Exhibit 2.1
================================================================================
DISTRIBUTION AGREEMENT
by and between
CONEXANT SYSTEMS, INC.
and
MINDSPEED TECHNOLOGIES, INC.
================================================================================
June 27, 2003
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS..................................................................................... 1
Section 1.01 General........................................................................... 1
ARTICLE II THE CONTRIBUTION............................................................................... 18
Section 2.01 Intercorporate Reorganization..................................................... 18
Section 2.02 Financial Instruments............................................................. 21
Section 2.03 Intercompany Accounts and Arrangements............................................ 22
Section 2.04 Cash Management................................................................... 23
Section 2.05 The Mindspeed Board............................................................... 24
Section 2.06 Resignations; Transfer of Stock Held as Nominee................................... 24
Section 2.07 Mindspeed Certificate of Incorporation and Bylaws; Rights Plan.................... 25
Section 2.08 Consents.......................................................................... 25
ARTICLE III THE DISTRIBUTION.............................................................................. 26
Section 3.01 The Distribution.................................................................. 26
Section 3.02 Fractional Shares................................................................. 26
Section 3.03 Cooperation Prior to the Distribution............................................. 27
Section 3.04 Conexant Board Action; Conditions to the Distribution............................. 27
Section 3.05 Waiver of Conditions.............................................................. 28
ARTICLE IV MUTUAL RELEASE; INDEMNIFICATION; EXPENSES...................................................... 29
Section 4.01 Mutual Release.................................................................... 29
Section 4.02 Indemnification by Conexant....................................................... 30
Section 4.03 Indemnification by Mindspeed...................................................... 30
Section 4.04 Limitations on Indemnification Obligations........................................ 31
Section 4.05 Procedures Relating to Indemnification............................................ 32
Section 4.06 Remedies Cumulative............................................................... 34
Section 4.07 Indemnification under Tax Allocation Agreement.................................... 34
Section 4.08 Expenses.......................................................................... 34
ARTICLE V CERTAIN OTHER MATTERS........................................................................... 35
Section 5.01 Insurance......................................................................... 35
Section 5.02 Use of Names, Trademarks, etc..................................................... 38
Section 5.03 License of Intellectual Property.................................................. 41
Section 5.04 Jazz Warrant...................................................................... 51
Section 5.05 Charitable Funds.................................................................. 51
ARTICLE VI ACCESS TO INFORMATION.......................................................................... 51
Section 6.01 Provision of Corporate Records.................................................... 51
Section 6.02 Access to Information............................................................. 52
i
Section 6.03 Production of Witnesses........................................................... 53
Section 6.04 Retention of Records.............................................................. 53
Section 6.05 Confidentiality................................................................... 54
ARTICLE VII MISCELLANEOUS................................................................................. 54
Section 7.01 Entire Agreement; Construction.................................................... 54
Section 7.02 Survival of Agreements............................................................ 55
Section 7.03 Governing Law..................................................................... 55
Section 7.04 Notices........................................................................... 55
Section 7.05 Dispute Resolution................................................................ 56
Section 7.06 Consent to Jurisdiction........................................................... 57
Section 7.07 Amendments........................................................................ 57
Section 7.08 Assignment........................................................................ 57
Section 7.09 Captions; Currency................................................................ 58
Section 7.10 Severability...................................................................... 58
Section 7.11 Parties in Interest............................................................... 58
Section 7.12 Schedules......................................................................... 58
Section 7.13 Termination....................................................................... 58
Section 7.14 Waivers; Remedies................................................................. 58
Section 7.15 Further Assurances................................................................ 59
Section 7.16 Counterparts...................................................................... 59
Section 7.17 Performance....................................................................... 59
Section 7.18 Currency Calculations............................................................. 59
Section 7.19 Interpretation.................................................................... 59
ii
SCHEDULES
Schedule 1.01(a) - Conexant Former Businesses
Schedule 1.01(b) - Amended Bylaws
Schedule 1.01(c) - Restated Certificate of Incorporation
Schedule 1.01(d) - Mindspeed Patents and Trademarks
Schedule 1.01(e) - Mindspeed Former Businesses
Schedule 1.01(f) - Mindspeed Company Codes
Schedule 1.01(g) - Mindspeed Financial Instruments
Schedule 1.01(h) - Mindspeed Specified Liabilities
Schedule 1.01(i) - Mindspeed Real Property
Schedule 1.01(j) - Mindspeed Subsidiaries
Schedule 1.01(k) - Certain IT Assets
Schedule 2.01(c) - Reorganization Transactions
Schedule 2.03(a) - Intercompany Accounts
Schedule 2.03(b)(ii) - Intercompany Agreements
Schedule 2.05 - Mindspeed Directors
Schedule 2.06 - Continuing Directors and Officers
Schedule 4.02(b) - Certain Form 10 Sections
iii
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT (this "Agreement") is dated as of
June 27, 2003 by and between CONEXANT SYSTEMS, INC., a Delaware corporation
("Conexant"), and MINDSPEED TECHNOLOGIES, INC., a Delaware corporation and a
wholly-owned subsidiary of Conexant ("Mindspeed"). Capitalized terms used in
this Agreement shall have the meanings set forth in Section 1.01.
WHEREAS, the Conexant Board has determined that it is
appropriate and desirable to distribute all outstanding shares of Mindspeed
Common Stock on a pro rata basis to the holders of Conexant Common Stock; and
WHEREAS, subject to the terms and conditions contained herein,
immediately prior to the Distribution, Conexant and the Conexant Subsidiaries
will transfer the Mindspeed Assets and the Mindspeed Subsidiaries to Mindspeed
or one of the Mindspeed Subsidiaries and Mindspeed and the Mindspeed
Subsidiaries will assume the Mindspeed Liabilities, all as more fully described
in this Agreement (the "Contribution"); and
WHEREAS, Conexant and Mindspeed have determined that it is
appropriate and desirable to set forth the principal corporate transactions
required to effect the Contribution and the Distribution and certain other
agreements that will govern certain matters relating to the Contribution and the
Distribution and the relationship of Conexant, Mindspeed and the respective
members of the Conexant Group and the Mindspeed Group following the Contribution
and the Distribution.
NOW, THEREFORE, in consideration of the premises and of the
respective agreements and covenants contained in this Agreement, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 General. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Accounts Receivable" means accounts, loans and notes
receivable (whether current or not current), including receivables due from
employees, and all proceeds thereof and rights to payment with respect thereto.
"Action" means, with respect to any Person, any actual or
threatened or future action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Entity or any claims or other legal
matters that have been or may be asserted by or against, or otherwise affect,
such Person.
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person; provided, however, that for purposes of the Separation Agreements,
following the Time of Distribution, neither Conexant nor any Conexant Subsidiary
shall be deemed to be an Affiliate of any member of the Mindspeed Group and
neither Mindspeed nor any Mindspeed Subsidiary shall be deemed to be an
Affiliate of any member of the Conexant Group. For purposes of the immediately
preceding sentence, the term "control" (including, with correlative meanings,
the terms "controlled by" and "under common control with"), as used with respect
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through ownership of voting securities, by contract or otherwise.
"Agreement" shall have the meaning set forth in the preamble.
"American Stock Exchange" means the American Stock Exchange
LLC.
"Asset/Liability Allocation Matter" shall have the meaning set
forth in Section 2.01(b).
"Assets" means any and all assets, properties and rights,
whether tangible or intangible, real, personal or mixed, fixed, contingent or
otherwise, and wherever located (other than ownership interests in
Subsidiaries), including the following:
(a) Real Property;
(b) Machinery and Equipment;
(c) Inventories;
(d) bank accounts;
(e) cash (including cash in bank accounts), cash on hand, cash
equivalents, funds, certificates of deposit, similar instruments,
travelers checks and cash deposits held by third parties securing or
otherwise collateralizing obligations;
(f) Accounts Receivable;
(g) advances, performance and surety bonds, and interests as
beneficiary under letters of credit and other similar instruments and
all proceeds thereof;
(h) Securities;
(i) Hedging Arrangements;
(j) Data and Records;
2
(k) Patents and Trademarks;
(l) Trade Secrets;
(m) Contracts;
(n) credits, prepayments and prepaid expenses;
(o) claims, causes of action, rights under express or implied
warranties, guarantees and indemnities and similar rights, rights of
recovery, rights of set-off, rights of subrogation and all other rights
of any kind (including the right to receive mail and other
communications);
(p) Permits;
(q) goodwill and going concern value; and
(r) other intangible assets not otherwise included in clauses (a)
through (q) of this definition.
"Assigning Party" shall have the meaning set forth in Section
2.08.
"Broadband Business" means (a) the businesses and operations
engaged in prior to the Time of Distribution by the members of the
Pre-Distribution Group (but with respect to each such member who has ceased to
be an Affiliate of Conexant or its predecessors, only businesses engaged in
prior to the time that such member of the Pre-Distribution Group ceased to be an
Affiliate of Conexant or its predecessors) of researching, developing,
designing, engineering, manufacturing, having manufactured, assembling, having
assembled, selling, distributing, installing, modifying, repairing, servicing
and supporting semiconductor products and systems for communications electronics
markets such as personal computers, personal imaging devices, network access
products, digital information and entertainment products, and activities related
thereto, (b) Former Businesses set forth on Schedule 1.01(a), (c) other Former
Business related primarily to any of the foregoing, and (d) activities related
primarily to the foregoing, other than, in the case of each of the foregoing
clauses (a), (b), (c) and (d), any businesses, operations or activities included
in the Mindspeed Business.
"Business Day" means any day other than a Saturday, Sunday or
other day when banks are authorized or required by law to be closed in
California or New York.
"Bylaws" means Mindspeed's amended Bylaws in the form attached
hereto as Schedule 1.01(b).
"Certificate of Incorporation" means Mindspeed's restated
certificate of incorporation in the form attached hereto as Schedule 1.01(c).
3
"Claims Administration" means the processing of claims made
under Policies, including the reporting of claims to the insurance carrier,
management and defense of claims, and providing for appropriate releases upon
settlement of claims.
"Claims Made Policies" shall have the meaning set forth in
Section 5.01(b)(ii).
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Conexant" shall have the meaning set forth in the preamble.
"Conexant Assets" means the following:
(a) all rights of any member of the Conexant Group under any
Separation Agreement to which it is or becomes a party;
(b) all Assets which are expressly allocated to any member of the
Conexant Group pursuant to the Employee Matters Agreement or the Tax
Allocation Agreement;
(c) the following specifically enumerated Assets which immediately
prior to the Time of Distribution are owned by Conexant or any of its
Subsidiaries (including members of the Mindspeed Group), in each case
whether or not such Assets are used in or relate to the Broadband
Business or the Mindspeed Business:
(i) all Conexant Bank Accounts;
(ii) all Conexant Cash;
(iii) all Accounts Receivable other than Mindspeed
Accounts Receivable;
(iv) all Inventories other than Mindspeed
Inventories;
(v) all Securities;
(vi) all Hedging Arrangements;
(vii) all Machinery and Equipment other than
Mindspeed Machinery and Equipment;
(viii) all Real Property other than Mindspeed Real
Property;
(ix) all Patents and Trademarks other than those
set forth on Schedule 1.01(d);
4
(x) all rights in, and to the use of, the
Conexant Marks, other than as provided for in Section 5.02;
(xi) all Policies and all rights, benefits and
privileges thereunder and related thereto (including the right
to receive any and all return premiums with respect thereto),
other than rights with respect to Policies to the extent
provided in Sections 5.01(b) and 5.01(c); and
(xii) all information technology Assets identified
in Schedule 1.01(k) as Conexant's;
(d) all other Assets which immediately prior to the Time of
Distribution are owned by Conexant or any of its Subsidiaries
(including members of the Mindspeed Group) that are not Mindspeed
Assets; and
(e) all rights, causes of action and claims of Conexant or any of
its Subsidiaries (including members of the Mindspeed Group) to the
extent relating to any asset described in clauses (a) through (d)
above.
Anything contained herein to the contrary notwithstanding,
assets described in paragraphs (b) and (c) of the definition of "Mindspeed
Assets" will not be included in Conexant Assets.
"Conexant Bank Accounts" means all bank accounts of Conexant
or any of its Subsidiaries (including members of the Mindspeed Group)
immediately prior to the Time of Distribution, other than Mindspeed Bank
Accounts.
"Conexant Board" means the Board of Directors of Conexant or a
duly authorized committee thereof.
"Conexant Cash" means all (i) cash (including cash in bank
accounts), cash on hand, cash equivalents, funds, certificates of deposit,
similar instruments and travelers checks held by Conexant or any of its
Subsidiaries and Affiliates (including members of the Mindspeed Group)
immediately prior to the Time of Distribution and (ii) cash deposits held by
third parties securing or otherwise collateralizing obligations of Conexant or
any of its Subsidiaries or Affiliates (including members of Mindspeed Group)
immediately prior to the Time of Distribution, other than, in the case of each
of the foregoing clauses (i) and (ii), Mindspeed Cash.
"Conexant Common Stock" means the common stock, par value $.01
per share, of Conexant.
"Conexant Expenses" means all out-of-pocket fees, costs and
expenses of Conexant or any of its Subsidiaries (including members of the
Mindspeed Group) incurred prior to the Time of Distribution in connection with
effecting the Contribution, the Distribution, the preparation, execution and
delivery of the Separation Agreements and the consummation of the Contribution
and the Distribution, other than Mindspeed Expenses.
5
"Conexant Group" means Conexant and the Conexant Subsidiaries.
"Conexant Indemnitees" mean each member of the Conexant Group
and each of their respective Representatives and Affiliates and each of the
heirs, executors, successors and permitted assigns of any of the foregoing.
"Conexant Liabilities" means the following:
(a) all Liabilities of any member of the Conexant Group under any
Separation Agreement to which it is or becomes a party;
(b) all Liabilities for which any member of the Conexant Group is
expressly made responsible pursuant to the Employee Matters Agreement
or the Tax Allocation Agreement;
(c) the following specifically enumerated Liabilities of Conexant
or any of its Subsidiaries (including members of the Mindspeed Group),
in each case whether or not such Liabilities relate to the Broadband
Business, the Conexant Assets, the Mindspeed Business or the Mindspeed
Assets:
(i) all Liabilities in respect of the
Convertible Notes; and
(d) all other Liabilities of Conexant or any of its Subsidiaries
(including members of the Mindspeed Group) in respect of operations
engaged in prior to the Time of Distribution that are not Mindspeed
Liabilities.
Anything contained herein to the contrary notwithstanding,
Liabilities described in paragraphs (b) and (c) of the definition of "Mindspeed
Liabilities" will not be included in Conexant Liabilities.
"Conexant Marks" means the names, trademarks, trade names,
domain names and service marks "Conexant", "Conexant Systems" and "Conexant
Systems, Inc." and all corporate symbols and logos related thereto and all
names, trademarks, trade names, domain names and service marks which include the
words "Conexant", "Conexant Systems" or "Conexant Systems, Inc." or any
derivative thereof and any other name, xxxx or symbol connoting "Conexant" or
which constitutes a formative thereof.
"Conexant Subsidiary" means each Subsidiary of Conexant other
than Mindspeed and the Mindspeed Subsidiaries.
"Consents" means consents, approvals, waivers, clearances,
exemptions, allowances, novations, authorizations, filings, registrations and
notifications.
"Contracts" means all agreements, personal property leases,
contracts (including employee contracts), licenses, memoranda of understanding,
letters of intent, sales orders, purchase orders, open bids and other
commitments, including in each case, all
6
amendments, modifications and supplements thereto and waivers and consents
thereunder, but excluding real property leases.
"Contribution" shall have the meaning set forth in the
recitals.
"Convertible Notes" means Conexant's (a) 4-1/4% convertible
subordinated notes due May 1, 2006 issued under the Indenture dated as of May
12, 1999 between Conexant and The First National Bank of Chicago, as trustee and
(b) 4% convertible subordinated notes due February 1, 2007 issued under the
Indenture dated as of February 1, 2000 between Conexant and Bank One Trust
Company, National Association, as trustee.
"Conveyance and Assumption Instruments" means, collectively,
the various agreements, bills of sale, stock powers, certificates of title,
instruments of conveyance and assignment, instruments of assumption and other
instruments and documents to be entered into to effect the transfer of Assets
and Subsidiaries and the assumption of Liabilities contemplated by the
transactions described in Sections 2.01(b) and (c).
"Credit Agreement" means the senior secured revolving credit
agreement dated as of the date hereof entered into prior to the Time of
Distribution by and between Conexant and Mindspeed under which Mindspeed may
borrow up to $50 million, subject to the terms set forth therein, together with
any related security documents and ancillary agreements.
"Data and Records" means financial, accounting, corporate,
operating, design, manufacturing, test and other data and records (in each case,
in whatever form or medium, including electronic media), including books,
records, notes, sales and sales promotional material and data, advertising
materials, credit information, cost and pricing information, customer, supplier
and agent lists, other records pertaining to customers, business plans,
reference catalogs, payroll and personnel records and procedures, blue-prints,
research and development files, data and laboratory books, sales order files,
litigation files, minute books, stock ledgers, stock transfer records and other
similar data and records.
"Dispute" shall have the meaning set forth in Section 7.05.
"Distribution" means the distribution, on the basis provided
for in Section 3.01, to the holders of Conexant Common Stock of the shares of
Mindspeed Common Stock owned by Conexant on the Distribution Date.
"Distribution Agent" means the distribution agent selected by
Conexant to distribute Mindspeed Common Stock in connection with the
Distribution.
"Distribution Date" means the date determined by the Conexant
Board in accordance with Section 3.01 as the date as of which the Distribution
will be effected.
"Employee Matters Agreement" means the Employee Matters
Agreement dated as of the date hereof entered into prior to the Time of
Distribution by and between Conexant and Mindspeed.
7
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Financing Agreements" means the Credit Agreement, the Initial
Warrants, the Financing Warrants, the Registration Rights Agreements, and each
other agreement, instrument or document expressly contemplated thereby to be
entered into by any party thereto.
"Financing Warrants" means warrants to purchase shares of
Mindspeed Common Stock to be issued by Mindspeed to Conexant in connection with
borrowings under the Credit Agreement.
"Form 10" means the registration statement on Form 10 filed by
Mindspeed with the Commission to effect the registration of the Mindspeed Common
Stock pursuant to the Exchange Act, including all amendments thereto filed by
Mindspeed with the Commission prior to the Time of Distribution.
