to Transferred Assets located in China or India, the Purchaser (or an Affiliate of the Purchaser) shall pay in U.S. dollars (unless otherwise required under local Legal Requirements) that portion of the Cash Closing Payment to the Affiliate of the Seller that is party to the Local Purchase Agreement related to such country. Payment made under this Section 1.3(c) shall reduce the payment required to be made by the Purchaser under Section 1.3(a) (which, in the case of any payment made other than in U.S. dollars, will be converted into U.S. dollars at the applicable Exchange Rate on the day prior to the Closing Date).

1.4 Inventory Adjustment.

(a)  Within 45 days following the Closing Date, the Purchaser shall deliver to the Seller a statement (the “ Purchaser’s Calculation ”) setting forth the Transferred Inventory, net of reserves (“ Net Inventory ”) as of the Closing Date (the “ Closing Inventory Value ”) determined in conformity with GAAP.

(b)  If the Seller disagrees with the Purchaser’s Calculation, the Seller may, within 15 days after delivery of the Purchaser’s Calculation, deliver a notice (the “ Seller’s Objection ”) to the Purchaser disagreeing with the Purchaser’s Calculation and specifying, in reasonable detail (i) the Seller’s calculation of the Closing Inventory Value and (ii) the Seller’s grounds for such disagreement.

(c)  If a Seller’s Objection is duly delivered pursuant to Section 1.4(b) , the Purchaser and the Seller shall, during the 15 days following such delivery, use their reasonable efforts to reach agreement on the Closing Inventory Value. If they are unable to reach such agreement during such period, the parties shall promptly engage the CPA Firm to review promptly the Net Inventory for the purpose of calculating the Closing Inventory Value. In making such calculation, the CPA Firm shall determine the Closing Inventory Value. The CPA Firm shall deliver to the Purchaser and the Seller, as promptly as practicable, a report setting forth such calculation of the Closing Inventory Value. Such report shall be final and binding upon the Purchaser and the Seller (absent manifest error). The cost of the CPA Firm shall be borne equally by the Purchaser and the Seller.

(d)  The Purchaser and the Seller each agree to reasonably cooperate and assist in the determination of the Closing Inventory Value under this Section 1.4 , including by making available to the other party and its representatives, to the extent reasonably requested, reasonable access to books, records, work papers, personnel and representatives in connection with such other party’s preparation and review of the closing statement.

(e)  The Seller shall use its commercially reasonable efforts to manage its purchases and sale of inventory in the Business such that the value, net of excess and obsolete inventory reserves, of the Transferred Inventory at the Closing (determined in accordance with GAAP as applied by the Seller consistent with its past practices), shall not be more than $2,000,000 less than the Base Inventory Value or more than $2,000,000 greater than the Base Inventory Value, unless the Seller has received the written consent of the Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed. The Seller shall also use its commercially reasonable efforts to manage its sales of Seller Products so that the amount of Seller Products remaining in Channel Inventory at the Closing does not have a value (determined in accordance with GAAP as applied by the Seller consistent with its past practices) in excess of $4,000,000. If the value of the Channel Inventory, determined using the Seller’s net sales price to the respective distributors, remaining at the Seller’s distributors at the Closing is greater than $4,000,000, the Seller shall pay to the Purchaser, as an adjustment to the Purchase Price, the amount by which the value of the Channel Inventory at the Closing is greater than $4,000,000, unless the Purchaser in its sole discretion agrees to a higher amount. If the Final Inventory Value is less than the Base Inventory Value, the Seller shall pay to the Purchaser, as an adjustment to the Purchase Price, the amount by which the Final Inventory Value is less than the Base Inventory Value. If the Final Inventory Value is greater than the Base Inventory Value, the Purchaser shall pay to the Seller, as an adjustment to the Purchase Price, the amount by which the Final Inventory Value is greater than the Base Inventory Value; provided that any such payment by the Purchaser to the Seller shall not exceed $2,000,000 unless the Purchaser has delivered an Inventory Consent with respect to the Inventory in excess of such amount. “ Final Inventory Value ” means the Closing Inventory Value (i) as shown in the Purchaser’s Calculation if no Seller’s Objection is duly delivered to the Purchaser in compliance with Section 1.4(b) ; or (ii) if such a notice of disagreement is delivered, (A) as agreed by the Purchaser and the Seller pursuant to Section 1.4(c) or (B) in the absence of such agreement, as shown in the CPA Firm’s calculation delivered pursuant to Section 1.4(c) . “ Channel Inventory ” means the Seller Products shipped by the Seller to its distributors prior to the Closing for resale, regardless of whether any of the following is applicable: (i) the Seller has, in accordance with GAAP, recognized on or before the Closing, the revenue from the sale of such Seller Products to the applicable distributor, or (ii) the distributor to whom the Seller sold the Seller Products has the right to return such Seller Products to the Seller pursuant to the applicable distributor agreement or otherwise.

(f)  During the Pre-Closing Period, the Seller shall operate in the ordinary course of business with respect to its Inventory practices. During the six-month period commencing on the Closing Date, the Seller shall permit its distributors (and the Purchaser shall also permit the Seller’s distributors) to sell any Channel Inventory in their possession at that time. During this same six-month period, the Purchaser shall not sell the same Seller Products at a lower price to the distributors of the Seller holding any Channel Inventory other than in the Purchaser’s ordinary course of business. Schedule 1.4(f) lists the original equipment manufacturers and distributors to which, for the six-month period commencing on the Closing Date, the Purchaser will not sell such products at a lower price or which the Purchaser will not offer any rebate, discount or other price incentive in a manner intended to induce such original equipment manufacturers or distributors to return any of the Channel Inventory to the Seller. From and after the date that is six months after the Closing Date, the Seller shall accept Channel Inventory from its distributors in return for a credit or payment therefor consistent with the applicable distributor agreement. The Seller shall promptly notify the Purchaser in writing of the return of any such Channel Inventory, and for a period of 20 days after receipt of such notice, the Purchaser shall have the right to purchase from the Seller any such returned Channel Inventory at the Seller’s standard cost. If the Purchaser declines to purchase, or does not respond to the Seller within such 20 day period, the Seller shall destroy such returned Channel Inventory.

(g)  Any payment pursuant to this Section 1.4 shall be made within 10 days after the determination of the Final Inventory Value by the Seller or the Purchaser, as the case may be, by wire transfer of immediately available funds to such account or accounts as may be designated by the Seller or the Purchaser, as the case may be.

1.5 Escrow Fund.

(a)  On or prior to the Closing, the Seller and the Purchaser shall enter into an escrow agreement, in substantially the form attached hereto as Exhibit D (the “ Escrow Agreement ”), with the Escrow Agent. Pursuant to the terms of the Escrow Agreement, the Purchaser will create the escrow fund (the “ Escrow Fund ”) on the date of the Closing by depositing the Escrow Amount with the Escrow Agent on the date of the Closing. The Escrow Agent shall hold the Escrow Fund in an escrow account and invest the Escrow Fund in a money market fund mutually agreed upon by the Seller and the Purchaser. In addition, the Escrow Agent will not transfer any interest in such Escrow Fund except pursuant to the terms of the Escrow Agreement.

(b)  Subject to the terms of the Escrow Agreement, the Escrow Amount still held in escrow (including accrued interest to the extent provided in the Escrow Agreement) and not subject to pending, unresolved claims thereunder shall be released from the Escrow Fund to the Seller five (5) Business Days following the end of the Survival Period.

