SALE AND PURCHASE AGREEMENT

Purchase and Sale Agreement

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SILICON LABORATORIES INC | Silicon Laboratories International Pte. Ltd.,

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Title: SALE AND PURCHASE AGREEMENT
Governing Law: New York Date: 2/9/2007
Industry: Semiconductors Law Firm: DLA Piper US LLP; Simpson Thacher & Bartlett LLP Sector: Technology

Exhibit 10.1

SALE AND PURCHASE AGREEMENT

This Sale and Purchase Agreement (this “ Agreement ”) is entered into as of February 8, 2007 (the “ Execution Date ”), by and between NXP B.V., a limited liability company organized under the laws of The Netherlands (“ Parent Buyer ”), NXP Semiconductors France SAS, a company incorporated under the laws of France (“ Subsidiary Buyer ”), Silicon Laboratories Inc., a Delaware corporation (“ Parent Seller ”) and Silicon Laboratories International Pte. Ltd., a private limited company organized under the laws of Singapore (“ Subsidiary Seller ”). Each of Parent Buyer and Subsidiary Buyer are sometimes referred to in this Agreement collectively as “ Buyer ” and each of Parent Seller and Subsidiary Seller are sometimes referred to in this Agreement collectively as “ Seller .”

AGREEMENT

In consideration of the respective covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS

1.1 Defined Terms . As used herein, the terms below shall have the following meanings. Any of such terms, unless the context otherwise requires, may be used in the singular or plural, depending upon the reference.

“ Action ” shall mean any action, claim, suit, litigation, proceeding, mediation, arbitration, governmental audit, criminal prosecution or hearing, in each case, before any Governmental Authority or arbitration tribunal or any inquiry or investigation by any Governmental Authority.

“ Ancillary Agreements ” shall mean the Intellectual Property License Agreement, the Transition Services Agreement, the Escrow Agreement, the French Local Sale Agreement, the Bill of Sale, the Assignment and Assumption Agreement and the Intellectual Property Assignment Agreement.

“ Assets ” shall mean all of the assets, tangible and intangible, as set forth below, without duplication:

(a) all of Seller’s and its Subsidiaries’ rights under all of the Contracts, including those listed on Schedule 1.1(a) (collectively, the “ Assumed Contracts ”);

(b) all Equipment primarily used in the Business, including the Equipment listed on Schedule 1.1(b);

(d) all Books and Records;

(e) all Intellectual Property Rights that are (i) listed on Schedule 1.1(e) or (ii) other than Patents and Trademarks, owned by Seller or its Subsidiaries (or licensed by any of them to extent transferable hereunder without additional monetary liability to Seller or its Subsidiaries) and exclusively used in the Business (together, the “ Transferred Business IPR ”);

(f) all of the capital stock of the California Subsidiary (for clarity, except as set forth in Section 10.18, the California Subsidiary shall retain all of its assets);

(g) all of the capital stock of the French Subsidiary (for clarity, except as set forth in Section 10.18, the French Subsidiary shall retain all of its assets);

(h) Seller’s and Seller’s Subsidiaries’ rights under the Facility Leases, together with all fixtures and improvements now or subsequently located thereon, and all rights, privileges and easements which are appurtenant thereto;

(i) all assets of the French Subsidiary Plans; and

(j) Seller’s and Seller’s Subsidiaries’ right to bring and control any Action in law or equity against third parties for the infringement, misappropriation, violation or other damage or injury to (or breach of or default under) the foregoing prior to the Closing Date (whether standing alone or in combination with an Action for post-Closing injuries), provided that Seller shall be reimbursed for any monetary recovery relating to the time period on or prior to the Closing Date.

Notwithstanding the foregoing, in no event shall the term Assets include any Excluded Assets.

“ Assumed Liabilities ” shall mean only the following Liabilities of Seller and its Subsidiaries:

(a) all Liabilities arising on or after the Closing Date under the Assumed Contracts (but not including any Liability for any Default under any Assumed Contract occurring prior to the Closing Date);

(b) all Liabilities for any Taxes attributable to the Business for Post-Closing Tax Periods;

(d) all Liabilities (whether arising prior to, on, or after the Closing Date) with respect to Open Incoming POs.

(e) all Liabilities (whether arising prior to, on, or after the Closing Date) with respect to Open Outgoing POs.

(f) all Liabilities for Product warranty claims and Product liability claims to the extent such Liabilities result from operation of the Business after the Closing Date;

(g) all Liabilities for Product warranty claims to the extent such Liabilities (i) result from operation of the Business on or prior to the Closing Date and (ii) do not exceed $25,000 with respect to any individual claim or series of related claims;

(h) all Liabilities of Transferred Subsidiaries, but excluding all liabilities for any Taxes attributable to the Transferred Subsidiaries for Pre-Closing Tax Periods (subject to the indemnification provisions set forth in Section 9.3);

(i) all Liabilities to Rehired Employees for accrued but unused vacation time;

(j) all Liabilities of the French Subsidiary Plans;

(k) all Liabilities to the extent arising out of, relating to or in connection with any Action or threatened Action (including a cease and desist letter, request for an investigation or offer to license) involving or relating to the Business or the Assets arising out of the conduct, operations or ownership of the Business or the Assets after the Closing Date;

(l) all Liabilities for Products sold after the Closing Date; and

(m) all Liabilities to distributors with respect to credit memos to be issued after the Closing Date with respect to earned and unearned price protection and ship and debits obligations.

“ Books and Records ” shall means Seller’s: (a) current product, business and marketing plans and promotional literature for the Products and the Projects, (b) books, records (including customer, supplier, employee and purchasing records), lists (including customer, supplier and distributor lists), financial data, files and reports for the six months prior to the Closing Date for the Products and the Projects, and (c) current product and design manuals, plans, drawings, technical manuals, operating records and all other work product (in any media) for the Products and the Projects.

“ Business ” means all activities by Seller and its Subsidiaries, including but not limited to research, development, manufacturing, marketing, and sales, occurring at any time on or prior to the Closing Date in connection with: (i) CMOS power amplifier integrated circuits, (ii) CMOS transceiver integrated circuits, (iii) CMOS baseband integrated circuits, (iv) baseband software, and/or (v) the integration of one or more of the integrated circuits and software listed in (i) to (iv) above into integrated circuits or systems, in each case of (i) to (v) where such circuit, integrated circuit, system or software is used to receive and/or transmit signals complying with one or more of the cellular communications standards GSM, GPRS, EDGE, UMTS (including WCDMA), CDMA and their derivatives, extensions and successors. For purpose of clarity, the term Business does not include any activities by Seller and its Subsidiaries in connection with the Retained Products of Seller.

“ Business Day ” means any day other than a Saturday, a Sunday or a day on which banks in New York, New York are required to be closed.

“ Business Employee ” shall mean those Business Personnel who are employees of Seller or any of its Subsidiaries listed on Schedule 1.1(g).

“ Business Personnel ” shall mean those employees and independent contractors of Seller listed on Schedule 1.1(g).

“ Cash ” shall mean cash, cash equivalents and short-term investments (as defined under GAAP).

“ Code ” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder.

“ Confidentiality Agreement ” shall mean that certain letter agreement, dated as of October 25, 2006, by and between Buyer and Seller.

“ Contract ” shall mean any agreement or contract to which Seller is a party or is bound and which primarily relates to the Assets or the Business.

“ Court Order ” shall mean any judgment, decision, consent decree, stipulation, injunction, ruling, writ or order of any foreign, federal, state or local Governmental Authority.