"Former Business" means any corporation, partnership, entity,
division, business unit, business, assets, plants, product line, operations or
contract (including any assets and liabilities comprising the same) that has
been sold, conveyed, assigned, transferred or otherwise disposed of or divested
(in whole or in part) by any member of the Pre-Distribution Group or the
operations, activities or production of which has been discontinued, abandoned,
completed or otherwise terminated (in whole or in part) by any member of the
Pre-Distribution Group.
"Governmental Entity" means any government or any court,
arbitral tribunal, administrative agency or commission or other governmental or
regulatory authority or agency, federal, state, local, domestic, foreign or
international.
"Group" means the Conexant Group or the Mindspeed Group, as
applicable.
"Hedging Arrangements" means swaps, collars, caps, forward
contracts and other hedging arrangements of any kind.
"Indemnifiable Losses" means any and all losses, Liabilities,
claims, damages, deficiencies, obligations, fines, payments, Taxes, Liens, costs
and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown, whenever arising and
whether or not resulting from Third Party Claims (including the costs and
expenses of any and all Actions; all amounts paid in connection with any
demands, assessments, judgments, settlements and compromises relating thereto;
interest and penalties with respect thereto; out-of-pocket expenses and
reasonable attorneys', accountants' and other experts' fees and expenses
reasonably incurred in investigating, preparing for or defending against any
such Actions or in asserting, preserving or enforcing an Indemnitee's rights
hereunder; and any losses that may result from the granting of injunctive relief
as a result of any such Actions).
"Indemnifying Party" shall have the meaning set forth in
Section 4.04(a).
8
"Indemnitee" means any of the Conexant Indemnitees or the
Mindspeed Indemnitees who or which is entitled to seek indemnification under
this Agreement.
"Indemnity Reduction Amounts" shall have the meaning set forth
in Section 4.04(a).
"Information" means all records, books, contracts,
instruments, computer data and other data and information (in each case, in
whatever form or medium, including electronic media).
"Information Statement" means the information statement with
respect to Mindspeed, which is part of the Form 10, sent to holders of Conexant
Common Stock in connection with the Distribution.
"Initial Warrants" mean warrants to purchase shares of
Mindspeed Common Stock dated as of the date hereof issued by Mindspeed to
Conexant prior to the Time of Distribution.
"Insurance Proceeds" means monies (a) received by an insured
from an insurance carrier, (b) paid by an insurance carrier on behalf of an
insured or (c) received from any third party in the nature of insurance,
contribution or indemnification in respect of any Liability.
"Intellectual Property" means all Patents and Trademarks,
Trade Secrets, and other intellectual property rights existing as of the Time of
Distribution.
"Inventories" means inventories, including raw materials,
work-in-process, materials, components, finished goods, parts, accessories and
supplies.
"Jazz" means Jazz Semiconductor, Inc. (formerly named
Specialtysemi, Inc.), a Delaware corporation.
"Jazz Contribution Agreement" means the Contribution Agreement
dated February 23, 2002 among Jazz, Conexant and Carlyle Capital Investors,
L.L.C., as amended by the First Amendment to Contribution Agreement dated March
12, 2002.
"Jazz Warrant" means the warrant to purchase 2.9 million
shares of Conexant Common Stock issued by Conexant to Jazz dated March 12, 2002,
as it may be adjusted from time to time.
"Liabilities" means any and all claims, debts, liabilities,
commitments and obligations of whatever nature, whether fixed, contingent or
absolute, matured or unmatured, liquidated or unliquidated, accrued or not
accrued, known or unknown, due or to become due, whenever or however arising and
whether or not the same would be required by generally accepted accounting
principles to be reflected as a liability in financial statements or disclosed
in the notes thereto, including all costs and expenses relating thereto and
those claims, debts, liabilities, commitments and obligations:
9
(a) based upon, arising out of or relating to any law, statute,
rule, regulation, judgment, order, decision or consent decree of any
Governmental Entity or any noncompliance therewith or breach or
violation of any thereof;
(b) in respect of accounts payable;
(c) in respect of outstanding checks;
(d) based upon, arising out of or relating to workers'
compensation, automobile liability, general liability, product
liability, intellectual property liability and other claims and matters
(whether direct or for indemnification of any Person or otherwise, and
whether insured or uninsured);
(e) based upon, arising out of or relating to Actions or any award
of any arbitrator of any kind;
(f) in respect of salary, bonuses, incentive payments, severance
payments and other compensation payments and all Taxes and withholdings
related thereto;
(g) in respect of employee welfare and fringe benefits (including
claims for medical and disability benefits);
(h) based upon, arising out of or relating to environmental
matters (including the presence, release or threatened release of
hazardous materials or any other environmental conditions or the
violation of any environmental laws), including all removal,
remediation and cleanup costs, investigatory costs, settlement costs,
governmental response costs, natural resources damages, property
damages, personal injury damages and all other costs and damages;
(i) based upon, arising out of or relating to Contracts;
(j) based upon, arising out of or relating to torts (whether based
on negligence, strict liability or otherwise) or infringements; and
(k) in respect of products and services, including warranty
liabilities, deferred revenues, product liability claims and
liabilities in respect of the return, repair or replacement of
products.
"License and Assignment Agreement" means the License and
Assignment Agreement dated as of June 26, 2003 by and between Conexant and
Mindspeed.
"Lien" means any lien, security interest, pledge, mortgage,
charge, restriction, retention of title agreement or other encumbrance of
whatever nature.
"Machinery and Equipment" means machinery, equipment, tooling,
vehicles, furniture and fixtures (other than real property fixtures), leasehold
improvements, repair parts, tools, plant, laboratory and office equipment and
supplies, computer hardware and software,
10
computer networking equipment, engineering and design equipment, test equipment
and other tangible personal property (other than tangible personal property
included in other categories of assets in the definition of "Assets"), together
with any rights or claims arising out of maintenance or service contracts
relating thereto or the breach of any express or implied warranty by the
manufacturers or sellers of any of such assets or any component part thereof.
"Mindspeed" shall have the meaning set forth in the preamble.
"Mindspeed Accounting Ledgers" means the general ledgers and
other subsidiary ledgers of Conexant for each of the Mindspeed Company Codes.
"Mindspeed Accounts Receivable" mean the Accounts Receivable
set forth on the Mindspeed Accounting Ledgers immediately prior to the Time of
Distribution.
"Mindspeed Assets" means the following:
(a) all rights of any member of the Mindspeed Group under any
Separation Agreement to which it is or becomes a party;
(b) all Assets which are expressly allocated to any member of the
Mindspeed Group pursuant to the Employee Matters Agreement or the Tax Allocation
Agreement;
(c) the following specifically enumerated Assets which immediately
prior to the Time of Distribution are owned by Conexant or any of its
Subsidiaries (including members of the Mindspeed Group):
(i) the Mindspeed Bank Accounts;
(ii) the Mindspeed Cash (subject to Section
2.04(b));
(iii) the Mindspeed Accounts Receivable;
(iv) the Mindspeed Inventories;
(v) the Mindspeed Machinery and Equipment;
(vi) the Mindspeed Real Property;
(vii) the Patents and Trademarks set forth on
Schedule 1.01(d);
(viii) rights to the extent relating to the
Mindspeed Business to receive indemnification from Rockwell
pursuant to the Rockwell Distribution Agreement;
(ix) rights to the extent relating to the
Mindspeed Business to receive indemnification from Skyworks
pursuant to the Skyworks Distribution Agreement;
11
(x) rights to the extent relating to the
Mindspeed Business to receive indemnification from Jazz
pursuant to the Jazz Contribution Agreement;
(xi) one-third of the amount pre-paid by Conexant
to ARM Limited, or $580,909, pursuant to the Agreement dated
June 14, 2002 between Conexant and ARM Limited; and
(xii) all information technology Assets identified
in Schedule 1.01(k) as Mindspeed's;
(d) the following Assets (other than those described in paragraphs
(b) and (c) of the definition of "Conexant Assets") which immediately
prior to the Time of Distribution are owned by Conexant or any of its
Subsidiaries (including members of the Mindspeed Group) and which are
used exclusively in or relate exclusively to the Mindspeed Business, as
the same shall exist as of such time:
(i) Contracts;
(ii) advances, performance and surety bonds, and
interests as beneficiary under letters of credit and other
similar instruments and all proceeds thereof;
(iii) Permits;
(iv) credits, prepayments and prepaid expenses;
(v) claims, causes of action, rights under
express or implied warranties, guarantees and indemnities and
similar rights, rights of recovery, rights of set-off, rights
of subrogation and all other rights of any kind (including the
right to receive mail and other communications); and
(vi) goodwill, going concern value and other
intangible assets not otherwise included in clauses (a)
through (q) of the definition of "Assets";
(e) the following Assets (other than those described in paragraphs
(b) and (c) of the definition of "Conexant Assets") which immediately
prior to the Time of Distribution are owned by Conexant or any of its
Subsidiaries (including members of the Mindspeed Group) and which are
used 75% or more in or relate 75% or more to the Mindspeed Business, as
the same shall exist as of such time:
(i) Data and Records; and
(ii) Trade Secrets; and
12
(f) all rights, causes of action and claims of Conexant or any of
its Subsidiaries (including members of the Mindspeed Group) to the
extent relating to any asset described in clauses (a) through (e)
above.
Anything contained herein to the contrary notwithstanding,
assets described in paragraphs (b) and (c) of the definition of "Conexant
Assets" will not be included in Mindspeed Assets.
"Mindspeed Bank Accounts" means all bank accounts which are
solely in the name of one or more members of the Mindspeed Group immediately
prior to the Time of Distribution.
"Mindspeed Board" means the Board of Directors of Mindspeed.
"Mindspeed Business" means (a) the business and operations
engaged in prior to the Time of Distribution by the members of the
Pre-Distribution Group (but with respect to each such member who has ceased to
be an Affiliate of Conexant or its predecessors, only businesses engaged in
prior to the time that such member of the Pre-Distribution Group ceased to be an
Affiliate of Conexant or its predecessors) of researching, developing,
designing, engineering, manufacturing, having manufactured, assembling, having
assembled, selling, distributing, installing, modifying, repairing, servicing
and supporting semiconductor networking products for communications applications
in enterprise, access, metropolitan and wide-area networks and activities
related thereto, (b) Former Businesses set forth on Schedule 1.01(e), (c) other
Former Businesses related primarily to any of the foregoing and (d) activities
related primarily to the foregoing.
"Mindspeed Cash" means (i) the following to the extent set
forth on the Mindspeed Accounting Ledgers immediately prior to the Time of
Distribution or located at locations of the Mindspeed Business at the Time of
Distribution: cash in Mindspeed Bank Accounts, cash on hand, cash equivalents,
funds, certificates of deposits, similar instruments and travelers checks and
(ii) cash deposits held by third parties securing or otherwise collateralizing
obligations relating to the Mindspeed Business immediately prior to the Time of
Distribution.
"Mindspeed Common Stock" means the common stock, par value
$.01 per share, of Mindspeed.
"Mindspeed Company Codes" means the Mindspeed company codes
set forth on Schedule 1.01(f).
"Mindspeed Expenses" means the following out-of-pocket fees,
costs and expenses of Conexant or any of its Subsidiaries (including members of
the Mindspeed Group), in each case, whether incurred and/or paid before, at or
after the Time of Distribution:
(a) all out-of-pocket fees, costs, and expenses (including legal
fees and expenses) of and related to the Credit Agreement, the credit
facility established thereby and the Financing Warrants; and
13
(b) all out-of-pocket fees, costs and expenses of the transfer
agent and registrar for the Mindspeed Common Stock.
"Mindspeed Financial Instruments" means those credit
facilities, guaranties, foreign currency forward exchange contracts, comfort
letters, letters of credit and similar instruments related to the Mindspeed
Business under which any member of the Conexant Group has any primary,
secondary, contingent, joint, several or other Liability, including those set
forth on Schedule 1.01(g).
"Mindspeed Group" means Mindspeed and the Mindspeed
Subsidiaries.
"Mindspeed Indemnitees" means each member of the Mindspeed
Group and each of their respective Representatives and Affiliates and each of
the heirs, executors, successors and permitted assigns of any of the foregoing.
"Mindspeed Inventories" means the Inventories set forth on the
Mindspeed Accounting Ledgers immediately prior to Time of Distribution.
"Mindspeed Liabilities" means the following:
(a) all Liabilities of any member of the Mindspeed Group under any
Separation Agreement to which it is or becomes a party;
(b) all Liabilities for which any member of the Mindspeed Group is
expressly made responsible pursuant to the Employee Matters Agreement
or the Tax Allocation Agreement;
(c) the following specifically enumerated Liabilities of Conexant
or any of its Subsidiaries (including members of the Mindspeed Group),
in each case whether or not such Liabilities relate to the Broadband
Business, the Conexant Assets, the Mindspeed Business or the Mindspeed
Assets:
(i) all Liabilities set forth on the Mindspeed
Accounting Ledgers immediately prior to the Time of
Distribution; and
(ii) all Liabilities set forth on Schedule
1.01(h); and
(d) all Liabilities (other than those described in paragraphs (b)
and (c) of the definition of "Conexant Liabilities") of Conexant or any
of its Subsidiaries (including members of the Mindspeed Group) to the
extent based upon, arising out of or relating to the Mindspeed Assets
or the Mindspeed Business, including:
(i) all Liabilities (including Liabilities
arising out of any breaches or violations) to the extent
relating to the Mindspeed Business based upon, arising out of
or relating to Contracts (whether or not such Contracts
constitute Mindspeed Assets) (including any primary,
secondary, contingent or other obligations, such as under
guaranties or indemnities, in respect of such
14
Contracts), including (A) all Liabilities to the extent
relating to the Mindspeed Assets or the Mindspeed Business for
which Conexant has agreed to indemnify Rockwell and certain
other Persons pursuant to the Rockwell Distribution Agreement,
(B) all Liabilities to the extent relating to the Mindspeed
Assets or the Mindspeed Business for which Conexant has agreed
to indemnify Skyworks and certain other Persons pursuant to
the Skyworks Distribution Agreement and (C) all Liabilities to
the extent relating to the Mindspeed Assets or the Mindspeed
Business for which Conexant has agreed to indemnify Jazz and
certain other Persons pursuant to the Jazz Contribution
Agreement; and
(ii) the Actions set forth in paragraph E of
Schedule 1.01(h).
Anything contained herein to the contrary notwithstanding,
Liabilities described in paragraphs (b) and (c) of the definition of "Conexant
Liabilities" will not be included in Mindspeed Liabilities.
"Mindspeed Machinery and Equipment" means the Machinery and
Equipment set forth on the Mindspeed Accounting Ledgers immediately prior to the
Time of Distribution.
"Mindspeed Real Property" means the Real Property set forth on
Schedule 1.01(i).
"Mindspeed Subsidiary" means each Person listed on Schedule
1.01(j).
"New Jazz-Mindspeed Warrant" shall have the meaning set forth
in Section 5.04.
"Occurrence Basis Policies" shall have the meaning set forth
in Section 5.01(b)(i).
"Patents and Trademarks" means (a) all patents (including
utility and design patents, industrial designs and utility models), patent
applications and patent and invention disclosures, together with all
reissuances, continuations, continuations-in-part, divisions, revisions,
supplementary protection certificates, extensions and re-examinations thereof,
and any other U.S. or foreign patent rights entitled to the same priority claim
(in whole or in part) as any of the foregoing, (b) trademarks, service marks,
trade names, trade dress, logos, Internet domain names, business and product
names and slogans and all registrations and applications for registration of any
of the foregoing, (c) copyrights and all applications, registrations and
renewals in connection therewith and (d) mask work and semiconductor chip right
applications, registrations and renewals in connection therewith.
"Patent License Agreement" means the Patent License Agreement
dated as of the date hereof by and between Conexant and Mindspeed.
15
"Permits" means licenses, permits, authorizations, Consents,
certificates, registrations, variances, franchises and other approvals from any
Governmental Entity, including those relating to environmental matters.
"Person" means any individual, partnership, joint venture,
corporation, limited liability entity, trust, unincorporated organization or
other entity (including a Governmental Entity).
"Policies" means all insurance policies, insurance contracts
and claim administration contracts of any kind of Conexant and its Subsidiaries
(including members of the Mindspeed Group) and their predecessors which were or
are in effect at any time at or prior to the Time of Distribution (other than
insurance policies, insurance contracts and claim administration contracts
established in contemplation of the Distribution to cover only Mindspeed and its
Subsidiaries after the Time of Distribution), including the Property Policy,
primary, excess and umbrella, commercial general liability, fiduciary liability,
product liability, automobile, aircraft, property and casualty, business
interruption, directors and officers liability, employment practices liability,
workers' compensation, crime, errors and omissions, special accident, cargo and
employee dishonesty insurance policies and captive insurance company
arrangements, together with all rights, benefits and privileges thereunder.
"Pre-Distribution Group" means (a) each of Conexant, the
Subsidiaries of Conexant existing immediately prior to the Time of Distribution
(including members of the Mindspeed Group) and Persons that have ceased to be
Subsidiaries of Conexant prior to the Time of Distribution, (b) each of the
predecessors of each of the foregoing (including Rockwell) and (c) each of the
Persons that have ceased to be Subsidiaries and other Affiliates of each of the
foregoing and their predecessors prior to the Time of Distribution.
Notwithstanding the foregoing, (i) Boeing North American, Inc. and Persons who
are Affiliates of Boeing North American, Inc. after December 6, 1996 will not
constitute members of the Pre-Distribution Group for periods after December 6,
1996, (ii) Rockwell and Persons who are Affiliates of Rockwell after December
31, 1998 will not constitute members of the Pre-Distribution Group for periods
after December 31, 1998 and (iii) Washington and Persons who are Affiliates of
Washington or its successor after June 25, 2002 will not constitute members of
the Pre-Distribution Group for periods after June 25, 2002.
"Privileged Information" means, with respect to a Group,
Information regarding a member of such Group, or any of its operations,
employees, Assets or Liabilities (whether in documents or stored in any other
form or known to its employees or agents) that is or may be protected from
disclosure pursuant to the attorney-client privilege, the work product doctrine
or other applicable privileges, that a member of the other Group has or may come
into possession of or has obtained or may obtain access to pursuant to this
Agreement or otherwise.
"Property Policy" means the Conexant property insurance
policies for the policy year July 1, 2002 through June 30, 2003.
16
"Real Property" means real property (including land, plants,
buildings, real property fixtures and improvements) and real property interests
(including real property leases, easements and rights of way, occupancy or use).
"Recipient Party" shall have the meaning set forth in Section
2.08.
"Record Date" means the close of business on June 20, 2003.