1.6 Assumption of Liabilities.

(a)  On the terms and subject to the conditions set forth herein, at the Closing, the Purchaser shall assume the following obligations and liabilities of the Seller (the “ Assumed Liabilities ”): (i) all Liabilities arising on or after the Closing under the Transferred Contracts (but excluding, for any breach arising in whole or in part on or prior to the Closing Date, that portion of the Liability relating to the pre-Closing breach); (ii) all Liabilities with respect to Taxes arising out of or related to the operation of the Business or the Transferred Assets after the Closing Date; (iii) all Liabilities with respect to Open Incoming POs entered into (A) on or before the date hereof or (B) otherwise in compliance with this Agreement (but excluding, for any breach arising in whole or in part on or prior to the Closing Date, that portion of the Liability relating to the pre-Closing breach); (iv) all Liabilities with respect to Open Outgoing POs for normal operating expenses entered into by the Seller in the ordinary course of business and in accordance with this Agreement and as listed on Schedule 1.6(a) which shall be delivered by the Seller to the Purchaser seven (7) days prior to the Closing and dated as of such date; (v) all Liabilities for product warranty claims and product liability claims with respect to Seller Products manufactured or sold after the Closing Date; (vi) all Liabilities to the extent arising out of, relating to or in connection with the ownership or operation of the Business or the Transferred Assets after the Closing Date; (vii) all Liabilities for all accrued but unpaid vacation, holiday, flexible time off and sick pay of the Specified Employees, except for the Specified Employees in Noida, India (collectively, “ Vacation Accrual ”); and (viii) any Liabilities for Patent infringement with respect to activities conducted by the Purchaser after the Closing Date, including the sale of any Seller Products (including any Seller Products included in the Transferred Inventory) after the Closing Date. For the avoidance of doubt, Assumed Liabilities shall not include any Excluded Liabilities.

(b)  At the Closing, the Purchaser shall deliver to the Seller the Assignment and Assumption Agreements. For the avoidance of doubt it is hereby clarified that the Purchaser’s assumption of liabilities under this Section 1.6 shall be considered part of the consideration paid for the Transferred Assets. Taxes shall only be an Assumed Liability to the extent provided for in this Section 1.6 .

1.7 Excluded Liabilities. The Seller and its Affiliates shall retain and be responsible for all Excluded Liabilities.

1.8 Sales and Transfer Taxes; VAT; Tax Matters.

(a)  Any sales taxes, use taxes, transfer taxes, documentary charges, recording fees, Import Duties, filing fees or similar taxes, charges, fees or expenses (other than Taxes attributable to the Seller’s gain or income from the sale of the Transferred Assets or Seller’s ownership, use and operation of the Business or any Transferred Assets or expenses associated with a failure by the Seller to appropriately remit Taxes or timely file the appropriate Tax Returns) (all such amounts are collectively referred to herein as “ Transfer Taxes ”) that may become payable in connection with the sale of the Transferred Assets to the Purchaser and the assumption by the Purchaser of the Assumed Liabilities or any of the other transactions contemplated by the Transactional Agreements, other than VAT, shall be split evenly such that one-half of such amounts shall be borne and paid by the Seller and one-half shall be borne and paid by the Purchaser. Notwithstanding the foregoing, the Purchaser shall bear all government fees, Transfer Taxes and other costs that arise directly as the result of the de-bonding and transfer of the de-bonded Transferred Assets in India, including, without limitation, import duties levied as a direct result of the de-bonding process for assets held by the Seller in a bonded customs warehouse arrangement under the Software Technology Parks of India program and any costs that would be incurred regardless of whether or not the Transferred Assets are de-bonded shall be split evenly such that one-half of such amounts actually incurred shall be borne and paid by the Seller and one-half shall be borne and paid by the Purchaser.

(b)  The Purchase Price under this Agreement in respect of the sale of the Transferred Assets and the assumption of the Assumed Liabilities is exclusive of any VAT in respect of which the provisions of this Section 1.8(b) shall apply. To the extent that any relevant jurisdiction provides for relief or exemption from VAT on the transfer of a business or a company or treats such a transaction as being non-taxable for VAT purposes, including as a result of it being a transfer of a going concern, the Seller and the Purchaser shall each use all reasonable efforts to secure such treatment as regards the sale of the Transferred Assets and the assumption of the Assumed Liabilities (insofar as the Business is carried on in the relevant jurisdiction) under this Agreement. Such efforts shall, for the avoidance of doubt, include the making of an election or application in respect of VAT in any such jurisdiction or entering into a written agreement. The Purchaser agrees that it will use the Transferred Assets acquired in carrying on the same kind of business, whether or not as part of its existing business, as the Seller, unless otherwise explicitly stated in this Agreement.

If VAT is chargeable, the Seller shall provide the Purchaser with a valid VAT invoice that meets all requirements imposed by the relevant Governmental Entity with responsibility for Taxes and which specifically states the VAT (or equivalent, if any) and meets further conditions necessary to allow the Purchaser to obtain relief from such VAT to the extent such relief is available. Provided the Purchaser is in receipt of a valid VAT invoice, the Purchaser will, subject to the provision of the preceding paragraph, pay to the Seller such VAT in addition to any amounts expressed in this Agreement.

The VAT amounts shall be paid in the currency in which the VAT in question must be accounted for in the relevant jurisdiction.

1.9 Allocation of Purchase Price. The Seller and the Purchaser recognize their mutual obligations pursuant to Section 1060 of the Code (and any comparable provisions of any other Tax law) to allocate the Purchase Price and all other items properly included in “consideration”, if any, consistent with the principles set forth therein, and to timely file IRS Form 8594 (or comparable form) and subsequent Forms 8594 (or comparable forms), if any are required, with each of their respective Tax Returns (the “ Asset Allocation Statements ”). Accordingly, the Seller and the Purchaser agree to cooperate in the preparation of any Asset Allocation Statements. Within ninety (90) Business Days after the Closing Date, the Purchaser shall deliver to the Seller a statement of allocation of the Purchase Price and all other items properly included in “consideration,” if any, among the Transferred Assets, which shall be prepared in a manner consistent with the principles set forth in Section 1060 of the Code (the “ Allocation ”). The Purchaser and the Seller will endeavor in good faith to resolve any differences with respect to the Allocation within 60 days following the Seller’s receipt of the Allocation from the Purchaser. If the Seller withholds its consent to the Allocation after such 60-day period, then any remaining disputed matters will be finally and conclusively determined by an independent accounting firm of recognized national standing not otherwise providing services to the Seller or the Purchaser (the “ Allocation Arbiter ”) jointly selected by the Purchaser and the Seller. Promptly, but not later than 20 days after its acceptance of appointment hereunder; the Allocation Arbiter will determine (based solely on presentations by the Seller and the Purchaser and not by independent review) only those matters in dispute and will render a written report as to the disputed matters and the resulting allocation of Purchase Price and all other items properly included in “consideration,” if any, which report shall be conclusive and binding upon the parties. Each of the Seller and the Purchaser shall (i) be bound by the Allocation for purposes of determining any Taxes, (ii) prepare and file, and cause its Affiliates to prepare and file, its Tax Returns on a basis consistent with the Allocation, and (iii) take no position, and cause its Affiliates to take no position, inconsistent with the Allocation on any applicable Tax Return or in any proceeding before any taxing authority or otherwise; provided, however, that nothing contained in this subclause (iii) shall prevent the Purchaser or the Seller from settling any proposed deficiency or adjustment by any taxing authority based upon or arising out of the Allocation, and neither the Purchaser nor the Seller shall be required to litigate before any court any proposed deficiency or adjustment by any taxing authority challenging such Allocation. In the event that the Allocation is disputed by any taxing authority, the Party receiving notice of the dispute shall promptly notify the other Party hereto concerning resolution of the dispute. At least three (3) Business Days prior to the Closing, the Seller and the Purchaser shall in good faith allocate that portion of the Purchase Price representing the Transferred Assets located in India and China.

