AGREEMENT AND PLAN OF MERGER by and among LSI LOGIC CORPORATION ATLAS ACQUISITION CORP. and AGERE SYSTEMS INC. Dated as of December 3, 2006
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Exhibit 2.1
by and among
LSI LOGIC CORPORATION
ATLAS ACQUISITION CORP.
and
AGERE SYSTEMS INC.
Dated as of December 3, 2006
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THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as of
December 3, 2006 by and among LSI Logic Corporation, a Delaware corporation (“LSI”), Atlas
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of LSI (“Merger
Sub”), and Agere Systems Inc., a Delaware corporation (“Agere”).
W I T N E S S E T H:
WHEREAS, each of the respective Boards of Directors of LSI, Merger Sub and Agere have approved
the Agreement and the transactions contemplated hereby, and deems it advisable and in the best
interest of their stockholders to enter into this Agreement and consummate the transactions
contemplated hereby, pursuant to which, among other things, at the Effective Time, Merger Sub will
be merged with and into Agere (the “Merger”) in accordance with the terms and conditions of
this Agreement and the applicable provisions of the General Corporation Law of the State of
Delaware (the “DGCL”), Agere will continue as the surviving corporation of the Merger and
as a wholly owned subsidiary of LSI and each share of Agere Common Stock outstanding immediately
prior to the Effective Time (as defined herein) will be cancelled and converted into the right to
receive the consideration set forth herein, all upon the terms and subject to the conditions set
forth in this Agreement.
WHEREAS, for U.S. federal income tax purposes, it is intended that the Merger shall qualify as
a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the “Code”), and that this Agreement shall be, and is hereby, adopted as a plan of
reorganization within the meaning of Treasury Regulations Section 1.368-2(g).
WHEREAS, LSI and Agere desire to make certain representations and warranties to the other in
connection with the business combination transaction contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing premises and the representations,
warranties, covenants and agreements set forth herein, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, LSI, Merger Sub and Agere hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
1.1 Certain Definitions. For all purposes of and under this Agreement, the following capitalized terms shall have
the following respective meanings:
(a) “Acquisition Proposal” shall mean any offer or proposal (other than an offer or
proposal by the other party hereto) relating to any Acquisition Transaction.
(b) “Acquisition Transaction” shall mean, with respect to Agere or LSI, any
transaction or series of related transactions (other than the transactions contemplated by this Agreement or expressly permitted by Section 5.2) involving: (i) any acquisition or
purchase from
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a party hereto by any Person or “group” (as defined in or under Section 13(d) of the
Exchange Act), directly or indirectly, of a fifteen percent (15%) or greater interest in the total
outstanding equity interests or voting securities of such party, or any tender offer or exchange
offer that if consummated would result in any Person or “group” (as defined in or under Section
13(d) of the Exchange Act) beneficially owning fifteen percent (15%) or more of the total
outstanding equity interests or voting securities of a party hereto; (ii) any acquisition or
purchase of fifty percent (50%) or more of any class of equity or other voting securities of one or
more Subsidiaries of a party hereto the business(es) of which, individually or in the aggregate,
generate or constitute fifteen percent (15%) or more of the net revenues, net income or assets (as
of or for the twelve (12) month period ending on the last day of the applicable party’s most
recently completed fiscal year) of such party and its Subsidiaries, taken as a whole; (iii) any
merger, consolidation, business combination or other similar transaction involving a party hereto
or one or more of its Subsidiaries the business(es) of which, individually or in the aggregate,
generate or constitute fifteen percent (15%) or more of the net revenues, net income or assets (as
of or for the twelve (12) month period ending on the last day of the applicable party’s most
recently completed fiscal year) of such party and its Subsidiaries, taken as a whole, pursuant to
which the stockholders of such party or such Subsidiary or Subsidiaries, as applicable, immediately
preceding such transaction hold less than eighty-five percent (85%) of the equity interests in the
surviving or resulting entity of such transaction; (iv) any sale, lease (other than in the ordinary
course of business), exchange, transfer, license (other than in the ordinary course of business),
acquisition or disposition of assets of a party hereto that generate or constitute fifteen percent
(15%) or more of the net revenues, net income or assets (as of or for the twelve (12) month period
ending on the last day of the applicable party’s most recently completed fiscal year) of such party
and its Subsidiaries, taken as a whole; (v) any liquidation, dissolution, recapitalization or other
significant corporate reorganization of a party hereto or one or more of its Subsidiaries the
business(es) of which, individually or in the aggregate, generate or constitute fifteen percent
(15%) or more of the net revenues, net income or assets (as of or for the twelve (12) month period
ending on the last day of the applicable party’s most recently completed fiscal year) of such party
and its Subsidiaries, taken as a whole; or (vi) any combination of the foregoing.
(c) “Affiliate” shall mean, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by or is under common control with such Person. For
purposes of the immediately preceding sentence, the term “control” (including, with correlative
meanings, the terms “controlling,” “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.
(d) “Agere Balance Sheet” shall mean the audited balance sheet of Agere contained in
the Agere Annual Report on Form 10-K for the year ended September 30, 2006.
(e) “Agere Board” shall mean the Board of Directors of Agere.
(f) “Agere Bylaws” shall mean the Bylaws of Agere, as amended and in effect on the
date hereof.
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(g) “Agere Capital Stock” shall mean Agere Common Stock and Agere Preferred Stock.
(h) “Agere Certificate of Incorporation” shall mean the Restated Certificate of
Incorporation of Agere, as amended and in effect on the date hereof.
(i) “Agere Common Stock” shall mean the Common Stock, par value $0.01 per share, of
Agere.
(j) “Agere Employee Plans” shall mean all Employee Benefit Plans maintained, or
contributed to by Agere, any of Agere’s Subsidiaries or any of their respective ERISA Affiliates or
to which Agere, any of Agere’s Subsidiaries or any of their respective ERISA Affiliates is
obligated to contribute, or under which any of them has or may reasonably be likely to have any
liability for premiums or benefits or other obligations.
(k) “Agere ESPP” shall mean Agere’s 2001 Employee Stock Purchase Plan, as amended.
(l) “Agere Intellectual Property Business” shall mean the Agere business that manages
Agere’s Patent portfolio and is responsible for obtaining revenue in exchange for licenses, sales
or other transactions involving Agere Intellectual Property Rights.
(m) “Agere Intellectual Property Rights” shall mean Intellectual Property Rights that
are owned or purported to be owned by or exclusively licensed to Agere or its Subsidiaries.
(n) “Agere Material Adverse Effect” shall mean any fact, circumstance, change or
effect that, individually or when taken together with all other such facts, circumstances, changes
or effects that exist at the date of determination of the occurrence of the Agere Material Adverse
Effect, has or is reasonably likely to have a material adverse effect on the business, operations,
financial condition or results of operations of Agere and its Subsidiaries, taken as a whole;
provided, however, that no facts, circumstances, changes or effects (by themselves or when
aggregated with any other facts, circumstances, changes or effects) resulting from, relating to or
arising out of the following shall be deemed to be or constitute an Agere Material Adverse Effect,
and no facts, circumstances, changes or effects resulting from, relating to or arising out of the
following (by themselves or when aggregated with any other facts, circumstances, changes or
effects) shall be taken into account when determining whether an Agere Material Adverse Effect has
occurred or may, would or could occur: (i) economic, financial or political conditions in the
United States or any other jurisdiction in which Agere or any of its Subsidiaries has substantial
business or operations, and any changes therein (including any changes arising out of acts of
terrorism, war, weather conditions or other force majeure events), to the extent that such
conditions do not have a materially disproportionate impact on Agere and its Subsidiaries, taken as
a whole, relative to other semiconductor companies of comparable size; (ii) conditions in the
semiconductor industry, and any changes therein (including any changes arising out of acts of
terrorism, war, weather conditions or other force majeure events), to the extent that such
conditions do not have a materially disproportionate impact on Agere and its Subsidiaries, taken
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as
a whole, relative to other semiconductor companies of comparable size; (iii) conditions in the
financial markets, and any changes therein (including any changes arising out of acts of
terrorism, war, weather conditions or other force majeure events), to the extent that such
conditions do not have a materially disproportionate impact on Agere and its Subsidiaries, taken as
a whole, relative to other semiconductor companies of comparable size; (iv) acts of terrorism or
war; (v) the announcement or pendency of this Agreement and the transactions contemplated hereby;
(vi) changes in Legal Requirements or GAAP (or any interpretations of GAAP) applicable to Agere or
any of its Subsidiaries; (vii) compliance by Agere and its Subsidiaries with the express terms of
this Agreement or the failure by Agere or any of its Subsidiaries to take any action that is
prohibited by this Agreement; (viii) changes in Agere’s stock price or the trading volume of Agere
stock, in and of itself; (ix) the failure to meet public estimates or forecasts of revenues,
earnings of other financial metrics, in and of itself, or the failure to meet internal projections,
forecasts or budgets of revenues, earnings or other financial metrics, in and of itself; or (x) any
legal claims made or brought by any current or former Agere Stockholders (on their own behalf or on
behalf of Agere) or other Legal Proceedings arising out of or related to this Agreement or any of
the transactions contemplated hereby.
(o) “Agere Preferred Stock” shall mean the Preferred Stock, par value $1.00 per share,
of Agere.
(p) “Agere Product” shall mean all products, technologies and services developed
(including products, technologies and services under development), owned, made, provided,
distributed, imported, sold or licensed by or on behalf of Agere and/or any of its Subsidiaries.
(q) “Agere Restricted Stock Unit” shall mean any Agere Stock Award that is an award
representing the right to receive in the future shares of Agere Common Stock from Agere in
accordance with a vesting schedule or issuance schedule.
(r) “Agere Rights Plan” shall mean that certain Amended and Restated Rights Agreement
between Agere and Computershare Investor Services, LLC, as Rights Agent, dated May 27, 2005.
(s) “Agere Rights Plan Amendment” means any amendment to the Agere Rights Plan so as
to render the rights issued thereunder inapplicable to this Agreement and the transactions
contemplated by this Agreement.
(t) “Agere Stockholders” shall mean holders of shares of Agere Capital Stock.
(u) “Business Day” shall mean any day, other than a Saturday, Sunday and any day which
is a legal holiday under the laws of the State of California or New York or is a day on which
banking institutions located in such States are authorized or required by Legal Requirements or
other governmental action to close.
(v) “Closing Average” shall mean the average of the closing sale prices for one share
of LSI Common Stock as quoted on the NYSE for the ten (10) consecutive trading days ending on the
second (2nd) trading day immediately preceding the Closing Date.
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(w) “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and the rules and regulations promulgated thereunder, or any successor statute, rules and
regulations thereto.
(x) “Contract” shall mean any contract, subcontract, legally binding agreement or
commitment, note, bond, mortgage, indenture, lease, license, sublicense or other legally binding
obligation, arrangement or understanding, whether oral or in writing.
(y) “Delaware Law” shall mean the DGCL and any other applicable Legal Requirements of
the State of Delaware.
(z) “DOJ” shall mean the United States Department of Justice or any successor thereto.
(aa) “DOL” shall mean the United States Department of Labor or any successor thereto.
(bb) “EC Merger Regulation” shall mean the Council Regulation No. 4064/89 of the
European Community, as amended.
(cc) “Employee Benefit Plan” means any “employee pension benefit plan” covered under
Section 3(2) of ERISA, any material “employee welfare benefit plan” covered under Section 3(1) of
ERISA, and any other material written or oral plan, agreement or arrangement involving compensation
or benefits, including insurance coverage, severance benefits, disability benefits, deferred
compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other
forms of fringe benefits, perquisites, incentive compensation or post-retirement compensation or
post-employment compensation and all material employment, management, consulting, relocation,
repatriation, expatriation, visa, work permit change in control, severance or similar agreements,
written or otherwise, which is or has been maintained, contributed to or required to be contributed
to for the benefit of, or relating to, any current or former employee, officer, director or
consultant of Agere or any of its Subsidiaries or LSI, as applicable, or any ERISA Affiliate or
with respect to which any such party has or may have any Liability.
(dd) “Environmental Laws” are all laws (including common laws), directives, guidance,
rules, regulations, orders, treaties, statutes, and codes promulgated by any Governmental Authority
which prohibit, regulate or control any Hazardous Material or any Hazardous Material Activity,
including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the
Resource Recovery and Conservation Act of 1976, the Federal Water Pollution Control Act, the Clean
Air Act, the Hazardous Materials Transportation Act, the Clean Water Act, the WEEE Directive, or
any foreign Law implementing the WEEE Directive, and the RoHS Directive or any foreign Law
implementing the RoHS Directive, all as amended at any time.
(ee) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder, or any successor statue, rules and
regulations thereto.
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(ff) “ERISA Affiliate” shall mean any entity which is, or at any applicable time was,
a member of (i) a controlled group of corporations (as defined in Section 414(b) of the Code), (ii)
a group of trades or businesses under common control (as defined in Section 414(c) of the Code) or
(iii) an affiliated service group (as defined under Section 414(m) of the Code or the regulations
under Section 414(o) of the Code), any of which includes or included Agere or LSI, as applicable,
or a Subsidiary of Agere or LSI, as applicable.
(gg) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, or any successor statute, rules and regulations
thereto.
(hh) “FTC” shall mean the United States Federal Trade Commission or any successor
thereto.
(ii) “GAAP” shall mean generally accepted accounting principles, as applied in the
United States.
(jj) “Governmental Authority” shall mean any government, any governmental or
regulatory entity or body, department, commission, board, agency or instrumentality, and any court,
tribunal or judicial body, in each case whether federal, state, county, provincial, and whether
local or foreign.
(kk) “Hazardous Material” is any material, chemical, emission, substance or waste that
has been designated by any Governmental Authority to be radioactive, toxic, hazardous, corrosive,
reactive, explosive, flammable, a medical or biological waste, a pollutant or otherwise a danger to
health, reproduction or the environment.
(ll) “Hazardous Materials Activity” is the transportation, transfer, recycling,
storage, use, treatment, manufacture, removal, remediation, release, exposure of others to, sale,
or distribution of any Hazardous Material or any product or waste containing a Hazardous Material,
or product manufactured with Ozone depleting substances, including any required labeling, payment
of waste fees or charges (including so-called e-waste fees) and compliance with any product
take-back, collection, recycling, or product content requirements.
(mm) “HSR Act” shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder, or any successor statute, rules and
regulations thereto.
(nn) “Intellectual Property Rights” shall mean common law and statutory rights
anywhere in the world arising under or associated with (i) patents, patent applications and
inventors’ certificates (“Patent”), (ii) copyrights, copyright registrations and copyright
applications, “moral” rights and mask work rights (“Copyrights”), (iii) trade and
industrial secrets and confidential information and know-how (“Trade Secrets”), (iv)
trademarks, trade names and service marks, and any applications or registration of the same
(“Trademarks”), (v) other proprietary rights relating or with respect to the protection of
Technology, (vi) divisions, continuations, renewals, reissuances and extensions of the foregoing
(as applicable), and
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(vii) analogous rights to those set forth above, including the right to
enforce and recover damages for the infringement or misappropriation of any of the foregoing.
(oo) “IRS” shall mean the United States Internal Revenue Service or any successor
thereto.
(pp) “LSI Balance Sheet” shall mean the unaudited balance sheet of LSI contained in
the LSI Quarterly Report on Form 10-Q for the quarterly period ended October 1, 2006.
(qq) “LSI Board” shall mean the Board of Directors of LSI.
(rr) “LSI Bylaws” shall mean the Amended and Restated Bylaws of LSI, as amended and in
effect on the date hereof.
(ss) “LSI Common Stock” shall mean the Common Stock, par value $0.01 per share, of
LSI.
(tt) “LSI Certificate of Incorporation” shall mean the LSI Restated Certificate of
Incorporation, as amended and in effect on the date hereof.
(uu) “LSI Employee Plans” shall mean all Employee Benefit Plans maintained, or
contributed to by LSI, any of LSI’s Subsidiaries or any of their respective ERISA Affiliates or to
which LSI, any of LSI’s Subsidiaries or any of their respective ERISA Affiliates is obligated to
contribute, or under which any of them has or may reasonably be likely to have any liability for
premiums or benefits or other obligations.
(vv) “LSI Intellectual Property Rights” shall mean shall Intellectual Property Rights
that are owned or purported to be owned by or exclusively licensed to LSI or its Subsidiaries.
(ww) “LSI Material Adverse Effect” shall mean any fact, circumstance, change or effect
that, individually or when taken together with all other such facts, circumstances, changes or
effects that exist at the date of determination of the occurrence of the LSI Material Adverse
Effect, has or is reasonably likely to have a material adverse effect on the business, operations,
financial condition or results of operations of LSI and its Subsidiaries, taken as a whole;
provided, however, that no facts, circumstances, changes or effects (by themselves or when
aggregated with any other facts, circumstances, changes or effects) resulting from, relating to or
arising out of the following shall be deemed to be or constitute an LSI Material Adverse Effect, and
no facts, circumstances, changes or effects resulting from, relating to or arising out of the
following (by themselves or when aggregated with any other facts, circumstances, changes or
effects) shall be taken into account when determining whether an LSI Material Adverse Effect has
occurred or may, would or could occur: (i) economic, financial or political conditions in the
United States or any other jurisdiction in which LSI or any of its Subsidiaries has substantial
business or operations, and any changes therein (including any changes arising out of acts of
terrorism, war, weather conditions or other force majeure events), to the extent that such
conditions do not have a materially disproportionate impact on LSI and its Subsidiaries, taken as a
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whole, relative to other semiconductor companies of comparable size; (ii) conditions in the
semiconductor industry, and any changes therein (including any changes arising out of acts of
terrorism, war, weather conditions or other force majeure events), to the extent that such
conditions do not have a materially disproportionate impact on LSI and its Subsidiaries, taken as a whole, relative to other semiconductor companies of comparable size; (iii) conditions in the
financial markets, and any changes therein (including any changes arising out of acts of terrorism,
war, weather conditions or other force majeure events), to the extent that such conditions do not
have a materially disproportionate impact on LSI and its Subsidiaries, taken as a whole, relative
to other semiconductor companies of comparable size; (iv) acts of terrorism or war; (v) the
announcement or pendency of this Agreement and the transactions contemplated hereby; (vi) changes
in Legal Requirements or GAAP (or any interpretations of GAAP) applicable to LSI or any of its
Subsidiaries; (vii) compliance by LSI and its Subsidiaries with the express terms of this Agreement
or the failure by LSI or any of its Subsidiaries to take any action that is prohibited by this
Agreement; (viii) changes in LSI’s stock price or the trading volume of LSI stock, in and of
itself; (ix) the failure to meet public estimates or forecasts of revenues, earnings of other
financial metrics, in and of itself, or the failure to meet internal projections, forecasts or
budgets of revenues, earnings or other financial metrics, in and of itself; or (x) any legal claims
made or brought by any current or former LSI Stockholders (on their own behalf or on behalf of LSI)
or other Legal Proceedings arising out of or related to this Agreement or any of the transactions
contemplated hereby.
(xx) “LSI Rights Plan” shall mean that certain Preferred Share Purchase Rights
Agreement between LSI and BankBoston, dated November 20, 1998.
(yy) “Legal Proceeding” shall mean any action, claim, suit, litigation, proceeding
(public or private), criminal prosecution, audit or investigation by or before any Governmental
Authority.