"Registration Rights Agreements" means the two Registration
Rights Agreements dated as of the date hereof entered into prior to the Time of
Distribution by and between Conexant and Mindspeed, one each relating to (i) the
Initial Warrants and (ii) the Financing Warrants.
"Representative" means, with respect to any Person, any of
such Person's directors, officers, employees, agents, consultants, advisors,
accountants, attorneys and representatives.
"Rights" means the Rights to be issued pursuant to the Rights
Plan.
"Rights Plan" means the rights agreement dated as of June 26,
2003 by and between Mindspeed and Mellon Investor Services LLC, as rights agent.
"Rockwell" means Rockwell Automation, Inc. (formerly named
Rockwell International Corporation), a Delaware corporation.
"Rockwell Distribution Agreement" means the Distribution
Agreement dated as of December 31, 1998 between Conexant and Rockwell.
"Securities" means all short-term and long-term investments,
banker's acceptances, shares of stock, notes, bonds, debentures, evidences of
indebtedness, certificates of interest or participation in profit-sharing
agreements, collateral-trust certificates, preorganization certificates or
subscriptions, transferable shares, puts, calls, straddles, options, investment
contracts, voting trusts and certificates and other securities of any kind
(other than ownership interests in Subsidiaries).
"Separation Agreements" means, collectively, this Agreement,
the Employee Matters Agreement, the Tax Allocation Agreement, the Transition
Agreement, the Conveyance and Assumption Instruments, the Sublease and any other
agreement entered into between Conexant and Mindspeed in connection with the
Contribution and the Distribution (other than the Financing Agreements).
"Skyworks" means Skyworks Solutions, Inc., a Delaware
corporation (formerly named Alpha Industries, Inc.) and successor by merger to
Washington.
"Skyworks Distribution Agreement" means the Contribution and
Distribution Agreement dated as of December 16, 2001, as amended as of June 25,
2002, by and between Conexant and Washington.
17
"Sublease" means the Sublease dated as of the date hereof
entered into prior to the Time of Distribution by and between Conexant and
Mindspeed relating to premises at 0000 XxxXxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx,
Xxxxxxxxxx 00000-0000.
"Subsidiary" means, with respect to any Person, any
corporation or other organization, whether incorporated or unincorporated, of
which such Person or any Subsidiaries of such Person controls or owns, directly
or indirectly, more than 50% of the stock or other equity interest, or more than
50% of the voting power entitled to vote on the election of members to the board
of directors or similar governing body.
"Tax" and "Taxes" shall have the meaning set forth in the Tax
Allocation Agreement.
"Tax Allocation Agreement" means the Tax Allocation Agreement
dated as of the date hereof entered into prior to the Time of Distribution by
and between Conexant and Mindspeed.
"Third Party Claim" shall have the meaning set forth in
Section 4.05(a).
"Time of Distribution" means the close of business on the
Distribution Date.
"Trade Secrets" means (a) trade secrets and confidential
business and technical information (including ideas, research and development,
know-how, formulas, technology, compositions, manufacturing and production
processes and techniques, technical data, engineering, production and other
designs, drawings, engineering notebooks, industrial models, mask works,
semiconductor chip topographies, software and specifications and any other
information meeting the definition of a trade secret under the Uniform Trade
Secrets Act); (b) computer and electronic data processing programs and software,
both source code and object code (including data and related documentation, flow
charts, diagrams, descriptive texts and programs, computer print-outs,
underlying tapes, computer databases and similar items), computer applications
and operating programs; and (c) all copies and tangible embodiments of any or
all of the foregoing (in whatever form or medium, including electronic media).
"Transition Agreement" means the Transition Services Agreement
dated as of the date hereof entered into prior to the Time of Distribution by
and between Conexant and Mindspeed.
"Washington" means Washington Sub, Inc., a Delaware
corporation.
ARTICLE II
THE CONTRIBUTION
Section 2.01 Intercorporate Reorganization. (a) Prior to the
Time of Distribution, Conexant and Mindspeed will take all actions necessary to
increase the
18
outstanding shares of Mindspeed Common Stock so that, immediately prior to the
Distribution, Conexant will hold a number of shares of Mindspeed Common Stock
(rounded down to the nearest whole share) equal to the aggregate number of
shares of Conexant Common Stock (excluding treasury shares held by Conexant)
issued and outstanding as of the Record Date divided by three.
(b) Subject to Section 2.08, prior to the Time of Distribution:
(i) Conexant and each Conexant Subsidiary shall convey, assign
and transfer, or cause to be conveyed, assigned and transferred, to
Mindspeed or a Mindspeed Subsidiary, as appropriate, any and all right,
title and interest of Conexant and each of the Conexant Subsidiaries in the
Mindspeed Subsidiaries;
(ii) Mindspeed and each Mindspeed Subsidiary shall convey, assign
and transfer, or cause to be conveyed, assigned and transferred, to
Conexant or a Conexant Subsidiary, as appropriate, any and all right, title
and interest of Mindspeed and each of the Mindspeed Subsidiaries in the
Conexant Subsidiaries;
(iii) Conexant and each Conexant Subsidiary shall convey, assign
and transfer, or cause to be conveyed, assigned and transferred, to
Mindspeed or a Mindspeed Subsidiary, as appropriate, any and all right,
title and interest of Conexant and each of the Conexant Subsidiaries in the
Mindspeed Assets;
(iv) Mindspeed and each Mindspeed Subsidiary shall convey, assign
and transfer, or cause to be conveyed, assigned and transferred, to
Conexant or a Conexant Subsidiary, as appropriate, any and all right, title
and interest of Mindspeed and each of the Mindspeed Subsidiaries in the
Conexant Assets;
(v) Conexant or a Conexant Subsidiary, as appropriate, shall
unconditionally assume and undertake to pay, perform and discharge, in a
timely manner and in accordance with the terms thereof, all Liabilities of
Mindspeed and the Mindspeed Subsidiaries that are Conexant Liabilities; and
(vi) Mindspeed or a Mindspeed Subsidiary, as appropriate, shall
unconditionally assume and undertake to pay, perform and discharge, in a
timely manner and in accordance with the terms thereof, all Liabilities of
Conexant and the Conexant Subsidiaries that are Mindspeed Liabilities.
In the event that at any time or from time to time (whether at
or after the Time of Distribution) any member of the Conexant Group shall
receive or otherwise possess any Mindspeed Asset or interest in a Mindspeed
Subsidiary, such member will promptly convey, assign and transfer, or cause to
be conveyed, assigned and transferred, such Mindspeed Asset or interest in a
Mindspeed Subsidiary to Mindspeed. In the event that at any time or from time to
time (whether at or after the Time of Distribution) any member of the Mindspeed
Group shall receive or otherwise possess any Conexant Asset or interest in a
Conexant Subsidiary, such member will promptly convey, assign and transfer, or
cause to be conveyed,
19
assigned and transferred, such Conexant Asset or interest in a Conexant
Subsidiary to Conexant. Prior to any such transfer, the Person receiving or
possessing such Asset or interest in a Subsidiary will hold such Asset or
interest in a Subsidiary in trust for the benefit of the Person entitled thereto
(at the expense of the Person entitled thereto).
In the event that at any time or from time to time (whether at
or after the Time of Distribution) either Conexant or Mindspeed determines that
the other party (or any member of such other party's respective Group) shall not
have unconditionally assumed any Liabilities that are allocated to such other
party (or a member of such other party's respective Group) pursuant to this
Agreement, the Employee Matters Agreement or the Tax Allocation Agreement, such
other party will promptly execute and deliver, or cause to be executed and
delivered, all such documents and instruments and will take, or cause to be
taken, all such actions as the requesting party may reasonably request to
unconditionally assume, or cause to be unconditionally assumed, such
Liabilities.
Solely for purposes of implementing the terms of this
Agreement, during the period beginning on the date of this Agreement and ending
six months after the Distribution Date, Conexant and Mindspeed agree to discuss
the allocation of any Asset or Liability of Conexant and its Subsidiaries
(including members of the Mindspeed Group) that either of them reasonably
believes should be or should have been allocated differently than pursuant to
the terms of this Agreement (an "Asset/Liability Allocation Matter"). The
Conexant Chief Executive Officer will designate an employee of Conexant and the
Mindspeed Chief Executive Officer will designate an employee of Mindspeed who
will discuss an appropriate resolution of any Asset/Liability Allocation Matter.
If within thirty days of the receipt of the notification of an Asset/Liability
Allocation Matter by either Conexant or Mindspeed pursuant to this paragraph, or
such other time as Conexant and Mindspeed may agree, the designees have not
reached a mutually acceptable resolution of the Asset/Liability Allocation
Matter, the matter will be referred for discussion to the Conexant Chief
Executive Officer and the Mindspeed Chief Executive Officer. Should a mutually
acceptable resolution of the Asset/Liability Allocation Matter not be reached
within thirty days following the referral to them, the terms and conditions of
this Agreement shall remain in full force and effect, unamended, unmodified and
unsupplemented. In no event shall the terms and conditions of this Agreement be
amended, modified or supplemented other than in accordance with the provisions
of Section 7.07. Nothing in this paragraph shall affect the right of any party
to resort to the dispute resolution provisions of Section 7.05 in respect of any
dispute, claim or controversy arising out of an alleged breach of any provision
of this Agreement.
(c) Subject to Section 2.08, Conexant and Mindspeed will
take, or cause to be taken, the actions described on Schedule 2.01(c) in
connection with United States and international operations of the Broadband
Business and the Mindspeed Business.
(d) In connection with the transfers of Subsidiaries and
Assets and the assumptions of Liabilities contemplated by subsections (b) and
(c) of this Section 2.01, Conexant and Mindspeed will execute or cause to be
executed by the appropriate entities the Conveyance and Assumption Instruments.
The transfer of capital stock contemplated by such subsections will be effected
by means of delivery of stock certificates duly endorsed or
20
accompanied by duly executed stock powers and notation on the stock record books
of the corporation or other legal entities involved and, to the extent required
by applicable law, by notation on appropriate registries.
(e) Each of Conexant (on behalf of itself and each other member of
the Conexant Group) and Mindspeed (on behalf of itself and each other member of
the Mindspeed Group) understands and agrees that, except as expressly set forth
in any Separation Agreement, any Financing Agreement or any other agreement or
document contemplated by any Separation Agreement or Financing Agreement, no
party to any Separation Agreement, Financing Agreement or any other agreement or
document contemplated by any Separation Agreement or Financing Agreement either
has or is, in such agreement or otherwise, representing or warranting in any way
as to the Assets, Subsidiaries, businesses or Liabilities retained, conveyed,
assigned, transferred or assumed as contemplated hereby or thereby, as to any
consents or approvals required in connection with the transactions contemplated
by the Separation Agreements or the Financing Agreements, as to the value or
freedom from any Lien of, or any other matter concerning, any Assets,
Liabilities or Subsidiaries of such party, or as to the absence of any defenses
or rights of setoff or freedom from counterclaim with respect to any claim or
other Assets or Subsidiaries of any party, or as to the legal sufficiency of any
assignment, document or instrument delivered hereunder or thereunder to convey
title to any Asset or Subsidiary or thing of value upon the execution, delivery
or filing thereof. Except as may expressly be set forth in any Separation
Agreement, all Assets and Subsidiaries being transferred or retained as
contemplated by any Separation Agreement are being transferred, or are being
retained, on an "as is", "where is" basis (and, in the case of the transfer of
any Real Property, by means of a quitclaim or similar form deed or conveyance
for title and an assignment for leasehold or other rights not subject to the
Sublease) and the respective transferees shall bear the economic and legal risks
that any conveyance shall prove to be insufficient or that the title to any
Asset or Subsidiary shall be other than good and marketable and free and clear
of any Lien.
(f) It is the intention of the parties that payments made by the
parties to each other after the Time of Distribution pursuant to this Agreement,
the Employee Matters Agreement or the Tax Allocation Agreement are to be treated
as relating back to the transactions occurring prior to the Time of Distribution
pursuant to this Section 2.01 as an adjustment to the transfers of Assets,
Subsidiaries and Liabilities contemplated by this Section 2.01, and Conexant and
Mindspeed will, and will cause the Conexant Subsidiaries and the Mindspeed
Subsidiaries, respectively, to, take positions consistent with such intention
with any Tax authority, unless with respect to any payment any party receives an
opinion of counsel reasonably acceptable to the other party to the effect that
there is no substantial authority for such a position.
Section 2.02 Financial Instruments. (a) Mindspeed will (from
and after the Time of Distribution, at its expense) take or cause to be taken
all actions, and enter into (or cause the Mindspeed Subsidiaries to enter into)
such agreements and arrangements, as shall be necessary to effect the release of
and substitution for each member of the Conexant Group, effective as of the Time
of Distribution, from all primary, secondary, contingent, joint, several
21
and other Liabilities in respect of Mindspeed Financial Instruments (it being
understood that all Liabilities in respect of Mindspeed Financial Instruments
are Mindspeed Liabilities).
(b) Mindspeed's obligations under Section 2.02(a) will
continue to be applicable to all Mindspeed Financial Instruments identified at
any time by Conexant, whether before, at or after the Time of Distribution.
Section 2.03 Intercompany Accounts and Arrangements.
(a) Elimination of Intercompany Accounts.
(i) Except as set forth in Section 2.03(a)(ii) or on
Schedule 2.03(a), Conexant, on behalf of itself and each other member
of the Conexant Group, on the one hand, and Mindspeed, on behalf of
itself and each other member of the Mindspeed Group, on the other hand,
hereby settle and eliminate, by cancellation or transfer to a member of
the other Group (whether to cancel or transfer and the manner thereof
will be determined by Conexant), effective as of the Time of
Distribution, all intercompany receivables, payables and other balances
(including intercompany cash management balances) existing immediately
prior to the Time of Distribution between Conexant and/or any Conexant
Subsidiary, on the one hand, and Mindspeed and/or any Mindspeed
Subsidiary, on the other hand.
(ii) The provisions of Section 2.03(a)(i) will not apply
to any intercompany receivables, payables and other balances arising
under any Separation Agreement, including those arising under Section
2.04 or incurred in connection with the payment by any party of any
expenses which are required to be paid or reimbursed by the other party
pursuant to Section 4.08.
(b) Intercompany Agreements.
(i) Except as set forth in Section 2.03(b)(ii), in
furtherance of the releases and other provisions of Section 4.01,
Mindspeed, on behalf of itself and each other member of the Mindspeed
Group, and Conexant, on behalf of itself and each other member of the
Conexant Group, hereby terminate any and all agreements, arrangements,
commitments or understandings in existence as of the Time of
Distribution, whether or not in writing, between or among Mindspeed
and/or any Mindspeed Subsidiary, on the one hand, and Conexant and/or
any Conexant Subsidiary, on the other hand. No such terminated
agreement, arrangement, commitment or understanding (including any
provision thereof which purports to survive termination) shall be of
any further force or effect after the Time of Distribution.
(ii) The provisions of Section 2.03(b)(i) will not apply
to any of the following agreements, arrangements, commitments or
understandings (or to any of the provisions thereof): (A) the
Separation Agreements, the Financing Agreements, the License and
Assignment Agreement and the Patent License Agreement (and each
22
other agreement, instrument or document expressly contemplated by any
Separation Agreement or Financing Agreement to be entered into by any
party hereto or any of the members of their respective Groups); (B) any
agreements, arrangements, commitments or understandings listed or
described on Schedule 2.03(b)(ii); (C) any agreements, arrangements,
commitments or understandings to which any Person other than the
parties hereto and their respective Affiliates is a party; and (D) any
other agreements, arrangements, commitments or understandings that any
Separation Agreement or Financing Agreement expressly contemplates will
survive the Time of Distribution.
Section 2.04 Cash Management.
(a) Pre-Distribution Cash Contribution. At least one
Business Day prior to the Time of Distribution, Conexant shall contribute to
Mindspeed (by wire transfer to Mindspeed's Bank Account at Comerica Bank,
Account No. 1850968197, A.B.A. Routing Number 000000000) an amount in cash equal
to $97 million.
(b) Cash Balances at the Time of Distribution. In the
event the amount of Mindspeed Cash (after giving effect to the contribution
described in Section 2.04(a)) (x) exceeds $100 million, Mindspeed will pay to
Conexant (by wire transfer to Conexant's bank account at Comerica Bank, Account
No. 1850967629, A.B.A. Routing Number 000000000), within five Business Days
after the Distribution, an amount equal to such excess or (y) is less than $100
million, Conexant will pay to Mindspeed, within five Business Days after the
Distribution Date, an amount equal to such deficit.
(c) Funding of Outstanding Checks.
(i) Mindspeed or a Mindspeed Subsidiary will fund all
amounts in respect of checks that are outstanding immediately prior to
the Time of Distribution and presented for payment at or after the Time
of Distribution in Mindspeed Bank Accounts.
(ii) Conexant or a Conexant Subsidiary will fund all
amounts in respect of checks that are outstanding immediately prior to
the Time of Distribution and presented for payment at or after the Time
of Distribution in Conexant Bank Accounts.
(iii) The provisions of this Section 2.04(c) with respect
to funding of outstanding checks will not affect in any way, and will
be subject to, all other provisions of this Agreement providing for the
reimbursement of any amounts or the allocation of any Liabilities,
including Section 4.08.
(d) Customer Payments.
(i) Mindspeed will, and will cause the Mindspeed
Subsidiaries to, forward to Conexant (for the account of Conexant or
the applicable Conexant Subsidiary) any customer payments in respect of
accounts receivable constituting Conexant Assets
23
received by Mindspeed or any of the Mindspeed Subsidiaries after the
Time of Distribution, whether received in lock boxes, via wire transfer
or otherwise, by the first Business Day of the week after the week
during which such payment is received. Such amounts will be forwarded
by wire transfer (to Conexant's bank account at Comerica Bank, Account
No. 1850967629, A.B.A. Routing Number 000000000) in the case of
customer payments received within thirty days after the Time of
Distribution and by check in the case of customer payments received
thereafter.
(ii) Conexant will, and will cause the Conexant
Subsidiaries to, forward to Mindspeed (for the account of Mindspeed or
the applicable Mindspeed Subsidiary) any customer payments in respect
of accounts receivable constituting Mindspeed Assets received by
Conexant or any of the Conexant Subsidiaries after the Time of
Distribution, whether received in lock boxes, via wire transfer or
otherwise, by the first business day of the week after the week during
which such payment is received. Such amounts will be forwarded by wire
transfer (to Mindspeed's bank account at Comerica Bank, Account No.
1850968197, A.B.A. Routing Number 000000000) in the case of customer
payments received within thirty days after the Time of Distribution and
by check in the case of customer payments received thereafter.