1.10 Ancillary Agreements. At the Closing, the Seller and the Purchaser, or their respective Affiliates, as applicable, will enter into the following additional agreements to the extent not entered into previously (the “ Ancillary Agreements ”):

(a)  the IP License Agreement;

(b)  the Assignment and Assumption Agreements;

(c)  the Transition Services Agreement;

(d)  the Escrow Agreement;

(e)  the Local Purchase Agreements; and

(f)  the Intellectual Property Assignment Agreements.

1.11 Closing. The closing of the purchase of the Transferred Assets by the Purchaser (the “ Closing ”) will take place at the offices of Latham & Watkins LLP, 140 Scott Drive, Menlo Park, California 94025 at 8:00 A.M. California time, on the third Business Day after the satisfaction or waiver of the last to be satisfied or waived of the conditions set forth in Sections 5 and 6 (other than those conditions that by their nature are to be satisfied at the Closing but subject to the fulfillment or waiver of those conditions). For purposes of this Agreement, “ Closing Date ” means the date on which the Closing actually takes place.

1.12 Deliveries by the Purchaser. At the Closing, the Purchaser or an Affiliate of the Purchaser shall deliver, or cause to be delivered:

(a)  to the Seller the following (except to the extent actually delivered to the Seller or an Affiliate of the Seller at or prior to the Closing pursuant to a Local Purchase Agreement):

(i) the Cash Closing Payment in immediately available funds by wire transfer to an account or accounts which have been designated by the Seller at least four (4) Business Days prior to the Closing Date;

(ii) a duly executed counterpart of each Assignment and Assumption Agreement and other instruments of assumption or other documents in form and substance reasonably acceptable to the Purchaser and the Seller, as may be necessary to effect the Purchaser’s assumption of the Assumed Liabilities and the effective assignment of any Transferred Contracts or other Transferred Assets;

(iii) a duly executed counterpart of each of the other Ancillary Agreements;

(iv) the certificate to be delivered pursuant to Section 6.8 ; and

(v) such other customary instruments of transfer, assumptions, filings or documents, in form and substance reasonably satisfactory to the Seller, as may be required to give effect to this Agreement.

1.13 Deliveries by the Seller. At the Closing, the Seller or an Affiliate of the Seller shall deliver, or cause to be delivered, to the Purchaser or an Affiliate of the Purchaser the following (except to the extent actually delivered to the Purchaser or one of its Affiliates at or prior to the Closing pursuant to a Local Purchase Agreement):

(a)  a duly executed counterpart of each Assignment and Assumption Agreement, bill of sale and any other appropriate document of transfer in form and substance reasonably acceptable to the Purchaser and the Seller, transferring the tangible personal property included in the Transferred Assets to the Purchaser and assigning to the Purchaser all rights of the Seller and its Affiliates in and to all of the Transferred Contracts;

(b)  a duly executed counterpart of each of the other Ancillary Agreements;

(c)  assignments, in form and substance reasonably acceptable to the Purchaser and, if applicable, as required by any Governmental Entity with which the Seller’s or any of its Affiliates’ rights to any Transferred Intellectual Property have been filed, assigning to the Purchaser the Transferred Intellectual Property;

(d)  a duly executed certification pursuant to Treasury Regulation Section 1.1445-2(b)(2) that the Seller is not a foreign Person; it being understood that notwithstanding anything to the contrary contained herein, if the Seller fails to provide the Purchaser with such certification, the Purchaser shall be entitled to withhold the requisite amount from the Purchase Price in accordance with Section 1445 of the Code and the applicable Treasury Regulations;

(e)  evidence of the obtaining of each Seller Required Approval that is a condition to the Purchaser’s obligations under Section 5.8 ;

(f)  the certificate to be delivered pursuant to Section 5.9 ; and

(g)  such other customary instruments of transfer, assumptions, filings or documents, in form and substance reasonably satisfactory to the Purchaser, as may reasonably be deemed necessary or appropriate by the Purchaser to give effect to this Agreement.

1.14 Nonassignability of Assets. Notwithstanding anything to the contrary contained in this Agreement, to the extent that the sale, assignment, sublease, transfer, conveyance or delivery or attempted sale, sublease, assignment, transfer, conveyance or delivery to the Purchaser of any asset that would be a Transferred Asset or any claim or right or any benefit arising thereunder or resulting therefrom is prohibited by any Legal Requirement or would require any Governmental Authorizations or third party authorizations, approvals, consents or waivers, and such authorizations, approvals, consents or waivers shall not have been obtained prior to the Closing, the Closing shall proceed without the sale, assignment, sublease, transfer, conveyance or delivery of such asset unless such failure causes a failure of any of the conditions to Closing set forth in Section 5 , in which event the Closing shall proceed only if the failed condition is waived by the party or parties entitled to the benefit thereof. In the event that the failed condition is waived and the Closing proceeds without the transfer, sublease or assignment of any such asset, then following the Closing, the parties shall use their reasonable efforts, and cooperate with each other, to obtain promptly such authorizations, approvals, consents or waivers; provided , however , that none of the Seller or the Purchaser or any of their respective Affiliates shall be required to pay any consideration to obtain any contractual consent or waiver, other than (i) any de minimis fees, expenses or other consideration or (ii) any such fees, expenses or other consideration required to be paid pursuant to the express provisions of the contract requiring such consent, which consideration, fees or expenses shall be paid by the party obligated to seek such consent, nor shall any such party be required to pay any amounts in respect of any Governmental Authorization other than filing, recordation or similar fees which shall be shared equally by the Seller and the Purchaser. Pending such authorization, approval, consent or waiver, the parties shall take all reasonable and lawful arrangements to provide to the Purchaser the benefits of use of such asset and to the Seller or its Affiliates the benefits, including any indemnities, that they would have obtained had the asset been conveyed to the Purchaser at the Closing. Once authorization, approval, consent or waiver for the sale, assignment, sublease, transfer, conveyance or delivery of any such asset not sold, assigned, subleased, transferred, conveyed or delivered at the Closing is obtained, the Seller shall or shall cause the relevant Affiliates to, assign, transfer, convey and deliver such asset to the Purchaser at no additional cost. To the extent that any such asset cannot be transferred or the full benefits of use of any such asset cannot be provided to the Purchaser following the Closing pursuant to this Section 1.14 , then the Purchaser and the Seller shall enter into such arrangements (including subleasing, sublicensing or subcontracting) to provide to the parties hereto the economic (taking into account Tax costs and benefits) and operational equivalent, to the extent permitted, of obtaining such authorization, approval, consent or waiver and the performance by the Purchaser of the obligations thereunder. The Seller shall hold in trust for and pay to the Purchaser promptly upon receipt thereof, all income, proceeds and other monies received by the Seller or any of its Affiliates in connection with its use of any asset (net of any Taxes and any other costs imposed upon the Seller or any of its Affiliates) in connection with the arrangements under this Section 1.14 .

1.15 Affiliate Acquisitions. Notwithstanding anything to the contrary contained in this Agreement, (i) the Purchaser may elect to have any or all of the Transferred Assets conveyed or transferred to, or any of the Assumed Liabilities assumed by, one or more of the Purchaser’s Affiliates pursuant to one or more Local Purchase Agreements, and (ii) the Seller may elect to have any or all of the Transferred Assets located outside the United States of America conveyed from or transferred by, or any of the Assumed Liabilities assigned by, one or more of the Seller’s Affiliates pursuant to one or more Local Purchase Agreements, in each case so long as no such election results in any greater cost or obligation than the Seller or the Purchaser would otherwise have had; provided , however , that no such election shall relieve the Purchaser or the Seller of any of its obligations to the other Party and such Party’s Affiliates hereunder with respect to any obligations under this Agreement, the Assumed Liabilities or otherwise. The Purchase Price shall be allocated among those Transferred Assets to be conveyed to the Purchaser and those Transferred Assets to be conveyed to the respective Affiliates of the Purchaser, but in no event shall the amount of the Purchase Price or any other items to be paid for the Transferred Assets, the nature of the Assumed Liabilities to be assumed, the obligation to pay Taxes or transfer taxes or the allocation of risk and responsibility between the Seller and the Purchaser be modified to the detriment of the Seller or the Purchaser or any of their respective Affiliates as a result of the delivery of separate bills of sale, assignments and other closing documents.