“ Default ” shall mean (a) a material breach of or material default under any Contract, or (b) the occurrence of an event that with the passage of time or the giving of notice or both would constitute a material breach of or material default under any Contract.

“ Encumbrances ” shall mean any mortgage, pledge, lien, restriction, hypothecation, charge or other security interest other than (a) for Taxes not yet due and payable, (b) for purchase money, securing rental payments, or otherwise arising in the ordinary course of business and not incurred in connection with the borrowing of money; or (c) arising as a result of entering into this Agreement.

“ Environmental Claim ” shall mean any written or oral notice, claim, demand, order, action, cause of action, suit, complaint, proceeding, investigation or notice or other communication by any Person alleging any violation of, or any actual or potential liability (including actual or potential liability for investigatory costs, cleanup costs, monitoring costs, governmental response costs, natural resource damages, property damage, personal injury, fines or penalties) arising out of, relating to, based on or resulting from (a) the presence or Release or threatened Release into the indoor or outdoor environment, of any Hazardous Material, (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law or Permit or (c) obligations or liabilities under any Environmental Law.

“ Environmental Laws ” shall mean all federal, state, local, and foreign Laws regulating, relating to or imposing liability or standards of conduct concerning pollution, contamination, preservation or protection of the environment or workplace health or safety, including all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any hazardous materials, substances or wastes, as such requirements are enacted and in effect on or prior to the Execution Date.

“ Environmental Liabilities ” means any and all Liabilities (a) arising out of any Environmental Claims, (b) pursuant to any applicable Environmental Laws, or (c) concerning the presence, handling, transportation, recycling, disposal or Release of any Hazardous Material, including pursuant to any lease, sublease or other agreement.

“ Equipment ” shall mean machinery, computer hardware, spare parts, supplies, equipment, tooling, patterns, dies and similar tangible personal property, including all warranty rights with respect thereto, but shall exclude fixtures.

“ Excluded Assets ” shall mean the following assets of Seller and its Subsidiaries:

(a) all Cash;

(b) all Receivables;

(d) any of Seller Tax Returns, and records and work papers used in preparation thereof, excluding Tax Returns of any Transferred Subsidiary;

(e) all rights of Seller under this Agreement and the Ancillary Agreements;

(f) all Contracts set forth on the Schedule of Excluded Contracts (“ Excluded Contracts ”);

(g) other than the Facility Leases, all leases of real property, together with all fixtures and improvements now or subsequently located thereon, and all rights, privileges and easements which are appurtenant thereto;

(h) all Equipment listed on the Schedule of Excluded Equipment (“ Excluded Equipment ”);

(i) any Inventory that has been disposed of in the ordinary course of business prior to the Closing without violating Section 5.2;

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

(k) all Intellectual Property Rights not included in the Transferred Business IPR;

(l) all claims, rights, causes of action, choses in action, rights of recovery, rights of set-off of any kind against any Person, to the extent (i) related to Excluded Assets or Liabilities other than Assumed Liabilities, (ii) related to refunds of, and credits against, Taxes attributable to the Business for Pre-Closing Tax Periods, (iii) related to rights to payment or to enforce payment in connection with Products delivered by Seller on or prior to the Closing Date or (iv) otherwise related to periods on or prior to the Closing Date; and

(m) any Employee Plans other than the French Subsidiary Plans.

“ Facility Leases ” shall mean the leases set forth on Schedule 3.6.

“ French Local Sale Agreement ” shall mean the sale and purchase agreement between the Subsidiary Seller and the Subsidiary Buyer for the sale and purchase of all of the capital stock of the French Subsidiary to be entered into only for purposes of filing with the French authorities, in a form reasonably satisfactory to Seller and Buyer. In case of variation between the terms of the Agreement and the terms of the French Local Sale Agreement, the Agreement shall prevail.

“ French Subsidiary Plans ” means the Employee Plans listed on the Schedule of French Subsidiary Plans.

“ GAAP ” shall mean United States generally accepted accounting principles as in effect on the date or for the period with respect to which such principles are applied.

“ Governmental Authority ” shall mean any (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; or (c) governmental or quasi-governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, board, bureau, official, ministry, organization, unit, body or entity and any court or other tribunal).

“ Hazardous Materials ” shall mean the hazardous or toxic substances, wastes, or other pollutants, including gasoline, petroleum or petroleum distillates, asbestos or asbestos containing materials or polychlorinated biphenyls, in each case that are regulated pursuant to or as to which liability or standards of conduct are imposed pursuant to any Environmental Laws.

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

“ Indebtedness ” shall mean (a) any obligation for borrowed money, including any obligation for accrued and unpaid interest thereon and any prepayment or other penalties or premiums, (b) any capitalized lease obligations (as determined in accordance with GAAP), (c) any reimbursement obligations in respect of any acceptances, letters of credit, surety bonds or similar arrangements, (d) all obligations to pay the deferred and unpaid purchase price of property, (e) bank overdrafts (excluding undrawn lines) and outstanding checks to the extent related to any account of the Business and (f) all guarantees issued in respect of obligations of any other Person of the type described in clauses (a) through (f).

“ Intellectual Property Rights ” or “ IPR ” shall mean all U.S. and foreign intellectual property rights, including without limitation (i)(a) patents and patent applications and disclosures relating thereto (and any patents that issue as a result of those patent applications), and any renewals, reissues, reexaminations, extensions, continuations, continuations-in-part, divisions and substitutions relating to any of the patents and patent applications, as well as all related foreign patent and patent applications that are counterparts to such patents and patent applications (“ Patents ”), (b) trademarks, service marks, trade dress, logos, trade names and corporate names, whether registered or unregistered, and the goodwill associated therewith, together with any registrations and applications for registration thereof (“ Trademarks ”), (c) copyrights and rights under copyrights, including copyrights in Software, whether registered or unregistered, including moral rights, and any registrations and applications for registration thereof (“ Copyrights ”), (d) mask work rights and registrations and applications for registration thereof (“ Mask Works ”), (e) rights in databases and data collections (including knowledge databases, customer lists and customer databases) under the Laws of the United States or any other jurisdiction, whether registered or unregistered, and any applications for registration therefore (“ Databases ”); (f) any rights in discoveries, inventions, developments, processes, designs and techniques that are not included in the definition of “Patents,” including any documents, memoranda, reports, studies, data or analyses relating thereto, (g) and any rights in trade secrets, know-how, and confidential, proprietary or non-public information, including documents containing the foregoing, analyses thereof, research, and lists (“ Trade Secret Information ”); and (h) Residuals.

“ Inventory ” shall mean all of Seller’s inventory of the Products held for resale, including raw materials, work in process, finished products, wrapping, supply and packaging items with respect to the Products.

“ Laws ” shall mean, with respect to a Person, any constitutions, laws (including common law), statutes, codes, ordinances, or directives, regulations, rules, notice requirements, edicts, decrees, court decisions, agency guidelines, principles of law and orders of any Governmental Authority applicable to such Person.

“ Liabilities ” shall mean any direct or indirect liability, indebtedness, obligation, commitment, claim, deficiency, guaranty or endorsement of or by any Person of any type, whether known or unknown, disputed or undisputed, secured or unsecured, asserted or unasserted, due or to become due, vested or unvested, liquidated or unliquidated, accrued or unaccrued, absolute, contingent, fixed, matured or unmatured, whether or not the same is required to be accrued on the financial statements of such Person, and whenever arising.