Section 2.05 The Mindspeed Board. Prior to the Time of
Distribution, Mindspeed and Conexant will take all actions which may be required
to elect or otherwise appoint as directors of Mindspeed the persons named on
Schedule 2.05 to constitute the board of directors of Mindspeed at the Time of
Distribution.
Section 2.06 Resignations; Transfer of Stock Held as Nominee.
(a) Conexant will cause all of its employees and directors and all of the
employees and directors of each other member of the Conexant Group to resign,
effective not later than the Time of Distribution, from all boards of directors
or similar governing bodies of Mindspeed or any other member of the Mindspeed
Group on which they serve, and from all positions as officers of Mindspeed or
any other member of the Mindspeed Group in which they serve, except as otherwise
specified on Schedule 2.06. Mindspeed will cause all of its employees and
directors and all of the employees and directors of each other member of the
Mindspeed Group to resign, effective not later than the Time of Distribution,
from all boards of directors or similar governing bodies of Conexant or any
other member of the Conexant Group on which they serve, and from all positions
as officers of Conexant or any other member of the Conexant Group in which they
serve, except as otherwise specified on Schedule 2.06.
(b) Conexant will cause each of its employees, and each
of the employees of the other members of the Conexant Group, who holds stock or
similar evidence of ownership of any Mindspeed Group entity as nominee for such
entity pursuant to the laws of the country in which such entity is located to
transfer such stock or similar evidence of ownership to the Person so designated
by Mindspeed to be such nominee as of and after the Time of Distribution.
Mindspeed will cause each of its employees, and each of the employees of the
other members of the Mindspeed Group, who holds stock or similar evidence of
ownership of any Conexant Group entity as nominee for such entity pursuant to
the laws of the country in which such entity is located to transfer such stock
or similar evidence of
24
ownership to the Person so designated by Conexant to be such nominee as of and
after the Time of Distribution.
(c) Conexant will cause each of its employees and each of
the employees of the other members of the Conexant Group to revoke or withdraw
their express written authority, if any, to act on behalf of any Mindspeed Group
entity as an agent or representative therefor after the Time of Distribution.
Mindspeed will cause each of its employees and each of the employees of the
other members of the Mindspeed Group to revoke or withdraw their express written
authority, if any, to act on behalf of any Conexant Group entity as an agent or
representative therefor after the Time of Distribution.
Section 2.07 Mindspeed Certificate of Incorporation and
Bylaws; Rights Plan. Prior to the Time of Distribution, (a) the Mindspeed Board
will (i) approve the Certificate of Incorporation and will cause the same to be
filed with the Secretary of State of the State of Delaware and (ii) adopt the
Bylaws, and (b) Conexant, as sole shareholder of Mindspeed, will approve the
Certificate of Incorporation. Prior to the Time of Distribution, the Mindspeed
Board will adopt the Rights Plan and declare a dividend of the Rights so that
each share of Mindspeed Common Stock issued and outstanding as of the Time of
Distribution will initially have one Right attached thereto.
Section 2.08 Consents. Prior to and after the Distribution
Date, Conexant and Mindspeed will, and will cause the Conexant Subsidiaries and
the Mindspeed Subsidiaries, respectively, to, use their commercially reasonable
efforts (as requested by the other party) to obtain, or to cause to be obtained,
all Consents necessary for the transfer of all Assets, Subsidiaries and
Liabilities contemplated to be transferred pursuant to this Article II;
provided, however, that none of Conexant (or any of the Conexant Subsidiaries)
or Mindspeed (or any of the Mindspeed Subsidiaries) shall be obligated to pay
any consideration or offer or grant any financial accommodation in connection
therewith. Anything contained herein to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign any Contract or Permit if
an assignment or attempted assignment of the same without the Consent of any
other party or parties thereto or other required Consent would constitute a
breach thereof or of any applicable law or in any way impair the rights of any
member of the Conexant Group or the Mindspeed Group thereunder. If any such
Consent is not obtained or if an attempted assignment would be ineffective or
would impair any rights of any member of either Group under any such Contract or
Permit so that the contemplated assignee hereunder (the "Recipient Party") would
not receive all such rights, then after the Time of Distribution (x) the party
contemplated hereunder to assign such Contract or Permit (the "Assigning Party")
will use commercially reasonable efforts (it being understood that such efforts
shall not include any requirement of the Assigning Party to pay any
consideration or offer or grant any financial accommodation) to provide or cause
to be provided to the Recipient Party the benefits of any such Contract or
Permit and the Assigning Party will promptly pay or cause to be paid to the
Recipient Party when received all moneys and properties received by the
Assigning Party with respect to any such Contract or Permit and (y) the
Recipient Party will pay, perform and discharge on behalf of the Assigning Party
all of the Assigning Party's Liabilities thereunder in a timely manner and in
accordance with the terms thereof. If and when such Consents are obtained, the
transfer of the applicable Contract or Permit shall be
25
effected as promptly following the Time of Distribution as shall be practicable
in accordance with the terms of this Agreement. To the extent that any transfers
and assumptions contemplated by this Article II shall not have been consummated
on or prior to the Time of Distribution, the parties shall cooperate to effect
such transfers as promptly following the Time of Distribution as shall be
practicable, it nonetheless being agreed and understood by the parties that no
party shall be liable in any manner to any other party for any failure of any of
the transfers contemplated by this Article II to be consummated prior to the
Time of Distribution.
ARTICLE III
THE DISTRIBUTION
Section 3.01 The Distribution. (a) Subject to Section 3.04,
prior to the Time of Distribution, Conexant will deliver to the Distribution
Agent, for the benefit of holders of record of Conexant Common Stock as of the
Record Date, a number of shares of Mindspeed Common Stock (rounded down to the
nearest whole share) equal to the number of shares of Conexant Common Stock
issued and outstanding as of the Record Date (excluding treasury shares held by
Conexant) divided by three, and Conexant will instruct the Distribution Agent to
make book-entry credits on the Distribution Date or as soon thereafter as
practicable for each holder of record of Conexant Common Stock as of the Record
Date, or the designated transferee or transferees of such holder, for a number
of shares of Mindspeed Common Stock (rounded down to the nearest whole share)
equal to the number of shares of Conexant Common Stock so held by such holder of
record as of the Record Date (excluding treasury shares held by Conexant)
divided by three. The Distribution will be effective as of the Time of
Distribution.
(b) Conexant and Mindspeed each will provide to the
Distribution Agent all information (including information necessary to make
appropriate book-entry credits) and share certificates, in each case, as may be
required in order to complete the Distribution on the basis of one share of
Mindspeed Common Stock for every three shares of Conexant Common Stock
(excluding treasury shares held by Conexant).
Section 3.02 Fractional Shares. Anything contained herein to
the contrary notwithstanding, no fractional shares of Mindspeed Common Stock
will be distributed to holders of Conexant Common Stock in the Distribution.
Holders that are otherwise entitled to receive less than one whole share of
Mindspeed Common Stock in the Distribution will receive cash in lieu of such
fractional share as contemplated hereby. As soon as practicable after the
Distribution Date, Conexant will direct the Distribution Agent to determine in
accordance with its customary practice the number of fractional shares of
Mindspeed Common Stock otherwise allocable to holders of record or beneficial
owners of Conexant Common Stock as of the Record Date, to aggregate all such
fractional shares and sell as soon as practicable the whole shares obtained by
aggregating such fractional shares either in open market transactions or
otherwise, in each case at then prevailing trading prices, and to cause to be
distributed to each such holder or for the benefit of each such beneficial
owner, in lieu of
26
any fractional share, such holder's or owner's ratable share of the proceeds of
such sale, after making appropriate deductions of the amount required to be
withheld for federal income tax purposes and after deducting an amount equal to
all brokerage charges, commissions and transfer taxes attributed to such sale.
Conexant will direct the Distribution Agent to seek to aggregate the shares of
Conexant Common Stock that may be held by any such beneficial owner thereof
through more than one account in determining the fractional share allocable to
such beneficial owner.
Section 3.03 Cooperation Prior to the Distribution. Prior to
the Distribution:
(a) Conexant and Mindspeed will prepare the Information
Statement which will include appropriate disclosure concerning Mindspeed, its
business, operations and management, the Contribution, the Distribution and such
other matters as Conexant and Mindspeed may determine and as may be required by
law. Conexant and Mindspeed will prepare, and Mindspeed will file with the
Commission, the Form 10, which will include or incorporate by reference the
Information Statement. Mindspeed will use its commercially reasonable efforts to
cause the Form 10 to become effective under the Exchange Act as soon as
practicable following the filing thereof. Promptly after effectiveness of the
Form 10 and completion of the Information Statement included therein, and prior
to the Distribution, Conexant will mail to the holders of Conexant Common Stock
the Information Statement.
(b) Conexant and Mindspeed will cooperate in preparing,
filing with the Commission and causing to become effective any registration
statements or amendments thereof which are required to reflect the establishment
of, or amendments to, any employee benefit and other plans contemplated by the
Employee Matters Agreement.
(c) Conexant and Mindspeed will take all such action as
may be necessary or appropriate under the securities or "blue sky" laws of the
states or other political subdivisions of the United States and the securities
laws of any applicable foreign countries or other political subdivisions thereof
in connection with the transactions contemplated by this Agreement.
(d) Conexant and Mindspeed will cause to be prepared, and
Mindspeed will file and use its commercially reasonable efforts to have
approved, an application for the listing on the American Stock Exchange of the
Mindspeed Common Stock to be distributed in the Distribution.
Section 3.04 Conexant Board Action; Conditions to the
Distribution. The Conexant Board will in its discretion establish the Record
Date and the Distribution Date and all appropriate procedures in connection with
the Distribution, but in no event will the Distribution occur prior to such time
as each of the following conditions shall have been satisfied or shall have been
waived by the Conexant Board in accordance with Section 3.05:
(a) the Conexant Board shall be reasonably satisfied that
(i) Conexant will have sufficient surplus under Section 170 of the Delaware
General Corporation Law to permit the Distribution and (ii) after giving effect
to the Contribution and the Distribution, each of
27
Conexant and Mindspeed will not be insolvent and will not have unreasonably
small capital with which to engage in its respective businesses;
(b) the Conexant Board shall have given final approval of
the Distribution;
(c) the Conexant Board shall have received a favorable
opinion issued by Xxxxxxxxxx & Xxxxx LLP confirming that the Distribution should
qualify as a tax-free reorganization within the meaning of Section 368(a)(i)(d)
of the Code;
(d) all material Consents which are required to effect
the Contribution and the Distribution shall have been obtained and shall be in
full force and effect;
(e) the Form 10 shall have become effective under the
Exchange Act;
(f) the Certificate of Incorporation, the Bylaws and the
Rights Plan each shall have been adopted and be in effect;
(g) the Mindspeed Common Stock shall have been approved
for listing upon notice of issuance on the American Stock Exchange;
(h) the transactions contemplated by Section 2.01,
Section 2.02 and Section 2.04(a) shall have been consummated in all material
respects;
(i) Conexant and Mindspeed shall have entered into each
of the Separation Agreements and the Financing Agreements to which they are
parties and each such agreement shall be in full force and effect;
(j) no order, injunction or decree issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
consummation of the Contribution or the Distribution shall be in effect;
(k) no suit, action or proceeding by or before any court
of competent jurisdiction or other Governmental Entity shall have been commenced
and be pending to restrain or challenge the Contribution or Distribution, and no
inquiry shall have been received that in the reasonable judgment of the Conexant
Board may lead to such a suit, action or proceeding; and
(l) Mindspeed shall have issued to Conexant the Initial
Warrants;
provided, that the satisfaction of such conditions will not create any
obligation on the part of Conexant to effect or seek to effect the Contribution
or the Distribution or in any way limit Conexant's right to terminate this
Agreement set forth in Section 7.13 or alter the consequences of any such
termination from those specified in Section 7.13.
Section 3.05 Waiver of Conditions. Any or all of the
conditions set forth in Section 3.04 may be waived, in whole or in part, in the
sole discretion of the Conexant Board. The conditions set forth in Section 3.04
are for the sole benefit of Conexant and shall not give
28
rise to or create any duty on the part of Conexant or the Conexant Board to
waive or not waive any such conditions.
ARTICLE IV
MUTUAL RELEASE; INDEMNIFICATION; EXPENSES
Section 4.01 Mutual Release. Effective as of the Time of
Distribution and except as otherwise specifically set forth in the Separation
Agreements and Financing Agreements, each of Conexant, on behalf of itself and
each other member of the Conexant Group, on the one hand, and Mindspeed, on
behalf of itself and each other member of the Mindspeed Group, on the other
hand, hereby releases and forever discharges the other party and its
Subsidiaries, and its and their respective officers, directors, agents, record
and beneficial security holders (including trustees and beneficiaries of trusts
holding such securities), advisors and Representatives (in each case, in their
respective capacities as such) and their respective heirs, executors,
administrators, successors and assigns, of and from all debts, demands, actions,
causes of action, suits, accounts, covenants, contracts, agreements, damages,
claims and Liabilities whatsoever of every name and nature, both in law and in
equity, which the releasing party has or ever had or ever will have, which arise
out of or relate to events, circumstances or actions taken by such other party
occurring or failing to occur or any conditions existing at or prior to the Time
of Distribution; provided, however, that the foregoing general release shall not
apply to (i) any Liabilities or other obligations (including Liabilities with
respect to payment, reimbursement, indemnification or contribution) under the
Separation Agreements or Financing Agreements or assumed, transferred, assigned,
allocated or arising under any of the Separation Agreements or Financing
Agreements (including any Liability that the parties may have with respect to
payment, performance, reimbursement, indemnification or contribution pursuant to
any Separation Agreement or Financing Agreement for claims brought against the
parties by third Persons or any Indemnitee), and the foregoing release will not
affect any party's right to enforce the Separation Agreements or Financing
Agreements in accordance with their terms or (ii) any Liability arising from or
relating to any agreement, arrangement, commitment or undertaking described in
Section 2.03(b)(ii), or (iii) any Liability the release of which would result in
the release of any Person other than a Person released pursuant to this Section
4.01 (provided, that the parties agree not to bring suit or permit any of their
Subsidiaries to bring suit against any member of the other Group with respect to
any Liability to the extent such member of the other Group would be released
with respect to such Liability by this Section 4.01 but for this clause (iii)).
Each of Conexant and Mindspeed acknowledges that it has been
advised by its legal counsel and is familiar with the provisions of California
Civil Code Section 1542, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
29
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Being aware of said Code section, each of Conexant, on behalf of itself and each
of the Conexant Subsidiaries, and Mindspeed, on behalf of itself and each of the
Mindspeed Subsidiaries, hereby expressly waives any rights it may have under
California Civil Code Section 1542, as well as any other statutes or common law
principles of similar effect.
Section 4.02 Indemnification by Conexant. Subject to the
provisions of this Article IV, Conexant shall indemnify, defend and hold
harmless the Mindspeed Indemnitees from and against, and pay or reimburse, as
the case may be, the Mindspeed Indemnitees for, all Indemnifiable Losses, as
incurred, suffered by any Mindspeed Indemnitee to the extent based upon, arising
out of or relating to the following:
(a) the Conexant Liabilities (including the failure by
Conexant or any other member of the Conexant Group to pay, perform or otherwise
discharge the Conexant Liabilities in accordance with their terms), whether such
Indemnifiable Losses are based upon, arise out of or relate to events,
occurrences, actions, omissions, facts, circumstances or conditions occurring,
existing or asserted before, at or after the Time of Distribution;
(b) any untrue statement or alleged untrue statement of a
material fact contained in the sections of the Form 10 listed on Schedule
4.02(b), or any omission or alleged omission to state in such sections a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; but only in each case with respect to information relating to the
Conexant Group provided by Conexant expressly for use in the sections of the
Form 10 listed on Schedule 4.02(b);
(c) the breach by any member of the Conexant Group of any
agreement or covenant contained in a Separation Agreement which does not by its
express terms expire at the Time of Distribution;
(d) the use by members of the Conexant Group or their
respective sublicensees of any intellectual property licensed by Mindspeed and
the Mindspeed Subsidiaries pursuant to Section 5.03; and
(e) the enforcement by the Mindspeed Indemnitees of their
rights to be indemnified, defended and held harmless under this Section 4.02.
Section 4.03 Indemnification by Mindspeed. Subject to the
provisions of this Article IV, Mindspeed shall indemnify, defend and hold
harmless the Conexant Indemnitees from and against, and pay or reimburse, as the
case may be, the Conexant Indemnitees for, all Indemnifiable Losses, as
incurred, suffered by any Conexant Indemnitee to the extent based upon, arising
out of or relating to the following:
(a) the Mindspeed Liabilities (including the failure by
Mindspeed or any other member of the Mindspeed Group to pay, perform or
otherwise discharge the Mindspeed
30
Liabilities in accordance with their terms), whether such Indemnifiable Losses
are based upon, arise out of or relate to events, occurrences, actions,
omissions, facts, circumstances or conditions occurring, existing or asserted
before, at or after the Time of Distribution;
(b) any untrue statement or alleged untrue statement of a
material fact contained in the Form 10, or any omission or alleged omission to
state in the Form 10 a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except in each case with respect to information
relating to the Conexant Group provided by Conexant expressly for use in the
sections of the Form 10 listed on Schedule 4.02(b);
(c) the breach by any member of the Mindspeed Group of
any agreement or covenant contained in a Separation Agreement which does not by
its express terms expire at the Time of Distribution;
(d) the use by members of the Mindspeed Group (or, in the
case of intellectual property licensed by Conexant and the Conexant Subsidiaries
pursuant to Section 5.03, members of the Mindspeed Group or their respective
sublicensees) of any names, trademarks, trade names, domain names, service marks
or corporate symbols or logos pursuant to Section 5.02 or intellectual property
licensed by Conexant and the Conexant Subsidiaries pursuant to Section 5.03; and
(e) the enforcement by the Conexant Indemnitees of their
rights to be indemnified, defended and held harmless under this Section 4.03.