1.16 Withholding. The Purchaser shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to the Seller or any other Person such amounts as the Purchaser is required to deduct and withhold under the Code, or any Tax law, with respect to the making of such payment. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of whom such deductions and withholding was made.

2.

REPRESENTATIONS AND WARRANTIES OF THE SELLER.

The Seller represents and warrants to the Purchaser, as of the date hereof and as of the Closing, as follows, subject in each case to such exceptions as are specifically set forth in the attached disclosure schedules of the Seller (the “ Seller Disclosure Schedules ”), it being understood that each exception set forth in a section or subsection of the Seller Disclosure Schedules shall qualify only the corresponding representation and warranty set forth in this Agreement and shall qualify other representations and warranties in this Agreement to the extent (but only to the extent) that it is readily apparent on its face from a reading of the Seller Disclosure Schedules that such disclosure is intended to be applicable to such other representations and warranties:

2.1 Due Organization and Qualification. The Seller (and in the case of any Local Purchase Agreement, the relevant Seller Affiliate) is a legal entity duly organized, validly existing and (to the extent such concept is applicable in such jurisdiction) is in good standing under the laws of its respective jurisdiction of organization and has all requisite power and authority to own, lease and operate its assets (including any Transferred Assets) and to carry on the Business as currently conducted. The Seller (and in the case of any Local Purchase Agreement, the relevant Seller Affiliate) is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership or the operation of the Transferred Assets or the conduct of the Business requires such qualification. Section 2.1 of the Seller Disclosure Schedules lists each Affiliate of the Seller that owns Transferred Assets (each such Affiliate, a “ Seller Affiliate ,” together the “ Seller Affiliates ”) and its jurisdiction of incorporation.

2.2 Title to Assets. As of the Closing Date, the Seller (or in the case of any Local Purchase Agreement, the relevant Seller Affiliate) will have good and valid title to the Transferred Inventory and the Transferred Fixed Assets, free and clear of any Encumbrances, except for Permitted Encumbrances.

2.3 Financial Information. The quarterly statements of product line contribution for the fiscal year ended October 3, 2008 and the three months ended January 2, 2009 set forth in Section 2.3 of the Seller Disclosure Schedules (the “ Financial Information ”), have been prepared from the books and records of the Seller and present fairly in all material respects the revenues and direct expenses of the Business for such period. The revenues and direct expenses set forth in the Financial Information were recognized in accordance with the Seller’s historical revenue recognition and expense policies and practices all of which are consistent with GAAP. Any allocations made by the Seller and applicable to the expenses recorded on the statements of revenue and expenses included in the Financial Information have been made and recorded on a systematic and rational basis. The Seller maintains a system of internal accounting controls applicable to the Business sufficient to provide reasonable assurances, with respect to the Seller and its Subsidiaries, that (i) all transactions are executed in accordance with management’s general or specific authorization and (ii) all transactions are recorded as necessary to permit the preparation of consolidated financial statements in conformity with GAAP and to maintain proper accountability for items. The Seller’s enterprise-wide system of internal accounting controls is sufficient as applicable to the Seller and its Subsidiaries taken as a whole to provide reasonable assurances that (i) access to their properties and assets is permitted only in accordance with management’s general or specific authorization and (ii) the recorded accountability for items is compared with the actual levels at reasonable intervals and appropriate action is taken with respect to any differences. There are no credits, prepaid expenses, deferred charges, advance payments, security deposits, prepaid items or duties that are primarily, but not exclusively, related to any Transferred Assets that are individually or in the aggregate material to the Business.

2.4 Intellectual Property.

(a)  Section 2.4(a) of the Seller Disclosure Schedules sets forth a complete and accurate list of any and all contracts pursuant to which the Seller or any of its Subsidiaries has granted to any Person any express right to use, exercise, or otherwise practice any right under any Transferred IP, indicating for each such contract the title, the parties, and the date executed, other than (i) contracts pursuant to which a customer purchasing or licensing a Seller Product from the Seller in the ordinary course of business acquires only a nonexclusive right to use such product, and (ii) contracts entered into after the date of this Agreement by the Seller without violation of Section 4.2 (the “ Outbound IP Licenses ”).

(b)  Section 2.4(b)(i) of the Seller Disclosure Schedules sets forth a complete and accurate list of any and all written contracts pursuant to which the Seller or any of its Subsidiaries is a party and has been granted any express right by the other party to use, exercise, or otherwise practice any right under any Intellectual Property of such other party used in or necessary to the conduct of the Business as currently conducted by the Seller, and which are Transferred Contracts, indicating for each such contract the title, the parties, the date executed, and whether or not it is exclusive (the “ Transferred Inbound IP Licenses ” and together with the Outbound IP Licenses, the “ IP Contracts ”). Section 2.4(b)(ii) of the Seller Disclosure Schedules sets forth a complete and accurate list of any and all written contracts (or, if the Seller is unable to locate a copy of the contract or if the Seller’s confidentiality obligations under such a contract prevent Seller from disclosing such contract, in lieu of listing such written contract, the Seller may include a description of the Intellectual Property licensed under the contract and the vendor from whom such Intellectual Property is licensed) pursuant to which the Seller or any of its Subsidiaries has been granted any express right to use, exercise, or otherwise practice any right under any Intellectual Property of such other party that is related to any Seller Product and either (x) is incorporated into any Seller Product (or any component thereof) or any item of Transferred Non-Patent IP, or (y) comprises a software tool or other Intellectual Property necessary for the development, design, manufacture, support, maintenance, or distribution of any Seller Product (excluding licenses for general purpose office software, e.g. Microsoft Office, Microsoft Windows), but which in each case, are not being transferred to the Purchaser as Transferred Contracts, indicating for each such contract or arrangement the title, the parties, the date executed, and whether or not it is exclusive (the “ Non-Transferred Inbound IP Licenses ”).

(c)  The Transferred Non-Patent IP, the Transferred Patents, the Intellectual Property that is the subject of the Transferred Inbound IP Licenses and the Non Transferred Inbound IP Licenses, the Licensed Non-Patent IP, and the Licensed Patents collectively include all of the Intellectual Property owned by or licensed to the Seller that (i) is incorporated into any Seller Product (or any component thereof), or (ii) comprises a software tool necessary for the development, design, manufacture, support, maintenance, or distribution of any Seller Product (excluding licenses for general purpose office software, e.g. Microsoft Office, Microsoft Windows).

(d)  Except pursuant to those outbound Intellectual Property licenses or non-disclosure agreements included on Schedule 1.1(d ), consummation of the transactions contemplated by this Agreement will not place the Seller or its Subsidiaries in breach or default of any contract to which Seller is a party, or create any license under or lien on any Transferred IP. With respect to any of the outbound Intellectual Property licenses or non-disclosure agreements included on Schedule 1.1(d) , consummation of the transactions contemplated by this Agreement will not result in a breach or default of any such Transferred Contracts, or trigger any modification, termination or acceleration thereunder, or create any license under or lien on any Transferred IP, except to the extent such breach, default, modification, termination, acceleration, license or lien does not, individually or in the aggregate, have a materially adverse effect on the Transferred IP, taken as a whole.