(zz) “Legal Requirements” shall mean applicable domestic or foreign federal, state,
provincial, local, municipal or other law, statute, treaty, constitution, principle of common law,
binding resolution, ordinance, code, binding edict, decree, directive, order, rule, regulation,
ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into
effect by or under the authority of any Governmental Authority.
(aaa) “Liabilities” shall mean any liability, obligation or commitment of any kind,
whether absolute, accrued, fixed or contingent, matured or unmatured, determined or determinable or
otherwise and whether or not required to be recorded or reflected on a balance sheet prepared in
accordance with GAAP.
(bbb) “Lien” shall mean any lien, pledge, hypothecation, charge, mortgage, security
interest, encumbrance, claim, interference, option, right of first refusal, preemptive right,
community property interest or restriction of any nature.
(ccc) “NYSE” shall mean the New York Stock Exchange or any successor thereto.
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(ddd) “Order” shall mean any judgment, decision, decree, injunction, ruling, writ,
assessment or order of any Governmental Authority that is binding on any Person or its property
under applicable Legal Requirements.
(eee) “Pension Plan” shall mean each Employee Benefit Plan which is an “employee
pension benefit plan,” within the meaning of Section 3(2) of ERISA.
(fff) “Person” shall mean any individual, corporation (including any non-profit
corporation), limited liability company, joint stock company, general partnership, limited
partnership, joint venture, estate, trust, firm or other enterprise, association, organization,
entity or any Governmental Authority.
(ggg) “Registered Intellectual Property” means any Intellectual Property Right that is
the subject of a formal application or registration with any Governmental Authority (or with
respect to domain names, any domain name registrar) including (i) issued Patents, (ii) registered
Copyrights (including maskwork registrations), (iii) registered Trademarks, (iv) domain name
registrations, and (v) any applications, including provisional applications, for such registrations
(as applicable).
(hhh) “RoHS Directive” shall mean the European Directive 2002/95/EC on the restriction
of the use of certain hazardous substances in electrical and electronic equipment.
(iii) “Xxxxxxxx-Xxxxx Act” shall mean the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations promulgated thereunder, or any successor statute, rules or regulations thereto.
(jjj) “SEC” shall mean the United States Securities and Exchange Commission or any
successor thereto.
(kkk) “Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, or any successor statute, rules or regulations
thereto.
(lll) “Subsidiary” of any Person shall mean, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated, of which (i) such party
or any other Subsidiary of such party is a general partner, manager or managing member, (ii) such
party or any Subsidiary of such party owns in excess of a majority of the outstanding equity or
voting securities or interests or (iii) such party or any Subsidiary of such party has the right to
elect at least a majority of the board of directors or others performing similar functions with
respect to such corporation or other organization.
(mmm) “Superior Proposal” shall mean any bona fide written Acquisition Proposal
involving the acquisition of all of the outstanding voting securities of a party hereto (i) which,
if any cash consideration is involved, is not subject to any financing contingencies (and if
financing is required, such financing is then fully committed to the third party making such
Acquisition Proposal) and (ii) with respect to which the board of directors of the applicable party
hereto shall have reasonably determined in good faith (after consultation with a financial advisor
of nationally
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recognized standing and its outside legal counsel, and after taking into account,
among other things, the financial, legal and regulatory aspects of such Acquisition Transaction, as
well as any counter-offer or proposal made by the other party hereto) that (A) the acquiring party
is reasonably capable of timely consummating the proposed Acquisition Transaction on the terms
proposed and without unreasonable delay and (B) the proposed Acquisition Transaction would, if
timely consummated in accordance with its terms, be more favorable to the stockholders of the
applicable party hereto (in their capacity as such), from a financial point of view, than the
transactions contemplated by this Agreement (or any counter-offer or proposal made by the
other party hereto).
(nnn) “Taxes” shall mean any and all domestic or foreign, federal, state, local or
other taxes of any kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any Governmental Authority, including
taxes on or with respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, unemployment, social security, workers’
compensation or net worth, taxes in the nature of excise, withholding, ad valorem or value added,
and any obligations with respect to such amounts arising as a result of being a member of an
affiliated, consolidated, combined or unitary group for any period or under any agreements or
arrangements with any other person and including any liability for taxes of a predecessor or
transferor.
(ooo) “Tax Return” shall mean any return, report or similar filing (including the
attached schedules) required to be filed with respect to Taxes, including any information return,
claim for refund, amended return or declaration of estimated Taxes.
(ppp) “Technology” shall mean any or all of the following (i) works of authorship
including computer programs, source code, executable code, RTL and GDS II files, whether embodied
in software, firmware or otherwise, architecture, documentation, designs, files, records, and data
related to the foregoing, (ii) inventions (whether or not patentable), discoveries, improvements,
and technology, (iii) proprietary and confidential information, trade secrets and know how, (iv)
databases, data compilations and collections, and technical data, (v) logos, trade names, trade
dress, trademarks and service marks, (vi) domain names, web addresses and sites, (vii) tools,
methods and processes, (viii) devices, prototypes, schematics, breadboards, netlists, mask works,
test methodologies, verilog files, emulation and simulation reports, test vectors, and hardware
development tools, and (ix) any and all instantiations of the foregoing in any form and embodied in
any media.
(qqq) “WEEE Directive” shall mean the European Directive 2002/96/EC on waste
electrical and electronic equipment.
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1.2 Additional Definitions. The following capitalized terms shall have the respective meanings ascribed thereto in the
respective sections of this Agreement set forth opposite each of the capitalized terms below:
| Term | Section Reference | |
Affiliate Agreement |
6.18 | |
Agere |
Preamble | |
Agere 2001 Plan |
3.4(a)(ii) | |
Agere 401(k) Plans |
6.12(a) | |
the Agere Board Recommendation |
6.2(a) | |
the Agere Board Recommendation Change |
6.2(b) | |
Agere Disclosure Letter |
Article III | |
Agere Employees |
6.13(a) | |
Agere Executive Agreement |
6.13(d) | |
Agere In Licenses |
3.19(h) | |
Agere Insiders |
6.17(c) | |
Agere IP Licenses |
3.19(i) | |
Agere Material Contract |
3.13(a) | |
Agere Non-Employee Director Plan |
3.4(a) | |
Agere Non-U.S. Employee Plans |
3.14(k) | |
Agere Out Licenses |
3.19(i) | |
Agere Pension Plan |
3.14(g) | |
Agere Permits |
3.11(b) | |
Agere Qualified Plan |
3.14(e) | |
Agere Real Property Leases |
3.16 | |
Agere Registered Intellectual Property |
3.19(a) | |
Agere Restricted Stock |
2.7(d)(ii) | |
Agere SEC Reports |
3.7(a) | |
Agere Stock Awards |
3.4(c) | |
Agere Stock Option |
2.7(d)(i) | |
Agere Stock Plans |
3.4(b) | |
Agere Stockholder Meeting |
6.3(a) | |
Agere Subordinated Note |
3.4(a)(iii) | |
Agere Subsidiary Documents |
3.3 | |
Agere Terminating Plans |
6.12(b) | |
Agere Voting Proposal |
3.5(a) | |
Agreement |
Preamble | |
Antitrust Laws |
6.6(b) | |
Assumed Option |
2.7(d)(i) | |
Assumed Unit |
2.7(d)(iii) | |
Book Entry Shares |
2.8(c) | |
BONY |
5.3 | |
Certificate of Merger |
2.3 | |
Certificates |
2.8(c) |
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| Term | Section Reference | |
Closing |
2.2 | |
Closing Date |
2.2 | |
Code |
Preamble | |
Common Stock Consideration |
2.7(a)(i) | |
Confidentiality Agreement |
6.7(h) | |
D&O Policy |
6.15(c) | |
Delaware Secretary of State |
2.3 | |
DGCL |
Preamble | |
Effective Time |
2.3 | |
Exchange Agent |
2.8(a) | |
Exchange Fund |
2.8(b) | |
Exchange Ratio |
2.7(a)(i) | |
Extended Termination Date |
8.1(c) | |
Indemnified Parties |
6.14(b) | |
Indenture |
5.3 | |
Initial Termination Date |
8.1(c) | |
Joint Proxy Statement/Prospectus |
6.4(a) | |
LSI |
Preamble | |
the LSI Board Recommendation |
6.2(a) | |
the LSI Board Recommendation Change |
6.2(a) | |
LSI Convertible Notes |
4.4(a)(v) | |
LSI Disclosure Letter |
Article IV | |
LSI ESPP |
4.4(a)(iv) | |
LSI In Licenses |
4.19(h) | |
LSI IP Licenses |
4.19(a) | |
LSI Material
Contract |
4.13(a) | |
LSI Non-U.S. Employee Plans |
4.14(k) | |
LSI Out Licenses |
4.19(i) | |
LSI Pension Plan |
4.14(g) | |
LSI Permits |
4.11(b) | |
LSI Preferred Stock |
4.4(a) | |
LSI Qualified Plan |
4.14(e) | |
LSI Real Property Leases |
4.16 | |
LSI Registered Intellectual Property |
4.19(a) | |
LSI SEC Reports |
4.7(a) | |
LSI 2003 Stock Plan |
4.4(a)(iii) | |
LSI Stock Plans |
4.4(b) | |
LSI Stockholder Meeting |
6.3(a) | |
LSI Stockholder Proposal |
6.2(a) | |
LSI Subsidiary Documents |
4.3 | |
LSI Voting Proposal |
4.5(a) | |
Maximum Annual Premium |
6.14(c) | |
Merger |
Preamble | |
Merger Stockholder Meetings |
6.3(a) |
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| Term | Section Reference | |
Merger Sub |
Preamble | |
PBGC |
3.14(g) | |
PBGC Claims |
3.14(g) | |
Qualifying Amendment |
6.4(b) | |
Registration Statement |
6.4(a) | |
Regulation M-A Filing |
6.4(c) | |
Requisite Agere Stockholder Approval |
3.5(b) | |
Requisite LSI Stockholder Approval |
4.5(b) | |
Section 16 Information |
6.17(b) | |
Surviving Corporation |
2.1 | |
Takeover Statute |
3.24 | |
Tax Opinions |
6.19(b) | |
Termination Fee Amount |
8.3(b)(i) | |
Triggering Event |
8.1(f) | |
WARN Act |
3.15(c) |
1.3 Certain Interpretations.
(a) Unless otherwise indicated, all references herein to Articles, Sections, Exhibits or
Letters shall be deemed to refer to Articles, Sections, Exhibits or Letters of or to this
Agreement, as applicable.
(b) Unless otherwise indicated, the words “include,” “includes” and “including,” when used
herein, shall be deemed in each case to be followed by the words “without limitation.”
(c) The table of contents and headings set forth in this Agreement are for convenience of
reference purposes only and shall not affect or be deemed to affect in any way the meaning or
interpretation of this Agreement or any term or provision hereof.
(d) When reference is made herein to a Person, such reference shall be deemed to include all
direct and indirect Subsidiaries of such Person unless otherwise indicated or the context otherwise
requires.
(e) The parties hereto agree that they have been represented by counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of any Legal Requirement,
holding or rule of construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
ARTICLE II
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions set forth in this Agreement and the applicable
provisions of the DGCL, on the Closing Date and at the Effective
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Time Merger Sub shall be merged with and into Agere, the separate corporate existence of Merger Sub
shall thereupon cease and Agere shall continue as the surviving corporation of the Merger. Agere,
as the surviving corporation of the Merger, is sometimes referred to herein as the “Surviving
Corporation.”
2.2 The Closing. The consummation of the Merger (the “Closing”) shall take place
at a closing to occur at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation,
000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx, 00000, on a date and at a time to be agreed upon by LSI
and Agere, which date shall be no later than the second (2nd) Business Day after the
satisfaction or waiver (to the extent permitted hereunder) of the last to be satisfied or waived of
the conditions set forth in Article VII (other than those conditions that by their terms
are to be satisfied at the Closing, but subject to the satisfaction or waiver (to the extent
permitted hereunder), of such conditions), or at such other location, date and time as LSI and
Agere shall mutually agree upon in writing. The date upon which the Closing shall actually occur
pursuant hereto is referred to herein as the “Closing Date.”
2.3 The Effective Time. Upon the terms and subject to the conditions set forth in this
Agreement, on the Closing Date, LSI and Agere shall cause the Merger to be consummated under the
DGCL by filing a certificate of merger in customary form and substance (the “Certificate of
Merger”) with the Secretary of State of the State of Delaware (the “Delaware Secretary of
State”) in accordance with the applicable provisions of the DGCL. The time of such filing and
acceptance by the Delaware Secretary of State, or such later time as may be agreed in writing by
LSI and Agere and specified in the Certificate of Merger is referred to herein as the
“Effective Time.”
2.4 Effect of the Merger. The effect of the Merger shall be as provided in this Agreement
and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time all of the property, rights, privileges, powers and
franchises of Agere and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Agere and Merger Sub shall become the debts, liabilities and duties of
the Surviving Corporation.
2.5 Certificate of Incorporation and Bylaws.
(a) Certificate of Incorporation. Subject to the terms of Section 6.14(b), at
the Effective Time, the Certificate of Incorporation of Agere shall be amended and restated in its
entirety to read identically to the Certificate of Incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, and such amended and restated Certificate of Incorporation
shall become the Certificate of Incorporation of the Surviving Corporation until thereafter amended
in accordance with the applicable provisions of the DGCL and such Certificate of Incorporation;
provided, however, that at the Effective Time the Certificate of Incorporation of the Surviving
Corporation shall be amended so that the name of the Surviving Corporation shall be “Agere Systems
Inc.”
(b) Bylaws. Subject to the terms of Section 6.14(b), at the Effective Time,
the Bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall become the
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Bylaws of the Surviving Corporation until thereafter amended in accordance with the applicable
provisions of the DGCL, the Certificate of Incorporation of the Surviving Corporation and such
Bylaws.
2.6 Directors and Officers.
(a) Directors. At the Effective Time, the initial directors of the Surviving
Corporation shall be the directors of Merger Sub immediately prior to the Effective Time, each to
hold office in accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation until their respective successors are duly elected or appointed and qualified.
(b) Officers. At the Effective Time, the initial officers of the Surviving
Corporation shall be the officers of Merger Sub immediately prior to the Effective Time, each to
hold office in accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation until their respective successors are duly appointed.
2.7 Effect on Capital Stock.
(a) Capital Stock of Constituent Companies. Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time, by virtue of the Merger and without
any action on the part of LSI, Merger Sub, Agere, or the holders of any of the following
securities, the following shall occur:
(i) Agere Common Stock. Other than as set forth in Section 2.7(d), each share
of Agere Common Stock that is outstanding immediately prior to the Effective Time (other than
shares of Agere Common Stock owned by LSI, Merger Sub or Agere, or by any direct or indirect wholly
owned Subsidiary of LSI, Merger Sub or Agere, in each case immediately prior to the Effective Time)
shall be canceled and extinguished and automatically converted into the right to receive 2.16
shares of LSI Common Stock and the associated rights issued under the LSI Rights Plan (the
“Exchange Ratio”) and the cash payable in lieu of fractional shares pursuant to Section
2.7(c) (the “Common Stock Consideration”) upon the surrender of the certificate, if
any, representing such share of Agere Common Stock in the manner provided in Section 2.8
(or in the case of a lost, stolen or destroyed certificate, upon delivery of an affidavit (and
bond, if required) in the manner provided in Section 2.10).
(ii) Certain Owned Agere Common Stock. Each share of Agere Common Stock that is
owned by LSI, Merger Sub or Agere, or by any direct or indirect wholly owned Subsidiary of LSI,
Merger Sub or Agere, in each case immediately prior to the Effective Time, shall be cancelled and
extinguished without any conversion thereof or consideration paid therefor.
(iii) Capital Stock of Merger Sub. Each share of common stock, par value $0.001 per
share, of Merger Sub that is outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation. Each certificate evidencing ownership of such shares of common stock of
Merger Sub shall thereafter evidence ownership of shares of common stock of the Surviving
Corporation.
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(b) Adjustment to Exchange Ratio. The Exchange Ratio shall be appropriately adjusted
to reflect fully the effect of any stock split, reverse stock split, stock dividend (including any
dividend or distribution of securities convertible into LSI Common Stock or Agere Common Stock),
reorganization, recapitalization, reclassification or other like change with respect to LSI Common
Stock or Agere Common Stock having a record date on or after the date hereof and prior to the
Effective Time.
(c) Fractional Shares. No fraction of a share of LSI Common Stock will be issued by
virtue of the Merger, but in lieu thereof each holder of record of shares of Agere Common Stock who
would otherwise be entitled to a fraction of a share of Agere Common Stock pursuant to this
Section 2.7 (after aggregating all fractional shares of LSI Common Stock that otherwise
would be received by such holder of record) shall, upon the surrender of the certificate, if any,
representing such share of Agere Common Stock in the manner provided in Section 2.8 (or in
the case of a lost, stolen or destroyed certificate, upon delivery of an affidavit (and bond, if
required) in the manner provided in Section 2.10), receive from LSI an amount of cash
(rounded to the nearest whole cent), without interest, equal to the product obtained by multiplying
such fraction by the closing price of LSI Common Stock on the trading day immediately preceding the
Closing Date.
(d) Agere Stock Awards.
(i) At the Effective Time, each Agere Stock Award that is a stock option to purchase shares of
Agere Common Stock (each a “Agere Stock Option”) that is outstanding immediately prior to
the Effective Time, whether or not then vested or exercisable (each, an “Assumed Option”),
shall be assumed by LSI. Each Assumed Option shall be converted into an option to acquire that
number of shares of LSI Common Stock equal to the product obtained by multiplying (x) the number of
shares of Agere Common Stock subject to such Agere Stock Option and (y) the Exchange Ratio, rounded
up to the nearest whole share of LSI Common Stock. Each Assumed Option shall have an exercise price
per share equal to the quotient obtained by dividing (x) the per share exercise price of Agere
Common Stock subject to such Assumed Option by (y) the Exchange Ratio (which price per share shall
be rounded up to the nearest one-hundredth of one cent). Each Assumed Option shall otherwise be
subject to the same terms and conditions (including as to vesting and exercisability) as were
applicable under the respective Agere Stock Option immediately prior to the Effective Time. It is
the intention of the parties that each Assumed Option that qualified as a United States-based
incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the
maximum extent permissible, following the Effective Time. For employees of Agere or its
Subsidiaries located outside of the U.S., to the extent required to ensure compliance with
applicable local laws, LSI may require that outstanding options be exercised only by a cashless
exercise pursuant to which employees will authorize a broker to sell all shares that they are
entitled to at exercise immediately upon exercise and receive the difference between the market
value of the shares at exercise and the exercise price in cash.
(ii) If any shares of Agere Common Stock outstanding immediately prior to the Effective Time
are unvested or subject to a repurchase option or obligation, risk of forfeiture or other condition
under any applicable restricted stock purchase agreement or other
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agreement with Agere or under which Agere has any rights (the “Agere Restricted
Stock”), then the Common Stock Consideration payable in exchange for such Agere Restricted
Stock also shall be unvested and subject to the same repurchase option or obligation, risk of
forfeiture or other condition and need not be paid until such time as such repurchase option, risk
of forfeiture or other condition lapses or otherwise terminates, and the certificates representing
such shares of Agere Restricted Stock may accordingly be marked with appropriate legends. Prior to
the Effective Time, Agere shall take all action that may be necessary to ensure that, from and
after the Effective Time, LSI is entitled to exercise any such repurchase option or other right set
forth in any such restricted stock purchase agreement or other agreement.