“ Material Adverse Effect” shall mean the effect of any change, circumstance, development, condition or event that, in the aggregate, (i) is materially adverse to the business, properties, assets, condition or results of operations of the Business, taken as a whole, or (ii) materially impairs Seller’s ability to consummate the transactions contemplated by this Agreement and the Ancillary Agreements; provided, however , that “ Material Adverse Effect ” shall not be deemed to include the effect of (A) any change, circumstance, development, condition or event affecting the general economic conditions in the United States or the world; (B) change, circumstance, development, condition or event that affects the semiconductor industry generally; (C) change, circumstance, development, condition or event related to the execution, announcement, performance or pendency of, or compliance with, this Agreement or the transactions contemplated herein, (D) natural disasters which do not have a disproportionate impact on the Business compared to its competitors, (E) war, sabotage, armed hostilities or acts of terrorism which do not have a disproportionate impact on the Business compared to its competitors, (F) any failure by the Company to meet or exceed projections or forecasts (provided that the underlying causes of such failure shall be considered in determining whether there is a Material Adverse Effect), (G) any matter directly related to and arising out of the items set forth on Schedule 3.10 set forth in the Seller Disclosure Schedule, or (H) changes in applicable Law or GAAP.

“ Open Incoming POs ” shall mean all purchase orders, invoices, release orders and similar agreements regarding Products from customers and distributors to the extent that the Products have not been shipped to such customers or distributors on or prior to the Closing Date.

“ Open Outgoing POs ” shall mean all purchase orders, invoices, release orders and similar agreements with Seller’s manufacturers, suppliers and other vendors with respect to the Business to the extent that the applicable product or service has not been delivered or rendered to Seller on or prior to the Closing Date.

“ Permits ” shall mean all licenses, permits, franchises, approvals, authorizations, registrations, waivers, exemptions, qualifications, consents or orders of, or filings with, any Governmental Authority, whether foreign, federal, state or local, or any other Person, necessary for the past or present conduct of, or relating to the operation of the Business.

“ Person ” shall mean an individual, partnership, limited liability company, corporation, association, joint stock company, trust, joint venture, unincorporated organization or other entity or organization of any kindor Governmental Authority.

“ Post-Closing Tax Period ” shall mean any Tax Period beginning after the Closing Date and that portion of a Straddle Period beginning after the Closing Date.

“ Pre-Closing Tax Period ” shall mean any Tax Period ending on the Closing Date and the portion of any Straddle Period ending on the Closing Date.

“ Products ” shall mean the products of Seller set forth on Schedule 1.1(Products).

“ Projects ” shall mean the projects of Seller set forth on Schedule 1.1(Projects).

“ Property Taxes ” shall mean all real property Taxes, personal property Taxes and similar ad valorem Taxes.

“ Receivables ” shall mean (a) all trade accounts receivable and other rights to payment from customers and distributors related to the Business, (b) notes or other receivables, and (c) any claims, remedy or other rights related to any of the foregoing, in each case of clauses (a) through (c), in existence on or prior to the Closing Date.

“ Release ” shall mean any release, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment (including ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any property, including the movement of Hazardous Material through air, soil, surface water, groundwater or property.

“ Representative ” shall mean any officer, director, principal, attorney, agent, employee, accountant, advisor or other similar representative.

“ Residuals ” means Trade Secret Information in nontangible form (i.e., not in written or other documentary form, including tape, disk or other storage), including without limitation ideas, know-how or techniques, that is retained in the unaided memory of employees due to their past work for Seller or its Subsidiaries.

“ Retained Products ” shall mean those products and projects set forth on Schedule 1.1(Retained Products) and any logical extensions, successors, fixes, improvements and new releases thereof or thereto.

“ Software ” shall mean computer software, programs and databases in any form, including web content, source code, executable code, tools, developers kits, utilities, graphical user interfaces, menus, images, icons, and forms, and all versions, updates, corrections, enhancements and modifications thereof, and all related documentation, developer notes, comments and annotations related thereto.

“ Straddle Period ” shall mean any Tax Period beginning before and ending after the Closing Date.

“ Subsidiary ” of any Person shall mean any corporation, partnership or other entity of which such Person owns, directly or indirectly, 50% or more of the total combined voting power or other ownership interest or of which such Person acts as a general partner, managing member or in a similar capacity.

“ Tax ” shall mean any federal, state, local, foreign or other tax, levy, impost, fee, assessment or other government charge, including income, estimated income, business, occupation, value added, employment, social security, goods and services, stamp, alternative or add-on minimum, franchise, property, payroll, personal property, sales, transfer, use, employment, commercial rent, occupancy, franchise or withholding taxes, and any premium, including interest, penalties and additions in connection therewith.

“ Tax Period ” shall mean any period prescribed by any Governmental Authority for which a Tax Return is required to be filed or a Tax is required to be paid.

“ Tax Return ” shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ Transferred Subsidiary ” means (a) Silicon Laboratories France SARL (the “ French Subsidiary ”), all of the capital stock of which is owned by Subsidiary Seller and (b) StackCom, a California corporation (the “ California Subsidiary ”), all of the capital stock of which is owned by Parent Seller.

“ Viral Software ” means any Software licensed to Seller under an open source, copyleft or similar license agreement that requires, as a condition of being distributed or otherwise, that the source code for any proprietary Software that includes, utilizes, is derived from or is linked with such Software be licensed to third parties to whom such Software is distributed, including any Software licensed under the GNU General Public License, the GNU Lesser General Public License, or the Mozilla Public License.

1.2 Other Defined Terms . Capitalized terms not defined in Section 1.1 above shall have the meanings set forth in the applicable Sections of the Agreement.

ARTICLE II.

PURCHASE AND SALE OF ASSETS

2.1 Closing . The closing (the “ Closing ”) of the transactions contemplated by this Agreement and the Ancillary Agreements shall take place at 8:00 a.m. at the offices of DLA Piper US LLP, 1221 South Mopac Expressway, Suite 400, Austin, Texas 78746, or at such other place as shall be mutually agreeable to the parties hereto, as soon as practicable (but in no event later than two Business Days) after the satisfaction or waiver of the latest to occur of the conditions to the Closing set forth in Articles VI and VII hereof (other than the conditions to be satisfied at the Closing) or such other date and time as shall be mutually agreeable to the parties hereto (the “ Closing Date ”) and the Closing shall be deemed effective as of the end of the day on the Closing Date.

2.2 Transfer of Assets . Upon the terms and subject to the conditions contained herein, at the Closing, Seller and its Subsidiaries will sell, transfer and assign to Buyer, and Buyer will purchase and acquire from Seller and its Subsidiaries, all of the right, title and interest of Seller and its Subsidiaries in and to the Assets, free and clear of all Encumbrances.

2.3 Assumption of Liabilities . Upon the terms and subject to the conditions contained herein, at the Closing, Buyer shall assume and agree to discharge the Assumed Liabilities. Buyer’s assumption of the Assumed Liabilities shall not limit Buyer’s remedies for Seller’s breach of any representation or warranty in Article III.