(e)  Except as set forth in Section 2.4(e) of the Seller Disclosure Schedules, immediately prior to the Closing, the Seller (or in the case of any Local Purchase Agreement, the relevant Seller Affiliate) will exclusively own (beneficially and in the case of Patents or otherwise as applicable, of record), and will assign, transfer and convey to the Purchaser all right, title, and interest to and in all Transferred IP free and clear of any liens or other material encumbrances (other than encumbrances arising under the Outbound IP Licenses).

(f)  The Seller and its Subsidiaries have taken commercially reasonable steps to preserve the confidential nature of the Transferred IP that they, in their reasonable business judgment, determine should be held as confidential or proprietary (including, without limitation, any trade secrets). Without limiting the foregoing, the Seller and its Subsidiaries have enforced a policy of requiring each employee, consultant, contractor, and potential business partner or investor receiving access to such Transferred IP to execute confidentiality agreements substantially consistent with the Seller’s standard forms thereof (complete and current forms of which have been delivered or made available to the Purchaser).

(g)  To the Seller’s Knowledge, all Registered IP (other than pending applications for Registered IP) is valid, subsisting, and enforceable. The Seller is not subject to any outstanding order, judgment or decree issued by a court of competent jurisdiction adversely affecting the Seller’s or its Subsidiaries’ use of, or rights to, any Transferred IP. All filings, payments, and other actions required to be made or taken to maintain each item of Registered IP in full force and effect have been made by the applicable deadline. As of the date of this Agreement, Schedule B contains a complete and accurate list of all actions (including payment of fees) necessary within the 120 day period following the Closing Date, to maintain or otherwise to keep in full force and effect the Registered IP. As of the date of this Agreement, except as set forth on Schedule B , neither Seller’s legal department, Seller’s outside patent counsel retained to handle the relevant matter, nor any of Seller’s officers has been notified in writing of any pending or threatened interference, opposition, reissue, reexamination, or other legal proceeding in which the scope, validity, ownership, right to use, or enforceability of any Transferred IP is being contested or challenged. The Seller shall update Schedule B such that it is complete and accurate as of two (2) days prior to the Closing Date and shall deliver such updated schedule to the Purchaser two (2) days prior to the Closing Date.

(h)  Except as set forth in Section 2.4(h) of the Seller Disclosure Schedules, the conduct of Business as currently conducted (including the development, manufacture, use and sale of any Seller Products) does not infringe upon, misappropriate, or violate any Intellectual Property Rights of any Person. Except as set forth in Section 2.4(h) of the Seller Disclosure Schedules, since January 1, 2005, neither the Seller nor any of its Subsidiaries has been notified in writing of any allegation that (i) any conduct of the Business or any Seller Product infringes upon, misappropriates or violates the Intellectual Property Rights of any Person, or (ii) any particular Seller Product requires a license under the Intellectual Property Rights of any Person.

(i)  Except to the extent disclosed in Section 2.4(i) of the Seller Disclosure Schedules, neither Seller’s legal department, Seller’s outside patent counsel retained to handle the relevant matter, nor any of Seller’s officers has been notified in writing of any litigation, opposition, cancellation, proceeding, objection, or claim pending, asserted or threatened against the Seller or its Subsidiaries concerning the ownership, validity, registerability, enforceability, infringement or use of, or licensed right to use, any Transferred Intellectual Property or Licensed Non-Patent IP.

(j)  No claims for misappropriation, infringement, dilution or violation of any Transferred IP have been brought or threatened against any Person by or on behalf of the Seller or any of its Subsidiaries, and the Seller has no specific Knowledge that any Person is misappropriating, infringing, diluting or violating any specific Transferred IP.

(k)  Except as set forth in Section 2.4(k) of the Seller Disclosure Schedule, the software owned by the Seller or its Affiliates and included in the Transferred IP is not the subject of any escrow, or similar agreement or arrangement, giving any third party rights to the source code for such software upon the occurrence of certain events, except where such rights to the source code do not, individually or in the aggregate, have a materially adverse effect on the Transferred IP, taken as a whole.

(l)  Section 2.4(l)(i) of the Seller Disclosure Schedules sets forth a complete and accurate list of the Seller Products that are, in whole or in part, subject to any open source or other type of license or agreement that: (i) conditions the licensing, distribution or making available of the Seller Products on the disclosure or provision of all or a portion of the source code for such Seller Products, (ii) prohibits or limits the Seller or any of its Subsidiaries from charging a fee or receiving consideration in connection with licensing, sublicensing, or distributing any Seller Products, or (iii) requires the licensing of any Seller Product for the purpose of making derivative works (any such open source or other type of license or agreement described in clause (i), (ii), or (iii) above, a “ Limited License ”). By way of clarification, but not limitation, the term “ Limited License ” shall include: (A) GNU’s General Public License (GPL) or Lesser/Library GPL (LGPL); (B) the Artistic License (e.g., PERL); (C) the Mozilla Public License; (D) the Netscape Public License; (E) the Sun Community Source License (SCSL); and (F) the Sun Industry Standards License (SISL). Except as set forth in Section 2.4(l)(ii) of the Seller Disclosure Schedules, the Seller has not distributed any Seller Products in a manner that would require the Seller to make available under a Limited License the source code for the DSL Products’ data pump firmware that is contained in the Transferred IP.

(m)  Except as set forth in Section 2.4(m) of the Seller Disclosure Schedules, no government funding, facilities of a university, college, other educational institution, or research center was used in the creation or development of the Transferred IP in a manner that would give such government, university, college, educational institution, or research center any rights in the Transferred IP as a result.

(n)  Except for those exclusive licenses to the Transferred IP included in the outbound Intellectual Property licenses or non-disclosure agreements included on Schedule 1.1(d), t he Seller has not granted any exclusive licenses to any of the Transferred IP. The exclusive licenses granted under any of the outbound Intellectual Property licenses or non-disclosure agreements included on Schedule 1.1(d) do not, individually or in the aggregate, have a materially adverse effect on the Transferred IP, taken as a whole.

(o)  As of the Closing Date, except as set forth in Section 2.4(o) of the Seller Disclosure Schedules, the Seller (or in the case of any Local Purchase Agreement, the relevant Seller Affiliate) will have good and valid title to the Transferred Intellectual Property, free and clear of any Encumbrances, except for Permitted Encumbrances.

(p)  Notwithstanding any provision of this Agreement to the contrary, the Seller makes no representations or warranties with respect to the Other Transferred Patents.

2.5 Transferred Contracts. Each Transferred Contract identified on Schedule 1.1(d) is valid, is in full force and effect and is enforceable against each party thereto in accordance with the express terms thereof, and will continue to be so immediately following the consummation of the transactions contemplated by this Agreement, except as such enforceability may be limited by: (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (b) rules of law governing specific performance, injunctive relief and other equitable remedies. With respect to each Transferred Contract: (a) the Seller has not (and to the Seller’s Knowledge no other Person has), and the Seller has not received any written notice claiming that the Seller has, breached or violated such Transferred Contract and (b) there has not been an event of default, or any event or condition that, after notice or lapse of time or both, would constitute a violation, breach or event of default thereunder on the part of the Seller, or to the Seller’s Knowledge, any other party thereto. There are no material disputes pending or to the Seller’s Knowledge threatened under any Transferred Contract. No party to any Transferred Contract has given written notice to the other party to such contract of its intention to terminate, change the scope of rights under, or fail to renew such contract. Except for the Non-Transferred Inbound IP Licenses and except as set forth in Section 2.5 of the Seller Disclosure Schedules, the Transferred Contracts identified on Schedule 1.1(d) are all the material contracts of the Seller and its Affiliates primarily related to the Business or necessary for the design, development, engineering-related technical support or engineering of the Seller Products as that work is currently conducted by the Seller.