(iii) At the Effective Time, each Agere Restricted Stock Unit that is outstanding immediately
prior to the Effective Time, whether or not then vested or issuable (each, an “Assumed
Unit”), shall be assumed by LSI. Each Assumed Unit shall be converted into an award to receive
that number of shares of LSI Common Stock equal to the product obtained by multiplying (x) the
number of shares of Agere Common Stock subject to such Assumed Unit immediately prior to the
Effective Time by (x) the Exchange Ratio, rounded up, if necessary, to the nearest whole share of
LSI Common Stock. Each Assumed Unit that was granted with a purchase price equal to Agere par
value or with no purchase price shall have a purchase price equal to LSI par value, which LSI shall
deem paid by virtue of past services rendered by the holder of such Assumed Unit. Each Assumed
Unit that was granted with a purchase price other than Agere par value shall have a purchase price
per share equal to the quotient obtained by dividing (x) the per share purchase price of Agere
Common Stock subject to such Assumed Unit by (y) the Exchange Ratio (which price per share shall be
rounded down to the nearest one-hundredth of one cent). Each Assumed Unit shall otherwise be
subject to the same terms and conditions (including as to vesting and issuance) as were applicable
under the respective Agere Restricted Stock Unit immediately prior to the Effective Time; except
that with respect to any Restricted Stock Unit which vests upon a specified date or dates if
performance based criteria are achieved, achievement of such criteria shall be waived and the
Restricted Stock Unit shall vest otherwise in accordance with its terms and conditions over the
applicable period.
2.8 Exchange of Certificates.
(a) Exchange Agent. Prior to the Closing Date, LSI shall select a bank or trust
company reasonably acceptable to Agere to act as the exchange agent for the Merger pursuant to an
exchange agent agreement in form and substance reasonably satisfactory to Agere (the “Exchange
Agent”).
(b) LSI to Provide Common Stock. As promptly as practicable (and in any event within
two (2) Business Days) following the Effective Time, LSI shall make available to the Exchange Agent
for exchange in accordance with this Article II, the shares of LSI Common Stock issuable
pursuant to Section 2.7(a) in exchange for shares of Agere Common Stock. In addition, LSI
shall make available from time to time after the Effective Time as necessary, cash in an amount
sufficient to pay any cash payable in lieu of fractional shares pursuant to Section 2.7(c)
and any dividends or distributions to which holders of shares of Agere Common Stock may be entitled
pursuant to Section 2.8(d). Any LSI Common Stock and cash deposited with the Exchange
Agent shall hereinafter be referred to as the “Exchange Fund.”
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(c) Exchange Procedures. As promptly as practicable following the Effective Time, LSI
shall cause the Exchange Agent to mail to each holder of record (as of immediately prior to the
Effective Time) of a certificate or certificates (the “Certificates”) which immediately
prior to the Effective Time represented outstanding shares of Agere Common Stock (or effective
affidavits of loss in lieu thereof) or non-certificated shares of Agere Common Stock represented by
book entry (“Book Entry Shares”) (i) a letter of transmittal in customary form as Agere and LSI may
reasonably agree (which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates (or effective affidavits in
lieu thereof) or Book Entry Shares to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Certificates or Book Entry Shares in exchange for certificates
representing whole shares of LSI Common Stock pursuant to Section 2.7(a), cash payable in
respect thereof in lieu of any fractional shares pursuant to Section 2.7(c) and any
dividends or other distributions payable in respect thereof pursuant to Section 2.8(d).
With respect to uncertificated shares of Agere Common Stock held through “direct registration”, LSI
shall implement procedures with the Exchange Agent for effecting the exchange of such directly
registered uncertificated shares of Agere Common Stock and payment of cash in lieu of any
fractional shares pursuant to Section 2.7(a), as promptly as practicable after the
Effective Time. Upon surrender of Certificates (or effective affidavits in lieu thereof) or Book
Entry Shares for cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by LSI, together with such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto, the holders of such Certificates or Book Entry Shares
shall be entitled to receive in exchange therefor the number of whole shares of LSI Common Stock
(after taking into account all Certificates or such Book Entry Shares surrendered by such holder of
record) to which such holder is entitled pursuant to Section 2.7(a) (which, at the election
of LSI, may be in uncertificated book entry form unless a physical certificate is requested by the
holder of record or is otherwise required by applicable Legal Requirements), payment in lieu of
fractional shares to which such holder is entitled pursuant to Section 2.7(c) and any
dividends or distributions to which such holder is entitled pursuant to Section 2.8(d), and
the Certificates so surrendered shall forthwith be canceled. The Exchange Agent shall accept such
Certificates or Book Entry Shares upon compliance with such reasonable terms and conditions as the
Exchange Agent may impose to effect an orderly exchange thereof in accordance with normal exchange
practices. No interest shall be paid or accrued for the benefit of holders of the Certificates or
Book Entry Shares on the cash amounts payable upon the surrender of such Certificates or such Book
Entry Shares pursuant to this Section 2.8. Until so surrendered, from and after the
Effective Time outstanding Certificates or Book Entry Shares shall be deemed to evidence only the
ownership of the number of full shares of LSI Common Stock into which such shares of Agere Common
Stock shall have been so converted and the right to receive an amount in cash in lieu of the
issuance of any fractional shares in accordance with Section 2.7(c) and any dividends or
distributions payable pursuant to Section 2.8(d).
(d) Distributions With Respect to Unexchanged Shares. Whenever a dividend or other
distribution is declared or made after the date hereof with respect to LSI Common Stock with a
record date after the Effective Time, such declaration shall include a dividend or other
distribution in respect of all shares of LSI Common Stock issuable pursuant to this Agreement. No
dividends or other distributions declared or made after the date hereof with respect to LSI Common
Stock with a record date after the Effective Time will be paid to the holders of any
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unsurrendered Certificates or Book Entry Shares with respect to the shares of LSI Common Stock
represented thereby until the holders of record of such Certificates or such Book Entry Shares
shall surrender such Certificates or such Book Entry Shares. Subject to applicable Legal
Requirements, following surrender of any such Certificates or such Book Entry Shares, the Exchange
Agent shall deliver to the record holders thereof, without interest, promptly after such surrender,
the number of whole shares of LSI Common Stock issued in exchange therefor along with any such
dividends or other distributions with a record date after the Effective Time and theretofore paid
with respect to such whole shares of LSI Common Stock.
(e) Transfers of Ownership. In the event that a transfer of ownership of shares of
Agere Common Stock is not registered in the stock transfer books or ledger of Agere, or if shares
of LSI Common Stock are to be issued in a name other than that in which the Certificates
surrendered in exchange therefor are registered, it will be a condition of the issuance thereof
that the Certificates so surrendered are properly endorsed and otherwise in proper form for
surrender and transfer and the Person requesting such payment has paid to LSI (or any agent
designated by LSI) any transfer or other Taxes required by reason of the issuance of shares of LSI
Common Stock in any name other than that of the registered holder of the Certificates surrendered,
or established to the satisfaction of LSI (or any agent designated by LSI) that such transfer or
other Taxes have been paid or are otherwise not payable.
(f) Required Withholding. Each of the Exchange Agent, LSI and the Surviving
Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise
deliverable pursuant to this Agreement such amounts as may be required to be deducted or withheld
therefrom under applicable Legal Requirements. To the extent that such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as having been paid
to the Person to whom such amounts would otherwise have been paid.
(g) No Liability. Notwithstanding anything to the contrary set forth in this
Agreement, none of the Exchange Agent, LSI, the Surviving Corporation or any other party hereto
shall be liable to a holder of shares of LSI Common Stock or Agere Common Stock for any amount
properly paid to a public official pursuant to any applicable abandoned property, escheat or other
similar Legal Requirement.
(h) Termination of Exchange Fund. Any portion of the Exchange Fund which remains
undistributed to the holders of Certificates or Book Entry Shares twelve (12) months after the
Effective Time shall, at the request of the Surviving Corporation, be delivered to the Surviving
Corporation or otherwise according to the instruction of the Surviving Corporation, and any holders
of the Certificates or Book Entry Shares who have not surrendered such Certificates or Book Entry
Shares in compliance with this Section 2.8 shall after such delivery to Surviving
Corporation look only to the Surviving Corporation for delivery or payment of the shares of LSI
Common Stock issuable in respect thereof pursuant to Section 2.7(a), cash in lieu of any
fractional shares payable in respect thereof pursuant to Section 2.7(c) and any dividends
or other distributions payable in respect thereof pursuant to Section 2.8(d).
2.9 No Further Ownership Rights in Agere Common Stock. From and after the Effective Time,
all shares of Agere Common Stock shall no longer be outstanding and shall
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automatically be cancelled, retired and cease to exist, and each holder of a Certificate or Book Entry
Shares theretofore representing any shares of Agere Common Stock shall cease to have any rights
with respect thereto, except the right to receive the shares of LSI Common Stock issuable in
respect thereof pursuant to Section 2.7(a) and Section 2.7(d), cash in lieu of any
fractional shares payable in respect thereof pursuant to Section 2.7(c) and any dividends
or other distributions payable in respect thereof pursuant to Section 2.8(d). All shares
of LSI Common Stock issued upon the surrender for exchange of shares of Agere Common Stock in
accordance with the terms hereof (including any cash paid in respect thereof pursuant to
Section 2.7(c) and any dividends or other distributions paid in respect thereof pursuant to
Section 2.8(d)) shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Agere Common Stock, and there shall be no further registration of
transfers on the records of the Surviving Corporation of shares of Agere Common Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates
are presented to the Surviving Corporation for any reason, then such Certificates shall be canceled
and exchanged as provided in this Article II.
2.10 Lost, Stolen or Destroyed Certificates. In the event that any Certificates shall have
been lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, the
shares of LSI Common Stock issuable in respect thereof pursuant to Section 2.7(a), the cash
in lieu of fractional shares payable in respect thereof pursuant to Section 2.7(c) and any
dividends or distributions payable in respect thereof pursuant to Section 2.8(d); provided,
however, that LSI may, in its discretion and as a condition precedent to the issuance thereof,
require the owners of such lost, stolen or destroyed Certificates to deliver a bond in such sum as
it may reasonably direct as indemnity against any claim that may be made against LSI, the Surviving
Corporation or the Exchange Agent with respect to the Certificates alleged to have been lost,
stolen or destroyed.
2.11 Further Action. If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes or intent of this Agreement and to vest the
Surviving Corporation with full right, title and possession to all assets, property, rights,
privileges, powers and franchises of Agere and Merger Sub, the directors and officers of Agere and
Merger Sub shall have the authority to take all such lawful and necessary action.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AGERE
Except (i) as set forth in the disclosure letter delivered by Agere to LSI dated as of the
date hereof (the “Agere Disclosure Letter”), which expressly identifies the Section (or, if
applicable, subsection) to which such exception relates (it being understood and hereby agreed that
any disclosure in the Agere Disclosure Letter relating to one Section or subsection shall also
apply to any other Sections and subsections if and to the extent that it is reasonably apparent on
the face of such disclosure (without reference to the underlying documents referenced therein) that
such disclosure also relates to such other Sections or subsections), or (ii) as set forth in any
Agere SEC Reports filed with the SEC prior to the date hereof (other than in any “risk factors” or
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other forward looking statements included therein), Agere hereby represents and warrants to
LSI and Merger Sub as follows:
3.1 Organization and Qualification. Agere is duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate power and
authority necessary to own, lease and operate the properties it purports to own, lease or operate
and to carry on its business as it is presently being conducted. Agere is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction
where the character or location of the properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except to the extent that the
failure to be so qualified or licensed and in good standing would not reasonably be expected to
have, individually or in the aggregate, an Agere Material Adverse Effect.
3.2 Subsidiaries. A complete and accurate list of all of the Subsidiaries of Agere,
together with the jurisdiction of incorporation of each Subsidiary and the percentage of each
Subsidiary’s outstanding capital stock owned by Agere or another Subsidiary or affiliate of Agere,
is set forth in Section 3.2 of the Agere Disclosure Letter. Agere does not directly or
indirectly own any equity or similar interest in, or any interest convertible into or exchangeable
or exercisable for any equity or similar interest in, any Person, excluding securities in any
publicly traded company held for investment by Agere and comprising less than one percent of the
outstanding stock of such company. Each Subsidiary of Agere is duly organized, validly existing
and in good standing under the Legal Requirements of its jurisdiction of organization (to the
extent such concepts exist in such jurisdictions) and has all requisite corporate or other power
and authority necessary to own, lease and operate the properties it purports to own, lease or
operate and to carry on its business as it is presently being conducted, except to the extent that
the failure to be so organized or existing or in good standing or have such power or authority
would not reasonably be expected to have, individually or in the aggregate, an Agere Material
Adverse Effect. Each Subsidiary of Agere is duly qualified or licensed as a foreign corporation to
do business, and is in good standing, in each jurisdiction (to the extent such concepts exist in
such jurisdictions) where the character or location of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing necessary, except to the
extent that the failure to be so qualified or licensed and in good standing would not reasonably be
expected to have, individually or in the aggregate, an Agere Material Adverse Effect.
3.3 Certificate of Incorporation and Bylaws. Agere has heretofore made available to LSI a
complete and accurate copy of the Agere Certificate of Incorporation and Agere Bylaws. The Agere
Certificate of Incorporation and Agere Bylaws, and the charter and bylaws (or equivalent
organizational documents), each as amended to date, of each of its Subsidiaries (the “Agere
Subsidiary Documents”) are in full force and effect, and neither the Agere Board nor, to the
knowledge of Agere, any Agere Stockholder has taken any action to amend the Agere Certificate of
Incorporation or the Agere Bylaws in any respect. Agere has not taken any action in breach or
violation of any of the provisions of the Agere Certificate of Incorporation or the Agere Bylaws,
and each Subsidiary is not in breach or violation of any of the material provisions of their
respective Agere Subsidiary Documents, except, in the case of a Subsidiary, as would not reasonably
be expected to have, individually or in the aggregate, an Agere Material Adverse Effect.
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3.4 Capitalization.
(a) The authorized capital stock of Agere consists of 1,000,000,000 shares of Agere Common
Stock, and 250,000,000 shares of Agere Preferred Stock. As of November 30, 2006, (i) 167,741,924
shares of Agere Common Stock were issued and outstanding, (ii) 39,434,522 shares of Agere Common
Stock were reserved for issuance pursuant to awards granted pursuant to Agere’s 2001 Long-Term
Incentive Plan (the “Agere 2001 Plan”), (iii) 490,413 shares of Agere Common Stock were
reserved for issuance pursuant to awards granted pursuant to Agere’s Non-Employee Director Stock
Plan (the “Agere Non-Employee Director Plan”), (iv) 4,855,663 shares of Agere Common Stock
were available for purchase pursuant to Agere’s ESPP, (v) 10,934,543 shares of Common Stock were
issuable upon conversion of Agere’s 6.5% Convertible Subordinated Notes due December 15, 2009 (the
“Agere Subordinated Notes”), (vi) no shares of Agere Common Stock were issued and held in
the treasury of Agere; and (vii) no shares of Preferred Stock are issued and outstanding. Since
November 30, 2006, Agere has not issued any securities (including derivative securities) except for
shares of Agere Common Stock issued upon exercise of Agere Stock Awards, the vesting of Agere
Restricted Stock Units or the matching of contributions to or otherwise in connection with 401(k)
arrangements.
(b) Section 3.4(b) of the Agere Disclosure Letter sets forth a complete and accurate
list of all stock option plans or any other plan or agreement adopted by Agere that provides for
the issuance of equity to any Person (the “Agere Stock Plans”). Agere has made available
to LSI complete and accurate copies of all Agere Stock Plans and the forms of all award agreements
evidencing outstanding Agere Stock Awards.
(c) Section 3.4(c) of the Agere Disclosure Letter sets forth a complete and accurate
list as of the date hereof of all outstanding equity-based awards, whether payable in stock, cash
or other property or any combination of the foregoing (the “Agere Stock Awards”) granted
under any Agere Stock Plans or otherwise, indicating, with respect to each Agere Stock Award then
outstanding, the type of awards granted, the number of shares of Agere Common Stock subject to such
Agere Stock Award, the plan under which such Agere Stock Award was granted and the exercise or
purchase price (if any), date of grant, vesting schedule and expiration date thereof, including the
extent to which any vesting had occurred as of the date of this Agreement and whether (and to what
extent) the vesting of such Agere Stock Award will be accelerated in any way by the consummation of
the transactions contemplated by this Agreement.
(d) Except as described in Section 3.4(a) of this Agreement, no capital stock of Agere
or any of its Subsidiaries or any security convertible or exchangeable into or exercisable for such
capital stock, is issued, reserved for issuance or outstanding as of the date of this Agreement.
Except as described in Section 3.4(c) of this Agreement and except for changes since the
date of this Agreement resulting from the exercise of employee stock options outstanding on such
date or described on Section 3.4(c) of the Agere Disclosure Letter, there are no
exercisable securities, there are no options, preemptive rights, warrants, calls, rights,
commitments, agreements, arrangements or understandings of any kind to which Agere or any of its
Subsidiaries is a party, or by which Agere or any of its Subsidiaries is bound, obligating
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Agere or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock of Agere or any of its Subsidiaries or obligating Agere
or any of its Subsidiaries to grant, extend or accelerate the vesting of or enter into any such
option, warrant, call, right, commitment, agreement, arrangement or understanding. There are no
stockholder agreements, voting trusts, proxies or other similar agreements, arrangements or
understandings to which Agere or any of its Subsidiaries is a party, or by which it or they are
bound, obligating Agere or any of its Subsidiaries with respect to any shares of capital stock of
Agere or any of its Subsidiaries. There are no rights or obligations, contingent or otherwise
(including rights of first refusal in favor of Agere), of Agere or any of its Subsidiaries, to
repurchase, redeem or otherwise acquire any shares of capital stock of Agere or any of its
Subsidiaries or to provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any such Subsidiary or any other entity. There are no registration
rights or other agreements, arrangements or understandings to which Agere or any of its
Subsidiaries is a party, or by which it or they are bound, obligating Agere or any of its
Subsidiaries with respect to any shares of Agere Common Stock or shares of capital stock of any
such Subsidiary.
(e) All outstanding shares of Agere Common Stock are, and all shares of Agere Common Stock
reserved for issuance as specified above will be, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, duly authorized, validly issued,
fully paid and nonassessable and not subject to or issued in violation of any purchase option, call
option, right of first refusal, preemptive right, subscription right or any similar right under any
provision of the DGCL, the Agere Certificate of Incorporation or the Agere Bylaws or any agreement
to which Agere is a party or otherwise bound. None of the outstanding shares of Agere Common Stock
have been issued in violation of any United States federal or state securities laws. All of the
outstanding shares of capital stock of each of the Subsidiaries of Agere are duly authorized,
validly issued, fully paid and nonassessable, and all such shares (other than directors’ qualifying
shares in the case of foreign Subsidiaries) are owned by Agere or a Subsidiary of Agere free and
clear of any and all Liens. There are no accrued and unpaid dividends with respect to any
outstanding shares of capital stock of Agere or any of its Subsidiaries.
(f) Agere Common Stock constitutes the only class of equity securities of Agere or its
Subsidiaries registered or required to be registered under the Exchange Act.