2.4 Excluded Liabilities . Any other provision of this Agreement notwithstanding, Buyer shall not be obligated to assume, pay, perform, discharge or be responsible for any Liabilities of Seller or any of its Subsidiaries other than the Assumed Liabilities. Seller and its Subsidiaries shall retain and shall be responsible for the payment, performance and/or discharge of all Liabilities of Seller and its Subsidiaries, whether arising before or after the Closing Date, other than the Assumed Liabilities (such Liabilities, collectively, the “ Excluded Liabilities ”), including the following:

(i) any Liability to the extent arising out of or relating to the operation or conduct by Seller or any of its Subsidiaries or affiliates of any business other than the Business, including any Liability arising out of or related to (A) the transfer of assets or employees by the French Subsidiary to the Retained French Subsidiary pursuant to Section 10.18 (including any Liability under any agreement between the French Subsidiary and the Retained French Subsidiary relating to such transfer and any Liability to trade or other third party creditors or to tax authorities relating to or arising out of such transfer) or (B) any failure, whether in part or in whole, by Seller to procure such transfer of assets and employees;

(ii) any Liability to the extent arising out of or relating to any Excluded Asset;

(iii) any Liability for Taxes (A) for a Pre-Closing Tax Period, (B) attributable to the transactions contemplated in Section 10.18 (Pre-Closing Transfers) or (C) of any Person, whether by reason of Treasury Regulation section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise;

(iv) any Environmental Liabilities to the extent arising out of or relating directly or indirectly to the conditions existing or events occurring on or prior to the Closing Date involving or relating to the Business or the Assets or that are attributable to the conduct, acts, operations or omissions of Seller or any of its Subsidiaries;

(v) all Liabilities arising out of or related to Employee Plans other than the French Subsidiary Plans, including all Liabilities arising out of or related to the employees listed on Schedule 10.18;

(vi) all Liabilities related to Business Personnel and other employees or independent contractors of Seller and its Subsidiaries arising prior to or on the Closing Date (including any severance or termination Liabilities arising due to terminations of employment or services arrangements with Seller and its Subsidiaries);

(vii) any interest expense and indebtedness (whether as obligor, guarantor or otherwise) of Seller or its Subsidiaries to third parties for borrowed money;

(viii) any Liability for checks drawn on bank accounts of Seller or its Subsidiaries that have been issued but not cleared as of the Closing Date;

(ix) (A) all accounts payable of Seller or its Subsidiaries incurred in connection with the operation of the Business on or prior to the Closing Date and (B) any other Liability of Seller or any of its Subsidiaries for payment with respect to services performed or goods acquired in connection with the operation of the Business or the Assets on or prior to the Closing Date; or

(x) all Liabilities to the extent arising out of, relating to or in connection with any Action or threatened Action (including a cease and desist letter, request for an investigation or offer to license) involving or relating to the Business or the Assets arising out of the conduct, operations or ownership of the Business on or prior to the Closing Date.

2.5 Purchase Price . Upon the terms and subject to the conditions contained herein, on the Closing Date, (i) Parent Buyer shall (a) pay or cause to be paid to Parent Seller, by wire transfer of immediately available funds to the account designated in writing by Parent Seller at least three Business Days prior to the Closing, cash in U.S. dollars in an aggregate amount equal to $108,300,000 (the “ Parent Cash Closing Payment ”), and shall (b) pay or cause to be paid, by wire transfer of immediately available funds to JPMorgan Chase Bank, N.A. (the “ Escrow Agent ”) to be held in escrow (the “ Escrow Fund ”), cash in U.S. dollars in an aggregate amount equal to $14,250,000 (the “ Escrow Amount ”) and (ii) Parent Buyer shall pay or cause to be paid to Subsidiary Seller, by wire transfer of immediately available funds to the account designated in writing by Subsidiary Seller at least three Business Days prior to the Closing, cash in U.S. dollars in an aggregate amount equal to $162,450,000 (the “ Subsidiary Cash Closing Payment ” and, collectively with the Parent Cash Closing Payment and the Escrow Amount, the “ Purchase Price ”).

2.6 Purchase Price Adjustment .

(a) Within 60 days following the Closing Date, Seller shall deliver to Buyer a closing statement setting forth the valuation (“ Seller’s Calculation ”) of the Inventory, net of the reserve for Inventory write down (“ Net Inventory ”) as of the Closing Date (the “ Closing Inventory Value ”) calculated on a basis consistent with the valuation of Inventory in preparing the Financial Statements.

(b) If Buyer disagrees with Seller’s Calculation, Buyer may, within 30 days after delivery of the closing statement, deliver a notice to Seller disagreeing with Seller’s Calculation and specifying Buyer’s calculation of the Closing Inventory Value (“ Buyer’s Calculation ”) and, in reasonable detail, Buyer’s grounds for such disagreement.

(c) If the notice of disagreement shall be duly delivered pursuant to Section 2.6(b) , Buyer and Seller shall, during the 15 days following such delivery, use their reasonable efforts to reach agreement on the Closing Inventory Value. If Buyer and Seller are unable to reach such agreement during such period, the parties shall promptly engage a United States-based division of an accounting firm of international standing mutually agreeable to the parties as a mediator (the “ Mediating Auditor ”) to review promptly this Agreement and the Net Inventory for the purpose of calculating the Closing Inventory Value. In making such calculation, the Mediating Auditor shall determine the Closing Inventory Value, and such determination shall be an amount within the range established by Seller’s Calculation and Buyer’s Calculation. The Mediating Auditor shall deliver to Buyer and Seller, as promptly as practicable, a report setting forth such calculation of the Closing Inventory Valuation. Such report shall be final and binding upon Buyer and Seller (absent manifest error). The cost of the Mediating Auditor shall be borne (i) by Seller if the difference between Final Inventory Value and Seller’s Calculation is greater than the difference between the Final Inventory Value and Buyer’s Calculation, (ii) by Buyer if the first such difference is less than the second such difference; and (iii) equally by Buyer and Seller if otherwise.

(d) Buyer and Seller agree that they will reasonably cooperate and assist in the preparation of the closing statement, the calculation of the Closing Inventory Value and in the conduct of the reviews referred to in this Section 2.6 , 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 party’s review and preparation of the closing statement.

(e) If the Final Inventory Value is less than $12,500,000 (the “ Base Inventory Value ”), Seller shall pay to Buyer, as an adjustment to the Purchase Price, the amount of such detriment. “ Final Inventory Value ” means the Closing Inventory Value (i) as shown in Seller’s Calculation if no notice of disagreement with respect thereto is duly delivered to Seller in compliance with Section 2.6(b) ; or (ii) if such a notice of disagreement is delivered, (A) as agreed by Buyer and Seller pursuant to Section 2.6(c) or (B) in the absence of such agreement, as shown in the Mediating Auditor’s calculation delivered pursuant to Section 2.6(c) . Notwithstanding the foregoing, in no event shall the Final Inventory Value be more than Seller’s Calculation or less than Buyer’s Calculation.

(f) Any payment pursuant to this Section 2.6 shall be made at a mutually convenient time and place within 10 days after the determination of Final Inventory Value by Seller’s delivery by wire transfer of immediately available funds to such account or accounts of such other party as may be designated by such other party.

2.7 Earn-Out .

(a) Subject to the provisions of this Section 2.7, following the Closing Buyer shall pay or cause to be paid to Seller a payment based on 2007 Revenue, 2008 Revenue and 2009 Revenue, as applicable, as follows:

(i) No later than April 30, 2008, Buyer shall prepare and deliver to Seller (i) a statement setting forth in reasonable detail the 2007 Revenues and the amount of the 2007 Earnout Payment, if any, and (ii) a certificate of Buyer’s Chief Financial Officer or other officer of Buyer certifying on behalf of Buyer that the calculation of 2007 Revenues and the 2007 Earnout Payment, if any, was made in accordance with the terms of this Section 2.7 (such statement and certificate being referred to as the “ 2007 Earnout Certificate ”). If the 2007 Earnout Certificate provides that Seller is entitled to a 2007 Earnout Payment, Buyer shall make such 2007 Earnout Payment to Seller on or prior to the date that is 30 days following delivery of the 2007 Earnout Certificate.