2.6 Compliance with Legal Requirements. Except as set forth in Section 2.6 of the Seller Disclosure Schedules, (a) The Seller and each of its Affiliates has at all relevant times and currently is conducting the Business and operating the Transferred Assets in compliance in all material respects with all Legal Requirements relevant to the ownership, operation or use of the Business or the Transferred Assets; (b) neither the Seller nor any of its Affiliates has received any written notice alleging any failure to comply with any Legal Requirement relating to the ownership, operation or use of the Business or the Transferred Assets; (c) the Seller and each of its Affiliates possess all Governmental Authorizations necessary for the ownership, operation or use of the Business or the Transferred Assets as currently operated or used each of which is valid and in full force and effect and (d) no Governmental Authorizations or Non-Governmental Authorizations or applications therefor are required to be held by the Seller or any of its Affiliates that are specific to the design, manufacture, sale and distribution of any Seller Products (as opposed to other goods, products or services).

2.7 Employee Matters.

(a)  Section 2.7(a) of the Seller Disclosure Schedules specifies, with respect to each Specified Employee as of the date of this Agreement: (i) the original date of employment of such employee; (ii) the position held by such employee as of the date of this Agreement; (iii) whether such employee is not available to perform work as of the date of this Agreement because of disability or other leave; (iv) location of such employee; (v) total annual remuneration, including a breakdown of salary, bonus, commissions or other incentive compensation for the twelve (12) month period preceding the date of this Agreement; (vi) for any benefit that takes into account length of service to the employer, the date upon which each such term of employment with the Seller or any of its Subsidiaries became effective; (vii) employment authorization or work visa status; and (viii) all amounts payable with respect to such employee including for accrued but unpaid vacation and other paid time off, if such employee were terminated without cause on or prior to a date within one hundred twenty (120) days of the date hereof, all separately stated for each element of such total amount payable.

(b)  With respect to the Specified Employees: (i) no collective bargaining or other agreement exists between the Seller and any labor organization, trade union or works counsel; (ii) the Seller has not received written notice that any labor representation question presently exists, and, to the Seller’s Knowledge, no petition concerning representation under the National Labor Relations Act, as amended, or other labor or employment law is pending or threatened; (iii) no unfair labor practice charge or complaint is pending or, to the Seller’s Knowledge, threatened, before the National Labor Relations Board or similar agency or entity; and (iv) there is, and during the three years immediately preceding the date of this Agreement there has been, no labor dispute, strike, picketing, work slowdown, work stoppage or handbilling pending or, to the Seller’s Knowledge, threatened.

(c)  All amounts owing in respect of Specified Employees’ vacation pay and holiday pay have been fully accrued in the Seller’s books and records and reflected as such in the Seller’s financial statements.

2.8 Employee Benefits; ERISA.

(a)  Section 2.8(a) of the Seller Disclosure Schedules sets forth a true and complete list of: (i) all “employee benefit plans” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)) and any other material employee benefit or compensation plans, policies, trust funds or arrangements (whether written or unwritten, insured or self-insured, domestic or foreign) maintained or contributed to (or with respect to which an obligation to contribute has been undertaken) by the Seller or any Affiliate of the Seller on behalf of any employee of the Business or their dependents, spouses, or beneficiaries, including any material plan, policy or arrangement providing for health, life, vision or dental insurance coverage, workers’ compensation, disability benefits, supplemental unemployment benefits, vacation benefit, fringe benefits, for profit sharing, deferred compensation, bonuses, stock options, stock appreciation or other forms of incentive compensation or post-retirement insurance, compensation or benefits and (ii) other than individual employment agreements or offer letters executed in substantially the Seller’s (or its applicable Affiliate’s) form of employment agreement or offer letter, copies of which have been made available to the Purchaser, all material contracts with any employee of the Business, including any employment, termination, severance, retention, non-competition, compensation or change in control arrangements or any arrangement relating to a sale of the Business (each a “ Seller Plan ”). True and complete copies of each of the Seller Plans, amendments thereto and all related service agreements, summaries and summary plan descriptions have been made available to the Purchaser.

(b)  None of the Seller, any entity that would be deemed a “single employer” with the Seller under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA (an “ ERISA Affiliate ”) or any of their respective predecessors has contributed to, contributes to, has been required to contribute to, or otherwise participated in or participates in or in any way has any liability, directly or indirectly with respect to (i) any plan subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA, including any “multiemployer plan” (within the meaning of Sections 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code) or any single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) that is subject to Sections 4063, 4064 or 4069 of ERISA or Section 413(c) of the Code that covered or has covered any employee or former employee of the Business; or (ii) any plan or arrangement that provides for post-employment medical, life insurance or other welfare-type benefits (other than health continuation coverage required by Section 4980B of the Code and Title I, Subtitle B, Part 6 of ERISA (“ COBRA ”)).

(c)  Except as set forth on Section 2.8(c) of the Seller Disclosure Schedules, (i) none of the Seller Plans obligates the Seller or any Affiliate of the Seller to pay any separation, severance, termination or similar benefit or will result in any increased payment becoming due to any Specified Employee solely as a result of the transactions contemplated by this Agreement, and (ii) no employee of the Business is eligible for short-term or long-term disability insurance benefits as of the Closing Date.

2.9 Legal Proceedings.

(a)  Except as set forth on Section 2.9 of the Seller Disclosure Schedules, there is no civil, criminal or administrative action, suit, demand, claim, hearing, proceeding or investigation pending or, to the Seller’s Knowledge, threatened against the Seller as of the date of this Agreement that is against, relates to or involves the Transferred Assets, the Business or the transaction contemplated hereby.

(b)  None of the Transferred Assets is subject to any order, writ, judgment, award, injunction or decree of any court or Governmental Entity of competent jurisdiction or any arbitrator or arbitrators.

2.10 Authority. The Seller (and in the case of any Local Purchase Agreement, the relevant Seller Affiliate) has full corporate power and authority to execute and deliver each Transactional Agreement and to perform its obligations under the Transactional Agreements; and the execution, delivery and performance by the Seller (and in the case of any Local Purchase Agreement, the relevant Seller Affiliate) of the Transactional Agreements have been duly and validly authorized and no additional authorization or consent is required in connection with the performance of the Transactional Agreements. In particular, the Seller does not require an affirmative vote of its stockholders, whether under Section 271 of the DGCL or otherwise, to enter into, perform its obligations under or consummate the transactions contemplated by this Agreement or any of the other Transactional Agreements.

2.11 Binding Nature of Agreements. This Agreement constitutes, and, upon execution and delivery thereof, each of the other Transactional Agreements will constitute, the valid and legally binding obligation of the Seller and each applicable Seller Affiliate party thereto, enforceable against the Seller and each applicable Seller Affiliate party thereto in accordance with its terms, except such enforceability may be limited by: (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (b) rules of law governing specific performance, injunctive relief and other equitable remedies.

2.12 Non-Contravention; Consents. The execution, delivery and performance by the Seller and the Seller Affiliates of this Agreement and the other Transactional Agreements and the consummation of the transactions contemplated hereby and thereby do not and will not: (a) conflict with or result in any violation of any provision of the certificate of incorporation, bylaws or other charter or organizational documents of the Seller or any of its Affiliates; (b) assuming the receipt of all consents, approvals, waivers and authorizations and the making of the notices and filings set forth on Section 2.12 of the Seller Disclosure Schedules (collectively, the “ Seller Required Approvals ”), (i) conflict with, contravene or result in a violation or breach of, or constitute a default under, or result in the termination, modification or acceleration (whether after the filing of notice or the lapse of time or both) of any right or obligation of the Seller or any of its Affiliates under, or result in a loss of any material benefit to which the Seller or any of its Affiliates is entitled under, any Transferred Contract (excluding any outbound Intellectual Property licenses and non disclosure agreements included on Schedule 1.1(d) , where any such conflict, contravention, violation, breach, default, termination, modification, acceleration or loss does not, individually or in the aggregate, have a materially adverse effect on the Transferred IP, taken as a whole) or any other contract that would reasonably be expected to materially interfere with the Transactions, or (ii) violate or result in a breach of or constitute a default under any Legal Requirement applicable to the Seller or any of its Affiliates; or (c) result in the creation of any Encumbrance upon any of the Transferred Assets.