Section 4.04 Limitations on Indemnification Obligations. (a)
The amount which any party (an "Indemnifying Party") is or may be required to
pay to an Indemnitee in respect of Indemnifiable Losses or other Liability for
which indemnification is provided under this Agreement shall be reduced by any
amounts actually received (including Insurance Proceeds actually received) by or
on behalf of such Indemnitee (net of increased insurance premiums and charges
related directly and solely to the related Indemnifiable Losses and costs and
expenses (including reasonable legal fees and expenses) incurred by such
Indemnitee in connection with seeking to collect and collecting such amounts) in
respect of such Indemnifiable Losses or other Liability (such net amounts are
referred to herein as "Indemnity Reduction Amounts"). If any Indemnitee receives
any Indemnity Reduction Amounts in respect of an Indemnifiable Loss for which
indemnification is provided under this Agreement after the full amount of such
Indemnifiable Loss has been paid by an Indemnifying Party or after an
Indemnifying Party has made a partial payment of such Indemnifiable Loss and
such Indemnity Reduction Amounts exceed the remaining unpaid balance of such
Indemnifiable Loss, then the Indemnitee shall promptly remit to the Indemnifying
Party an amount equal to the excess (if any) of (A) the amount theretofore paid
by the Indemnifying Party in respect of such Indemnifiable Loss, less (B) the
amount of the indemnity payment that would have been due if such Indemnity
Reduction Amounts in respect thereof had been received before the indemnity
payment was made. An insurer or other third party who would otherwise be
obligated to pay any claim shall not be relieved of the responsibility with
respect thereto or, solely by virtue of the indemnification provisions
31
hereof, have any subrogation rights with respect thereto, it being expressly
understood and agreed that no insurer or any other third party shall be entitled
to any benefit they would not be entitled to receive in the absence of the
indemnification provisions by virtue of the indemnification provisions hereof.
(b) In determining the amount of any Indemnifiable
Losses, such amount shall be (i) reduced to take into account any net Tax
benefit realized by the Indemnitee arising from the incurrence or payment by the
Indemnitee of such Indemnifiable Losses and (ii) increased to take into account
any net Tax cost incurred by the Indemnitee as a result of the receipt or
accrual of payments hereunder (grossed-up for such increase), in each case
determined by treating the Indemnitee as recognizing all other items of income,
gain, loss, deduction or credit before recognizing any item arising from such
Indemnifiable Losses. It is the intention of the parties that indemnity payments
made pursuant to this Agreement are to be treated as relating back to the
Distribution as an adjustment to capital (i.e., capital contribution or
distribution), and the parties shall not take any position inconsistent with
such intention before any Tax Authority (as defined in the Tax Allocation
Agreement), except to the extent that a final determination (as defined in
Section 1313 of the Code) with respect to the recipient party causes any such
payment not to be so treated.
Section 4.05 Procedures Relating to Indemnification. (a) If a
claim or demand is made against an Indemnitee, or an Indemnitee shall otherwise
learn of an assertion, by any Person who is not a party to this Agreement (or an
Affiliate thereof) as to which an Indemnifying Party may be obligated to provide
indemnification pursuant to this Agreement (a "Third Party Claim"), such
Indemnitee will notify the Indemnifying Party in writing, and in reasonable
detail, of the Third Party Claim reasonably promptly after becoming aware of
such Third Party Claim; provided, however, that failure to give such
notification will not affect the indemnification provided hereunder except to
the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure. Thereafter, the Indemnitee will deliver to the
Indemnifying Party, promptly after the Indemnitee's receipt thereof, copies of
all material notices and documents (including court papers) received or
transmitted by the Indemnitee relating to the Third Party Claim.
(b) If a Third Party Claim is made against an Indemnitee,
the Indemnifying Party will be entitled to participate in or to assume the
defense thereof (in either case, at the expense of the Indemnifying Party) with
counsel selected by the Indemnifying Party and reasonably satisfactory to the
Indemnitee. Should the Indemnifying Party so elect to assume the defense of a
Third Party Claim, the Indemnifying Party will not be liable to the Indemnitee
for any legal or other expenses subsequently incurred by the Indemnitee in
connection with the defense thereof; provided, that if in the Indemnitee's
reasonable judgment a conflict of interest exists in respect of such claim or if
the Indemnifying Party shall have assumed responsibility for such claim with any
reservations or exceptions, such Indemnitee will have the right to employ
separate counsel reasonably satisfactory to the Indemnifying Party to represent
such Indemnitee and in that event the reasonable fees and expenses of such
separate counsel (but not more than one separate counsel for all Indemnitees
similarly situated) shall be paid by such Indemnifying Party. If the
Indemnifying Party assumes the defense of any Third Party Claim, the Indemnitee
will have the right to participate in the
32
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party will control such defense. The Indemnifying Party will be
liable for the fees and expenses of counsel employed by the Indemnitee for any
period during which the Indemnifying Party has failed to assume the defense
thereof. If the Indemnifying Party assumes the defense of any Third Party Claim,
the Indemnifying Party will promptly supply to the Indemnitee copies of all
material correspondence and documents relating to or in connection with such
Third Party Claim and keep the Indemnitee fully informed of all material
developments relating to or in connection with such Third Party Claim (including
providing to the Indemnitee on reasonable request updates and summaries as to
the status thereof). If the Indemnifying Party chooses to defend a Third Party
Claim, the parties hereto will cooperate in the defense thereof (such
cooperation to be at the expense, including reasonable legal fees and expenses,
of the Indemnifying Party), which cooperation shall include the retention in
accordance with this Agreement and (upon the Indemnifying Party's request) the
provision to the Indemnifying Party of records and information which are
reasonably relevant to such Third Party Claim, and making employees available on
a mutually convenient basis to provide additional information and explanation of
any material provided hereunder.
(c) No Indemnifying Party will consent to any settlement,
compromise or discharge (including the consent to entry of any judgment) of any
Third Party Claim without the Indemnitee's prior written consent (which consent
will not be unreasonably withheld); provided, that if the Indemnifying Party
assumes the defense of any Third Party Claim, the Indemnitee will agree to any
settlement, compromise or discharge of such Third Party Claim which the
Indemnifying Party may recommend and which by its terms obligates the
Indemnifying Party to pay the full amount of Indemnifiable Losses in connection
with such Third Party Claim and unconditionally and irrevocably releases the
Indemnitee and its Affiliates completely from all Liability in connection with
such Third Party Claim; provided, however, that the Indemnitee may refuse to
agree to any such settlement, compromise or discharge (x) that provides for
injunctive or other nonmonetary relief affecting the Indemnitee or any of its
Affiliates or (y) that, in the reasonable opinion of the Indemnitee, would
otherwise materially adversely affect the Indemnitee or any of its Affiliates.
Whether or not the Indemnifying Party shall have assumed the defense of a Third
Party Claim, the Indemnitee will not (unless required by law) admit any
liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the Indemnifying Party's prior written consent (which consent will
not be unreasonably withheld).
(d) Any claim on account of Indemnifiable Losses which
does not involve a Third Party Claim will be asserted by reasonably prompt
written notice given by the Indemnitee to the Indemnifying Party from whom such
indemnification is sought. The failure by any Indemnitee so to notify the
Indemnifying Party will not relieve the Indemnifying Party from any liability
which it may have to such Indemnitee under this Agreement, except to the extent
that the Indemnifying Party shall have been actually prejudiced by such failure.
(e) In the event of payment in full by an Indemnifying
Party to any Indemnitee in connection with any Third Party Claim, such
Indemnifying Party will be subrogated to and shall stand in the place of such
Indemnitee as to any events or
33
circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other Person. Such Indemnitee will
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.06 Remedies Cumulative. Subject to the provisions of
Section 7.05, the remedies provided in this Article IV shall be cumulative and
shall not preclude assertion by any Indemnitee of any other rights or the
seeking of any and all other remedies against any Indemnifying Party.
Section 4.07 Indemnification under Tax Allocation Agreement.
Notwithstanding anything in this Agreement to the contrary, indemnification in
respect of Tax matters will be governed exclusively by the Tax Allocation
Agreement.
Section 4.08 Expenses. (a) Except as otherwise set forth in
any Separation Agreement or Financing Agreement, (i) all Conexant Expenses will
be charged to and paid by Conexant and (ii) all Mindspeed Expenses will be
charged to and paid by Mindspeed.
(b) Within ten days after the Distribution Date,
Mindspeed will reimburse Conexant (by wire transfer to Conexant's bank account
at Comerica Bank, Account No. 1850967629, A.B.A. Routing Number 000000000) for
all amounts in respect of Mindspeed Expenses paid by Conexant or any of its
Subsidiaries (including members of the Mindspeed Group) before or at the Time of
Distribution and notified in writing by Conexant to Mindspeed within five days
after the Distribution Date. From time to time thereafter, promptly after
Conexant's request therefor, and in any event within ten days after any such
request, Mindspeed will reimburse Conexant (by wire transfer to the same bank
account referred to in the preceding sentence) for all Mindspeed Expenses paid
by Conexant or any of its Subsidiaries before, at or after the Time of
Distribution (other than as previously reimbursed by Mindspeed pursuant to the
preceding sentence). Conexant will, at the request of Mindspeed, provide
Mindspeed with appropriate documentation to support Mindspeed Expenses required
to be reimbursed to Conexant pursuant to this Section 4.08(b).
(c) Except as otherwise set forth in any Separation
Agreement or Financing Agreement, and subject in all events to the provisions of
Section 4.08(a), all out-of-pocket costs and expenses incurred following the
Time of Distribution in connection with implementation of the transactions
contemplated by the Separation Agreements will be charged to and paid by the
party for whose benefit the expenses are incurred, with any out-of-pocket
expenses which cannot be allocated on such basis to be split equally between
Conexant and Mindspeed.
34
ARTICLE V
CERTAIN OTHER MATTERS
Section 5.01 Insurance.
(a) Coverage. Subject to the provisions of this Section
5.01, coverage of Mindspeed and the Mindspeed Subsidiaries under all Policies
shall cease as of the Time of Distribution. From and after the Time of
Distribution, Mindspeed and the Mindspeed Subsidiaries will be responsible for
obtaining and maintaining all insurance coverages in their own right.
(b) Rights Under Shared Policies. From and after the Time
of Distribution, Mindspeed and the Mindspeed Subsidiaries will have no rights
with respect to any Policies, except that:
(i) Mindspeed will have the right to assert claims (and
Conexant will use commercially reasonable efforts to assist Mindspeed
in asserting claims) for any loss, liability or damage with respect to
Mindspeed Assets or Mindspeed Liabilities under Policies with
third-party insurers which are "occurrence basis" insurance policies
("Occurrence Basis Policies") arising out of insured incidents
occurring from the date coverage thereunder first commenced until the
Time of Distribution to the extent that the terms and conditions of any
such Occurrence Basis Policies and agreements relating thereto so
allow, and
(ii) Mindspeed will have the right to continue to
prosecute claims with respect to Mindspeed Assets or Mindspeed
Liabilities properly asserted with an insurer prior to the Time of
Distribution (and Conexant will use commercially reasonable efforts to
assist Mindspeed in connection therewith) under Policies with
third-party insurers which are insurance policies written on a "claims
made" basis ("Claims Made Policies") arising out of insured incidents
occurring from the date coverage thereunder first commenced until the
Time of Distribution to the extent that the terms and conditions of any
such Claims Made Policies and agreements relating thereto so allow,
provided, that in the case of both clauses (i) and (ii) above, (A) all of
Conexant's and each Conexant Subsidiary's reasonable out-of-pocket costs and
expenses incurred in connection with the foregoing are promptly paid by
Mindspeed, (B) Conexant and the Conexant Subsidiaries may, at any time, without
liability or obligation to Mindspeed or any Mindspeed Subsidiary (other than as
set forth in Section 5.01(d)), amend, commute, terminate, buy-out, extinguish
liability under or otherwise modify any Occurrence Basis Policies or Claims Made
Policies (and such claims shall be subject to any such amendments, commutations,
terminations, buy-outs, extinguishments and modifications), (C) such claims will
be subject to (and recovery thereon will be reduced by the amount of) any
applicable deductibles, retentions or self-insurance provisions, (D) such claims
will be subject to (and recovery thereon will be reduced by the amount of) any
payment or reimbursement obligations of
35
Conexant, any Conexant Subsidiary or any Affiliate of Conexant or any Conexant
Subsidiary in respect thereof and (E) such claims will be subject to exhaustion
of existing aggregate limits. In the event that claims submitted by Conexant and
Mindspeed exhaust existing aggregate limits in any one policy year, the amount
payable under the Policies shall be allocated pro rata based on the amounts paid
in satisfaction of such claims or the amounts that would have been paid to
satisfy such claims absent exhaustion of Policy limits. To the extent the amount
paid to Mindspeed or Conexant, as the case may be, in satisfaction of claims
exceeds its pro rata portion, Mindspeed or Conexant, as the case may be, shall
pay to the other party an amount equal to such excess. Conexant's obligation to
use commercially reasonable efforts to assist Mindspeed in asserting claims
under applicable Policies will include using commercially reasonable efforts in
assisting Mindspeed to establish its right to coverage under such Policies (so
long as all of Conexant's reasonable out-of-pocket costs and expenses in
connection therewith are promptly paid by Mindspeed). None of Conexant or the
Conexant Subsidiaries will bear any Liability for the failure of an insurer to
pay any claim under any Policy. It is understood that any Claims Made Policies
will not provide any coverage to Mindspeed and the Mindspeed Subsidiaries for
incidents occurring prior to the Time of Distribution but which are asserted
with the insurance carrier after the Time of Distribution. If a claim or claims
submitted by Mindspeed are paid under any Policy during any policy year in which
no claim or claims are paid to Conexant, and Conexant's annual premium increases
in the next policy year in respect of the Policy, then the full amount of such
premium increase in the first policy year after such Mindspeed claim or claims
are paid shall be deemed to be attributable to the Mindspeed claim or claims and
charged to Mindspeed. Promptly (and in no event later than ten (10) Business
Days) after receipt of a written request by Conexant, Mindspeed shall reimburse
Conexant for the full amount of such annual premium increase. If claims
submitted by both Conexant and Mindspeed are paid under the same Policy during
any policy year, and Conexant's annual premium increases in the next policy year
in respect of the Policy, then the amount of the premium increase will be
allocated between Conexant and Mindspeed based on the amount of the claims paid
to each party during the prior policy year. Promptly (and in no event later than
ten (10) Business Days) after receipt of a written request by Conexant,
Mindspeed shall reimburse Conexant for its pro rata portion.
(c) Rights Under Property Policy. Conexant will request
that the insurer under the Property Policy permit members of the Mindspeed Group
to be named as additional named insureds under the Property Policy with respect
to incidents occurring from the Time of Distribution to July 1, 2003, provided,
that no member of the Conexant Group will be required to pay any consideration
or grant any financial or other accommodation in connection therewith. In
connection therewith, from and after the Time of Distribution, Mindspeed will
have the right to assert claims (and Conexant will use commercially reasonable
efforts to assist Mindspeed in asserting claims) for any loss, liability or
damage with respect to Mindspeed Assets or Mindspeed Liabilities under the
Property Policy arising out of insured incidents occurring from the Time of
Distribution to July 1, 2003 to the extent that the terms and conditions of the
Property Policy and agreements relating thereto and the insurer thereunder so
allow; provided, that (i) all of Conexant's and each Conexant Subsidiary's
reasonable costs and expenses incurred in connection with the foregoing are
promptly paid by Mindspeed, (ii) Conexant and the Conexant Subsidiaries may, at
any time, without liability or obligation to Mindspeed or any Mindspeed
Subsidiary (other than as set
36
forth in Section 5.01(d)), amend, commute, terminate, buy-out, extinguish
liability under or otherwise modify the Property Policy (and such claims shall
be subject to any such amendments, commutations, terminations, buy-outs,
extinguishments and modifications), (iii) such claims will be subject to (and
recovery thereon will be reduced by the amount of) any applicable deductibles,
retentions, self-insurance provisions or any payment or reimbursement
obligations of Conexant, any Conexant Subsidiary or any Affiliate of Conexant or
any Conexant Subsidiary in respect thereof, and (iv) such claims will be subject
to exhaustion of existing aggregate limits. Conexant's obligation to use
commercially reasonable efforts to assist Mindspeed in asserting claims under
the Property Policy will include using commercially reasonable efforts in
assisting Mindspeed to establish its right to coverage under the Property Policy
(so long as all of Conexant's costs and expenses in connection therewith are
promptly paid by Mindspeed). None of Conexant or the Conexant Subsidiaries will
bear any Liability for the failure of the insurer to pay any Mindspeed claim
under the Property Policy. Within five (5) Business Days after the Time of
Distribution, Mindspeed will reimburse Conexant for its pro rata portion of the
premium paid by Conexant under the Property Policy reasonably determined by
Conexant to be attributable to Mindspeed for the period from the Time of
Distribution to June 30, 2003.
(d) Conexant Actions. In the event that after the Time of
Distribution Conexant or any Conexant Subsidiary proposes to amend, commute,
terminate, buy-out, extinguish liability under or otherwise modify any Policies
under which Mindspeed has rights to assert claims pursuant to Section 5.01(b)
and Section 5.01(c) in a manner that would adversely affect any such rights of
Mindspeed, (i) Conexant will give Mindspeed prior notice thereof and consult
with Mindspeed with respect to such action (it being understood that the
decision to take any such action will be in the sole discretion of Conexant) and
(ii) Conexant will pay to Mindspeed its equitable share (which shall be
determined by Conexant in good faith based on the amount of premiums paid by or
allocated to the Mindspeed Business in respect of the applicable Policy) of any
net proceeds actually received by Conexant from the insurer under the applicable
Policy as a result of such action by Conexant (after deducting Conexant's
reasonable costs and expenses incurred in connection with such action).
(e) Administration. From and after the Time of
Distribution:
(i) Conexant or a Conexant Subsidiary, as appropriate,
will be responsible for the Claims Administration with respect to
claims of Conexant and the Conexant Subsidiaries under Policies; and
(ii) Mindspeed or a Mindspeed Subsidiary, as appropriate,
will be responsible for the Claims Administration with respect to
claims of Mindspeed and the Mindspeed Subsidiaries under Policies.
(f) Insurance Premiums. From and after the Time of
Distribution, Conexant will pay all premiums (retrospectively-rated or
otherwise) as required under the terms and conditions of the respective Policies
in respect of periods prior to the Time of Distribution, whereupon Mindspeed
will, upon the request of Conexant, forthwith reimburse
37
Conexant for that portion of such premiums paid by Conexant as are reasonably
determined by Conexant to be attributable to the Mindspeed Business.
(g) Agreement for Waiver of Conflict and Shared Defense.
In the event that a Policy provides coverage for both Conexant and/or a Conexant
Subsidiary, on the one hand, and Mindspeed and/or a Mindspeed Subsidiary, on the
other hand, relating to the same occurrence, Conexant and Mindspeed agree to
defend jointly and to waive any conflict of interest necessary to the conduct of
that joint defense. Nothing in this Section 5.01(g) will be construed to limit
or otherwise alter in any way the indemnity obligations of the parties to this
Agreement, including those created by this Agreement, by operation of law or
otherwise.