(ii) No later than April 30, 2009, Buyer shall prepare and deliver to Seller (i) a statement setting forth in reasonable detail the 2008 Revenues and the amount of the 2008 Earnout Payment, if any, and (ii) a certificate of Buyer’s Chief Financial Officer or other officer of Buyer certifying on behalf of Buyer that the calculation of 2008 Revenues and the 2008 Earnout Payment, if any, was made in accordance with the terms of this Section 2.7 (such statement and certificate being referred to as the “ 2008 Earnout Certificate ”). If the Earnout Certificate provides that Seller is entitled to a 2008 Earnout Payment, Buyer shall make such 2008 Earnout Payment to Seller on or prior to the date that is 30 days following delivery of the 2008 Earnout Certificate.

(iii) No later than April 30, 2010, Buyer shall prepare and deliver to Seller (i) a statement setting forth in reasonable detail the 2009 Revenues and the amount of the 2009 Earnout Payment, if any, and (ii) a certificate of Buyer’s Chief Financial Officer or other officer of Buyer certifying on behalf of Buyer that the calculation of 2009 Revenues and the 2009 Earnout Payment, if any, was made in accordance with the terms of this Section 2.7 (such statement and certificate being referred to as the “ 2009 Earnout Certificate ”). If the Earnout Certificate provides that Seller is entitled to a 2009 Earnout Payment, Buyer shall make such 2009 Earnout Payment to Seller on or prior to the date that is 30 days following delivery of the 2009 Earnout Certificate.

(b) Prior to December 31, 2007, Seller shall provide Buyer with Seller’s calculation of Seller’s portion of 2007 Revenue. Seller shall have an opportunity to review the 2007 Earnout Certificate, 2008 Earnout Certificate or 2009 Earnout Certificate, as the case may be, for a period of 30 days following delivery of such certificate (the “ Review Period ”), during which period Seller and Seller’s representatives shall have reasonable access, during normal business hours and upon reasonable notice, to the books and records of Buyer and Buyer’s financial and accounting personnel for the purpose of confirming the calculations and information contained in the 2007 Earnout Certificate, 2008 Earnout Certificate or 2009 Earnout Certificate, as the case may be. All information obtained by Seller shall be deemed confidential information subject to the restrictions of an appropriate confidentiality agreement and shall not be disclosed or made use of in any manner by Seller other than for the limited purpose of enforcing Seller’s rights under this Agreement.

(i) For purposes of this Agreement, “ 2007 Revenue ” shall mean net revenue determined in accordance with GAAP, which is net of returns, allowances and advertiser discounts, recognized by Seller, Buyer or any of their Subsidiaries (without duplication and net of transactions between and among Buyer and its Subsidiaries) for the 12 months ending December 31, 2007, from the Products and Projects and their logical extensions, successors, fixes, improvements and new releases thereto.

(ii) For purposes of this Agreement, “ 2008 Revenue ” shall mean net revenue determined in accordance with GAAP, which is net of returns, allowances and advertiser discounts recognized by Buyer or any of its Subsidiaries (without duplication and net of transactions between and among Buyer and its Subsidiaries) for the 12 months ending December 31, 2008, from the Products and Projects and their logical extensions, successors, fixes, improvements and new releases thereto.

(iii) For purposes of this Agreement, “ 2009 Revenue ” shall mean net revenue determined in accordance with GAAP, which is net of returns, allowances and advertiser discounts recognized by Buyer or any of its Subsidiaries (without duplication and net of transactions between and among Buyer and its Subsidiaries) for the 12 months ending December 31, 2009, from the Products and Projects and their logical extensions, successors, fixes, improvements and new releases thereto.

(iv) Such calculations of 2007 Revenue, 2008 Revenue and 2009 Revenue shall be determined in a manner consistent with (x) GAAP applied on a basis consistent with Buyer’s past practices and (y) the revenue recognition policies of Buyer.

(v) The “ 2007 Earnout Payment ” shall equal the lesser of (A) $65,000,000 and (B)(1) 0.20 multiplied by (2) the excess of 2007 Revenue over $195,000,000 (the “ 2007 Revenue Target ”).

(vi) The “ 2008 Earnout Payment ” shall equal the lesser of (A)(1) $65,000,000 minus (2) the 2007 Earnout Payment and (B)(1) 0.20 multiplied by (2) the excess of 2008 Revenue over $230,000,000 (the “ 2008 Revenue Target ”).

(vii) The “ 2009 Earnout Payment ” shall equal the lesser of (A)(1) $65,000,000 minus (2) the 2007 Earnout Payment minus (3) the 2008 Earnout Payment and (B)(1) 0.20 multiplied by (2) the excess of 2009 Revenue over $246,000,0000 (the “ 2009 Revenue Target ” and together with the 2007 Revenue Target and 2008 Revenue Target, the “ Revenue Targets ”).

(viii) For the avoidance of doubt, the sum of the 2007 Earnout Payment, 2008 Earnout Payment and 2009 Earnout Payment (collectively, the “ Earnout Payments ”) shall not exceed $65,000,000 in the aggregate.

(d) Dispute Resolution.

(i) If Seller disagrees with any aspect of the 2007 Earnout Certificate, 2008 Earnout Certificate or 2009 Earnout Certificate, Seller shall deliver written notice to Buyer on or prior to the expiration of the Review Period, indicating in reasonable detail the nature and extent for such disagreement (an “ Earnout Dispute Notice ”). Unless an Earnout Dispute Notice is delivered on or prior to the expiration of the applicable Review Period, the 2007 Revenue, 2008 Revenue or 2009 Revenue as set forth in the 2007 Earnout Certificate, 2008 Earnout Certificate or 2009 Earnout Certificate, respectively, shall be final and binding on Seller and Buyer.

(ii) If Seller delivers an Earnout Dispute Notice to Buyer on or prior to the expiration of the Review Period, Seller and Buyer shall attempt in good faith to resolve the disagreements set forth in the Earnout Dispute Notice. If Seller and Buyer are able to resolve the disagreements set forth in the Earnout Dispute Notice, they shall reduce such resolution to writing and such agreed upon 2007 Revenue, 2008 Revenue or 2009 Revenue, as the case may be, shall be final and binding on Seller and Buyer and shall be paid to Seller within 5 Business Days of the execution of such writing.

(iii) If Seller and Buyer are not able to resolve the disagreements set forth in the Earnout Dispute Notice within 30 days following delivery of the Earnout Dispute Notice, Seller and Buyer will refer the items of disagreement for determination to an independent accounting firm of outstanding reputation agreed upon by Seller and Buyer (the “ Independent Accounting Firm ”) to resolve the disagreements and make a final and binding determination of the 2007 Revenue, 2008 Revenue or 2009 Revenue, as the case may be, provided , however , that the determination of the Independent Accounting Firm shall not be in excess of the amount proposed by Seller nor less than the amount proposed by Buyer. The Independent Accounting Firm, Buyer and Seller will enter into such engagement letters as reasonably required by the Independent Accounting Firm to perform under this Section 2.7. The non-prevailing party shall be responsible for the fees and expenses of the Independent Accounting Firm; provided that if the Independent Accounting Firm resolves the dispute so that Buyer and Seller both prevail in part, Buyer and Seller shall each pay the fees and expenses of the Independent Accounting Firm in the proportion that such dispute was resolved in favor of the other party, which shall be determined by the Independent Accounting Firm.

(iv) If the Independent Accounting Firm determines that Seller is entitled to a 2007 Earnout, 2008 Earnout or 2009 Earnout, Buyer shall make such payment within 5 Business Days of such determination.