3.5 Authority; Requisite Agere Stockholder Approval.
(a) Agere has full corporate power and authority to execute and deliver this Agreement and,
subject only to the approval of the stockholders of Agere as described below, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly approved by the
Agere Board. As of the date of this Agreement, the Agere Board has determined by unanimous vote of the directors voting that
this Agreement and the transactions contemplated hereby (including the Merger) are advisable and in
the best interests of the Agere stockholders and has by unanimous vote of the directors voting determined to recommend that the Agere
Stockholders adopt this Agreement (the “Agere Voting Proposal”). This Agreement has been
duly and validly executed and delivered by Agere,
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and assuming due authorization, execution and delivery by LSI and Merger Sub, this Agreement
constitutes a valid and binding obligation of Agere, enforceable against Agere in accordance with
its terms.
(b) Except for the approval of the Agere Voting Proposal by the affirmative vote of the
holders of a majority of the outstanding shares of Agere Common Stock entitled to vote at a meeting
of the Agere Stockholders called to consider the Agere Voting Proposal (the “Requisite Agere
Stockholder Approval”), no other corporate proceedings on the part of Agere are necessary to
approve or adopt this Agreement under applicable Legal Requirements and to consummate the
transactions contemplated hereby.
3.6 Required Filings and Consents.
(a) The execution and delivery by Agere of this Agreement do not, and the performance by Agere
of its covenants and agreements under this Agreement and the consummation by Agere of the
transactions contemplated by this Agreement will not, (i) assuming receipt of the Requisite Agere
Stockholder Approval conflict with or violate the Agere Certificate of Incorporation or the Agere
Bylaws or any Agere Subsidiary Documents, (ii) assuming receipt of the government approvals
contemplated by Section 3.6(b) conflict with or violate any Legal Requirements applicable
to Agere or any of its Subsidiaries or by which its or any of their respective properties is bound
or affected, (iii) require notice to or the consent of any Person under, result in any breach of or
constitute a default (or an event that with notice or lapse of time or both would become a
default), or impair Agere’s or any of its Subsidiaries’ rights or alter the rights or obligations
of any third party under, or give to any third party any rights of termination, amendment, payment,
acceleration or cancellation of, or result in the creation of a Lien on any of the properties or
assets (including intangible assets) of Agere or any of its Subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Agere or any of its Subsidiaries is a party or by which Agere or
any of its Subsidiaries or its or any of their respective properties is bound or affected, or (iv)
give rise to or result in any person having, or having the right to exercise, any preemptive
rights, rights of first refusal, rights to acquire or similar rights with respect to any capital
stock of Agere or any of its Subsidiaries or any of their respective assets or properties, except
in the case of the preceding clauses (ii) through (iv), inclusive, as would not reasonably be
expected to have, individually or in the aggregate, an Agere Material Adverse Effect.
(b) The execution and delivery by Agere of this Agreement do not, and the performance by Agere
of its covenants and agreements under this Agreement and the consummation by Agere of the
transactions contemplated by this Agreement (including the Merger) will not, require any consent,
approval, order, license, authorization, registration, declaration or permit of, or filing with or
notification to, any Governmental Authority, except (i) as may be required by the HSR Act, (ii) as
may be required under any foreign antitrust or competition Legal Requirement, including the EC
Merger Regulation, (iii) the filing of the Joint Proxy Statement/Prospectus with the SEC in
accordance with the Exchange Act and as may be required under the Securities Act, (iv) such
consents, approvals, orders, licenses, authorizations, registrations, declarations, permits,
filings, and notifications as may be required under applicable
00
Xxxxx xx Xxxxxxxx
Xxxxxx Xxxxxx federal and state securities laws, (v) the filing of the Certificate of Merger
or other documents as required by the DGCL and (vi) such other consents, approvals, orders,
registrations, declarations, permits, filings and notifications which, if not obtained or made,
would not reasonably be expected to have, individually or in the aggregate, an Agere Material
Adverse Effect.
3.7 Agere SEC Reports.
(a) Agere has filed and made available to LSI all forms, reports, schedules, statements and
other documents, including any exhibits thereto, required to be filed by Agere with the SEC
(collectively, the “Agere SEC Reports”). The Agere SEC Reports, including all forms,
reports and documents filed by Agere with the SEC after the date hereof and prior to the Effective
Time, (i) were and, in the case of the Agere SEC Reports filed after the date hereof, will be,
prepared in accordance with the applicable requirements of the Securities Act, the Exchange Act and
the Xxxxxxxx-Xxxxx Act, as the case may be, and the rules and regulations thereunder, and (ii) did
not at the time they were filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing), and in the case of such forms, reports and documents
filed by Agere with the SEC after the date of this Agreement, will not as of the time they are
filed, contain any untrue statement of a material fact or omit to state a material fact required to
be stated in such Agere SEC Reports or necessary in order to make the statements in such Agere SEC
Reports, in light of the circumstances under which they were and will be made, not misleading.
None of the Subsidiaries of Agere is required to file any forms, reports, schedules, statements or
other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each case, any related notes
and schedules), contained in the Agere SEC Reports, including any Agere SEC Reports filed after the
date of this Agreement, complied or will comply, as of its respective date, in all material
respects with all applicable accounting requirements and the published rules and regulations of the
SEC with respect thereto, was or will be prepared in accordance with GAAP (except as may be
indicated in the notes thereto) applied on a consistent basis throughout the periods involved and
fairly presented in all material respects or will fairly present in all material respects the
consolidated financial position of Agere and its Subsidiaries as of the respective dates thereof
and the consolidated results of its operations and cash flows for the periods indicated, except
that any unaudited interim financial statements are subject to normal and recurring year-end
adjustments which have not been and are not expected to be material in amount, individually or in
the aggregate.
(c) The chief executive officer and chief financial officer of Agere have made all
certifications required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act, and the statements
contained in any such certifications are complete and correct, and Agere is otherwise in compliance
with all applicable effective provisions of the Xxxxxxxx-Xxxxx Act and the applicable listing and
corporate governance rules of the NYSE.
3.8 Disclosure Controls and Procedures.
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(a) Agere and each of its Subsidiaries has established and maintains, adheres to and enforces
a system of internal accounting controls which are effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements in
accordance with GAAP, including policies and procedures that (i) require the maintenance of records
that in reasonable detail accurately and fairly reflect the material transactions and dispositions
of the assets of Agere and its Subsidiaries, (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with GAAP,
and that receipts and expenditures of Agere and its Subsidiaries are being made only in accordance
with appropriate authorizations of management and the Agere Board and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition
of the assets of Agere and its Subsidiaries.
(b) To the knowledge of Agere, neither Agere nor its independent auditors have identified (i)
any significant deficiency or material weakness in the system of internal accounting controls
utilized by Agere and its Subsidiaries, (ii) any fraud, whether or not material, that involves
Agere’s management or other employees who have a role in the preparation of financial statements or
the internal accounting controls utilized by Agere and its Subsidiaries or (iii) any claim or
allegation regarding any of the foregoing.
(c) Neither Agere nor any of its Subsidiaries is a party to, or has any commitment to become a
party to, any joint venture, partnership agreement or any similar Contract (including any Contract
relating to any transaction, arrangement or relationship between or among Agere or any of its
Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance,
special purpose or limited purpose entity or Person, on the other hand (such as any arrangement
described in Section 303(a)(4) of Regulation S-K of the SEC)) where the purpose or effect of such
arrangement is to avoid disclosure of any material transaction involving, or material liabilities
of, Agere or any of its Subsidiaries in Agere’s consolidated financial statements.
(d) Neither Agere nor any of its Subsidiaries nor, to the knowledge of Agere, any director,
officer, auditor, accountant, consultant or representative of Agere or any of its Subsidiaries has
received or otherwise had or obtained knowledge of any substantive complaint, allegation, assertion
or claim, whether written or oral, that Agere or any of its Subsidiaries has engaged in
questionable accounting or auditing practices. No current or former attorney representing Agere or
any of its Subsidiaries has reported evidence of a material violation of securities laws, breach of
fiduciary duty or similar violation by Agere or any of its officers, directors, employees or agents
to the current the Agere Board or any committee thereof or to any current director or executive
officer of Agere.
(e) To the knowledge of Agere, no employee of Agere or any of its Subsidiaries has provided or
is providing information to any law enforcement agency regarding the commission or possible
commission of any crime or the violation or possible violation of any applicable Legal Requirements
of the type described in Section 806 of the Xxxxxxxx-Xxxxx Act by Agere or any of its Subsidiaries.
Neither Agere nor any of its Subsidiaries nor, to the knowledge of Agere, any director, officer,
employee, contractor, subcontractor or agent of Agere or any such Subsidiary has discharged,
demoted, suspended, threatened, harassed or in any other manner
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discriminated against an employee of Agere or any of its Subsidiaries in the terms and
conditions of employment because of any lawful act of such employee described in Section 806 of the
Xxxxxxxx-Xxxxx Act.
3.9 No Undisclosed Liabilities. Except as reflected in the Agere Balance Sheet, neither
Agere nor any of its Subsidiaries has any Liabilities, other than (i) Liabilities incurred since
the date of the Agere Balance Sheet in the ordinary course of business consistent with past
practice, (ii) Liabilities under this Agreement or expressly permitted to be incurred under this
Agreement, and (iii) Liabilities that, individually and in the aggregate, have not had, and would
not reasonably be expected to have, an Agere Material Adverse Effect.
3.10 Absence of Certain Changes or Events. Since the date of the Agere Balance Sheet
through the date hereof, Agere has conducted its business in the ordinary course of business
consistent with past practice and, since such date through the date hereof, there has not occurred
(i) any Agere Material Adverse Effect or (ii) any action taken by Agere or event that would have
required the consent of LSI pursuant to Section 5.2 had such action or event occurred after
the date of this Agreement.
3.11 Compliance with Laws; Permits.
(a) Agere and its Subsidiaries are in compliance with, and are not in default under or
violation of (and have not received any notice of material non-compliance, default or violation
with respect to) any Legal Requirement applicable to Agere or any of its Subsidiaries or by which
any of their respective properties is bound, except for such non-compliance, defaults and
violations that would not reasonably be expected to have, individually or in the aggregate, an
Agere Material Adverse Effect.
(b) Agere and its Subsidiaries hold all permits, licenses, easements, variances, exemptions,
consents, certificates, authorizations, registrations, orders and other approvals from Governmental
Entities that are material to the operation of the business of Agere and its Subsidiaries taken as
a whole as currently conducted (collectively, the “Agere Permits”). The Agere Permits are
in full force and effect, have not been violated in any material respect and, to the knowledge of
Agere, no suspension, revocation or cancellation thereof has been threatened, and there is no Legal
Proceeding pending or, to the knowledge of Agere, threatened, seeking the suspension, revocation or
cancellation of any Agere Permits. No Agere Permit shall cease to be effective as a result of the
consummation of the transactions contemplated by this Agreement.
3.12 Legal Proceedings; Orders. Except as would not reasonably be expected to have,
individually or in the aggregate, an Agere Material Adverse Effect, there are no material Legal
Proceedings (other than arising from or relating to the Merger or any of the other transactions
contemplated by this Agreement), (a) pending against Agere or any of its Subsidiaries or any of
their respective properties or assets, or (b) to the knowledge of Agere, threatened against Agere
or any of its Subsidiaries, or any of their respective properties or assets. Neither Agere nor any
Subsidiary of Agere is subject to any outstanding Order that would reasonably be expected to
prevent or materially delay the consummation of the transactions contemplated by this Agreement.
There has not been nor are there currently any internal investigations or inquiries
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being conducted by Agere, the Agere Board (or any committee thereof) or any third party at the
request of any of the foregoing concerning any financial, accounting, tax, conflict of interest,
self-dealing, fraudulent or deceptive conduct or other misfeasance or malfeasance issues.
3.13 Material Contracts.
(a) For all purposes of and under this Agreement, an “Agere Material Contract” shall
mean:
(i) any “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of
the SEC, other than those agreements and arrangements described in Item 601(b)(10)(iii)) with
respect to Agere and its Subsidiaries;
(ii) any employment-related Contract or plan, including any stock option plan, stock
appreciation right plan or stock purchase plan or material Contract, any of the benefits of which
will be increased, or the vesting of benefits of which will be accelerated, by the consummation of
the transactions contemplated by this Agreement (whether alone or in connection with subsequent or
additional events);
(iii) any Contract containing any covenant (A) limiting the right of Agere or any of its
Subsidiaries to engage in any line of business or to compete with any Person in any line of
business, or (B) prohibiting Agere or any of its Subsidiaries (or, after the Closing Date, LSI)
from engaging in business with any Person or levying a fine, charge or other payment for doing so;
(iv) any Contract (A) relating to the pending or future disposition or acquisition by Agere or
any of its Subsidiaries after the date of this Agreement of a material amount of assets other than
in the ordinary course of business or (B) pursuant to which Agere or any of its Subsidiaries will
acquire after the date of this Agreement any material ownership interest in any other Person or
other business enterprise other than Agere’s Subsidiaries;
(v) any material manufacturing Contract;
(vi) any mortgages, indentures, guarantees, loans or credit agreements, security agreements or
other Contracts relating to the borrowing of money or extension of credit, in each case in excess
of $25,000,000, other than (A) accounts receivables and payables, (B) loans to direct or indirect
wholly owned Subsidiaries, and (C) advances to employees for travel and business expenses, in each
case in the ordinary course of business consistent with past practice;
(vii) any settlement Contract with ongoing obligations other than (A) releases that are
immaterial in nature or amount entered into in the ordinary course of business, (B) settlement
Contracts only involving the payment of cash in amounts that do not exceed $5,000,000 in any
individual case, or (C) settlement Contracts relating to Patent licenses entered into in the
ordinary course of business, consistent with past practices;
(viii) any Contract that is collectively bargained by Agere;
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(ix) other than purchase orders in the ordinary course of business, any other Contract that
provides for payment obligations by Agere or any of its Subsidiaries in any twelve (12) month
period of $15,000,000 or more in any individual case that is not terminable by Agere or its
Subsidiaries upon notice of ninety (90) days or less without material liability to Agere or its
Subsidiary and is not disclosed pursuant to clauses (i) through (viii) above, inclusive; and
(x) any Contract, or group of Contracts with a Person (or group of affiliated Persons), the
termination of which would be reasonably expected to have an Agere Material Adverse Effect and is
not disclosed pursuant to clauses (i) through (x) above, inclusive.
(b) Section 3.13(b) of the Agere Disclosure Letter contains a complete and accurate
list of all Agere Material Contracts as of the date hereof, to or by which Agere or any of its
Subsidiaries is a party or is bound, and identifies each subsection of Section 3.13(a) that
describes such Agere Material Contract.
(c) Each Agere Material Contract is valid and binding on Agere (and/or each such Subsidiary of
Agere party thereto) and is in full force and effect, other than those Contracts that by their
terms have expired or been terminated since the date hereof, and neither Agere nor any of its
Subsidiaries party thereto, nor, to the knowledge of Agere, any other party thereto, is in breach
of, or default under, any such Agere Material Contract, and no event has occurred that with notice
or lapse of time or both would constitute such a breach or default thereunder by Agere or any of
its Subsidiaries, or, to the knowledge of Agere, any other party thereto, except for such failures
to be in full force and effect and such breaches and defaults that would not reasonably be expected
to have, individually or in the aggregate, an Agere Material Adverse Effect.
3.14 Employee Benefit Matters.
(a) Section 3.14(a) of the Agere Disclosure Letter sets forth a complete and accurate
list of all U.S. Agere Employee Plans. Neither Agere nor any ERISA Affiliate has any plan or
commitment to establish any new Agere Employee Plan, to modify any Agere Employee Plan (except to
the extent required by law or to conform any such Agere Employee Plan to the requirements of any
applicable law, in each case as previously disclosed to LSI in writing, or as required by this
Agreement), or to adopt or enter into any Agere Employee Plan.
(b) With respect to each Agere Employee Plan, Agere has made available to LSI complete and
accurate copies of (i) such Agere Employee Plan (or a written summary of any unwritten plan)
together with all amendments, (ii) in the case of any plan for which Forms 5500 are required to be
filed, the three most recent annual reports (Form 5500) with schedules attached, (iii) in the case
of any plan that is intended to be qualified under Section 401(a) of the Code, the most recent
determination, opinion, notification or advisory letter from the IRS, and correspondence to or from
the IRS or the DOL with respect to such letter (iv) each trust agreement, group annuity contract,
administration and similar material agreements, investment management or investment advisory
agreements, (v) the most recent summary plan descriptions and employee handbook, or other similar
material employee communications relating to
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employee benefits matters, (vi) all personnel, payroll and employment manuals and policies,
(vii) the most recent annual and periodic financial statements and other annual accounting of
assets for each Agere Employee Plan that is funded, (viii) all material correspondence to or from
any governmental agency relating to any Agere Employee Plan within the past two (2) years and (ix)
the three (3) most recent plan years’ discrimination tests for each Agere Employee Plan.
(c) Each Agere Employee Plan has been established, maintained and administered in all material
respects in accordance with all applicable Legal Requirements, including if applicable, ERISA and
the Code, and in accordance with its terms, and each of Agere, Agere’s Subsidiaries and their
respective ERISA Affiliates have in all material respects met their obligations with respect to
each Agere Employee Plan and have timely made (or timely will make) all required contributions
thereto.
(d) Section 3.14(d) of the Agere Disclosure Letter contains a complete and accurate
list of each Agere Employee Benefit Plan that has assets which include securities issued by Agere,
any of Agere’s Subsidiaries or any of their respective ERISA Affiliates.
(e) All Agere Employee Plans that are intended to be qualified under Section 401(a) of the
Code, and all trusts that are intended to be qualified under Section 501(a) of the Code (each, a
“Agere Qualified Plan”), have received determination, opinion or advisory letters from the
Internal Revenue Service to the effect that such Agere Employee Plans are qualified and the plans
and trusts related thereto are exempt from federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, or Agere has remaining a period of time under applicable U.S. Department
of the Treasury regulations or Internal Revenue Service pronouncements in which to apply for such a
letter and to make any amendments necessary to obtain a favorable determination as to the qualified
status of each such Agere Qualified Plan. No such determination, opinion or advisory letter has
been revoked and, to the knowledge of Agere, revocation has not been threatened, and no such Agere
Employee Plan has been amended or operated since the date of its most recent determination letter
or application therefor in any respect, and no act or omission has occurred, that would reasonably
be expected to adversely affect its qualification or materially increase its cost. There has been
no termination, partial termination or discontinuance of contributions to any Agere Qualified Plan
that resulted or may reasonably be expected to result in material liability to Agere. No
“prohibited transaction,” within the meaning of Section 4975 of the Code or Sections 406 and 407 of
ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred with respect to any Agere
Employee Plan.
(f) Neither Agere, any of Agere’s Subsidiaries nor any of their respective ERISA Affiliates
has in the preceding six (6) years maintained, participated in or contributed to (or been obligated
to contribute to), or can reasonably expect to have future material liability with respect to (i) a
“multiemployer plan” (as defined in Section 4001(a)(3) of ERISA), (ii) a “multiple employer plan”
as defined in ERISA or the Code, or (iii) a “funded welfare plan” within the meaning of Section 419
of the Code. No Agere Employee Plan is funded by, associated with or related to a “voluntary
employees’ beneficiary association” within the meaning of Section 501(c)(9) of the Code. No Agere
Employee Plan provides health benefits that are not fully insured through an insurance contract.