(h) Directors' and Officers' Insurance. Conexant will use
commercially reasonable efforts to cause the persons currently serving as
directors and/or officers of Conexant or any Subsidiary of Conexant who will be,
effective as of the Time of Distribution, directors and/or officers of Mindspeed
or any Mindspeed Subsidiary to be covered for a period of six years from the
Time of Distribution with respect to claims arising from facts or events which
occurred prior to the Time of Distribution by the directors' and officers'
liability insurance policies maintained by Conexant during such six-year period
following the Time of Distribution for all persons who served as directors
and/or officers of Conexant or any Conexant Subsidiary prior to the Time of
Distribution with respect to claims arising from facts or events which occurred
prior to the Time of Distribution. The parties understand and acknowledge that
coverage under such directors' and officers' liability insurance policies will
continue so long as the continuity date under such policies remains December 31,
1998. Conexant shall be under no obligation to purchase run-off coverage in the
event that the continuity date under such policies changes. In addition,
Conexant shall not be restricted from reducing the amount of directors' and
officers' liability insurance coverage purchased after the Time of Distribution
so long as the coverage for the Mindspeed directors and officers is no less than
the coverage purchased for Conexant's ongoing directors and officers.
Section 5.02 Use of Names, Trademarks, etc. (a) From and after
the Time of Distribution, subject to Section 5.02(b), Conexant will own all
rights of Conexant or any of its Subsidiaries (including members of the
Mindspeed Group) in, and to the use of, the Conexant Marks. Prior to or promptly
after the Time of Distribution (but in no event later than 90 days after the
Time of Distribution in the case of United States Persons and 180 days after the
Time of Distribution in the case of non-United States Persons), Mindspeed will
change the name of any Mindspeed Subsidiary or other Person under its control to
eliminate therefrom the names "Conexant", "Conexant Systems" and "Conexant
Systems, Inc." and all derivatives thereof.
(b) From and after the Time of Distribution, except as
permitted in this Section 5.02(b), the Mindspeed Group will not use or have any
rights to the Conexant Marks or any name, xxxx or symbol confusingly similar
thereto, or any special script, type font, form, style, logo, design, device,
trade dress or symbol which contains, represents or evokes the Conexant Marks or
any name or xxxx confusingly similar thereto. From and after the Time of
Distribution, the Mindspeed Group will not hold itself out as having any
affiliation with the Conexant Group. However, Conexant hereby grants to
Mindspeed a non-exclusive, non-transferable (other than by way of sublicenses to
members of the Mindspeed Group)
38
license to utilize without obligation to pay royalties to Conexant the names,
trademarks, trade names and service marks "Conexant", "Conexant Systems" and
"Conexant Systems, Inc." and any corporate symbol or logo related thereto in
connection with stationery, supplies, labels, catalogs, vehicles, signs,
packaging and products of the Mindspeed Business, but only as described in
paragraphs (i) through (v) of this Section 5.02(b), subject to the terms and
conditions of this Section 5.02(b) and Section 5.02(c), in each case in the same
manner and to the same extent as such names, trademarks, trade names, service
marks, corporate symbols or logos were used by the Mindspeed Business at any
time within the two year period preceding the Distribution:
(i) All documents constituting Mindspeed Assets as of the
Time of Distribution within the following categories may be used for
the duration of the periods following the Distribution indicated below
or until the supply is exhausted, whichever is the first to occur:
Maximum Period
of Permitted Use
Following the
Category of Documents Distribution
--------------------- ------------
A. Stationery 6 months
B. Invoices, purchase orders, debit and credit memos and other
similar documents of a transactional nature 6 months
C. Business cards 6 months
D. Other outside forms such as packing lists, labels, packing
materials and cartons, etc. 6 months
E. Forms for internal use only 6 months
F. Product literature 6 months;
provided, however, that Mindspeed will cause each document within any
of the above categories A, B or F used for any purpose within the
stated period to clearly and prominently display a statement, the form
of which is approved by Conexant, to the effect that the Mindspeed
Group was formerly affiliated with Conexant.
(ii) All vehicles constituting Mindspeed Assets as of the
Time of Distribution may continue to be used without re-marking (except
as to legally required permit numbers, license numbers, etc.) for a
period not to exceed six months following the Distribution Date or the
date of disposition of the vehicle, whichever is the first to occur.
Mindspeed will cause all markings on such vehicles to be removed or
permanently obscured prior to the disposition of such vehicles.
39
(iii) Within six months following the Distribution Date,
Mindspeed will remove or cause to be removed from display all signs and
displays which contain the Conexant Marks.
(iv) Products of the Mindspeed Business may have applied
thereto the names, trademarks, trade names or service marks "Conexant",
"Conexant Systems" or "Conexant Systems, Inc." or any Conexant
corporate symbol or logo related thereto for a period of six months
after the Distribution.
(v) Products of the Mindspeed Business in finished goods
inventory and work in process (to the extent the same bear the name,
trademark, trade name or service xxxx "Conexant", "Conexant Systems" or
"Conexant Systems, Inc." or any Conexant corporate symbol or logo
related thereto as of the Time of Distribution or have any such name,
trademark, trade name, service xxxx, corporate symbol or logo applied
to them in accordance with paragraph (iv) above) may be disposed of
without re-marking.
(c) (i) Apart from the rights granted under Section
5.02(b), no member of the Mindspeed Group shall have any right, title or
interest in, or to the use of, the Conexant Marks, either alone or in
combination with any other word, name, symbol, device, trademarks, or any
combination thereof. Anything contained herein to the contrary notwithstanding,
except as expressly permitted by Section 5.02(b), in no event will any member of
the Mindspeed Group utilize the Conexant Marks as a component of a company or
trade name. Mindspeed will not, and will cause each other member of the
Mindspeed Group not to, challenge or contest the validity of the Conexant Marks,
the registration thereof or the ownership thereof by the Conexant Group.
Mindspeed will not, and will cause each other member of the Mindspeed Group not
to, apply anywhere at any time for any registration as owner or exclusive
licensee of the Conexant Marks. If, notwithstanding the foregoing, any member of
the Mindspeed Group develops, adopts or acquires, directly or indirectly, any
right, title or interest in, or to the use of, any Conexant Marks in any
jurisdiction, or any goodwill incident thereto, Mindspeed will, and will cause
the Mindspeed Subsidiaries, upon the request of Conexant, and for a nominal
consideration of one dollar, assign or cause to be assigned to Conexant or any
designee of Conexant, all right, title and interest in, and to the use of, such
Conexant Marks in any and all jurisdictions, together with any goodwill incident
thereto.
(ii) If the laws of any country require that any xxxx
subject to Section 5.02(b) or the right of any member of the Mindspeed Group to
use any xxxx as permitted by Section 5.02(b) be registered in order to fully
protect the Conexant Group, Conexant and Mindspeed will cooperate in
constituting such member of the Mindspeed Group as a registered user (or its
equivalent) in each of the countries in which such registration is necessary. If
any such laws of any country require that any such xxxx or the use by any member
of the Mindspeed Group of any such xxxx be registered prior to use in order to
protect fully the Conexant Group, the license granted pursuant to Section
5.02(b) will not extend to such country until such registration has been
effected to the reasonable satisfaction of Conexant. Any expenses for
registering such xxxx or constituting such
40
member of the Mindspeed Group as a registered user in any country shall be borne
by Mindspeed. Any registration of such member of the Mindspeed Group as a
registered user of any xxxx hereunder shall be expunged on termination of the
period of permitted use under this Agreement or upon a breach or threatened
breach by any member of the Mindspeed Group of the terms of this Section 5.02
and Mindspeed will, upon request of Conexant, take all necessary steps to cause
such registration to be so expunged upon such termination or breach or
threatened breach.
(iii) Conexant will have the right to terminate the license
granted in Section 5.02(b) upon 30 days written notice to Mindspeed for any
material failure by any member of the Mindspeed Group to observe the terms of
Section 5.02(b) or this Section 5.02(c), provided that such failure is not
remedied prior to the effectiveness of the termination.
(iv) Mindspeed hereby constitutes and appoints Conexant
the true and lawful attorney of Mindspeed and its Subsidiaries to act as their
attorney-in-fact to execute any documents and to take all necessary steps to
cause Mindspeed and its Subsidiaries to perform any of their obligations set
forth in this Section 5.02(c), provided however, that Conexant will provide
Mindspeed sixty days written notice prior to executing such documents or
commencing such steps.
Section 5.03 License of Intellectual Property.
(a) Licenses from Conexant to Mindspeed.
(i) Conexant-Owned Intellectual Property. Subject to
Section 5.03(a)(v) and Section 5.03(c) and subject to any licenses or
rights previously granted to a third party, effective as of the Time of
Distribution, Conexant, on behalf of itself and the Conexant
Subsidiaries, hereby grants to the Mindspeed Group a nonexclusive,
worldwide, irrevocable (except as provided in Section 5.03(a)(vi)),
royalty-free license, without the right to assign or grant sublicenses
except as provided in Sections 5.03(a)(iii) and (iv), under all
Intellectual Property that constitutes Conexant Assets (excluding
trademarks, trade names, domain names, service marks, trade dress and
any other form of trade identity) and that the Conexant Group has a
right to license without the payment of royalties or other fees to a
third party, (A) with respect to any copyrighted work included in such
Intellectual Property, to reproduce, display, distribute and prepare
derivative works of such copyrighted work; and (B) to make, have made
(including by third-party contract manufacturers), use, import, sell,
offer for sale, and otherwise dispose of Mindspeed Products and to
practice any process involved in the use or manufacture thereof. For
purposes of this Section 5.03, a product will be considered a
"Mindspeed Product" if the specifications and designs of such product
(taken as a whole) are developed or owned by, or exclusively licensed
to, Mindspeed or a Mindspeed Subsidiary (even if the specifications and
designs of individual components of such Product are not owned or
developed by or exclusively licensed to Mindspeed or a Mindspeed
Subsidiary).
41
(ii) Third-Party Intellectual Property. Solely to the
extent allowed (without Conexant or any Conexant Subsidiary being
required to pay any royalty or other fee to a third party) by, and
subject to all applicable terms, conditions, limitations and
requirements of, any Contract pursuant to which Intellectual Property
owned by a third party is licensed to Conexant or any Conexant
Subsidiary, Conexant, on behalf of itself and the Conexant
Subsidiaries, hereby grants to the Mindspeed Group a nonexclusive,
worldwide, irrevocable (except as provided in Section 5.03(a)(vi)),
royalty-free sublicense, without the right to assign or grant further
sublicenses except as provided in Sections 5.03(a)(iii) and (iv), under
such third-party Intellectual Property, (A) with respect to any
copyrighted work included in such third-party Intellectual Property, to
reproduce, display, distribute and prepare derivative works of such
copyrighted work; and (B) to make, have made (including by third-party
contract manufacturers), use, import, sell, offer for sale, and
otherwise dispose of Mindspeed Products and to practice any process
involved in the use or manufacture thereof. If, at any time after the
Time of Distribution, Mindspeed becomes aware of any Intellectual
Property owned by a third party that was licensed to Conexant or a
Conexant Subsidiary as of the Time of Distribution and that Conexant or
the Conexant Subsidiary had (at the Time of Distribution) and continues
to have the right to sublicense to the Mindspeed Group (or any portion
thereof) without being required to pay any royalty or other fee to the
third party, but that was not effectively sublicensed to the Mindspeed
Group pursuant to the previous sentence, then at Mindspeed's written
request, Conexant will grant, or (provided that the relevant Conexant
Subsidiary is at the time a wholly-owned subsidiary of Conexant) cause
the Conexant Subsidiary to grant, to the Mindspeed Group (or if
sublicensing to the entire Mindspeed Group is not allowed, to a portion
thereof, to the maximum extent allowed), a nonexclusive, royalty-free
sublicense to such third-party Intellectual Property, to the maximum
extent (and solely to this extent) allowed under, and subject to all
applicable terms, conditions, limitations and requirements of, the
Contract pursuant to which such third-party Intellectual Property is
licensed to Conexant or the Conexant Subsidiary.
(iii) Assignment of License Rights. Mindspeed or a
Mindspeed Subsidiary may assign any or all of its rights under the
license granted in Section 5.03(a)(i) (other than the right to
sublicense provided in Section 5.03(a)(iv)) to any entity that is, at
the time of such assignment, a direct or indirect wholly-owned
subsidiary of Mindspeed. Except as expressly provided in the preceding
sentence and in Section 5.03(a)(iv), and notwithstanding anything to
the contrary in this Agreement, neither Mindspeed nor any Mindspeed
Subsidiary may assign or otherwise transfer any of its rights under
such license (whether in insolvency proceedings, in corporate mergers,
by acquisition or other change of control or otherwise), and any
purported assignment or transfer in violation hereof will be null and
void. Mindspeed or a Mindspeed Subsidiary may assign any or all of its
rights under any sublicense of third-party Intellectual Property
granted in Section 5.03(a)(ii) to the maximum extent (and solely to
this extent) allowed under, and subject to all applicable terms,
conditions, limitations and requirements of, the Contract pursuant to
which such third-party Intellectual Property is licensed to Conexant or
a Conexant Subsidiary.
42
(iv) Sublicensing. Subject to Section 5.03(a)(v)(B),
Mindspeed or a Mindspeed Subsidiary may sublicense any or all of its
rights under the license granted in Section 5.03(a)(i) (other than the
right to sublicense provided herein) (A) to any entity that is, at the
time when such sublicense grant is made, a direct or indirect
wholly-owned subsidiary of Mindspeed; (B) to any third party in
connection with a divestiture, sale, or spin-off of any business unit,
product line, or business operation of Mindspeed or a Mindspeed
Subsidiary; and/or (C) to any third party that works under a joint
development agreement with Mindspeed to jointly develop a new Mindspeed
Product or to jointly redevelop an existing Mindspeed Product wherein
the Mindspeed contribution comprises a substantial hardware
contribution to the resulting Mindspeed Product developed under the
joint development agreement. Except as expressly provided in the
preceding sentence, and notwithstanding anything to the contrary in
this Agreement, neither Mindspeed nor any Mindspeed Subsidiary may
sublicense any of its rights under such license, and any purported
sublicense in violation hereof will be null and void. Mindspeed or a
Mindspeed Subsidiary may sublicense any or all of its rights under any
sublicense of third-party Intellectual Property granted in Section
5.03(a)(ii) to the maximum extent (and solely to this extent) allowed
under, and subject to all applicable terms, conditions, limitations and
requirements of, the Contract pursuant to which such third-party
Intellectual Property is licensed to Conexant or the Conexant
Subsidiary.
(v) Limitations on Mindspeed's Rights.
(A) Change in Control. If Mindspeed or any
Mindspeed Subsidiary undergoes a Change in Control, the rights licensed
to Mindspeed or such Mindspeed Subsidiary, as the case may be, in
Section 5.03(a)(i) will be limited at all times after such Change in
Control to (i) Mindspeed Products being developed, manufactured, or
sold by or for Mindspeed or the Mindspeed Subsidiary, as the case may
be, immediately prior to the time of such Change in Control, (ii)
future versions of such Mindspeed Products, and (iii) Successor
Products of such Mindspeed Products developed by or for Mindspeed or
the Mindspeed Subsidiary after the Change in Control occurs, and in no
event will such licenses or rights be deemed to extend to products
already developed or being developed, manufactured, or sold by or for
any third party involved in the Change in Control immediately prior to
the time of the Change in Control.
(B) Sublicense. If Mindspeed or any Mindspeed
Subsidiary grants a sublicense permitted under Section 5.03(a)(iv) to
any of the rights licensed to Mindspeed or such Mindspeed Subsidiary,
as the case may be, in Section 5.03(a)(i), to any person or entity that
is not a direct or indirect wholly-owned subsidiary of Mindspeed, the
rights sublicensed to the third party will cover and be limited to, at
all times after such sublicense grant, (i) Mindspeed Products being
developed, manufactured, or sold by or for Mindspeed or the Mindspeed
Subsidiary immediately prior to the time of such sublicense grant, (ii)
future versions of such Mindspeed Products, and (iii) Successor
Products of such Mindspeed Products developed by or for the sublicensee
after the sublicense grant occurs, and in no event will such
43
sublicensed rights be deemed to extend to products already developed or
being developed, manufactured, or sold by or for the sublicensee
immediately prior to the time of the sublicense grant.
(vi) Termination. If Mindspeed or a Mindspeed Subsidiary
purports to assign or sublicense rights licensed to it in this Section
5.03(a) in willful and knowing breach of this Section 5.03(a), Conexant
may, in addition to all other rights and remedies it may have,
terminate the license or sublicense granted to Mindspeed or the
Mindspeed Subsidiary, as the case may be, under which Mindspeed or the
Mindspeed Subsidiary was attempting to assign or sublicense rights.
Such termination will be effective immediately when the notice of
termination is given to Mindspeed or the Mindspeed Subsidiary by
Conexant.
(b) License of Mindspeed Intellectual Property to
Conexant.
(i) Mindspeed-Owned Intellectual Property. Subject to
Section 5.03(b)(v) and Section 5.03(c) and subject to any licenses or
rights previously granted to a third party, effective as of the Time of
Distribution, Mindspeed, on behalf of itself and the Mindspeed
Subsidiaries, hereby grants to the Conexant Group a nonexclusive,
worldwide, irrevocable (except as provided in Section 5.03(b)(vi)),
royalty-free license, without the right to assign or grant sublicenses
except as provided in Sections 5.03(b)(iii) and (iv), under all
Intellectual Property that constitutes Mindspeed Assets (excluding
trademarks, trade names, domain names, service marks, trade dress and
any other form of trade identity) and that the Mindspeed Group has a
right to license without the payment of royalties or other fees to a
third party, (A) with respect to any copyrighted work included in such
Intellectual Property, to reproduce, display, distribute and prepare
derivative works of such copyrighted work; and (B) to make, have made
(including by third-party contract manufacturers), use, import, sell,
offer for sale, and otherwise dispose of Conexant Products and to
practice any process involved in the use or manufacture thereof. For
purposes of this Section 5.03, a product will be considered a "Conexant
Product" if the specifications and designs of such product (taken as a
whole) are developed or owned by, or exclusively licensed to, Conexant
or a Conexant Subsidiary (even if the specifications and designs of
individual components of such Product are not owned or developed by or
exclusively licensed to Conexant or a Conexant Subsidiary).