(e) Covenants Regarding Contingent Payments . Seller acknowledges, understands and agrees that, after the Closing, Buyer and its Subsidiaries shall exercise operational control of the Business and the Assets without interference by Seller. Seller understands that the future creation and marketing of the Business and its products and projects shall be exercised by Buyer and its Subsidiaries in accordance with their own business judgment and in their sole and absolute discretion. Seller further acknowledges, understands and agrees that: (A) Buyer and its Subsidiaries will have complete control and sole and absolute discretion with respect to decisions concerning the Business after the Closing, (B) such control and discretion by Buyer could have a material adverse effect upon any amount that may be payable under Section 2.7 of this Agreement, (C) such control and discretion by Buyer and its Subsidiaries over the matters set forth in clauses (A) and (B) above could result in Seller receiving no amounts whatsoever under Section 2.7 of this Agreement and (D) Buyer and its Subsidiaries have no duty to Seller to commercially exploit the Business or its products or projects or to exert any level of efforts in marketing the Business or its products or projects. In addition, Seller acknowledges, understands and agrees that whether or not Buyer or any of its Subsidiaries make any sales with respect to the Business after the Closing, neither Buyer, nor any of its Subsidiaries are prohibited pursuant to this Section 2.7 from researching, developing, manufacturing, marketing or selling other products that may compete with or reduce the sales of the Business. Seller also acknowledges, understands and agrees that personnel of Buyer and its Subsidiaries are only required to take actions in connection with the commercial exploitation of the Business and its products and projects that such personnel believe to be in the best interests of Buyer and, as applicable, its Subsidiaries, and that they are not required to take into account the interests of Seller in determining whether to take such actions. Accordingly, with respect to this Section 2.7, Seller agrees not to challenge in any subsequent claim or action any decision regarding such commercial exploitation of the Business and its products and projects made by any director, officer, employee or agent of Buyer or of any of its Subsidiaries in what such decision-making individual subjectively believes to be the best interests of Buyer or any of its Subsidiaries, unless such action constitutes a breach by Buyer of any of its express obligations under this Agreement or the Ancillary Agreements.

(f) Distribution . With respect to each payment to Seller pursuant to this Section 2.7, 40% of such payment shall be made to Parent Seller and 60% of such payment shall be made to Subsidiary Seller.

(g) Successors . Until all obligations of Buyer under this Section 2.7 are completed, Buyer will require any successor to Buyer’s interest in the Assets (whether direct or indirect, including by merger, consolidation, reorganization, or sale of all or substantially all of the Assets) to assume and agree to perform this Agreement, in the same manner and to the same extent that Buyer would have been required to perform it if no such succession had taken place. In the event that Buyer sells a material portion (but less than substantially all) of the Assets, Buyer and Seller shall negotiate in good faith to adjust the provisions of this Section 2.7 appropriately. For example, if Buyer sells its rights with respect to the Si4300/4300T Product, the Revenue Targets shall be appropriately lowered.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF SELLER

Any reference in this Article III to “ Seller ” shall be deemed to refer to Parent Seller and its Subsidiaries unless the context requires otherwise. Seller hereby represents and warrants to Buyer that the statements contained in this Article III are true and correct, except as expressly set forth in the disclosure schedule of Seller delivered to Buyer concurrently herewith (the “ Seller Disclosure Schedule ”). The Seller Disclosure Schedule shall be arranged in sections and paragraphs corresponding to the numbered and lettered sections and paragraphs contained in this Article III, and the disclosure in any section or paragraph shall qualify (a) the corresponding section or paragraph in this Article III and (b) the other sections and paragraphs in this Article III only to the extent that it is reasonably apparent from a reading of such disclosure that it also qualifies or applies to such other sections and paragraphs.

3.1 Organization of Parent Seller . Parent Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Parent Seller has the requisite corporate power and authority to conduct its business (including the Business) as it is presently being conducted and to own, lease and operate its properties and assets (including the Assets). Parent Seller is qualified or licensed to do business and is in good standing in each jurisdiction in which either the ownership or use of its property or assets or the conduct of its business requires such qualification or license, except for any failure to be so qualified, licensed or in good standing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

3.2 Subsidiaries . Schedule 3.2 sets forth each Subsidiary of Seller which owns, leases, operates or makes use of any of the Assets. Parent Seller owns, directly or indirectly, all of the issued and outstanding capital stock of each Subsidiary listed on Schedule 3.2. Each of the Subsidiaries listed on Schedule 3.2, is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Each of the Subsidiaries listed on Schedule 3.2 has the requisite corporate power and authority to conduct its business as it is presently being conducted and to own, lease and operate its properties and assets. Each of the Subsidiaries listed on Schedule 3.2 is qualified or licensed to do business and is in good standing in each jurisdiction in which either the ownership or use of its property or assets or the conduct of its business requires such qualification or license, except for any failure to be so qualified, licensed or in good standing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

3.3 Authorization . Seller has the requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party, to consummate the transactions contemplated hereby and thereby and to perform its obligations hereunder and thereunder. The execution and delivery by Seller of this Agreement and the Ancillary Agreements to which it is a party and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action of Seller. No other corporate actions or proceedings on the part of Seller are necessary to authorize the execution, delivery and performance of this Agreement, the Ancillary Agreements to which it is a party or the transactions contemplated hereby and thereby. This Agreement has been duly and validly executed and delivered by Seller and constitutes the valid and legally binding obligation of Seller, enforceable in accordance with its terms. Upon execution and delivery of the Ancillary Agreements, such Ancillary Agreements will be duly executed and delivered by Seller and will constitute the valid and legally binding obligations of Seller, enforceable in accordance with their terms.

3.4 Absence of Certain Changes . Since the Balance Sheet Date, there has not been (i) any Material Adverse Effect, (ii) any condition, event or occurrence which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect or (iii) any event which, if it had taken place following the Balance Sheet Date, would not have been permitted by Section 5.2 of this Agreement without the prior consent of Buyer.

3.5 Tangible Assets . Seller has good and marketable title to, or a valid leasehold interest in, the tangible Assets taking into account sales of Inventory in the ordinary course. All such tangible Assets are in good operating condition and repair, ordinary wear and tear excepted, and have been maintained in accordance with normal industry practice.

3.6 Facilities . True and complete copies of each Facility Lease (including all amendments, supplements, extensions and modifications thereto) have been delivered or made available to Buyer. Subject to obtaining the consent of the lessor to the extent required by any Facility Lease, Seller or the Transferred Subsidiary (as applicable) is not in Default under the terms of such Facility Lease. The Facility Leases entered into by the French Subsidiary are all commercial leases as governed by provisions of the Commercial Code replacing the decree no53-960 of 30 September 1953 as well as the provisions of such decree not yet codified in the Commercial Code and the French Subsidiary benefits from the commercial ownership in respect to these leases. Seller does not own any real property, the use and operations of which are primarily related to the Business.

3.7 Contracts and Commitments .

(a) Contracts . Schedule 3.7 sets forth a list of all material Contracts of the following categories to which Seller is party as of the Execution Date, including:

(i) Contracts for the lease of any Assets which constitute personal property;

(ii) licensing, development and royalty Contracts (and any other Contracts involving Intellectual Property Rights) involving material Assets or with material obligations of or to Seller (excluding purchase orders or invoices entered into in the ordinary course of business);

(iii) Contracts with any customers listed in Schedule 3.18 containing material warranty obligations on the part of Seller (other than under its unmodified form of standard customer agreement, the form of which has been made available to counsel to Buyer);

(iv) any partnership or joint venture Contracts;

(v) Contracts with any Governmental Entity;

(vi) collective bargaining or union Contracts;

(vii) any employment Contracts for Business Employees involving severance, termination, golden parachute, or other similar payments in excess of $25,000 to any Business Employee following termination of employment or otherwise as a result of the consummation of the transactions contemplated by this Agreement;

(viii) confidentiality and non-disclosure Contracts (whether Seller is the beneficiary or the obligated party thereunder);

(ix) any Contract prohibiting the Business or the owner thereof from competing with any Person with respect to the Business in any geographic area; and

(x) any other Contract not otherwise covered above which is (a) an Assumed Contract and (b) material to the Business.