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(g) The Pension Plans set forth in Section 3.14(g) of the Agere Disclosure Letter are
the only Pension Plans that Agere or any Agere ERISA Affiliate has maintained, sponsored,
participated or contributed to in the preceding six (6) years, or currently maintains, sponsors,
participates in or contributes to, or can reasonably expect to have future material liability with
respect to, that is subject to Title IV of ERISA or Section 412 of the Code (each, an “Agere
Pension Plan”). As of the Effective Time: (i) no legal or administrative action has been taken
by the Pension Benefit Guaranty Corporation (the “PBGC”) to terminate or to appoint a
trustee to administer any Agere Pension Plan; (ii) no liability to the PBGC under Title IV of ERISA
has been incurred by Agere or an Agere ERISA Affiliate that has not been satisfied in full; (iii)
no Agere Pension Plan has a reportable event within the meaning of Section 4043 of ERISA for which
the 30 day notice requirement has not been waived by the PBGC has occurred within the past six
years or is reasonably expected to occur with respect to any Agere Employee Plan; and (iv) no Agere
Pension Plan has incurred any event described in Section 4041, 4062 or 4063 of ERISA. No complete
or partial termination of any Agere Employee Plan subject to Title IV of ERISA has occurred or is
expected to occur and no proceedings have been instituted and, to the knowledge of Agere, no
condition exists and no event has occurred that is reasonably likely to constitute grounds under
Title IV of ERISA to terminate or appoint a trustee to administer any Agere Pension Plan. Each
Agere Pension Plan has been maintained in compliance with the minimum funding standards of ERISA
and the Code where applicable and no Agere Pension Plan subject to §412 or 418B of the Code or §302
of ERISA has incurred any accumulated funding deficiency within the meaning of §412 or 418B of the
Code or §302 of ERISA, respectively, or has applied for or obtained a waiver from the IRS of any
minimum funding requirement or an extension of any amortization period under §412 of the Code or
§303 or 304 of ERISA. Except for payments of premiums to the PBGC, which have been paid in full,
Agere has not incurred any liability (including any indirect liability through an agreement with
any other party and any material contingent or material secondary liability) to the PBGC in
connection with any Agere Pension Plan covering any active, retired or former employees or
directors of Agere, including any liability under §4069 or 4212(c) of ERISA or any penalty imposed
under §4071 of ERISA, or ceased operations at any facility or withdrawn from any such Agere Pension
Plan in a manner which could subject it to liability under §4062, 4063 or 4064 of ERISA, or knows
of any facts or circumstances that might give rise to any liability of Agere to the PBGC under
Title IV of ERISA that could reasonably be anticipated to result in any claims being made against
Agere by the PBGC (“PBGC Claims”). Section 3.14(g) of the Agere Disclosure Letter
sets forth the approximate liability for any Agere Pension Plan accumulated funding deficiency
within the meaning of §412 or 418B of the Code or §302 of ERISA.
(h) Other than as required under Section 601 et seq. of ERISA or equivalent state law, none of
the Agere Employee Plans promises or provides health or other welfare benefits (excluding normal
claims for benefits under Agere’s group life insurance, accidental death and dismemberment
insurance and disability plans and policies) or coverage to any person following retirement or
other termination of employment.
(i) There is no action, suit, proceeding, claim, arbitration, audit or investigation pending
or, to the knowledge of Agere, threatened or reasonably anticipated, with respect to any Agere
Employee Plan or the assets of any Agere Employee Benefit Plan, other than claims for benefits in
the ordinary course. No Agere Employee Plan is or within the last
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three calendar years has been the subject of, or has received notice that it is the subject
of, examination by a government agency or a participant in a government sponsored amnesty,
voluntary compliance or similar program.
(j) To the knowledge of Agere, each individual who has received compensation for the
performance of services on behalf of Agere, any of Agere’s Subsidiaries or any of their respective
ERISA Affiliates has been properly classified as an employee or independent contractor in
accordance with applicable Legal Requirement.
(k) Each Agere Employee Plan maintained or covering employees outside the United States (the
“Agere Non-U.S. Employee Plans”), and the books and records thereof, is in material
compliance with all applicable Legal Requirements of each applicable jurisdiction. No such Agere
Non-U.S. Employee Plan has unfunded liabilities, that as of the Effective Time, will not be offset
by insurance or fully accrued. Section 3.13(k) of the Agere Disclosure Letter contains a
complete and accurate list of each country in which Agere or any of its Subsidiaries or affiliates
has operations as of the Agere Balance Sheet Date and the approximate number of employees in each
such country as of the Agere Balance Sheet Date.
(l) Section 3.14(l) of the Agere Disclosure Letter sets forth a complete and accurate
list of (i) all employment agreements with employees of Agere or any of its Subsidiaries, other
than customary offer letters and other similar employment agreements entered into in the ordinary
course of business; and (ii) all operative severance agreements, programs and policies of Agere or
any of its Subsidiaries with or relating to its Section 16 officers, excluding programs and
policies required to be maintained by Legal Requirement.
(m) All contributions required to be made with respect to any Agere Employee Plan on or prior
to the Effective Time have been or will be timely made or are reflected on Agere Balance Sheet.
(n) The negotiation or consummation of the transactions contemplated by this Agreement will
not, either alone or in combination with another event, (i) entitle any current or former employee,
director, consultant or officer of Agere or any Subsidiary of Agere to severance pay, or any other
payment from Agere or any of its Subsidiaries, or pursuant to any Agere Employee Plan, (ii)
accelerate the time of distribution, payment or vesting, a lapse of repurchase rights or increase
the amount of compensation or benefits due any such employee, director or officer, (iii) result in
the forgiveness of indebtedness, or (iv) trigger an obligation to fund benefits. Section
3.13(n) of the Agere Disclosure Letter contains a complete and accurate list of each Agere
“disqualified individual” (as defined in Code Section 280G and the regulations thereunder). No
payment or benefit which will or may be made by Agere or its ERISA Affiliates with respect to any
current or former employee or any other “disqualified individual” is reasonably expected to be
characterized as a “parachute payment,” within the meaning of Section 280G(b)(2) of the Code.
There is no contract, agreement, plan or arrangement to which Agere or any ERISA Affiliates is a
party or by which it is bound to compensate any current or former employee or other disqualified
individual for excise taxes paid pursuant to Section 4999 of the Code.
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(o) Each material nonqualified deferred compensation plan (as defined in Section 409A(d)(1) of
the Code) maintained or sponsored by Agere has been operated since January 1, 2005 in good faith
compliance with Section 409A of the Code and IRS Notice 2005-1. No material nonqualified deferred
compensation plan has been “materially modified” (within the meaning of IRS Notice 2005-1) at any
time after October 3, 2004.
(p) No stock option, stock appreciation right or service provider warrant of Agere (i) has an
exercise price that has been or may be less than the fair market value of the underlying equity as
of the date such option or right was granted or (ii) has any feature for the deferral of
compensation other than the deferral of recognition of income until the later of exercise or
disposition of such option or right.
(q) Neither Agere nor any ERISA Affiliate has or is reasonably likely to have any liability or
obligations to Lucent or AT&T, with respect to any compensation or benefits with respect to
employees or former employees of Lucent or AT&T who are not employees or former employees of Agere
pursuant to an agreement with Lucent or AT&T.
(r) There is no Contract to which Agere or any of its Subsidiaries is a party, including the
provisions of this Agreement, covering any employee, consultant or director of Agere or any of its
Subsidiaries, which, individually or collectively, reasonably could be expected to give rise to the
payment of any amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of the
Code or that would give rise to a penalty under Section 409A of the Code.
3.15 Labor Matters.
(a) Agere and each of its Subsidiaries (i) has withheld and reported all amounts required by
law or by agreement to be withheld and reported with respect to wages, salaries and other payments
to employees; (ii) is not liable for any arrears of wages or any taxes or any penalty for failure
to comply with any of the foregoing; and (iii) is not liable for any payment to any trust or other
fund governed by or maintained by or on behalf of any governmental authority, with respect to
unemployment compensation benefits, social security or other benefits or obligations for employees
(other than routine payments to be made in the normal course of business and consistent with past
practice), except in each case, for any failure to withhold, report or pay which would have or
could reasonably be expected to have an Agere Material Adverse Effect.
(b) To the knowledge of Agere: (i) there are no current labor union organizing activities with
respect to any employees of Agere and/or any of its Subsidiaries, (ii) no labor union, labor
organization, trade union, works council, or group of employees of Agere and/or any of its
Subsidiaries has made a pending demand for recognition or certification, (iii) there are no
representation or certification proceedings or petitions seeking a representation proceeding
presently pending or threatened in writing to be brought or filed with the National Labor Relations
Board or any other labor relations tribunal or authority, and (iv) there are no labor strikes or
lockouts, or threats thereof, against or affecting Agere or any of its Subsidiaries.
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(c) Agere and each of its Subsidiaries are and have been in material compliance with all
notice and other requirements under the Worker Adjustment and Retraining Notification Act of 1988,
as amended (the “WARN Act”), and any similar foreign, state or local law relating to plant
closings and layoffs.
3.16 Properties. Agere and each of its Subsidiaries have good and valid title to, or a
valid leasehold interest in, all the properties and assets which it purports to own or lease (real,
tangible, personal and mixed), including all the properties and assets reflected in the Agere
Balance Sheet (except for personal property sold since the date of the Agere Balance Sheet in the
ordinary course of business consistent with past practice). All properties and assets reflected in
the Agere Balance Sheet are free and clear of all Liens, except for Liens reflected on the Agere
Balance Sheet and Liens for current taxes not yet due and other Liens that do not materially impair
the use of the property or assets subject thereto. All real property leases, subleases, licenses
or other occupancy agreements to which Agere or any of its Subsidiaries is a party (collectively,
the “Agere Real Property Leases”) are in full force and effect, except where the failure of
such Agere Real Property Leases to be in full force and effect would not be reasonably likely to
result in an Agere Material Adverse Effect. There is no default by Agere or any of its
Subsidiaries under any of the Agere Real Property Leases, or, to the knowledge of Agere, defaults
by any other party thereto, except such defaults as have been waived in writing or cured or such
defaults that in the aggregate would not be reasonably likely to result in an Agere Material
Adverse Effect.
3.17 Tax Matters. Agere and each of its Subsidiaries have prepared and timely filed
(taking into account any extension of time within which to file) all material Tax Returns required
to be filed by any of them and all such filed Tax Returns are true, correct and complete in all
material respects, (ii) Agere and each of its Subsidiaries have paid all Taxes that are required to
be paid by any of them, except with respect to matters for which adequate reserves have been
established on the Financial Statements in accordance with GAAP, (iii) the U.S. consolidated
federal income Tax Returns of Agere have been examined by the Internal Revenue Service (or the
period for assessment of the Taxes in respect of which such Tax Returns were required to be filed
has expired) for all periods ending on or before December 30, 2001, (iv) there are not pending or
threatened in writing, any audits, examinations, investigations or other proceedings in respect of
income Taxes or other material Taxes, (v) there are no Liens for Taxes on any of the assets of
Agere or any of its Subsidiaries other than Liens for Taxes not yet due and payable or being
contested in good faith and for which adequate reserves have been established on the Financial
Statements in accordance with GAAP, (vi) none of Agere or any of its Subsidiaries has been a
“controlled corporation” or a “distributing corporation” in any distribution occurring during the
two-year period ending on the date hereof that was purported or intended to be governed by Section
355 of the Code (or any similar provision of state, local or foreign Law) and (vii) none of Agere
or any of its Subsidiaries has engaged in a “reportable transaction,” within the meaning of Treas.
Reg. Section 1.6011-4(b), including any transaction that is the same or substantially similar to
one of the types of transactions that the Internal Revenue Service has determined to be a tax
avoidance transaction and identified by notice, regulation or other form of published guidance as a
“listed transaction,” as set forth in Treas. Reg. Section 1.6011-4(b)(2).
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3.18 Environmental Matters.
(a) Except as would not reasonably be expected to have, individually or in the aggregate, an
Agere Material Adverse Effect, no Hazardous Materials are present on any real property that is
currently owned, operated, occupied, controlled or leased by Agere or any of its Subsidiaries or
were present on any real property at the time it ceased to be owned, operated, occupied, controlled
or leased by Agere or its Subsidiaries, including the land, the improvements thereon, the
groundwater thereunder and the surface water thereon. Except as would not reasonably be expected
to have, individually or in the aggregate, an Agere Material Adverse Effect, there are no
underground storage tanks, asbestos which is friable or likely to become friable or PCBs present on
any real property currently owned, operated, occupied, controlled or leased by Agere or any of its
Subsidiaries or as a consequence of the acts of Agere, its Subsidiaries or their agents.
(b) Except as would not reasonably be expected to have, individually or in the aggregate, an
Agere Material Adverse Effect, Agere and its Subsidiaries have conducted all Hazardous Material
Activities in compliance in all material respects with all applicable Environmental Laws. Except
as would not reasonably be expected to have, individually or in the aggregate, an Agere Material
Adverse Effect, the Hazardous Materials Activities of Agere and its Subsidiaries prior to the
Closing have not resulted in the exposure of any person to a Hazardous Material in a manner which
has caused or could reasonably be expected to cause an adverse health effect to any such person.
(c) Except as would not reasonably be expected to have, individually or in the aggregate, an
Agere Material Adverse Effect, Agere and its Subsidiaries have complied in all material respects
with all covenants and conditions of any Environmental Permit which is or has been in force with
respect to its Hazardous Materials Activities. No circumstances exist which could reasonably be
expected to cause any material Environmental Permit to be revoked, modified, or rendered
non-renewable upon payment of the permit fee.
(d) No action, proceeding, revocation proceeding, amendment procedure, writ, injunction or
claim is pending, or to the knowledge of Agere, threatened, concerning or relating to any
Environmental Permit or any Hazardous Materials Activity of Agere or any of its Subsidiaries that
would reasonably be expected to have, individually or in the aggregate, an Agere Material Adverse
Effect.
(e) Neither Agere nor any of its Subsidiaries is aware of any fact or circumstance that could
result in any Liability under an Environmental Law which would reasonably be expected to have an
Agere Material Adverse Effect. Except as would not reasonably be expected to have an Agere
Material Adverse Effect, neither Agere nor any Subsidiary has entered into any Contract that may
require it to guarantee, reimburse, pledge, defend, hold harmless or indemnify any other party with
respect to liabilities arising out of Environmental Laws or the Hazardous Materials Activities of
Agere or any of its Subsidiaries.
(f) Agere and the Subsidiaries have delivered to LSI or made available for inspection by LSI
and its agents, representatives and employees all material environmental site
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assessments and environmental audits in Agere’s possession or control. Agere and the
Subsidiaries have complied in all material respects with all environmental disclosure obligations
imposed by applicable law with respect to this transaction.
3.19 Intellectual Property Matters.
(a) Section 3.19(a) of the Agere Disclosure Letter contains a complete and accurate
list of all Patents that are Registered Intellectual Property owned or purported to be owned by
Agere or any of its Subsidiaries (such Patents and all other material Registered Intellectual
Property owned or purported to be owned by Agere or any of its Subsidiaries, collectively the
“Agere Registered Intellectual Property”).
(b) All material Agere Registered Intellectual Property Rights are owned exclusively by Agere
or one or more of its Subsidiaries free and clear of any Liens (excluding any rights granted to any
licensee of any Agere Intellectual Property Right entered into in the ordinary course of business).
Neither Agere nor any of its Subsidiaries has transferred ownership of, or granted an exclusive
license to, any third party, of any Intellectual Property Rights that are or were material Agere
Registered Intellectual Property Rights.
(c) Neither Agere nor its Subsidiaries has, in the conduct of the business of Agere and its
Subsidiaries as currently conducted, knowingly infringed upon, violated or used without
authorization, any Intellectual Property Rights owned by any third Person. There is no pending or,
to Agere’s knowledge, threatened (and at no time within the three (3) years prior to the date of
this Agreement has there been pending any) suit, arbitration or other adversarial proceeding before
any court, government agency or arbitral tribunal, or in any jurisdiction, against Agere or any of
its Subsidiaries, alleging that any activities or conduct of Agere’s or any of its Subsidiaries’
business infringes or will infringe upon, violate or constitute the unauthorized use of the
Intellectual Property Rights of any third Person, or challenging the ownership, validity,
enforceability, or registerability of any Agere Intellectual Property Rights. Agere is not party
to any settlements, covenants not to xxx, consents, decrees, stipulations, judgments, or orders
resulting from suits, actions or similar legal proceedings, which (i) materially restrict Agere’s
or any of its Subsidiaries’ rights to use, license or transfer any Agere Intellectual Property
Rights, (ii) materially restrict the conduct of the business of Agere or any of its Subsidiaries in
order to accommodate any third party’s Intellectual Property Rights, or (iii) compel or require
Agere or any of its Subsidiaries to license or transfer any Agere Intellectual Property Rights.
(d) Neither Agere nor any Agere Subsidiary has committed, agreed or become obligated to
license on a royalty-free basis, any Agere Intellectual Property Rights to any third Person as a
result of any participation in an industry association, standard setting organization or similar
body, or otherwise.
(e) Agere and its Subsidiaries have taken commercially reasonable measures consistent with
industry standard practices to protect the proprietary nature of the Trade Secrets owned by Agere
or such Subsidiary that is material to the business of Agere and its Subsidiaries as currently
conducted.
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(f) To the knowledge of Agere, all material Agere Intellectual Property Rights are, and
following the transactions contemplated hereby shall be, freely, transferable, licensable and
alienable without the consent of, or notice or payment of any kind to any Governmental Authority or
third party.
(g) To the knowledge of Agere, no third party is misappropriating, infringing, diluting or
violating any Agere Intellectual Property Rights in a manner that has or would reasonably be
expected to have an Agere Material Adverse Effect. There are no pending claims, suits,
arbitrations or other adversarial proceedings before any court, government agency or arbitral
tribunal brought by Agere or any of its Subsidiaries against any third party with respect to any
Agere Intellectual Property Rights, which remain unresolved as of the date hereof.
(h) Section 3.19(h) of the Agere Disclosure Letter contains a complete and accurate
list of all material Contracts pursuant to which a third party has licensed to Agere or any of its
Subsidiaries any Intellectual Property Right that is material to the business of Agere or any Agere
Subsidiary (“Agere In Licenses”), other than Contracts with respect to commercial available
Technology that is not included in an Agere Product or necessary to the manufacture of and Agere
Product.
(i) Section 3.19(i) of the Agere Disclosure Letter contains a complete and accurate
list of all material Contracts pursuant to which Agere or any of its Subsidiaries has granted a
third Person or affiliate any rights or licenses to any Agere Intellectual Property Rights, other
than non-exclusive licenses granted in the ordinary course of business (“Agere Out
Licenses,” and together with the Agere In Licenses, the “Agere IP Licenses”).
(j) Neither Agere nor any of its Subsidiaries, nor, to the knowledge of Agere any other party
to an Agere IP License, is in material breach of any such Agere IP License that is material to the
business of Agere and its Subsidiaries, taken as a whole. The consummation of the transactions
contemplated hereby will not result or cause (i) the breach by Agere or any of its Subsidiaries of
any Agere IP License, (ii) the termination, impairment or restriction of any right or license
granted to Agere or any of its Subsidiaries under an Agere IP License, or (iii) Agere or any of its
Subsidiaries to grant, or expand the scope of a prior grant, to a third party of any rights to any
material Agere Intellectual Property Rights (including by release of any source code), except as
would not reasonably be expected to have an Agere Material Adverse Effect.
3.20 Insurance. All fire and casualty, general liability, business interruption, product
liability, sprinkler and water damage insurance policies and other forms of insurance maintained by
Agere or any of its Subsidiaries have been made available to LSI. Each such policy is in full
force and effect and all premiums due thereon have been paid in full.