(ii) Third-Party Intellectual Property. Solely to the
extent allowed (without Mindspeed or any Mindspeed Subsidiary being
required to pay any royalty or other fee to a third party) by, and
subject to all applicable terms, conditions, limitations and
requirements of, any Contract pursuant to which Intellectual Property
owned by a third party is licensed to Mindspeed or any Mindspeed
Subsidiary, Mindspeed, on behalf of itself and the Mindspeed
Subsidiaries, hereby grants to the Conexant Group a nonexclusive,
worldwide, irrevocable (except as provided in Section 5.03(b)(vi)),
royalty-free sublicense, without the right to assign or grant further
sublicenses except as provided in Sections 5.03(b)(iii) and (iv), under
such third-party Intellectual Property, (A) with respect to any
copyrighted work included in such third-party
44
Intellectual Property, to reproduce, display, distribute and prepare
derivative works of such copyrighted work; and (B) to make, have made
(including by third-party contract manufacturers), use, import, sell,
offer for sale, and otherwise dispose of Conexant Products and to
practice any process involved in the use or manufacture thereof. If, at
any time after the Time of Distribution, Conexant becomes aware of any
Intellectual Property owned by a third party that was licensed to
Mindspeed or a Mindspeed Subsidiary as of the Time of Distribution and
that Mindspeed or the Mindspeed Subsidiary had (at the Time of
Distribution) and continues to have the right to sublicense to the
Conexant Group (or any portion thereof) without being required to pay
any royalty or other fee to the third party, but that was not
effectively sublicensed to the Conexant Group pursuant to the previous
sentence, then at Conexant's written request, Mindspeed will grant, or
(provided that the relevant Mindspeed Subsidiary is at the time a
wholly-owned subsidiary of Mindspeed) cause the Mindspeed Subsidiary to
grant, to the Conexant Group (or if sublicensing to the entire Conexant
Group is not allowed, to a portion thereof, to the maximum extent
allowed), a nonexclusive, royalty-free sublicense to such third-party
Intellectual Property, to the maximum extent (and solely to this
extent) allowed under, and subject to all applicable terms, conditions,
limitations and requirements of, the Contract pursuant to which such
third-party Intellectual Property is licensed to Mindspeed or the
Mindspeed Subsidiary.
(iii) Assignment of License Rights. Conexant or a Conexant
Subsidiary may assign any or all of its rights under the license
granted in Section 5.03(b)(i) (other than the right to sublicense
provided in Section 5.03(b)(iv)) to any entity that is, at the time of
such assignment, a direct or indirect wholly-owned subsidiary of
Conexant. Except as expressly provided in the preceding sentence and in
Section 5.03(b)(iv), and notwithstanding anything to the contrary in
this Agreement, neither Conexant nor any Conexant Subsidiary may assign
or otherwise transfer any of its rights under such license (whether in
insolvency proceedings, in corporate mergers by acquisition or other
change of control or otherwise), and any purported assignment or
transfer in violation hereof will be null and void. Conexant or a
Conexant Subsidiary may assign any or all of its rights under any
sublicense of third-party Intellectual Property granted in Section
5.03(b)(ii) to the maximum extent (and solely to this extent) allowed
under, and subject to all applicable terms, conditions, limitations and
requirements of, the Contract pursuant to which such third-party
Intellectual Property is licensed to Mindspeed or a Mindspeed
Subsidiary.
(iv) Sublicensing. Subject to Section 5.03(b)(v)(B),
Conexant or a Conexant Subsidiary may sublicense any or all of its
rights under the license granted in Section 5.03(b)(i) (other than the
right to sublicense provided herein) (A) to any entity that is, at the
time when such sublicense grant is made, a direct or indirect
wholly-owned subsidiary of Conexant; (B) to any third party in
connection with a divestiture, sale, or spin-off of any business unit,
product line, or business operation of Conexant or a Conexant
Subsidiary; and/or (C) to any third party that works under a joint
development agreement with Conexant to jointly develop a new Conexant
Product or to jointly redevelop an existing Conexant Product wherein
the Conexant contribution comprises a substantial hardware contribution
to the resulting Conexant
45
Product developed under the joint development agreement. Except as
expressly provided in the preceding sentence, and notwithstanding
anything to the contrary in this Agreement, neither Conexant nor any
Conexant Subsidiary may sublicense any of its rights under such
license, and any purported sublicense in violation hereof will be null
and void. Conexant or a Conexant Subsidiary may sublicense any or all
of its rights under any sublicense of third-party Intellectual Property
granted in Section 5.03(b)(ii) to the maximum extent (and solely to
this extent) allowed under, and subject to all applicable terms,
conditions, limitations and requirements of, the Contract pursuant to
which such third-party Intellectual Property is licensed to Mindspeed
or a Mindspeed Subsidiary.
(v) Limitations on Conexant's Rights.
(A) Change in Control. If Conexant or any
Conexant Subsidiary undergoes a Change in Control, the rights licensed
to Conexant or such Conexant Subsidiary, as the case may be, in Section
5.03(b)(i) will be limited at all times after such Change in Control to
(i) Conexant Products being developed, manufactured, or sold by or for
Conexant or the Conexant Subsidiary, as the case may be, immediately
prior to the time of such Change in Control, (ii) future versions of
such Conexant Products, and (iii) Successor Products of such Conexant
Products developed by or for Conexant or the Conexant Subsidiary after
the Change in Control occurs, and in no event will such licenses or
rights be deemed to extend to products already developed or being
developed, manufactured, or sold by or for any third party involved in
the Change in Control immediately prior to the time of the Change in
Control.
(B) Sublicense. If Conexant or any Conexant
Subsidiary grants a sublicense permitted under Section 5.03(b)(iv) to
any of the rights licensed to Conexant or such Conexant Subsidiary, as
the case may be, in Section 5.03(b)(i), to any person or entity that is
not a direct or indirect wholly-owned subsidiary of Conexant, the
rights sublicensed to the third party will cover and be limited to, at
all times after such sublicense grant, (i) Conexant Products being
developed, manufactured, or sold by or for Conexant or the Conexant
Subsidiary immediately prior to the time of such sublicense grant, (ii)
future versions of such Conexant Products, and (iii) Successor Products
of such Conexant Products developed by or for the sublicensee after the
sublicense grant occurs, and in no event will such sublicensed rights
be deemed to extend to products already developed or being developed,
manufactured, or sold by or for the sublicensee immediately prior to
the time of the sublicense grant.
(vi) Termination. If Conexant or a Conexant Subsidiary
purports to assign or sublicense rights licensed to it in this Section
5.03(b) in willful and knowing breach of this Section 5.03(b),
Mindspeed may, in addition to all other rights and remedies it may
have, terminate the license or sublicense granted to Conexant or the
Conexant Subsidiary, as the case may be, under which Conexant or the
Conexant Subsidiary was attempting to assign or sublicense rights. Such
termination will be effective
46
immediately when the notice of termination is given to Conexant or the
Conexant Subsidiary by Mindspeed.
(c) Order of Precedence. In the event of any
inconsistency or conflict between this Section 5.03 and either (i) the License
and Assignment Agreement or (ii) the Patent License Agreement, the License and
Assignment Agreement or the Patent License Agreement, as the case may be, will
control. Nothing in this Section 5.03 will be construed as granting or conveying
any right or license to any Intellectual Property (including Intellectual
Property owned by a third party) that is licensed or sublicensed pursuant to the
License and Assignment Agreement or the Patent License Agreement.
(d) Definitions. Solely for purposes of this Section
5.03:
(i) "Change in Control" of an entity means the occurrence
of any of the following: (i) a sale of assets representing more than
fifty percent (50%) of the net book value or fair market value of such
entity's consolidated assets (in a single transaction or in a series of
related transactions) other than to one or more direct or indirect
wholly-owned subsidiaries of such entity; (ii) a merger or
consolidation of such entity with a third party, whether or not such
entity is the surviving entity, in which such entity's stockholders
immediately before such merger or consolidation do not own, directly or
indirectly, more than fifty percent (50%) of the outstanding stock of
the surviving entity; or (iii) an acquisition, other than in a merger
or consolidation of the type referred to in clause (ii) of this
sentence, of beneficial ownership of outstanding voting securities of
such entity representing at least fifty percent (50%) of the combined
voting power of such entity, in a single transaction or series of
related transactions.
(ii) "Successor Product" shall mean, with respect to a
product, a new product based on the same core technology that has
substantially similar features and functionality (with or without
enhancements or improvements thereto) and that is marketed and
distributed under a different name instead of as a new version of the
original product.
(iii) "Under Development". For purposes of this Section
5.03, the phrase "being developed" by an entity means, with respect to
a product, that such entity is actively engaged in the development of
the product (as reflected in such entity's laboratory notebooks,
product development plans and reports, and other documents and
records), either alone or in conjunction with a third party, pursuant
to existing functional specifications (which need not be detailed
technical specifications) and a development schedule or timeline.
(e) Defensive Use of Other Party's Patents.
(i) From and after the Time of Distribution, each party
has and retains the unrestricted right to enforce against any third
party such Intellectual Property rights as that party then owns.
Notwithstanding the grant of any license or sublicense to the
47
other party (or the members of such other party's Group) under Section
5.03(a) or 5.03(b), the owner of such Intellectual Property (the
"Owner") may enforce the same without any obligation to the other
party.
(ii) Upon the occurrence of any dispute involving
Intellectual Property, including a pre-litigation dispute, (an "IP
Dispute") either party may request (the requesting party referred to
hereinafter as "Requestor") from the other party who is the Owner of
the applicable Intellectual Property, the right to use certain
Intellectual Property owned by the Owner for defensive purposes, but
only during the five-year period following the Distribution Date,
unless such date is extended in writing by both parties, and subject to
strict compliance with the provisions of Section 5.03(e)(i) - (xvi),
each of which is material.
(iii) A Requestor who desires to use the Owner's
Intellectual Property for defensive purposes in connection with an IP
Dispute in accordance with this section 5.03(e) shall first confer with
the Owner and submit in writing the proposed terms and conditions of
any proposed license to a third party who is a party to the IP Dispute
(the "Third Party") or the plan of enforcement (the "Enforcement
Plan"), including the identity of the Third Party and a list of
Intellectual Property proposed to be licensed or enforced.
(iv) The Owner may reject or condition the proposed terms
and conditions of the license or the Enforcement Plan for any of the
following reasons:
(A) The proposed license or Enforcement Plan
would violate or conflict with any contractual obligation of the Owner;
(B) The requested Intellectual Property is
encumbered and the proposed license or Enforcement Plan is prohibited
by such encumbrance;
(C) The proposed terms and conditions of the
license would impose obligations on the Owner other than or in addition
to a naked patent grant including, without limitation, the obligations
to enforce the patent(s) or to transfer technology; or
(D) The Owner can demonstrate a significant,
near-term competitive harm to its business other than one specified in
subparts (A)-(C) above, and including but not limited to evidence of
imminent threat of suit by the same Third Party, were the proposed
license to be granted or the Enforcement Plan be carried out.
(v) In response to a request by a Requestor to use the
Owner's patents for defensive purposes in connection with an IP Dispute
in accordance with this Section 5.03(e), the Owner may either:
(A) Initiate suit against the alleged infringer
as a co-party with the Requestor; or
48
(B) Assign to the Requestor the Intellectual
Property rights necessary for the Requestor to initiate suit or
counter-claim in its own name along with the rights necessary to obtain
remedies for past infringement; provided, however, that subject to the
Owner's discretion, if the Requestor negotiates a license for itself
from the Third Party, Requestor agrees to use commercially reasonable
efforts to secure a comparable license for the benefit of the Owner.
(vi) The Owner will cooperate as reasonably required for
the Requestor to resolve the controversy with the Third Party and, if
necessary, to enforce the Intellectual Property rights, whether as a
co-party with the Requestor, or as assignor to the Requestor, provided
that all costs to the Owner occasioned thereby shall be promptly and
fully paid by the Requestor.
(vii) If the Owner elects to commence suit along with the
Requestor as co-plaintiff as provided in Section 5.03(e)(v)(A) above,
the Requestor shall be responsible for all costs for prosecution of the
suit and shall control prosecution of the suit through settlement or
judgment as the Requestor considers appropriate; provided, however,
that the Owner may, at its own expense, be represented by its own
counsel and participate in the proceedings and any settlement, subject
to the Requestor's right of control.
(viii) If the Owner elects to assign the Intellectual
Property rights to the Requestor as provided in Section 5.03(e)(v)(B)
above, any such assignment shall be subject to the reservation to the
Owner of an irrevocable, freely assignable, royalty-free, world-wide
license to practice the assigned Intellectual Property rights in the
Owner's business on terms and conditions agreed to by the parties and
subject to the following conditions:
(A) The Requestor may enforce up to a maximum of
10 of the Owner's patents for each IP Dispute;
(B) Subject to applicable laws, any Intellectual
Property rights assigned to the Requestor pursuant to Section
5.03(e)(v)(B) will be reassigned back to the Owner immediately
following the conclusion of the IP Dispute; and
(C) With respect to the Owner's patents, the
Requestor agrees to zealously assert infringement, defend validity and
not stipulate to invalidity or non-infringement of any claim.
(ix) Anything contained herein to the contrary
notwithstanding, the Owner will not be required to initiate suit,
assign Intellectual Property rights to the Requestor or otherwise
cooperate in the enforcement of Intellectual Property rights if the
putative defendant or party against which enforcement is sought is a
duly authorized licensee or sub-licensee of the Owner under the
Intellectual Property rights sought to be enforced by the Requestor.
49
(x) No license shall become effective and no rights shall
be granted to a Third Party unless and until the Owner has approved in
writing all of the terms and conditions of the proposed license, such
terms and conditions will include at a minimum:
(A) a non-exclusive license grant to the Third
Party; and
(B) a clause that revokes said license grant in
the event that the Third Party, its successors and/or assigns,
initiates a patent infringement suit against the Owner.
(xi) The Requestor and the Owner shall share equally any
royalties and/or damages recovered after reimbursement to the Requestor
of any costs and expenses associated with the grant of any license or
damages under this Section 5.03(e).
(xii) The rights granted between the parties under this
Section 5.03(e) shall expire five years from the Time of Distribution;
provided, however, that any license granted to a Third Party may be
made for the life of the patent rights underlying such grant and all
such licenses shall survive expiration of this Section 5.03(e) and
remain in full force and effect for the duration of the license.
(xiii) Anything contained herein to the contrary
notwithstanding, the rights granted between the parties under this
Section 5.03(e) are personal and nontransferable by either party to any
other Person, whether or not in connection with the sale of any party's
business or any portion thereof. The rights granted between the parties
under this Section 5.03(e) shall, unless otherwise agreed in writing,
terminate upon a Change in Control of either party; provided, however,
that licenses granted prior to such termination shall remain in full
force and effect for the duration of the license.
(xiv) In any dispute between the parties arising under the
provisions of this Section 5.03(e) with respect to the right to grant a
license or the scope of such license, the General Counsel of Conexant
and the General Counsel of Mindspeed will attempt a good faith
resolution of such dispute within thirty days after either party
notifies the other of such dispute. If such dispute is not resolved
within thirty days of such notification, such dispute will be referred
for resolution to the Chief Executive Officers and, ultimately, to the
respective Chairmen of the Board of Conexant and Mindspeed, whose joint
decision will be final and binding on the parties. Notwithstanding
anything contained in this Agreement to the contrary, this Section
5.03(e)(xiv) shall be the parties' exclusive remedy with respect to
claims arising under the provisions of this Section 5.03(e).
(xv) Conexant makes no representations or warranties of
any kind with respect to the validity, scope or enforceability of any
Intellectual Property rights licensed by Conexant and the Conexant
Subsidiaries pursuant to this Section 5.03(e) and Conexant has no
obligation to file or prosecute any patent applications or maintain
50
any patents in force in connection therewith. Conexant will, at no cost
to Mindspeed, promptly execute or cause a member of the Conexant Group
promptly to execute such further documents as Mindspeed may reasonably
request as necessary or desirable to carry out the terms of this
Section 5.03(e). Notwithstanding anything contained herein to the
contrary, this Section 5.03(e) will not be applicable to any rights in
and use of the names, trademarks, trade names and service marks
"Conexant" and "Conexant Systems" and all corporate symbols and logos
related thereto and all names, trademarks, trade names and service
marks which include the words "Conexant" or "Conexant Systems" or any
derivative thereof.
(xvi) Mindspeed makes no representations or warranties of
any kind with respect to the validity, scope or enforceability of any
Intellectual Property rights licensed by Mindspeed and Mindspeed
Subsidiaries pursuant to this Section 5.03(e) and Mindspeed has no
obligation to file or prosecute any patent applications or maintain any
patents in force in connection therewith. Mindspeed will, at no cost to
Conexant, promptly execute or cause a member of the Mindspeed Group
promptly to execute such further documents as Conexant may reasonably
request as necessary or desirable to carry out the terms of this
Section 5.03(e).
Section 5.04 Jazz Warrant. Effective as of the Time of
Distribution Mindspeed will issue to the holder of the Jazz Warrant a warrant to
purchase shares of Mindspeed Common Stock (the "New Jazz-Mindspeed Warrant"),
pursuant to the equitable adjustment and other provisions of the Jazz Warrant.
The number of shares of Mindspeed Common Stock subject to the New Jazz-Mindspeed
Warrant and the per-share exercise price of the New Jazz-Mindspeed Warrant will
be determined as set forth in the Jazz Warrant. The New Jazz-Mindspeed Warrant
will otherwise have substantially the same terms and conditions as the Jazz
Warrant, except that references to Conexant will be changed to refer to
Mindspeed.
Section 5.05 Charitable Funds. As promptly as practicable
after the Time of Distribution, Conexant and Mindspeed shall cooperate and take
actions reasonably required to effect the transfer of $300,000 from the Conexant
Systems Charitable Fund, a donor advisor fund established by Conexant and
administered through the California Community Foundation, to a charitable fund
to be established by Mindspeed and also administered through the California
Community Foundation.
ARTICLE VI
ACCESS TO INFORMATION
Section 6.01 Provision of Corporate Records. Prior to or as
promptly as practicable after the Time of Distribution, Conexant shall deliver
to Mindspeed all minute books and other records of meetings of the Board of
Directors, committees of the Board of Directors and stockholders of the
Mindspeed Group and all corporate books and records of the Mindspeed Group in
its possession, including, in each case, all active agreements and
51
active litigation files. From and after the Time of Distribution, all such books
and records shall be the property of Mindspeed. Prior to or as promptly as
practicable after the Time of Distribution, Mindspeed shall deliver to Conexant
all corporate books and records of the Conexant Group in Mindspeed's possession
(other than the books and records described in the first sentence of this
Section 6.01), including, in each case, all active agreements and active
litigation files. From and after the Time of Distribution, all such books and
records shall be the property of Conexant.