Seller has delivered to Buyer copies of all of the Contracts listed on Schedule 3.7, including all amendments and supplements thereto.

(b) Absence of Defaults . All of the Assumed Contracts are valid, binding and enforceable obligations of Seller and, to the Knowledge of Seller, any other party thereto, in accordance with their terms, subject to applicable Law. Seller is not and is not alleged to be in Default under any of the Assumed Contracts, and, to the Knowledge of Seller, no other party to any Assumed Contract is or is alleged to be in Default thereunder. Neither the execution and delivery of this Agreement or the Ancillary Agreements nor the consummation of the transactions contemplated hereby and thereby will conflict with, violate or result in or constitute a breach, lapse, cancellation, modification or Default under (with the giving of notice or passage of time or both), or result in the termination or modification of, or accelerate the performance required under, or result in a right of termination or acceleration of, any Assumed Contract set forth on Schedule 3.7(a).

3.8 No Conflict or Violation . Neither the execution, delivery and performance of this Agreement and the Ancillary Agreements nor the consummation of the transactions contemplated hereby or thereby will (a) violate any provision of Seller’s Certificate of Incorporation or Bylaws, (b) require Seller to give any notice to, or make any filing with, or obtain any authorization, consent or approval of any Governmental Authority (other than under the HSR Act or under the laws of Germany) or (c) violate any Law or Court Order applicable to the Business or the Assets.

3.9 Financial Statements .

(a) December 30, 2006 is referred to herein as the “ Balance Sheet Date .” Schedule 3.9 hereto sets forth the unaudited pro forma consolidated balance sheet with respect to the Business at the Balance Sheet Date (the “ Balance Sheet ”) and unaudited pro forma consolidated statement of operations with respect to the Business with respect to Seller’s fiscal year ending on the Balance Sheet Date (the “ Operating Statement ” and collectively with the Balance Sheet, the “ Financial Statements ”). The Financial Statements (i) have been prepared in accordance with the books and records regularly maintained by management of Seller and used to prepare the audited consolidated financial statements of Seller, (ii) have been derived from and reconciled to those books and records used to prepare the audited consolidated financial statements which have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved and (iii) fairly present, in all material respects, the financial position and results of operations of the Business as of the dates thereof and for the applicable periods then ended.

(b) There are no Assumed Liabilities of the nature required to be disclosed on financial statements prepared in accordance with GAAP (other than footnotes thereto), except for such liabilities or obligations (i) stated or provided for in the Financial Statements, (ii) set forth on Schedule 3.9(b) or (iii) incurred by the Business in the ordinary course of business since the Balance Sheet Date and that, solely in the case of clause (iii), would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

3.10 Litigation .

(a) Schedule 3.10 sets forth all Actions pending as of the Execution Date, or to the Knowledge of Seller, threatened (including cease and desist letters or letters stating that Seller or its Subsidiaries may wish to avoid an infringement claim by licensing a third-party’s Intellectual Property Rights) as of the Execution Date against Seller or any of its Subsidiaries (i) with respect to the Business or the Assets, (ii) against the Transferred Subsidiaries or (iii) seeking to prohibit the transactions contemplated by this Agreement and the Ancillary Agreements. As of the Execution Date, neither Seller nor any Transferred Subsidiary is subject to any Court Order adversely affecting the Business or the Assets.

(b) There is no Action pending, or to the Knowledge of Seller, threatened (including cease and desist letters or letters stating that Seller or its Subsidiaries may wish to avoid an infringement claim by licensing a third-party’s Intellectual Property Rights) against Seller or any of its Subsidiaries (i) with respect to the Business or the Assets, (ii) against the Transferred Subsidiaries, or (iii) seeking to prohibit the transactions contemplated by this Agreement and the Ancillary Agreements, in each case, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither Seller nor any Transferred Subsidiary is subject to any Court Order affecting the Assets or the Business except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

3.11 Labor Matters . Except as set forth on Schedule 3.11, Seller is not a party to, or bound by, any collective bargaining or labor agreement with respect to the Business. In the past three years, Seller has not experienced any material strike or similar collective bargaining or labor dispute.

3.12 Compliance with Law . Seller is and has conducted the Business in compliance with all Laws and Court Orders relating to the Business, except where the failure to comply would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Since January 1, 2004, Seller has not received any notice to the effect that, or otherwise been advised that, it is not in compliance with any Laws or Court Orders related to the Assets, the Business or the Transferred Subsidiaries.

3.13 Brokers . Seller has no liability or obligation to pay any fees or commissions to any broker, finder or similar agent with respect to the transactions contemplated by this Agreement for which Buyer would become liable or obligated. No Transferred Subsidiary has any liability or obligation to pay any fees or commissions to any broker, finder or similar agent with respect to the transactions contemplated by this Agreement.

3.14 Intellectual Property Rights .

Business IPR . The (i) Transferred Business IPR, (ii) Field IPR (as defined in the Intellectual Property License Agreement and together with the Transferred Business IPR, the “ Business IPR ”) and (iii) the IPR set forth on Schedule 3.14(a), collectively constitute all IPR used by Seller or its Subsidiaries in the conduct by Seller and its Subsidiaries of the Business as currently conducted.

(b) Rights . Subject to any licenses granted by Seller to third parties and licenses granted to, and use restrictions binding upon, Seller (copies of all of which have been provided to Parent Buyer), Seller (i) owns all right, title and interest in and to the Transferred Business IPR, free and clear of any Encumbrance and (ii) has the right to grant the licenses in the Field IPR granted in the Intellectual Property License Agreement. The IPR registrations and applications specifically identified on Schedule 1.1(e) as Transferred Business IPR have not expired or been abandoned. To the Knowledge of Seller, no Software included in the Transferred Business IPR is or contains Viral Software.

(c) Non-infringement . The manufacture, use and sale of the Products and the operation of the Business as it is currently conducted do not (i) to the Knowledge of Seller, infringe any Patent or (ii) materially infringe or violate any of the Trade Secrets, Copyrights or Mask Works of any other Person. To the Knowledge of Seller, the Transferred Business IPR is not invalid or unenforceable. Notwithstanding any other provision of this Agreement or the Intellectual Property License Agreement, this Section 3.14(c), the second sentence of Section 3.14(b) and Section 3.10 contain the sole and exclusive representations and warranties as to the validity of Seller’s and/or its Subsidiaries’ Intellectual Property Rights and/or Seller’s or its Subsidiaries’ infringement or other violation of any third-party Intellectual Property Rights.

(d) In-Licenses . Except as set forth on Schedule 3.14(d), Seller does not have any contractual obligation to compensate any Person for the use of any of the Transferred Business IPR. Except as set forth on Schedule 3.14(d), Seller has not licensed any of the Transferred Business IPR from a third Person or entered into a Contract that would restrict Buyer’s use of any of the Transferred Business IPR.

(e) Out-Licenses . Schedule 3.14(e) lists all Contracts pursuant to which Seller has granted any third Person a license under any Transferred Business IPR.

(f) Trade Secret Information . Seller has taken reasonable actions to protect and maintain the confidentiality of the Trade Secret Information included in the Transferred Business IPR, and has executed (i) confidentiality and invention assignment agreements with all employees and contractors (including former employees and contractors) that have contributed to the creation or invention of or have had access to such Trade Secret Information and (ii) invention assignment agreements with all employees and contractors that have contributed to the creation or invention of Patents included in the Transferred Business IPR.