2.13 Taxes. Except as provided in Section 2.13 of the Seller Disclosure Schedules, all of the Tax Returns required to be filed by the Seller or any of its Affiliates on or before the date hereof that relate to the Business or the Transferred Assets have been filed and all such Tax Returns required to be filed on or before the Closing Date will have been filed on or before the date on which they are required to be filed and all such Tax Returns were when filed, and are, true, complete and correct in all material respects. All Taxes (whether or not shown on any Tax Return) required to be paid by the Seller prior to the Closing that relate to the Business or the Transferred Assets have been (or with respect to those not required to be paid as of the date hereof will prior to the Closing be) paid in full. No statute of limitations has been extended or waived by any Tax authority with respect to any Taxes or Tax Returns referred to in the two preceding sentences. No issues that have been raised by the relevant taxing authority in connection with any examination of the Tax Returns referred to in this Section 2.13 are currently pending, and all deficiencies asserted or assessments made, if any, as a result of such examinations have been paid in full. There are no Encumbrances (other than Permitted Encumbrances) for Taxes upon any of the Transferred Assets nor, to the Seller’s Knowledge, is any taxing authority in the process of imposing any Encumbrances for Taxes on any of the Transferred Assets.

2.14 Territorial Restrictions. None of the Seller or any of its Affiliates is restricted by any agreement with any Person (other than the Purchaser) from carrying on the Business anywhere in the world or from expanding the Business in any way or entering into any new businesses, except for such restrictions that do not apply to any of the Business, the Transferred Assets or the Purchaser following the Closing.

2.15 Absence of Changes. Since October 3, 2008, (a) the Seller and its Affiliates have owned and operated the Transferred Assets and conducted the Business only in the ordinary course of business, (b) no event or condition has occurred or exists, and to the Seller’s Knowledge no event or condition is threatened, that, individually or in the aggregate, has had or is reasonably likely to have, a Seller Material Adverse Effect and (c) none of the actions or events prohibited or circumscribed by Section 4.2 have been taken or have occurred, except as disclosed in Section 2.15 of the Seller Disclosure Schedules or permitted by this Agreement.

2.16 Assets, Properties.

(a)  Other than the material tangible assets and material services (i) used or provided by the Seller’s internal business support and general and administrative functions, such as, but not limited to, legal, sales, finance, human resources, information technology, manufacturing, process engineering and back end operations, (ii) used or provided by the Seller under the Transition Services Agreement, or (iii) included in the Excluded Assets, the Transferred Assets, when taken together with the Purchaser’s rights under the other Ancillary Agreements, constitute all of the material tangible assets and material services of the Seller and its Affiliates primarily used in, primarily related to or necessary to conduct the Business as currently conducted.

(b)  As of the date hereof, no Transferred Asset is owned by any entity other than the Seller or the relevant Seller Affiliate. As of the Closing Date, no Transferred Asset will be owned by any entity other than the Seller (or in the case of any Local Purchase Agreement, the relevant Seller Affiliate).

2.17 Customers and Suppliers. No customer or supplier material to the Business as currently conducted or as proposed to be conducted by the Seller, has canceled or otherwise terminated any contract with the Seller relevant to the Business prior to the expiration of such Transferred Contract’s term, or, to the Seller’s Knowledge, has threatened to cancel or otherwise terminate its relationship with the Seller or to substantially reduce its sales to or purchases from the Seller of any Seller Product.

2.18 Seller Products and Inventory.

(a)  (i) Neither the Seller nor any of its Affiliates has made or provided a warranty, express or implied, written or oral, with respect to the Seller Products other than pursuant to the Seller’s standard terms and conditions as identified in Section 2.18(a) of the Seller Disclosure Schedules and which have been made available to the Purchaser; (ii) as of the date hereof there are no pending or, to the Seller’s Knowledge, threatened claims, and neither the Seller nor any of its Affiliates have been notified in writing of any claims, relating to any warranty obligations, failure to meet warranties or material product returns; (iii) there are no statements, citations or decisions by any Governmental Entity declaring any of the Seller Products defective or unsafe; (iv) there have been no recalls, including any recalls ordered by any Governmental Entity, with respect to any Seller Product; and (v) there are no pending, or, to the Seller’s Knowledge, threatened, and neither the Seller nor any of its Affiliates have been notified in writing of, any material claims relating to product liability against or involving the Seller or any Seller Product and no such claims have been settled or adjudicated. All of the Seller Products comply in all material respects with applicable authorizations, permits or licenses of any Governmental Entity and all applicable Legal Requirements. Each Seller Product that is sold or licensed by the Seller or any of its Affiliates is designed and manufactured, and functions and operates, in all material respects in accordance with the product’s intended use as described in the applicable Seller marketing material for such Seller Product, and has conformed and complied in all material respects with the terms and requirements of any applicable warranty or contract made by the Seller or its Affiliates.

(b)  All of the Transferred Inventory has been created or acquired in the ordinary course of business, and, as of the date of this Agreement, is fit for the purpose for which it was procured or manufactured and such Transferred Inventory (i) is not obsolete, damaged or defective, and (ii) is of a good quality usable (as to raw materials or work in process) or saleable (as to finished goods) in the ordinary course of business, subject in the case of clauses (i) and (ii) to reserves therefor recorded in accordance with GAAP and reflected in the Financial Information. Section 2.18(b) of the Seller Disclosure Schedules sets forth the Transferred Inventory as of April 3, 2009.

2.19 Export Controls, Trade Sanctions and Certain Payments.

(a)  The Seller has in the conduct of the Business and the ownership and operation of the Transferred Assets complied in all material respects with all statutory and regulatory requirements relating to export controls and trade sanctions under all applicable Legal Requirements of each jurisdiction in which the Seller conducts the Business or holds any Transferred Assets, including the International Traffic in Arms Regulations, the Export Administration Regulations, antiboycott provisions, regulations administered by the Office of Foreign Assets Control, and provisions under the Foreign Corrupt Practices Act.

(b)  The Seller does not maintain or conduct, and has not maintained or conducted, any business, investment, operation or other activity in the conduct of the Business and the ownership, operation or use of the Transferred Assets in or with: (i) any country or person targeted by any of the economic sanctions of the United States of America administered by the United States Treasury Department’s Office of Foreign Assets Control; (ii) any person appearing on the list of Specially Designated Nationals and Blocked Persons issued by the United States Treasury Department’s Office of Foreign Assets Control; or (iii) any country or person designated by the United States Secretary of the Treasury pursuant to the USA PATRIOT Act as being of “primary money laundering concern.”

(c)  No director, officer, agent, or employee of the Seller, or any other Person associated with or acting for or on behalf of the Seller, has in the conduct of the Business and the ownership operation, or use of the Transferred Assets directly or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services in violation of any Legal Requirements or of the Seller’s code of business conduct or other written policy of the Seller or any of its Affiliates; or (ii) established or maintained any fund or asset that has not been properly recorded in the books and records of the Seller.

2.20 Continued Employment. As of the date of this Agreement, the Key Employee has not given written notice to the Seller to resign from his employment or has terminated his employment nor is an officer of the Seller actually aware of the Key Employee’s intention to resign from his employment.