Section 6.02 Access to Information. (a) From and after the
Time of Distribution, Conexant will, and will cause each Conexant Subsidiary to,
afford to Mindspeed and its Representatives (at Mindspeed's expense) reasonable
access and duplicating rights during normal business hours and upon reasonable
advance notice to all Information within the Conexant Group's possession or
control relating to Mindspeed, any Mindspeed Subsidiary, any Mindspeed Asset,
any Mindspeed Liability or the Mindspeed Business, insofar as such access is
reasonably required by Mindspeed or any Mindspeed Subsidiary, subject to the
provisions below regarding Privileged Information.
(b) From and after the Time of Distribution, Mindspeed
will, and will cause each Mindspeed Subsidiary to, afford to Conexant and its
Representatives (at Conexant's expense) reasonable access and duplicating rights
during normal business hours and upon reasonable advance notice to all
Information within the Mindspeed Group's possession or control relating to
Conexant, any Conexant Subsidiary, any Conexant Asset, any Conexant Liability or
the Broadband Business, insofar as such access is reasonably required by
Conexant or any Conexant Subsidiary, subject to the provisions below regarding
Privileged Information.
(c) Without limiting the foregoing, Information may be
requested under this Article VI for audit, accounting, claims, litigation,
insurance, environmental and safety and tax purposes, as well as for purposes of
fulfilling disclosure and reporting obligations and for performing this
Agreement and the transactions contemplated hereby.
In furtherance of the foregoing:
(i) Each party acknowledges that (A) each of Conexant and
Mindspeed (and the members of the Conexant Group and the Mindspeed
Group, respectively) has or may obtain Privileged Information; (B)
there are or may be a number of Actions affecting one or more of the
members of the Conexant Group and the Mindspeed Group; (C) the parties
may have a common legal interest in Actions, in the Privileged
Information, and in the preservation of the confidential status of the
Privileged Information; and (D) each of Conexant and Mindspeed intends
that the transactions contemplated by the Separation Agreements and any
transfer of Privileged Information in connection therewith shall not
operate as a waiver of any potentially applicable privilege.
(ii) Each of Conexant and Mindspeed agrees, on behalf of
itself and each member of the Group of which it is a member, not to
disclose or otherwise waive any
52
privilege attaching to any Privileged Information relating to the
business of the other Group or relating to or arising in connection
with the relationship between the Groups on or prior to the Time of
Distribution, without providing prompt written notice to and obtaining
the prior written consent of the other, which consent will not be
unreasonably withheld. In the event of a disagreement between any
member of the Conexant Group and any member of the Mindspeed Group
concerning the reasonableness of withholding such consent, no
disclosure will be made prior to a final, nonappealable resolution of
such disagreement by a court of competent jurisdiction.
(iii) Upon any member of the Conexant Group or any member
of the Mindspeed Group receiving any subpoena or other compulsory
disclosure notice from a court, other Governmental Entity or otherwise
which requests disclosure of Privileged Information, in each case
relating to the business of the other Group or relating to or arising
in connection with the relationship between the Groups on or prior to
the Time of Distribution, the recipient of the notice will promptly
provide to the other party (following the notice provisions set forth
herein) a copy of such notice, the intended response, and a description
of all materials or information relating to the other Group that might
be disclosed. In the event of a disagreement as to the intended
response or disclosure, unless and until the disagreement is resolved
as provided in Section 6.02(c)(ii), the parties will cooperate to
assert all defenses to disclosure claimed by either Group, at the cost
and expense of the Group claiming such defense to disclosure, and shall
not disclose any disputed documents or information until all legal
defenses and claims of privilege have been finally determined.
Section 6.03 Production of Witnesses. Subject to Section 6.02,
after the Time of Distribution, each of Conexant and Mindspeed will, and will
cause each member of the Conexant Group and the Mindspeed Group, respectively,
to, make available to the other party and members of such other party's Group,
upon written request and at the cost and expense of the party so requesting, its
directors, officers, employees and agents as witnesses to the extent that any
such Person may reasonably be required (giving consideration to business demands
of such directors, officers, employees and agents) in connection with any
Actions, administrative or other proceedings in which the requesting party may
from time to time be involved and relating to the business of either Group or
relating to or arising in connection with the relationship between the Groups on
or prior to the Time of Distribution, provided that the same shall not
unreasonably interfere with the conduct of business by the Group of which the
request is made.
Section 6.04 Retention of Records. Except as otherwise
required by law or agreed to by the parties in writing, if any Information
relating to the pre-Distribution business, Assets or Liabilities of a member of
a Group is retained by a member of the other Group, each of Conexant and
Mindspeed will, and will cause the members of the Group of which it is a member
to, retain for the period required by the applicable Conexant records retention
policy in effect immediately prior to the Time of Distribution all such
Information in such Group's possession or under its control. In addition, if,
prior to the scheduled date for destruction or disposal of such Information
under the applicable Conexant records retention policy,
53
Conexant or Mindspeed, on behalf of any member of its Group, requests in writing
that any of the Information scheduled to be destroyed or disposed of be
delivered to such requesting party, the party whose Group is scheduled to
destroy or dispose of such Information will arrange for the delivery of the
requested Information to a location specified by, and at the expense of, the
requesting party, at or about the time such Information would have otherwise
been destroyed or disposed of.
Section 6.05 Confidentiality. Subject to the provisions of
Section 6.02, which shall govern Privileged Information, from and after the Time
of Distribution, each of Conexant and Mindspeed shall hold, and shall use
reasonable efforts to cause members of its Group and its and their Affiliates
and Representatives to hold, in strict confidence all Information concerning the
other party's Group in its possession or control prior to the Time of
Distribution or furnished to it by such other party's Group pursuant to the
Separation Agreements or the transactions contemplated thereby and will not
release or disclose such Information to any other Person, except members of its
Group and its and their Representatives, who will be bound by the provisions of
this Section 6.05; provided, however, that any member of the Conexant Group or
the Mindspeed Group may disclose such Information to the extent that (a)
disclosure is compelled by judicial or administrative process or, in the opinion
of such Person's counsel, by other requirements of law (in which case the party
required to make such disclosure will notify the other party as soon as
practicable of such obligation or requirement and cooperate with the other party
(at the expense of the other party) to limit the Information required to be
disclosed and to obtain a protective order or other appropriate remedy with
respect to the Information ultimately disclosed) or (b) such Person can show
that such Information was (i) available to such Person on a nonconfidential
basis (other than from a member of the other party's Group) prior to its
disclosure by such Person, (ii) in the public domain through no fault of such
Person or (iii) lawfully acquired by such Person from another source after the
time that it was furnished to such Person by the other party's Group, and not
acquired from such source subject to any confidentiality obligation on the part
of such source known to the acquiror, or on the part of the acquiror. Each party
acknowledges that it will be liable for any breach of this Section 6.05 by its
Affiliates, Representatives and Subsidiaries. Notwithstanding the foregoing,
each of Conexant and Mindspeed will be deemed to have satisfied its obligations
under this Section 6.05 with respect to any Information (other than Privileged
Information) if it exercises the same care with regard to such Information as it
takes to preserve confidentiality for its own similar Information.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Entire Agreement; Construction. The Separation
Agreements, the Financing Agreements, the License and Assignment Agreement and
the Patent License Agreement including any annexes, schedules and exhibits
hereto or thereto, and other agreements and documents referred to herein and
therein, will together constitute the entire agreement between the parties with
respect to the subject matter hereof and thereof and will
54
supersede all prior negotiations, agreements and understandings of the parties
of any nature, whether oral or written, with respect to such subject matter.
Notwithstanding any other provisions in the Separation Agreements to the
contrary, (i) in the event and to the extent that there is a conflict between
the provisions of this Agreement and the provisions of the Employee Matters
Agreement, the Tax Allocation Agreement, the License and Assignment Agreement or
the Patent License Agreement, the provisions of the Employee Matters Agreement,
the Tax Allocation Agreement, the License and Assignment Agreement or the Patent
License Agreement, as appropriate, will control and (ii) in the event and to the
extent that there is a conflict between the provisions of this Agreement and the
provisions of any Conveyance and Assumption Instruments, the provisions of this
Agreement will control.
Section 7.02 Survival of Agreements. Except as otherwise
contemplated by the Separation Agreements (including Section 7.13 of this
Agreement), all covenants and agreements of the parties contained in the
Separation Agreements will remain in full force and effect and survive the Time
of Distribution. The obligations of each of Conexant and Mindspeed under Article
IV will not terminate at any time and will survive the sale or other transfer by
any party of any assets or businesses or the assignment by any party of any
Liabilities with respect to any Indemnifiable Losses of the other related to
such assets, businesses or Liabilities.
Section 7.03 Governing Law. This Agreement will be governed by
and construed in accordance with the internal laws of the State of Delaware
applicable to contracts made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
Section 7.04 Notices. All notices, requests, claims, demands
and other communications required or permitted to be given hereunder will be in
writing and will be delivered by hand or telecopied, e-mailed or sent, postage
prepaid, by registered, certified or express mail or reputable overnight courier
service and will be deemed given when so delivered by hand or telecopied, when
e-mail confirmation is received if delivered by e-mail, or three Business Days
after being so mailed (one Business Day in the case of express mail or overnight
courier service). All such notices, requests, claims, demands and other
communications will be addressed as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:
(a) If to Conexant:
Conexant Systems, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx
Chairman of the Board and Chief
Executive Officer
Telecopy: (000) 000-0000
E-mail: xxxxxx.xxxxxx@xxxxxxxx.xxx
55
with a copy to:
Conexant Systems, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. X'Xxxxxx, Esq.
Senior Vice President, General Counsel
and Secretary
Telecopy: (000) 000-0000
E-mail: xxxxxx.x'xxxxxx@xxxxxxxx.xxx
(b) If to Mindspeed:
Mindspeed Technologies, Inc.
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Chief Executive Officer
Telecopy: (000) 000-0000
E-mail: xxxxx.xxxxx@xxxxxxxxx.xxx
with a copy to:
Mindspeed Technologies, Inc.
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxx X. Stock, Esq.
Senior Vice President, General
Counsel and Secretary
Telecopy: (000) 000-0000
E-mail: xxx.xxxxx@xxxxxxxxx.xxx
Section 7.05 Dispute Resolution. Except as otherwise provided
in Section 5.03(e)(xiv), in the event that from and after the Time of
Distribution any dispute, claim or controversy (collectively, a "Dispute")
arises out of or relates to this Agreement, the Employee Matters Agreement or
the Tax Allocation Agreement or any transaction contemplated thereby or the
breach, performance, enforcement or validity or invalidity of any thereof, the
designees of the Conexant Chief Executive Officer and the Mindspeed Chief
Executive Officer will attempt a good faith resolution of the Dispute within
thirty days after either party notifies the other party in writing of the
Dispute. If the Dispute is not resolved within thirty days of the receipt of the
notification, or within such other time as they may agree, the Dispute will be
referred for resolution to the Conexant Chief Executive Officer and the
Mindspeed Chief Executive Officer. Should they be unable to resolve the Dispute
within thirty days following the referral to them, or within such other time as
they may agree,
56
Conexant and Mindspeed will then attempt in good faith to resolve such Dispute
by mediation in accordance with the then-existing CPR Mediation Procedures
promulgated by the CPR Institute for Dispute Resolution. If such mediation is
unsuccessful within sixty days after commencement thereof, any party to the
Dispute may pursue any other remedies available to it.
Section 7.06 Consent to Jurisdiction. Each of Conexant and
Mindspeed irrevocably submits to the exclusive jurisdiction of (i) the Superior
Court of the State of California, Orange County and (ii) the United States
District Court for the Central District of California, for the purposes of any
suit, action or other proceeding arising out of this Agreement, the Employee
Matters Agreement or the Tax Allocation Agreement or any transaction
contemplated thereby or the breach, performance, enforcement or validity or
invalidity of any thereof (and agrees not to commence any action, suit or
proceeding relating thereto except in such courts). Each of Conexant and
Mindspeed further agrees that service of any process, summons, notice or
document hand delivered or sent by U.S. registered mail to such party's
respective address set forth in Section 7.04 will be effective service of
process for any action, suit or proceeding in California with respect to any
matters to which it has submitted to jurisdiction as set forth in the
immediately preceding sentence. Each of Conexant and Mindspeed irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement, the Employee Matters Agreement or
the Tax Allocation Agreement or the transactions contemplated thereby or the
breach, performance, enforcement or validity or invalidity of any thereof in (i)
the Superior Court of the State of California, Orange County or (ii) the United
States District Court for the Central District of California, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. Notwithstanding the foregoing, each
party agrees that a final judgment in any action, suit or proceeding so brought
shall be conclusive and may be enforced by suit on the judgment in any
jurisdiction or in any other manner provided in law or in equity.
Section 7.07 Amendments. This Agreement cannot be amended,
modified or supplemented except by a written agreement executed by Conexant and
Mindspeed.
Section 7.08 Assignment. Except as otherwise provided herein,
neither party will convey, assign or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of the other
party in its sole and absolute discretion. Notwithstanding the foregoing, but
subject to the provisions of Section 5.03, either party may (without obtaining
any consent) assign all or any portion of its rights and obligations hereunder
to (i) the surviving entity resulting from a merger or consolidation involving
such party, (ii) the acquiring entity in a sale or other disposition of all or
substantially all of the assets of such party as a whole or of any line of
business or division of such party, or (iii) any other Person that is created as
a result of a spin-off from, or similar reorganization transaction of, such
party or any line of business or division of such party. In the event of an
assignment pursuant to (ii) or (iii) above, the nonassigning party shall, at the
assigning party's request, use good faith commercially reasonable efforts to
enter into separate agreements with each of the resulting entities and take such
further actions as may be reasonably required to assure that the
57
rights and obligations under this Agreement are preserved, in the aggregate, and
divided equitably between such resulting entities. Any conveyance, assignment or
transfer requiring the prior written consent of another party pursuant to this
Section 7.08 which is made without such consent will be void ab initio. No
assignment of this Agreement will relieve the assigning party of its obligations
hereunder.
Section 7.09 Captions; Currency. The article, section and
paragraph captions herein and the table of contents hereto are for convenience
of reference only, do not constitute part of this Agreement and will not be
deemed to limit or otherwise affect any of the provisions hereof. Unless
otherwise specified, all references herein to numbered articles or sections are
to articles and sections of this Agreement and all references herein to
schedules are to schedules to this Agreement. Unless otherwise specified, all
references contained in this Agreement, in any schedule referred to herein or in
any instrument or document delivered pursuant hereto to dollars or "$" shall
mean United States Dollars.
Section 7.10 Severability. If any provision of this Agreement
or the application thereof to any Person or circumstance is determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby. If the economic or legal substance of
the transactions contemplated hereby is affected in any manner adverse to any
party as a result thereof, the parties will negotiate in good faith in an effort
to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
Section 7.11 Parties in Interest. This Agreement is binding
upon and is for the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement is not made for the benefit of
any Person not a party hereto, and no Person other than the parties hereto or
their respective successors and permitted assigns will acquire or have any
benefit, right, remedy or claim under or by reason of this Agreement, except
that the provisions of Sections 4.02 and 4.03 shall inure to the benefit of and
shall be enforceable by the Persons referred to therein.
Section 7.12 Schedules. All schedules attached hereto are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein. Capitalized terms used in the schedules hereto but not otherwise defined
therein will have the respective meanings assigned to such terms in this
Agreement.
Section 7.13 Termination. This Agreement may be terminated and
the Distribution abandoned at any time prior to the Time of Distribution by and
in the sole discretion of the Conexant Board without the approval of Mindspeed
or Conexant's shareowners. In the event of such termination, neither party will
have any liability of any kind to the other party on account of such
termination.
Section 7.14 Waivers; Remedies. The conditions to Conexant's
obligation to consummate the Distribution are for the sole benefit of Conexant
and may be waived in
58
writing by Conexant in whole or in part in Conexant's sole discretion. No
failure or delay on the part of either Conexant or Mindspeed in exercising any
right, power or privilege hereunder will operate as a waiver thereof, nor will
any waiver on the part of either Conexant or Mindspeed of any right, power or
privilege hereunder operate as a waiver of any other right, power or privilege
hereunder, nor will any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. Subject to Section
7.05, the rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which the parties may otherwise have at law
or in equity.
Section 7.15 Further Assurances. From time to time after the
Time of Distribution, as and when requested by either party hereto, the other
party shall execute and deliver, or cause to be executed and delivered, all such
documents and instruments and shall take, or cause to be taken, all such actions
as the requesting party may reasonably request to consummate the transactions
contemplated by the Separation Agreements.
Section 7.16 Counterparts. This Agreement may be executed in
separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same
agreement. This Agreement may be executed and delivered by telecopier with the
same force and effect as if it were a manually executed and delivered
counterpart.
Section 7.17 Performance. Conexant will cause to be performed
and hereby guarantees the performance of all actions, agreements and obligations
set forth herein to be performed by any Conexant Subsidiary. Mindspeed will
cause to be performed and hereby guarantees the performance of all actions,
agreements and obligations set forth herein to be performed by any Mindspeed
Subsidiary.
Section 7.18 Currency Calculations. Following the Distribution
Date, for purposes of calculating the United States Dollar equivalent of any
amount payable under any Separation Agreement which is denominated in a currency
other than United States Dollars, the New York foreign exchange selling rate
applicable to such currency will be used, as published in the Wall Street
Journal, New York Edition, for the second Business Day preceding the earlier of
the date such payment is due or the date such payment is made (it being
understood that this Section 7.18 shall not apply to the conversion of foreign
currency balances made as of the Distribution Date in accordance with standard
Conexant accounting practices and procedures).
Section 7.19 Interpretation. Any reference herein to any
federal, state, local, or foreign law shall be deemed also to refer to all rules
and regulations promulgated thereunder, unless the context requires otherwise.
For the purposes of this Agreement, (a) words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires, (b) the terms "hereof",
"herein", and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this
59
Agreement and (c) the word "including" and words of similar import when used in
this Agreement shall mean "including, without limitation".
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
60
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties as of the date first
hereinabove written.
CONEXANT SYSTEMS, INC.
By: /s/ Xxxxxx X. X'Xxxxxx
----------------------------------------------
Name: Xxxxxx X. X'Xxxxxx
Title: Senior Vice President, General
Counsel and Secretary
MINDSPEED TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President and Chief
Administrative Officer
61