3.21 Interested Party Transactions. Since September 30, 2006, no event has occurred that
would be required to be reported as a Certain Relationship or Related Transaction pursuant to
Statement of Financial Accounting Standards No. 57.
3.22 Brokers, Finders and Financial Advisors. No broker, finder or investment banker
(other than Xxxxxxx, Xxxxx & Co., whose brokerage, finder’s or other fees will be paid by
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Agere) is entitled to any brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or on behalf of Agere
or any of its Subsidiaries. Agere has furnished to LSI a complete and correct copy of all
agreements between Agere and Xxxxxxx, Sachs & Co. pursuant to which such firm would be entitled to
any such payment.
3.23 Opinion of Financial Advisor of Agere. The financial advisor of Agere, Xxxxxxx, Xxxxx
& Co., has delivered to the Board of Directors of Agere an opinion to the effect that, as of the
date of this Agreement and based upon and subject to the matters set forth therein, the Exchange
Ratio is fair, from a financial point of view, to the stockholders of Agere. Such opinion has not
been withdrawn, revoked or modified.
3.24 Takeover Statutes. No “business combination,” “fair price,” “moratorium,” “control
share acquisition” or other similar anti-takeover statute or regulation under the laws of the State
of Delaware or other applicable Legal Requirement (each, a “Takeover Statute”) is
applicable to Agere, the Merger or any of the other transactions contemplated by this Agreement.
3.25 Rights Plan. Agere has taken all action so that (a) the approval, execution and
delivery of this Agreement, the consummation of the Merger and the transactions contemplated
hereby, and the public announcement of any of the foregoing shall not cause any of LSI, Merger Sub
or any of their Affiliates to be deemed to be an “Acquiring Person” (as such term is defined in the
Agere Rights Plan) under the Agere Rights Plan and (b) the entering into of this Agreement and
consummating the transactions contemplated hereby will not result in the grant of any rights to any
Person under the Agere Rights Plan or enable or require the Agere Rights to be exercised,
distributed or triggered as a result thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF LSI AND MERGER SUB
Except (i) as set forth in the disclosure letter delivered by LSI to Agere dated as of the
date hereof (the “LSI Disclosure Letter”), which expressly identifies the Section (or, if
applicable, subsection) to which such exception relates (it being understood and hereby agreed that
any disclosure in the LSI Disclosure Letter relating to one Section or subsection shall also apply
to any other Sections and subsections if and to the extent that it is reasonably apparent on the
face of such disclosure (without reference to the underlying documents referenced therein) that
such disclosure also relates to such other Sections or subsections), or (ii) as set forth in any
LSI SEC Reports filed with the SEC prior to the date hereof (other than in any “risk factors” or
other forward looking statements included therein), LSI and Merger Sub hereby represent and warrant
to Agere as follows:
4.1 Organization and Qualification. Each of LSI and Merger Sub is duly organized, validly
existing and in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority necessary to own, lease and operate the properties it purports to
own, lease or operate and to carry on its business as it is presently being conducted. LSI is duly
qualified or licensed as a foreign corporation to do business, and is in good standing, in each
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jurisdiction where the character or location of the properties owned, leased or operated by it
or the nature of its activities makes such qualification or licensing necessary, except to the
extent that the failure to be so qualified or licensed and in good standing would not reasonably be
expected to have, individually or in the aggregate, an LSI Material Adverse Effect. Merger Sub has
been formed by LSI for the purposes of the Merger and has no material, assets, Liabilities or
operations except as contemplated hereby.
4.2 Subsidiaries. A complete and accurate list of all of the Subsidiaries of LSI,
together with the jurisdiction of incorporation of each Subsidiary and the percentage of each
Subsidiary’s outstanding capital stock owned by LSI or another Subsidiary or affiliate of LSI, is
set forth in Section 4.2 of the LSI Disclosure Letter. LSI does not directly or indirectly
own any equity or similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any Person, excluding securities in any publicly
traded company held for investment by LSI and comprising less than one percent of the outstanding
stock of such company. Each Subsidiary of LSI is duly organized, validly existing and in good
standing under the Legal Requirements of its jurisdiction of organization (to the extent such
concepts exist in such jurisdictions) and has all requisite corporate or other power and authority
necessary to own, lease and operate the properties it purports to own, lease or operate and to
carry on its business as it is presently being conducted, except to the extent that the failure to
be so organized or existing or in good standing or have such power or authority would not
reasonably be expected to have, individually or in the aggregate, an LSI Material Adverse Effect.
Each Subsidiary of LSI is duly qualified or licensed as a foreign corporation to do business, and
is in good standing, in each jurisdiction (to the extent such concepts exist in such jurisdictions)
where the character or location of the properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except to the extent that the
failure to be so qualified or licensed and in good standing would not reasonably be expected to
have, individually or in the aggregate, an LSI Material Adverse Effect.
4.3 Certificate of Incorporation and Bylaws. LSI has heretofore made available to Agere a
complete and accurate copy of the LSI Certificate of Incorporation and LSI Bylaws. The LSI
Certificate of Incorporation and LSI Bylaws, and the charter and bylaws (or equivalent
organizational documents), each as amended to date, of each of its Subsidiaries (the “LSI
Subsidiary Documents”) are in full force and effect, and neither the LSI Board nor, to the
knowledge of LSI, any LSI Stockholder has taken any action to amend the LSI Certificate of
Incorporation or the LSI Bylaws in any respect. LSI has not taken any action in breach or
violation of any of the provisions of the LSI Certificate of Incorporation or the LSI Bylaws, and
each Subsidiary is not in breach or violation of any of the material provisions of their respective
LSI Subsidiary Documents, except, in the case of a Subsidiary, as would not reasonably be expected
to have, individually or in the aggregate, an LSI Material Adverse Effect.
4.4 Capitalization.
(a) The authorized capital stock of LSI consists of 1,300,000,000 shares of LSI Common Stock,
and 2,000,000 shares of LSI preferred stock, par value $0.01 per share (“LSI Preferred
Stock”). As of November 30, 2006, (i) 403,412,361 shares of LSI Common Stock were issued and
outstanding, (ii) no shares of LSI Preferred Stock were issued and outstanding,
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(iii) 3,792,827 shares of LSI Common Stock were reserved for issuance pursuant to outstanding
options and awards granted pursuant to LSI’s 2003 Equity Incentive Plan (the “LSI 2003 Stock
Plan”), (iv) 18,457,370 shares of LSI Common Stock were available for purchase pursuant to
LSI’s Employee Stock Purchase Plan and International Stock Purchase Plan (the “LSI ESPP”),
(v) 26,080,460 shares of Common Stock were issuable upon conversion of LSI’s 4% Convertible
Subordinated Notes due May 2010 (the “LSI Convertible Notes”), and (vi) no shares of LSI
Common Stock were issued and held in the treasury of LSI. Since November 30, 2006, LSI has not
issued any securities (including derivative securities) except for shares of LSI Common Stock
issued upon exercise of stock options or other stock awards.
(b) Section 4.4(b) of the LSI Disclosure Letter sets forth a complete and accurate
list of all stock option plans or any other plan or agreement adopted by LSI that provides for the
issuance of equity to any Person (the “LSI Stock Plans”). LSI has made available to Agere
complete and accurate copies of all LSI Stock Plans and the forms of all award agreements
evidencing outstanding LSI Stock Awards.
(c) Except as described in Section 4.4(a) of this Agreement, no capital stock of LSI
or any of its Subsidiaries or any security convertible or exchangeable into or exercisable for such
capital stock, is issued, reserved for issuance or outstanding as of the date of this Agreement.
Except as described in Section 4.4(a) of this Agreement and except for changes since the
date of this Agreement resulting from the exercise of employee stock options outstanding on such
date and described on Section 4.4(b) of the LSI Disclosure Letter, there are no exercisable
securities, there are no options, preemptive rights, warrants, calls, rights, commitments,
agreements, arrangements or understandings of any kind to which LSI or any of its Subsidiaries is a
party, or by which LSI or any of its Subsidiaries is bound, obligating LSI or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares
of capital stock of LSI or any of its Subsidiaries or obligating LSI or any of its Subsidiaries to
grant, extend or accelerate the vesting of or enter into any such option, warrant, call, right,
commitment, agreement, arrangement or understanding. There are no stockholder agreements, voting
trusts, proxies or other similar agreements, arrangements or understandings to which LSI or any of
its Subsidiaries is a party, or by which it or they are bound, obligating LSI or any of its
Subsidiaries with respect to any shares of capital stock of LSI or any of its Subsidiaries. There
are no rights or obligations, contingent or otherwise (including rights of first refusal in favor
of LSI), of LSI or any of its Subsidiaries, to repurchase, redeem or otherwise acquire any shares
of capital stock of LSI or any of its Subsidiaries or to provide funds to or make any investment
(in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other
entity. There are no registration rights or other agreements, arrangements or understandings to
which LSI or any of its Subsidiaries is a party, or by which it or they are bound, obligating LSI
or any of its Subsidiaries with respect to any shares of LSI Common Stock or shares of capital
stock of any such Subsidiary.
(d) All outstanding shares of LSI Common Stock are, all shares of LSI Common Stock reserved
for issuance as specified above, and all shares of LSI Common Stock to be issued in the Merger
pursuant to Section 2.7(a) or upon the exercise of Assumed Options pursuant to Section
2.7(e), will be, upon issuance on the terms and conditions specified in the instruments
pursuant to which they are issuable, duly authorized, validly issued, fully paid and
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nonassessable and not subject to or issued in violation of any purchase option, call option,
right of first refusal, preemptive right, subscription right or any similar right under any
provision of the DGCL, the LSI Certificate of Incorporation or the LSI Bylaws or any agreement to
which Agere is a party or otherwise bound. None of the outstanding shares of LSI Common Stock have
been issued in violation of any United States federal or state securities laws. All of the
outstanding shares of capital stock of each of the Subsidiaries of LSI are duly authorized, validly
issued, fully paid and nonassessable, and all such shares (other than directors’ qualifying shares
in the case of foreign Subsidiaries) are owned by LSI or a Subsidiary of LSI free and clear of any
and all Liens. There are no accrued and unpaid dividends with respect to any outstanding shares of
capital stock of LSI or any of its Subsidiaries.
(e) LSI Common Stock constitutes the only class of equity securities of LSI or its
Subsidiaries registered or required to be registered under the Exchange Act.
4.5 Authority; Requisite LSI Stockholder Approval.
(a) LSI has full corporate power and authority to execute and deliver this Agreement and,
subject only to the approval of the stockholders of LSI as described below, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (including the Merger) have been duly and
validly approved by the LSI Board. As of the date of this Agreement, the LSI Board has unanimously
determined that this Agreement and the transactions contemplated hereby are advisable and in the
best interests of the LSI stockholders and has unanimously recommended that the LSI Stockholders
approve the issuance of shares of Common Stock in the Merger (the “LSI Voting Proposal”).
This Agreement has been duly and validly executed and delivered by LSI, and assuming due
authorization, execution and delivery by LSI, this Agreement constitutes a valid and binding
obligation of LSI, enforceable against LSI in accordance with its terms.
(b) Except for the approval of the LSI Voting Proposal by the affirmative vote of the holders
of a majority of votes cast on the LSI Voting Proposal at the LSI Stockholder Meeting called to
consider the LSI Voting Proposal, provided that the total vote cast on the LSI Voting Proposal
represents over fifty percent in interest of all securities entitled to vote on the LSI Voting
Proposal (the “Requisite LSI Stockholder Approval”), no other corporate proceedings on the
part of LSI are necessary to approve or adopt this Agreement under applicable Legal Requirements
and to consummate the transactions contemplated hereby.
4.6 Required Filings and Consents.
(a) The execution and delivery by LSI of this Agreement do not, and the performance by LSI of
its covenants and agreements under this Agreement and the consummation by LSI of the transactions
contemplated by this Agreement will not, (i) assuming receipt of the Requisite LSI Stockholder
Approval, conflict with or violate the LSI Certificate of Incorporation or the LSI Bylaws or any
LSI Subsidiary Documents, (ii) assuming receipt of the government approvals contemplated by
Section 4.6(b) conflict with or violate any Legal Requirements applicable to LSI or any of
its Subsidiaries or by which its or any of their
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respective properties is bound or affected, (iii) require notice to or the consent of any
Person under, result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default), or impair LSI’s or any of its Subsidiaries’ rights
or alter the rights or obligations of any third party under, or give to any third party any rights
of termination, amendment, payment, acceleration or cancellation of, or result in the creation of a
Lien on any of the properties or assets (including intangible assets) of LSI or any of its
Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which LSI or any of its Subsidiaries is a
party or by which LSI or any of its Subsidiaries or its or any of their respective properties is
bound or affected, or (iv) give rise to or result in any person having, or having the right to
exercise, any preemptive rights, rights of first refusal, rights to acquire or similar rights with
respect to any capital stock of LSI or any of its Subsidiaries or any of their respective assets or
properties, except in the case of the preceding clauses (ii) through (iv), inclusive, as would not
reasonably be expected to have, individually or in the aggregate, an LSI Material Adverse Effect.
(b) The execution and delivery by LSI of this Agreement do not, and the performance by LSI of
its covenants and agreements under this Agreement and the consummation by LSI of the transactions
contemplated by this Agreement (including the Merger) will not, require any consent, approval,
order, license, authorization, registration, declaration or permit of, or filing with or
notification to, any Governmental Authority, except (i) as may be required by the HSR Act, (ii) as
may be required under any foreign antitrust or competition Legal Requirement, including the EC
Merger Regulation, (iii) the filing of a Registration Statement with the SEC in accordance with the
Securities Act, and the filing of the Joint Proxy Statement/Prospectus with the SEC in accordance
with the Exchange Act and as may be required under the Securities Act, (iv) such consents,
approvals, orders, licenses, authorizations, registrations, declarations, permits, filings, and
notifications as may be required under applicable United States federal and state securities laws,
(v) the filing of the Certificate of Merger or other documents as required by the DGCL and (vi)
such other consents, approvals, orders, registrations, declarations, permits, filings and
notifications which, if not obtained or made, would not reasonably be expected to have,
individually or in the aggregate, an LSI Material Adverse Effect.
4.7 LSI SEC Reports.
(a) LSI has filed and made available to LSI all forms, reports, schedules, statements and
other documents, including any exhibits thereto, required to be filed by LSI with the SEC since
December 1, 2000 (collectively, the “LSI SEC Reports”). The LSI SEC Reports, including all
forms, reports and documents filed by LSI with the SEC after the date hereof and prior to the
Effective Time, (i) were and, in the case of the LSI SEC Reports filed after the date hereof, will
be, prepared in accordance with the applicable requirements of the Securities Act, the Exchange Act
and the Xxxxxxxx-Xxxxx Act, as the case may be, and the rules and regulations thereunder, and (ii)
did not at the time they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing), and in the case of such forms, reports and
documents filed by LSI with the SEC after the date of this Agreement, will not as of the time they
are filed, contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such LSI SEC Reports or necessary in order to make the
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statements in such LSI SEC Reports, in light of the circumstances under which they were and
will be made, not misleading. None of the Subsidiaries of LSI is required to file any forms,
reports, schedules, statements or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each case, any related notes
and schedules) contained in the LSI SEC Reports, including any LSI SEC Reports filed after the date
of this Agreement, complied or will comply, as of its respective date, in all material respects
with all applicable accounting requirements and the published rules and regulations of the SEC with
respect thereto, was or will be prepared in accordance with GAAP (except as may be indicated in the
notes thereto) applied on a consistent basis throughout the periods involved and fairly presented
in all material respects or will fairly present in all material respects the consolidated financial
position of LSI and its Subsidiaries as of the respective dates thereof and the consolidated
results of its operations and cash flows for the periods indicated, except that any unaudited
interim financial statements are subject to normal and recurring year-end adjustments which have
not been and are not expected to be material in amount, individually or in the aggregate.
(c) The chief executive officer and chief financial officer of LSI have made all
certifications required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act, and the statements
contained in any such certifications are complete and correct, and LSI is otherwise in compliance
with all applicable effective provisions of the Xxxxxxxx-Xxxxx Act and the applicable listing and
corporate governance rules of the NYSE.
4.8 Disclosure Controls and Procedures.
(a) LSI and each of its Subsidiaries has established and maintains, adheres to and enforces a
system of internal accounting controls which are effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements in
accordance with GAAP, including policies and procedures that (i) require the maintenance of records
that in reasonable detail accurately and fairly reflect the material transactions and dispositions
of the assets of LSI and its Subsidiaries, (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with GAAP, and
that receipts and expenditures of LSI and its Subsidiaries are being made only in accordance with
appropriate authorizations of management and the LSI Board and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of the
assets of LSI and its Subsidiaries.
(b) To the knowledge of LSI, neither LSI nor its independent auditors have identified (i) any
significant deficiency or material weakness in the system of internal accounting controls utilized
by LSI and its Subsidiaries, (ii) any fraud, whether or not material, that involves LSI’s
management or other employees who have a role in the preparation of financial statements or the
internal accounting controls utilized by LSI and its Subsidiaries or (iii) any claim or allegation
regarding any of the foregoing.
(c) Neither LSI nor any of its Subsidiaries is a party to, or has any commitment to become a
party to, any joint venture, partnership agreement or any similar Contract (including
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any Contract relating to any transaction, arrangement or relationship between or among LSI or
any of its Subsidiaries, on the one hand, and any unconsolidated affiliate, including any
structured finance, special purpose or limited purpose entity or Person, on the other hand (such as
any arrangement described in Section 303(a)(4) of Regulation S-K of the SEC)) where the purpose or
effect of such arrangement is to avoid disclosure of any material transaction involving, or
material liabilities of, LSI or any of its Subsidiaries in LSI’s consolidated financial statements.
(d) Neither LSI nor any of its Subsidiaries nor, to the knowledge of LSI, any director,
officer, auditor, accountant, consultant or representative of LSI or any of its Subsidiaries has
received or otherwise had or obtained knowledge of any substantive complaint, allegation, assertion
or claim, whether written or oral, that LSI or any of its Subsidiaries has engaged in questionable
accounting or auditing practices. No current or former attorney representing LSI or any of its
Subsidiaries has reported evidence of a material violation of securities laws, breach of fiduciary
duty or similar violation by LSI or any of its officers, directors, employees or agents to the
current the LSI Board or any committee thereof or to any current director or executive officer of
LSI.
(e) To the knowledge of LSI, no employee of LSI or any of its Subsidiaries has provided or is
providing information to any law enforcement agency regarding the commission or possible commission
of any crime or the violation or possible violation of any applicable Legal Requirements of the
type described in Section 806 of the Xxxxxxxx-Xxxxx Act by LSI or any of its Subsidiaries. Neither
LSI nor any of its Subsidiaries nor, to the knowledge of LSI, any director, officer, employee,
contractor, subcontractor or agent of LSI or any such Subsidiary has discharged, demoted,
suspended, threatened, harassed or in any other manner discriminated against an employee of LSI or
any of its Subsidiaries in the terms and conditions of employment because of any lawful act of such
employee described in Section 806 of the Xxxxxxxx-Xxxxx Act.
4.9 No Undisclosed Liabilities. Except as reflected in the LSI Balance Sheet, neither LSI
nor any of its Subsidiaries has any Liabilities, other than (i) Liabilities incurred since the date
of the LSI Balance Sheet in the ordinary course of business consistent with past practice, (ii)
Liabilities under this Agreement or expressly permitted to be incurred under this Agreement, and
(iii) Liabilities that, individually and in the aggregate, have not had, and would not reasonably
be expected to have, an LSI Material Adverse Effect.