2.21 Disclosure. To the Seller’s Knowledge, no representation or warranty by the Seller contained in this Agreement, and no statement contained in the Seller Disclosure Schedules or the Transactional Agreements contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading.

2.22 Financial Advisor. Except for Credit Suisse Securities (USA) LLC, the fees and expenses of which are payable by the Seller, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Seller.

2.23 Opinion of Financial Advisor. The Seller has received the opinion of Credit Suisse Securities (USA) LLC, financial advisor to the Seller, dated as of the date hereof, to the effect that as of the date of such opinion, the Purchase Price to be received by the Seller in exchange for the Transferred Assets is fair to the Seller from a financial point of view, a written copy of which opinion has been delivered or will be delivered promptly after the date hereof to the Purchaser for informational purposes only and the Purchaser agrees to keep the opinion confidential and not further distribute it, except that the Purchaser may also provide a copy of the opinion to TWVC as long as TWVC also agrees to keep such opinion confidential and not further distribute the opinion.

2.24 Valuation Analysis.

(a)  The Seller will use its commercially reasonable efforts to seek a valuation analysis of the Transferred Assets for the purpose of delivering such valuation to the trustee (the “ Trustee ”) under the indenture governing the Seller’s senior secured notes (the “ Indenture ”).

(b)  With respect to the Indenture: (i) the Seller has not (and to the Seller’s Knowledge no other Person has), and the Seller has not received any written notice claiming that the Seller has, breached or violated such Indenture and (ii) there has not been an event of default.

3.

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

The Purchaser represents and warrants to the Seller as follows, subject in each case to such exceptions as are specifically set forth in the attached disclosure schedules of the Purchaser (the “ Purchaser Disclosure Schedules ”), it being understood that each exception set forth in a section or subsection of the Purchaser Disclosure Schedules shall qualify only the corresponding representation and warranty set forth in this Agreement:

3.1 Due Organization. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware. The Purchaser has all requisite corporate power and authority to own and operate its assets and to carry on its business as currently conducted.

3.2 Authority. The Purchaser has full corporate power and authority to execute and deliver each Transactional Agreement to which it is or may become a party and to perform its obligations under each Transactional Agreement to which it is or may become a party; and the execution and delivery by the Purchaser of each Transactional Agreement to which the Purchaser is or may become a party have been duly and validly authorized by all necessary action on the part of the Purchaser, and no additional corporate or stockholder authorization or consent is required in connection with the performance of the Transactional Agreements except for the Requisite Stockholder Approval (as defined in the Securities Purchase Agreement). Except for the Requisite Stockholder Approval (as defined in the Securities Purchase Agreement) in connection with the transactions contemplated by the Securities Purchase Agreement, no vote of the shareholders of the Purchaser is required to authorize the transactions contemplated by this Agreement.

3.3 Binding Nature of Agreements. This Agreement constitutes, and, upon execution and delivery thereof, each of the other Transactional Agreements will constitute, the valid and legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except such enforceability may be limited by: (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (b) rules of law governing specific performance, injunctive relief and other equitable remedies.

3.4 Non-Contravention; Consents. The execution, delivery and performance by the Purchaser of this Agreement and the other Transactional Agreements, and the consummation of the transactions contemplated hereby and thereby do not and will not: (a) conflict with or result in any violation of any provision of the certificate of incorporation or bylaws of the Purchaser; (b) result in a breach or constitute a default by the Purchaser under, any material contract to which the Purchaser is a party; or (c) violate or result in a breach of or constitute a default under any Legal Requirement or order applicable to the Purchaser. The Purchaser is not and will not be required to obtain any Consent from any Person in connection with the execution, delivery or performance of any of the Transactional Agreements or the consummation of any of the transactions contemplated hereby or thereby.

3.5 Cash Consideration. On the Closing Date, the Purchaser will have sufficient funds to enable it to pay the Purchase Price and perform its obligations under this Agreement and any other Transactional Agreements.

3.6 Financial Advisor . Except for Barclays Capital Inc., the fees and expenses of which shall be paid by the Purchaser, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Purchaser.

4.

PRE-CLOSING COVENANTS.

4.1 Access. Subject to compliance by the Purchaser with the terms of the Confidentiality Agreement and subject to applicable Legal Requirements regarding confidentiality of employee information, during the period from the date of this Agreement through the Closing Date (the “ Pre-Closing Period ”), the Seller will, after receiving reasonable advance notice from the Purchaser, give the Purchaser reasonable access (during normal business hours) to those of its books and records relating to the Business or the Transferred Assets, and will provide the Purchaser with such information regarding the Business and the Transferred Assets as the Purchaser may reasonably request, for the sole purposes of enabling the Purchaser (a) to further investigate, at the Purchaser’s sole expense, the Transferred Assets and the Hired Employees; and (b) to verify the accuracy of the representations and warranties set forth in Section 2 ; provided , however , that such access shall not interfere with the normal business and operations of the Seller and shall be in compliance in all material respects with all requirements set forth in any applicable real property lease.

4.2 Conduct of Business. Except (i) as contemplated or permitted by (x) this Agreement, (y) any of the Ancillary Agreements, or (z)  Section 4.2 of the Seller Disclosure Schedules or (ii) as approved in writing by the Purchaser during the Pre-Closing Period:

(a)  the Seller will (i) conduct the Business and own, operate and use the Transferred Assets in the ordinary course and consistent with its past practices; and (ii) use reasonable efforts to preserve intact the Business and the Transferred Assets and maintain good relations with the Hired Employees, the parties to the Transferred Contracts and any other customer, supplier or creditor of the Business;

(b)  the Seller will not:

(i) sell, lease, license, transfer or dispose of any Transferred Assets (other than (A) sales of Inventory in the ordinary course of business and in compliance with the limitations in Section 1.4 , and (B) grants of non-exclusive licenses to use IP contained in a Seller Product in connection with sales of Seller Products to customers in the ordinary course of business consistent with past practice);

(ii) incur, create or assume any Encumbrance on any of the Transferred Assets other than a Permitted Encumbrance;

(iii) terminate or extend or modify any (individually or in the aggregate) material Transferred Contract except with the prior consent of the Purchaser (which consent shall not be unreasonably conditioned, withheld or delayed);

(iv) enter into any material contract, arrangement or commitment with respect to the Business or the Transferred Assets other than in the ordinary course of business consistent with past practice, provided that such ordinary course contract, arrangement or commitment does not (A) license any IP (other than a non-exclusive license to use IP contained in a Seller Product) or (B) impose any material restriction or limits the right or ability of the Seller or any of its Subsidiaries or any of their respective Affiliates, or, after the Closing, the right or ability of the Purchaser or any of its respective Affiliates, (x) to compete in any line of business, in any geographic area or with any Person, or pursuant to which any benefit or right is required to be given or lost as a result of so competing or engaging, or which would have any such effect after the Closing Date, or (y) to develop, distribute or license any Intellectual Property or Intellectual Property Rights (other than grants of non-exclusive licenses to use IP contained in a Seller Product in connection with sales of Seller Products to customers in the ordinary course of business consistent with past practice);

(v) dispose of or permit to lapse any rights in, to or for the use of any Transferred IP (except that the Seller may allow its national/regional phase filing rights to lapse in foreign counterparts to such Transferred IP if the Purchaser, after reasonable notice from the Seller, elects not to reimburse the Seller for all costs incurred in connection with such filings; and the limiting or elimination of claims as part of Seller’s patent prosecution practices conducted in the ordinary course of business consistent with past practice shall not be deemed a disposal or lapse of such rights); or disclose to any Person not an employee any information related to the Transferred IP that the Seller, in its reasonable business judgment, determines should be hel