3.15 Employee Benefit Plans .

(a) Definitions . The following terms, when used in this Section 3.15 , shall have the following meanings. Any of these terms may, unless the context otherwise requires, be used in the singular or the plural depending on the reference.

(i) Benefit Arrangement . “ Benefit Arrangement ” shall mean any employment, consulting, severance, retention, change of control or other similar contract, arrangement or policy and each plan, arrangement (written or oral), program, agreement or commitment providing for insurance coverage (including any self-insured arrangements), workers’ compensation, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits, life, health, disability or accident benefits (including any “voluntary employees’ beneficiary association” as defined in Section 501(c)(9) of the Code providing for the same or other benefits) or for deferred compensation, profit-sharing bonuses, stock options, stock appreciation rights, stock purchases or other forms of incentive compensation or post-retirement insurance, compensation or benefits which

(A) (1) is not a Welfare Plan, Pension Plan or Multiemployer Plan, (2) is entered into, maintained, contributed to or required to be contributed to, as the case may be, by Seller or an ERISA Affiliate or under which Seller or any ERISA Affiliate may incur any Liability, and (3) covers any employee or former employee of Seller or any ERISA Affiliate (with respect to their relationship with such entities), or

(B) is a plan covering employees or former employees of any Foreign Subsidiary (with respect to their relationship with such entities) which if maintained or administered in or otherwise subject to the laws of the United States would be described in paragraph (A).

(ii) Employee Plans . “ Employee Plans ” shall mean all Benefit Arrangements, Multiemployer Plans, Pension Plans and Welfare Plans.

(iii) ERISA . “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended.

(iv) ERISA Affiliate . “ ERISA Affiliate ” shall mean any entity which is (or at any relevant time was) a member of a “controlled group of corporations” with, under “common control” with, or a member of an “affiliated service group” with, Seller as defined in Section 414(b), (c), (m) or (o) of the Code.

(v) Foreign Subsidiary . “ Foreign Subsidiary ” shall mean any Subsidiary organized under the laws of or doing business in any country other than the United States.

(vi) Multiemployer Plan . “ Multiemployer Plan ” shall mean any “multiemployer plan,” as defined in Section 3(37) or 4001(a)(3) of ERISA, which any Seller or any ERISA Affiliate maintains, administers, contributes to or is required to contribute to, or maintained, administered, contributed to or was required to contribute to, or under which any Seller or any ERISA Affiliate has or may have any Liability.

(vii) Pension Plan . “ Pension Plan ” shall mean

(A) any “employee pension benefit plan” as defined in Section 3(2) of ERISA (other than a Multiemployer Plan) (1) which Seller or any ERISA Affiliate maintains, administers, contributes to or is required to contribute to, or, within the five years prior to the Closing Date, maintained, administered, contributed to or was required to contribute to, or under which Seller or any ERISA Affiliate may incur any Liability and (2) which covers any employee or former employee of Seller or any ERISA Affiliate (with respect to their relationship with such entities), or

(B) any plan covering employees or former employees of any Foreign Subsidiary (with respect to their relationship with such entities) which if maintained or administered in or otherwise subject to the laws of the United States would be described in paragraph (A); provided, however, that any statutory pension plan covering employees or former employees of any Foreign Subsidiary (with respect to their relationship with such entities) shall also be deemed a Pension Plan for purposes hereof.

(viii) Welfare Plan . “ Welfare Plan ” shall mean

(A) any “employee welfare benefit plan” as defined in Section 3(1) of ERISA, (1) which Seller or any ERISA Affiliate maintains, administers, contributes to or is required to contribute to, or under which Seller or any ERISA Affiliate may incur any Liability and (2) which covers any employee or former employee of Seller or any ERISA Affiliate (with respect to their relationship with such entities), or

(B) any plan covering employees or former employees of any Foreign Subsidiary (with respect to their relationship with such entities) which if maintained or administered in or otherwise subject to the laws of the United States would be described in paragraph (A) provided, however , that any statutory welfare benefit plan covering employees or former employees of any Foreign Subsidiary (with respect to their relationship with such entities), including any statutory severance or termination protection benefits, shall also be deemed a Welfare Plan for purposes hereof.

(b) Disclosure; Delivery of Copies of Relevant Documents and Other Information . Schedule 3.15 contains a complete list of material Employee Plans which cover Business Employees or any former employee, director or consultant of any Foreign Subsidiary (with respect to their relationship with such entities). Copies of each of the following documents have been made available by Seller to Buyer: (i) each material Welfare Plan, Pension Plan and Multiemployer Plan (and, if applicable, related trust agreements) which covers Business Employees or any former employee, director or consultant of any Foreign Subsidiary (with respect to their relationship with such entities) and all amendments thereto, and (ii) each Employee Plan which covers or has covered Business Employees (with respect to their relationship with Seller) and a description of any such Employee Plan which is not in writing. Each Employee Plan that is also a French Subsidiary Plan is set forth on the Schedule of French Subsidiary Plans.

(i) No Pension Plan . Neither Seller nor any ERISA Affiliate has ever maintained, established, sponsored, participated in, or contributed to, any Pension Plan subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the Code.

(ii) Multiemployer Plans . None of the Employee Plans is a “multiemployer plan” (as defined in Section 3(37) of ERISA regardless of ERISA’s applicability thereto) or a multi-employer benefit plan.

(iii) Retiree Obligations . No Welfare Plan provides retiree life insurance, retiree health or other retiree employee welfare benefits to any person, except as may be required by COBRA or other applicable law, and neither Seller nor any ERISA Affiliate has ever promised to or contracted with any Business Employee that such Business Employee would be provided with retiree life insurance, retiree health or other retiree employee welfare benefits, except to the extent required by law.

(iv) General Compliance . Each Employee Plan that covers any Business Employee or any former employee, director or consultant of any Foreign Subsidiary has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all applicable Laws and Court Orders, including ERISA and the Code.

(v) Schedule 3.15(c)(v) sets forth a true and complete list of all Business Personnel (with names redacted for Business Personnel who are employed by the French Subsidiary) together with their salaries, target annual bonus or commission (if applicable) and location, in each case as of the Execution Date. As of the Execution Date, no undertaking to employ any additional persons has been given by the French Subsidiary.

(vi) Each Employee Plan intended to be “qualified” under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service as to its qualified status.

(vii) All contributions, premiums and other amounts required to be paid under the French Subsidiary Plans or by applicable Law have been paid on a timely basis in accordance with such applicable Law and the terms of such French Subsidiary Plans, except for any failure to make such payments that would not result in a material liability to Buyer. The French Subsidiary has duly and timely filed all returns with the social and retirement Governmental Authorities.

(viii) Except as disclosed in Schedule 3.15(c)(viii), no Business Employee is on short-term or long-term disability leave, secondment, statutory leave of absence or receiving benefits pursuant to any workers’ compensation legislation or is on any other leave of absence.

(ix) Except as disclosed in Schedule 3.15(c)(ix), neither Seller nor any of its Subsidiaries has made any formal plan or any promise to improve or change the benefits provided under any Employee Plan covering Business Employees.

(x) No material claim has been made, commenced or, to Seller’s knowledge, threatened with respect to any French Subsidiary Plan or any employee or former employee of the French Subsidiary in connection with their employment (other than routine claims for benefits payable in the ordinary course, and appeals of any denied claims).

(xi) No Employee Plan provides for any bonus, retirement, severance, job security or similar benefit or any accel

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