4.10 Absence of Certain Changes or Events. Since the date of the LSI Balance Sheet through
the date hereof, LSI has conducted its business in the ordinary course of business consistent with
past practice and, since such date through the date hereof, there has not occurred (i) any LSI
Material Adverse Effect or (ii) any action taken by LSI or event that would have required the
consent of LSI pursuant to Section 5.2 had such action or event occurred after the date of
this Agreement.
4.11 Compliance with Laws; Permits.
(a) LSI and its Subsidiaries are in compliance with, and are not in default under or violation
of (and have not received any notice of material non-compliance, default or violation with respect
to) any Legal Requirement applicable to LSI or any of its Subsidiaries or
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by which any of their respective properties is bound, except for such non-compliance, defaults
and violations that would not reasonably be expected to have, individually or in the aggregate, an
LSI Material Adverse Effect.
(b) LSI and its Subsidiaries hold all permits, licenses, easements, variances, exemptions,
consents, certificates, authorizations, registrations, orders and other approvals from Governmental
Entities that are material to the operation of the business of LSI and its Subsidiaries taken as a
whole as currently conducted (collectively, the “LSI Permits”). The LSI Permits are in
full force and effect, have not been violated in any material respect and, to the knowledge of LSI,
no suspension, revocation or cancellation thereof has been threatened, and there is no Legal
Proceeding pending or, to the knowledge of LSI, threatened, seeking the suspension, revocation or
cancellation of any LSI Permits. No LSI Permit shall cease to be effective as a result of the
consummation of the transactions contemplated by this Agreement.
4.12 Legal Proceedings; Orders. Except as would not reasonably be expected to have,
individually or in the aggregate, an LSI Material Adverse Effect, there are no material Legal
Proceedings (other than arising from or relating to the Merger or any of the other transactions
contemplated by this Agreement), (a) pending against LSI or any of its Subsidiaries or any of their
respective properties or assets, or (b) to the knowledge of LSI, threatened against LSI or any of
its Subsidiaries, or any of their respective properties or assets. Neither LSI nor any Subsidiary
of LSI is subject to any outstanding Order that would reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated by this Agreement. There has
not been nor are there currently any internal investigations or inquiries being conducted by LSI,
the LSI Board (or any committee thereof) or any third party at the request of any of the foregoing
concerning any financial, accounting, tax, conflict of interest, self-dealing, fraudulent or
deceptive conduct or other misfeasance or malfeasance issues.
4.13 Material Contracts.
(a) For all purposes of and under this Agreement, an “LSI Material Contract” shall
mean:
(i) any “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of
the SEC, other than those agreements and arrangements described in Item 601(b)(10)(iii)) with
respect to LSI and its Subsidiaries;
(ii) any employment-related Contract or plan, including any stock option plan, stock
appreciation right plan or stock purchase plan or material Contract, any of the benefits of which
will be increased, or the vesting of benefits of which will be accelerated, by the consummation of
the transactions contemplated by this Agreement (whether alone or in connection with subsequent or
additional events);
(iii) any Contract containing any covenant (A) limiting the right of LSI or any of its
Subsidiaries to engage in any line of business or to compete with any Person in any line of
business, or (B) prohibiting LSI or any of its Subsidiaries (or, after the Closing Date, LSI)
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from engaging in business with any Person or levying a fine, charge or other payment for doing
so;
(iv) any Contract (A) relating to the pending or future disposition or acquisition by LSI or
any of its Subsidiaries after the date of this Agreement of a material amount of assets other than
in the ordinary course of business or (B) pursuant to which LSI or any of its Subsidiaries will
acquire after the date of this Agreement any material ownership interest in any other Person or
other business enterprise other than LSI’s Subsidiaries;
(v) material manufacturing Contract;
(vi) any mortgages, indentures, guarantees, loans or credit agreements, security agreements or
other Contracts relating to the borrowing of money or extension of credit, in each case in excess
of $25,000,000, other than (A) accounts receivables and payables, (B) loans to direct or indirect
wholly owned Subsidiaries, and (C) advances to employees for travel and business expenses, in each
case in the ordinary course of business consistent with past practice;
(vii) any settlement Contract with ongoing obligations other than (A) releases that are
immaterial in nature or amount entered into in the ordinary course of business, (B) settlement
Contracts only involving the payment of cash in amounts that do not exceed $5,000,000 in any
individual case, or (C) settlement Contracts relating to Patent licenses entered into in the
ordinary course of business, consistent with past practices;
(viii) any Contract that is collectively bargained by LSI;
(ix) other than purchase orders in the ordinary course of business, any other Contract that
provides for payment obligations by LSI or any of its Subsidiaries in any twelve (12) month period
of $15,000,000 or more in any individual case that is not terminable by LSI or its Subsidiaries
upon notice of ninety (90) days or less without material liability to LSI or its Subsidiary and is
not disclosed pursuant to clauses (i) through (viii) above, inclusive; and
(x) any Contract, or group of Contracts with a Person (or group of affiliated Persons), the
termination of which would be reasonably expected to have an LSI Material Adverse Effect and is not
disclosed pursuant to clauses (i) through (ix) above, inclusive.
(b) Section 4.13(b) of the LSI Disclosure Letter contains a complete and accurate list
of all LSI Material Contracts as of the date hereof, to or by which LSI or any of its Subsidiaries
is a party or is bound, and identifies each subsection of Section 4.13(a) that describes
such LSI Material Contract.
(c) Each LSI Material Contract is valid and binding on LSI (and/or each such Subsidiary of LSI
party thereto) and is in full force and effect, other than those Contracts that by their terms have
expired or been terminated since the date hereof, and neither LSI nor any of its Subsidiaries party
thereto, nor, to the knowledge of LSI, any other party thereto, is in breach of, or default under,
any such LSI Material Contract, and no event has occurred that with notice or lapse of time or both
would constitute such a breach or default thereunder by LSI or any of its
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Subsidiaries, or, to the knowledge of LSI, any other party thereto, except for such failures
to be in full force and effect and such breaches and defaults that would not reasonably be expected
to have, individually or in the aggregate, an LSI Material Adverse Effect.
4.14 Employee Benefit Matters.
(a) Section 4.14(a) of the LSI Disclosure Letter sets forth a complete and accurate
list of all U.S. LSI Employee Plans. Neither LSI nor any ERISA Affiliate has any plan or
commitment to establish any new LSI Employee Plan, to modify any LSI Employee Plan (except to the
extent required by law or to conform any such LSI Employee Plan to the requirements of any
applicable law, in each case as previously disclosed to Agere in writing, or as required by this
Agreement), or to adopt or enter into any LSI Employee Plan.
(b) With respect to each LSI Employee Plan, LSI has made available to Agere complete and
accurate copies of (i) such LSI Employee Plan (or a written summary of any unwritten plan) together
with all amendments, (ii) in the case of any plan for which Forms 5500 are required to be filed,
the three most recent annual reports (Form 5500) with schedules attached, (iii) in the case of any
plan that is intended to be qualified under Section 401(a) of the Code, the most recent
determination, opinion notification or advisory letter from the IRS, and correspondence to or from
the IRS or the DOL with respect to such letter, (iv) each trust agreement, group annuity contract,
administration and similar material agreements, investment management or investment advisory
agreements, (v) the most recent summary plan descriptions and employee handbook, or other similar
material employee communications relating to employee benefits matters, (vi) all personnel, payroll
and employment manuals and policies, (vii) the most recent annual and periodic financial statements
and other annual accounting of assets for each LSI Employee Plan that is funded, (viii) all
material correspondence to or from any governmental agency relating to any LSI Employee Plan within
the past two (2) years, and (ix) the three (3) most recent plan years’ discrimination tests for
each LSI Employee Plan.
(c) Each LSI Employee Plan has been established, maintained and administered in all material
respects in accordance with all applicable Legal Requirements, including if applicable, ERISA and
the Code, and in accordance with its terms, and each of LSI, LSI’s Subsidiaries and their
respective ERISA Affiliates have in all material respects met their obligations with respect to
each LSI Employee Plan and have timely made (or timely will make) all required contributions
thereto.
(d) Section 4.14(d) of the LSI Disclosure Letter contains a complete and accurate list
of each LSI Employee Benefit Plan that has assets which include securities issued by LSI, any of
LSI’s Subsidiaries or any of their respective ERISA Affiliates.
(e) All LSI Employee Plans that are intended to be qualified under Section 401(a) of the Code,
and all trusts that are intended to be qualified under Section 501(a) of the Code (each, a “LSI
Qualified Plan”), have received determination, opinion or advisory letters from the Internal
Revenue Service to the effect that such LSI Employee Plans are qualified and the plans and trusts
related thereto are exempt from federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, or LSI has remaining a period of time under applicable U.S.
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Department of the Treasury regulations or Internal Revenue Service pronouncements in which to
apply for such a letter and to make any amendments necessary to obtain a favorable determination as
to the qualified status of each such LSI Qualified Plan. No such determination, opinion or
advisory letter has been revoked and, to the knowledge of LSI, revocation has not been threatened,
and no such LSI Employee Plan has been amended or operated since the date of its most recent
determination letter or application therefor in any respect, and no act or omission has occurred,
that would reasonably be expected to adversely affect its qualification or materially increase its
cost. There has been no termination, partial termination or discontinuance of contributions to any
LSI Qualified Plan that resulted or may reasonably be expected to result in material liability to
LSI. No “prohibited transaction,” within the meaning of Section 4975 of the Code or Sections 406
and 407 of ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred with respect to
any LSI Employee Plan.
(f) Neither LSI, any of LSI’s Subsidiaries nor any of their respective ERISA Affiliates has in
the past six (6) years maintained, participated in or contributed to (or been obligated to
contribute to) or can reasonably be expected to have future material liability with respect to (i)
a “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA), (ii) a “multiple employer plan”
as defined in ERISA or the Code, or (iii) a “funded welfare plan” within the meaning of Section 419
of the Code. No LSI Employee Plan is funded by, associated with or related to a “voluntary
employees’ beneficiary association” within the meaning of Section 501(c)(9) of the Code. No LSI
Employee Plan provides health benefits that are not fully insured through an insurance contract.
(g) The Pension Plans set forth in Section 4.14(g) of the LSI Disclosure Letter are
the only Pension Plans that LSI or any LSI ERISA Affiliate has maintained, sponsored, participated
or contributed to in the preceding six (6) years, or currently maintains, sponsors, participates in
or contributes to, or can reasonably be expected to have future material liability with respect to,
that is subject to Title IV of ERISA or Section 412 of the Code (each, an “LSI Pension
Plan”). As of the Effective Time: (i) no legal or administrative action has been taken by the
PBGC to terminate or to appoint a trustee to administer any LSI Pension Plan; (ii) no liability to
the PBGC under Title IV of ERISA has been incurred by LSI or an LSI ERISA Affiliate that has not
been satisfied in full; (iii) no LSI Pension Plan has a reportable event within the meaning of
Section 4043 of ERISA for which the 30 day notice requirement has not been waived by the PBGC has
occurred within the past six years or is reasonably expected to occur with respect to any LSI
Employee Plan; and (iv) no LSI Pension Plan has incurred any event described in Section 4041, 4062
or 4063 of ERISA. No complete or partial termination of any LSI Employee Plan subject to Title IV
of ERISA has occurred or is expected to occur and no proceedings have been instituted and, to the
knowledge of LSI, no condition exists and no event has occurred that is reasonably likely to
constitute grounds under Title IV of ERISA to terminate or appoint a trustee to administer any LSI
Pension Plan. Each LSI Pension Plan has been maintained in compliance with the minimum funding
standards of ERISA and the Code where applicable and no LSI Pension Plan subject to §412 or 418B of
the Code or §302 of ERISA has incurred any accumulated funding deficiency within the meaning of
§412 or 418B of the Code or §302 of ERISA, respectively, or has applied for or obtained a waiver
from the IRS of any minimum funding requirement or an extension of any amortization period under
§412 of the Code or §303 or 304 of ERISA. Except for payments of premiums to the PBGC, which have
been paid in full,
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LSI has not incurred any liability (including any indirect liability through an agreement with
any other party and any material contingent or material secondary liability) to the PBGC in
connection with any LSI Pension Plan covering any active, retired or former employees or directors
of LSI, including any liability under §4069 or 4212(c) of ERISA or any penalty imposed under §4071
of ERISA, or ceased operations at any facility or withdrawn from any such LSI Pension Plan in a
manner which could subject it to liability under §4062, 4063 or 4064 of ERISA, or knows of any
facts or circumstances that might give rise to any liability of LSI to the PBGC under Title IV of
ERISA that could reasonably be anticipated to result in any PBGC Claims being made against LSI.
Section 4.14(g) of the LSI Disclosure Letters sets forth the approximate liability for any
LSI Pension Plan accumulated funding deficiency within the meaning of §412 or 418B of the Code or
§302 of ERISA.
(h) Other than as required under Section 601 et seq. of ERISA or equivalent state law, none of
the LSI Employee Plans promises or provides health or other welfare benefits (excluding normal
claims for benefits under LSI’s group life insurance, accidental death and dismemberment insurance
and disability plans and policies) or coverage to any person following retirement or other
termination of employment.
(i) There is no action, suit, proceeding, claim, arbitration, audit or investigation pending
or, to the knowledge of LSI, threatened or reasonably anticipated, with respect to any LSI Employee
Plan or the assets of any LSI Employee Benefit Plan, other than claims for benefits in the ordinary
course. No LSI Employee Plan is or within the last three calendar years has been the subject of,
or has received notice that it is the subject of, examination by a government agency or a
participant in a government sponsored amnesty, voluntary compliance or similar program.
(j) To the knowledge of LSI, each individual who has received compensation for the performance
of services on behalf of LSI, any of LSI’s Subsidiaries or any of their respective ERISA Affiliates
has been properly classified as an employee or independent contractor in accordance with applicable
Legal Requirement.
(k) Each LSI Employee Plan maintained or covering employees outside the United States (the
“LSI Non-U.S. Employee Plans”), and the books and records thereof, is in material
compliance with all applicable Legal Requirements of each applicable jurisdiction. No such LSI
Non-U.S. Employee Plan has unfunded liabilities, that as of the Effective Time, will not be offset
by insurance or fully accrued. Section 4.14(k) of the LSI Disclosure Letter contains a
complete and accurate list of each country in which LSI or any of its Subsidiaries or affiliates
has operations as of the LSI Balance Sheet Date and the approximate number of employees in each
such country as of the LSI Balance Sheet Date.
(l) Section 4.14(l) of the LSI Disclosure Letter sets forth a complete and accurate
list of (i) all employment agreements with employees of LSI or any of its Subsidiaries, other than
customary offer letters and other similar employment agreements entered into in the ordinary course
of business; and (ii) all operative severance agreements, programs and policies of LSI or any of
its Subsidiaries with or relating to its Section 16 officers, excluding programs and policies
required to be maintained by Legal Requirement.
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(m) All contributions required to be made with respect to any LSI Employee Plan on or prior to
the Effective Time have been or will be timely made or are reflected on LSI Balance Sheet.
(n) The negotiation or consummation of the transactions contemplated by this Agreement will
not, either alone or in combination with another event, (i) entitle any current or former employee,
director, consultant or officer of LSI or any Subsidiary of LSI to severance pay, or any other
payment from LSI or any of its Subsidiaries, or pursuant to any LSI Employee Plan, (ii) accelerate
the time of distribution, payment or vesting, a lapse of repurchase rights or increase the amount
of compensation or benefits due any such employee, director or officer, (iii) result in the
forgiveness of indebtedness, or (iv) trigger an obligation to fund benefits. Section
4.14(n) of the LSI Disclosure Letter contains a complete and accurate list of each LSI
“disqualified individual” (as defined in Code Section 280G and the regulations thereunder). No
payment or benefit which will or may be made by LSI or its ERISA Affiliates with respect to any
current or former employee or any other “disqualified individual” is reasonably expected to be
characterized as a “parachute payment,” within the meaning of Section 280G(b)(2) of the Code.
There is no contract, agreement, plan or arrangement to which LSI or any ERISA Affiliates is a
party or by which it is bound to compensate any current or former employee or other disqualified
individual for excise taxes paid pursuant to Section 4999 of the Code.
(o) Each material nonqualified deferred compensation plan maintained or sponsored by LSI (as
such term is defined in Section 409A(d)(1) of the Code) has been operated since January 1, 2005 in
good faith compliance with Section 409A of the Code and IRS Notice 2005-1. No material
nonqualified deferred compensation plan has been “materially modified” (within the meaning of IRS
Notice 2005-1) at any time after October 3, 2004.
(p) No stock option, stock appreciation right or service provider warrant of LSI (i) has an
exercise price that has been or may be less than the fair market value of the underlying equity as
of the date such option or right was granted or (ii) has any feature for the deferral of
compensation other than the deferral of recognition of income until the later of exercise or
disposition of such option or right.
(q) There is no Contract to which LSI or any of its Subsidiaries is a party, including the
provisions of this Agreement, covering any employee, consultant or director of LSI or any of its
Subsidiaries, which, individually or collectively, reasonably could be expected to give rise to the
payment of any amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of the
Code or that would give rise to a penalty under Section 409A of the Code.
4.15 Labor Matters.
(a) LSI and each of its Subsidiaries: (i) has withheld and reported all amounts required by
law or by agreement to be withheld and reported with respect to wages, salaries and other payments
to employees; (ii) is not liable for any arrears of wages or any taxes or any penalty for failure
to comply with any of the foregoing; and (iii) is not liable for any payment to any trust or other
fund governed by or maintained by or on behalf of any governmental authority, with respect to
unemployment compensation benefits, social security or other benefits or
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obligations for employees (other than routine payments to be made in the normal course of
business and consistent with past practice), except, in each case, for any failure to withhold,
report or pay which would have or could reasonably be expected to have an LSI Material Adverse
Effect.
(b) To the knowledge of LSI: (i) there are no current labor union organizing activities with
respect to any employees of LSI and/or any of its Subsidiaries, (ii) no labor union, labor
organization, trade union, works council, or group of employees of LSI and/or any of its
Subsidiaries has made a pending demand for recognition or certification, (iii) there are no
representation or certification proceedings or petitions seeking a representation proceeding
presently pending or threatened in writing to be brought or filed with the National Labor Relations
Board or any other labor relations tribunal or authority, and (iv) there are no labor strikes or
lockouts, or threats thereof, against or affecting LSI or any of its Subsidiaries.
(c) LSI and each of its Subsidiaries are and have been in material compliance with all notice
and other requirements under the WARN Act, and any similar foreign, state or local law relating to
plant closings and layoffs
4.16 Properties. LSI and each of its Subsidiaries have good and valid title to, or a valid
leasehold interest in, all the properties and assets which it purports to own or lease (real,
tangible, personal and mixed), including all the properties and assets reflected in the LSI Balance
Sheet (except for personal property sold since the date of the LSI Balance Sheet in the ordinary
course of business consistent with past practice). All properties and assets reflected in the LSI
Balance Sheet are free and clear of all Liens, except for Liens reflected on the LSI Balance Sheet
and Liens for current taxes not yet due and other Liens that do not materially impair the use of
the property or assets subject thereto. All real property leases, subleases, licenses or other
occupancy agreements to which LSI or any of its Subsidiaries is a party (collectively, the “LSI
Real Property Leases”) are in full force and effect, except where the failure of such LSI Real
Property Leases to be in full force and effect would not be reasonably likely to result in an LSI
Material Adverse Effect. There is no default by LSI or any of its Subsidiaries under any of the
LSI Real Property Leases, or, to the knowledge of LSI, defaults by any other party thereto, except
such defaults as have been waived in writing or cured or such defaults that in the aggregate would
not be reasonably likely to result in an LSI Material Adverse Effect.
4.17 Tax Matters. LSI and each of its Subsidiaries have prepared and timely filed (taking
into account any extension of time within which to file) all material Tax Returns required to be
filed by any of them and all such filed Tax Returns are true, correct and complete in all material
respects, (ii) LSI and each of its Subsidiaries have paid all Taxes that are required to be paid by
any of them, except with respect to matters for which adequate reserves have been established on
the Financial Statements in accordance with GAAP, (iii) the U.S. consolidated federal income Tax
Returns of LSI have been examined by the Internal Revenue Service (or the period for assessment of
the Taxes in respect of which such Tax Returns were required to be filed has expired) for all
periods ending on or before December 30, 2001, (iv) there are not pending or threatened in writing,
any audits, examinations, investigations or other proceedings in respect of income Taxes or other
material Taxes, (v) there are no Liens for Taxes on any of the assets of LSI or any of its
Subsidiaries other than Liens for Taxes not yet due and payable or
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being contested in good faith and for which adequate reserves have been established on the Financial
Statements in accordance with GAAP, (vi) none of LSI or any of its Subsidiaries has been a
“controlled corporation” or a “distributing corporation” in any distribution occurring during the
two-year period ending on the date hereof that was purported or intended to be governed by Section
355 of the Code (or any similar provision of state, local or foreign Law) and (vii) none of LSI or
any of its Subsidiaries has engaged in a “reportable transaction,” within the meaning of Treas.
Reg. Section 1.6011-4(b), including any transaction that is the same or substantially similar to
one of the types of transactions that the Internal Revenue Service has determined to be a tax
avoidance transaction and identified by notice, regulation or other form of published guidance as a
“listed transaction,” as set forth in Treas. Reg. Section 1.6011-4(b)(2).
4.18 Environmental Matters.
(a) Except as would not reasonably be expected to have, individually or in the aggregate, an
LSI Material Adverse Effect, no Hazardous Materials are present on any real property that is
currently owned, operated, occupied, controlled or leased by LSI or any of its Subsidiaries or were
present on any real property at the time it ceased to be owned, operated, occupied, controlled or
leased by LSI or its Subsidiaries, including the land, the improvements thereon, the groundwater
thereunder and the surface water thereon. Except as would not reasonably be expected to have,
individually or in the aggregate, an LSI Material Adverse Effect, there are no underground storage
tanks, asbestos which is friable or likely to become friable or PCBs present on any real property
currently owned, operated, occupied, controlled or leased by LSI or any of its Subsidiaries or as a
consequence of the acts of LSI, its Subsidiaries or their agents.
(b) Except as would not reasonably be expected to have, individually or in the aggregate, an
LSI Material Adverse Effect, LSI and its Subsidiaries have conducted all Hazardous Material
Activities in compliance in all material respects with all applicable Environmental Laws. Except
as would not reasonably be expected to have, individually or in the aggregate, an LSI Material
Adverse Effect, the Hazardous Materials Activities of LSI and its Subsidiaries prior to the Closing
have not resulted in the exposure of any person to a Hazardous Material in a manner which has
caused or could reasonably be expected to cause an adverse health effect to any such person.
(c) Except as would not reasonably be expected to have, individually or in the aggregate, an
LSI Material Adverse Effect, LSI and its Subsidiaries have complied in all material respects with
all covenants and conditions of any Environmental Permit which is or has been in force with respect
to its Hazardous Materials Activities. No circumstances exist which could reasonably be expected
to cause any material Environmental Permit to be revoked, modified, or rendered non-renewable upon
payment of the permit fee.
(d) No action, proceeding, revocation proceeding, amendment procedure, writ, injunction or
claim is pending, or to the knowledge of LSI, threatened, concerning or relating to any
Environmental Permit or any Hazardous Materials Activity of LSI or any of its Subsidiaries that
would reasonably be expected to have, individually or in the aggregate, an LSI Material Adverse
Effect.
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(e) Neither LSI nor any of its Subsidiaries is aware of any fact or circumstance that could
result in any Liability under an Environmental Law which would reasonably be expected to have an LSI
Material Adverse Effect. Except as would not reasonably be expected to have an LSI Material Adverse
Effect, neither LSI nor any Subsidiary has entered into any Contract that may require it to
guarantee, reimburse, pledge, defend, hold harmless or indemnify any other party with respect to
liabilities arising out of Environmental Laws or the Hazardous Materials Activities of LSI or any
of its Subsidiaries.
(f) LSI and the Subsidiaries have delivered to LSI or made available for inspection by LSI and
its agents, representatives and employees all material environmental site assessments and
environmental audits in LSI’s possession or control. LSI and the Subsidiaries have complied in all
material respects with all environmental disclosure obligations imposed by applicable law with
respect to this transaction.
4.19 Intellectual Property Matters.
(a) Section 4.19(a) of the LSI Disclosure Letter contains a complete and accurate list
of all Patents that are Registered Intellectual Property owned or purported to be owned by LSI or
any of its Subsidiaries (such Patents and all other material Registered Intellectual Property owned
or purported to be owned by LSI or any of its Subsidiaries, collectively the “LSI Registered
Intellectual Property”).
(b) All material LSI Registered Intellectual Property Rights are owned exclusively by LSI or
one or more of its Subsidiaries free and clear of any Liens (excluding any rights granted to any
licensee of any LSI Intellectual Property Right entered into in the ordinary course of business).
Neither LSI nor any of its Subsidiaries has transferred ownership of, or granted an exclusive
license to, any third party, of any Intellectual Property Rights that are or were material LSI
Registered Intellectual Property Rights.
(c) Neither LSI nor its Subsidiaries has, in the conduct of the business of LSI and its
Subsidiaries as currently conducted, knowingly infringed upon, violated or used without
authorization, of any Intellectual Property Rights owned by any third Person. There is no pending
or, to LSI’s knowledge, threatened (and at no time within the three (3) years prior to the date of
this Agreement has there been pending any) suit, arbitration or other adversarial proceeding before
any court, government agency or arbitral tribunal, or in any jurisdiction, against LSI or any of
its Subsidiaries, alleging that any activities or conduct of LSI’s or any of its Subsidiaries’
business infringes or will infringe upon, violate or constitute the unauthorized use of the
Intellectual Property Rights of any third Person, or challenging the ownership, validity,
enforceability, or registerability of any LSI Intellectual Property Rights. LSI is not party to
any settlements, covenants not to xxx, consents, decrees, stipulations, judgments, or orders
resulting from suits, actions or similar legal proceedings, which (i) materially restrict LSI’s or
any of its Subsidiaries’ rights to use, license or transfer any LSI Intellectual Property Rights,
(ii) materially restrict the conduct of the business of LSI or any of its Subsidiaries in order to
accommodate any third party’s Intellectual Property Rights, or (iii) compel or require LSI or any
of its Subsidiaries to license or transfer any LSI Intellectual Property Rights.
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(d) Neither LSI nor any LSI Subsidiary has committed, agreed or become obligated to license on
a royalty-free basis any LSI Intellectual Property Rights to any third Person as a result of any
participation in an industry association, standard setting organization or similar body, or
otherwise.
(e) LSI and its Subsidiaries have taken commercially reasonable measures consistent with
industry standard practices to protect the proprietary nature of the Trade Secrets owned by LSI or
such Subsidiary that is material to the business of LSI and its Subsidiaries as currently
conducted.
(f) To the knowledge of LSI, all material LSI Intellectual Property Rights are, and following
the transactions contemplated hereby shall be, freely, transferable, licensable and alienable
without the consent of, or notice or payment of any kind to any Governmental Authority or third
party.
(g) To the knowledge of LSI, no third party is misappropriating, infringing, diluting or
violating any LSI Intellectual Property Rights in a manner that has or would reasonably be expected
to have an LSI Material Adverse Effect. There are no pending claims, suits, arbitrations or other
adversarial proceedings before any court, government agency or arbitral tribunal brought by LSI or
any of its Subsidiaries against any third party with respect to any LSI Intellectual Property
Rights, which remain unresolved as of the date hereof.
(h) Section 4.19(h) of the LSI Disclosure Letter contains a complete and accurate list
of all material Contracts pursuant to which a third party has licensed to LSI or any of its
Subsidiaries any Intellectual Property Right that is material to the business of LSI or any LSI
Subsidiary (“LSI In Licenses”), other than Contracts with respect to commercial available
Technology that is not included in an LSI Product or necessary to the manufacture of any LSI
Product.
(i) Section 4.19(i) of the LSI Disclosure Letter contains a complete and accurate list
of all material Contracts pursuant to which LSI or any of its Subsidiaries has granted a third
Person or affiliate any rights or licenses to any LSI Intellectual Property Rights, other than
non-exclusive licenses granted in the ordinary course of business (“LSI Out Licenses,” and
together with the LSI In Licenses, the “LSI IP Licenses”).
(j) Neither LSI nor any of its Subsidiaries, nor, to the knowledge of LSI any other party to an
LSI IP License, is in material breach of any such LSI IP License that is material to the business
of LSI and its Subsidiaries, taken as a whole. The consummation of the transactions contemplated
hereby will not result or cause (i) the breach by LSI or any of its Subsidiaries of any LSI IP
License, (ii) the termination, impairment or restriction of any right or license granted to LSI or
any of its Subsidiaries under an LSI IP License, or (iii) LSI or any of its Subsidiaries to grant,
or expand the scope of a prior grant, to a third party of any rights to any material LSI
Intellectual Property Rights (including by release of any source code), except as would not
reasonably be expected to have an LSI Material Adverse Effect.
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4.20 Insurance. All fire and casualty, general liability, business interruption, product
liability, sprinkler and water damage insurance policies and other forms of insurance maintained by
LSI or any of its Subsidiaries have been made available to LSI. Each such policy is in full force
and effect and all premiums due thereon have been paid in full.
4.21 Interested Party Transactions. Since December 31, 2005, no event has occurred that
would be required to be reported as a Certain Relationship or Related Transaction pursuant to
Statement of Financial Accounting Standards No. 57.
4.22 Brokers, Finders and Financial Advisors. No broker, finder or investment banker
(other than Xxxxxx Xxxxxxx & Co. Incorporated (“Xxxxxx Xxxxxxx”), whose brokerage, finder’s or
other fees will be paid by LSI) is entitled to any brokerage, finder’s or other fee or commission
in connection with the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of LSI or any of its Subsidiaries. LSI has furnished to Agere a complete and correct
copy of all agreements between LSI and Xxxxxx Xxxxxxx pursuant to which such firm would be entitled
to any such payment.
4.23 Opinion of Financial Advisor of LSI. The financial advisor of LSI, Xxxxxx Xxxxxxx,
has delivered to the Board of Directors of LSI an opinion to the effect that, as of the date of
this Agreement, and based upon and subject to the matters set forth
therein, the Exchange Ratio is
fair, from a financial point of view, to LSI. Such opinion has not been withdrawn, revoked or
modified.
4.24 Takeover Statutes. No Takeover Statute is applicable to LSI, the Merger or any of the
other transactions contemplated by this Agreement.
ARTICLE V
CONDUCT OF BUSINESS
5.1 Affirmative Obligations Except (i) as expressly contemplated or permitted by this
Agreement, (ii) as required by Legal Requirements, (iii) as set forth in Section 5.1 of the
Agere Disclosure Letter or the LSI Disclosure Letter, or (iv) as approved in advance by the other
party hereto in writing (which approval shall not be unreasonably withheld, delayed or
conditioned), at all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, each of Agere and LSI shall, and each of them shall
cause its Subsidiaries to (i) carry on its business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and in compliance with all applicable Legal
Requirements, (ii) pay its debts and Taxes when due, in each case subject to good faith disputes
over such debts or Taxes, (iii) pay or perform all material obligations when due and (iv) use
reasonable best efforts, consistent with past practices and policies, to (A) preserve intact its
present business, (B) keep available the services of its present officers and employees and (C)
preserve its relationships with customers, suppliers, distributors, licensors, licensees and others
with which it has significant business dealings.
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5.2
Negative Obligations. Except (i) as expressly contemplated or permitted by this
Agreement, (ii) as may be required by Legal Requirements, (iii) as set forth in Section 5.2
of the Agere Disclosure Letter or the LSI Disclosure Letter, as the case may be, or (iv) as
approved in advance by the other party hereto in writing (which approval shall not be unreasonably
withheld, delayed or conditioned), at all times during the period commencing with the execution and
delivery of this Agreement and continuing until the earlier to occur of the termination of this
Agreement pursuant to Article VIII and the Effective Time, neither Agere nor LSI shall, nor
shall either of them cause or permit any of their respective Subsidiaries to, do any of the
following:
(a) propose to adopt any amendments to or amend its certificate of incorporation or bylaws or
comparable organizational documents, provided that the organizational documents of Subsidiaries may
be amended in a way that is not material;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, other equity-based (whether payable
in cash, securities or other property or any combination of the foregoing) commitments,
subscriptions, rights to purchase or otherwise) any of its securities or any securities of any of
its Subsidiaries, except for (i) the issuance and sale of shares of common stock pursuant to stock
options or restricted stock units outstanding prior to the date hereof, (ii) grants of purchase
rights under an employee stock purchase or other similar plan, and (iii) grants to newly hired
employees of stock options to purchase common stock granted in the ordinary course of business
consistent with past practice, with a per share exercise price that is no less than the
then-current market price of a share of common stock and not subject to any accelerated vesting or
other provision that would be triggered solely as a result of the consummation of the transactions
contemplated hereby.
(c) acquire or redeem, directly or indirectly, or amend any of its securities or any
securities of any of its Subsidiaries; provided, however, that nothing in this paragraph (c) shall
prohibit Agere or LSI from dissolving and/or merging into any of its Subsidiaries certain other
Subsidiaries that are not material to it and its Subsidiaries, taken as a whole;
(d) other than cash dividends made by any of its direct or indirect wholly owned Subsidiaries
to itself or one of its Subsidiaries, split, combine or reclassify any shares of capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash, shares or property
or any combination thereof) in respect of any shares of capital stock, or make any other actual,
constructive or deemed distribution in respect of the shares of capital stock; provided, however,
that nothing in this paragraph (d) shall prohibit Agere or LSI from dissolving and/or merging into
any of its Subsidiaries certain other Subsidiaries that are not material to it and its
Subsidiaries, taken as a whole;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of it or any of its
Subsidiaries (other than the transactions contemplated hereby); provided, however, that nothing in
this paragraph (e) shall prohibit Agere or LSI from dissolving and/or merging into any of its
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Subsidiaries certain other Subsidiaries that are not material to it and its Subsidiaries,
taken as a whole;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except
for (A) letters of credit issued in the ordinary course of business consistent with past practice,
(B) short-term debt incurred to fund operations of the business or for cash management purposes, in
each case in the ordinary course of business consistent with past practice, (C) loans or advances
to direct or indirect wholly owned Subsidiaries in the ordinary course of business consistent with
past practices, and (D) with respect only to existing indebtedness having a maturity date occurring
after the date of this Agreement but prior to the Effective Time, to refinance, extend or renew the
maturity of any existing indebtedness in an amount not to exceed such existing indebtedness,
provided that such refinancing or extension is at prevailing market interest rates and otherwise
on terms not materially less favorable in the aggregate than the existing indebtedness being so
refinanced, renewed or extended, (ii) other than in the ordinary course of business, assume,
guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or
otherwise) for any material obligations of any other Person except obligations of any of their
respective direct or indirect wholly owned Subsidiaries, (iii) make any material loans, advances or
capital contributions to or investments in any other Person or (iv) mortgage or pledge any of its
or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien
thereupon, except (A) pursuant to, or as permitted under the indebtedness described in (i), (B) as
incurred in the ordinary course of business consistent with past practices, or (C) any rights
granted to any licensee of any Agere Intellectual Property Right entered into in the ordinary
course of business consistent with past practice;
(g) except as may be required by applicable Legal Requirements, or to satisfy contractual
obligations existing on the date hereof; (i) enter into, adopt, amend (including to provide for the
acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance,
termination, option, appreciation right, performance unit, stock equivalent, share purchase
agreement, pension, retirement, deferred compensation, employment, severance or other employee
benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare
of any consultant, director, officer or employee in any manner or increase in any material manner
the compensation or fringe benefits of any consultant, director, officer or employee, or (ii) pay
any special bonus, remuneration or benefit to any director, officer or employee not required by any
plan or arrangement as in effect as of the date hereof; provided, however, that this paragraph (g)
shall not prevent either company or any of their respective Subsidiaries (A) from entering into
employment agreements, offer letters or retention agreements with non-officer employees in the
ordinary course of business consistent with past practices, or (B) from increasing annual
compensation of non-officer employees and/or from providing for or amending bonus arrangements for
non-officer employees in the ordinary course of compensation reviews (to the extent that such
compensation increases and new or amended bonus arrangements are consistent with past practice and
do not result in a material increase in benefits or compensation expense);
(h) forgive any loans to any of its employees, officers or directors or any employees,
officers or directors of any of its Subsidiaries, or any of its Affiliates;
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(i) make any deposits or contributions of cash or other property to or take any other action
to fund or in any other way secure the payment of compensation or benefits under any of its
Employee Benefit Plans or any Employee Benefit Plans of any of its Subsidiaries, other than
deposits and contributions that are required pursuant to the terms of any such Employee Benefit
Plans or any Contracts subject to any such Employee Benefit Plans in effect as of the date hereof
or as required by applicable Legal Requirements;
(j) enter into, amend, or extend any collective bargaining agreement;
(k) acquire, sell, lease, license or dispose of any material property or assets in any single
transaction or series of related transactions, except for (i) transactions pursuant to existing
Contracts, (ii) transactions in the ordinary course of business consistent with past practice, or
(iii) transactions not in excess of $10,000,000 individually, or $40,000,000 in the aggregate;
(l) except as may be required to remain in compliance with applicable Legal Requirements or
GAAP, make any change in any of the accounting principles or practices used by it;
(m) make or change any material Tax election, adopt or change any Tax accounting method,
settle or compromise any material Tax liability, or consent to the extension or waiver of the
limitations period applicable to a material Tax claim or assessment;
(n) enter
into any Contract that would be an Agere Material Contract or an LSI Material
Contract, as the case may be, or amend in any material respect any Agere Material Contract or LSI
Material Contract, as the case may be, or grant any release or relinquishment of any material
rights under any Agere Material Contract or LSI Material Contract, as the case may be;
(o) grant any exclusive rights with respect to any of its material Intellectual Property
Rights or the material Intellectual Property Rights of any of its Subsidiaries, divest any of its
material Intellectual Property Rights or the material Intellectual Property Rights of any of its
Subsidiaries, or materially modify the standard warranty terms for Agere Products or LSI Products,
as the case may be, or services or materially amend or modify any product or service warranty;
(p) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or
any equity interest therein;
(q) authorize, incur or commit to incur any new capital expenditure(s) which in the aggregate
exceed $40,000,000; provided, however, that the foregoing shall not limit any maintenance capital
expenditures or capital expenditures required pursuant to existing Contracts;
(r) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or
satisfy or agree to pay, discharge or satisfy any Liability, other than the settlement, compromise,
payment, discharge or satisfaction of Legal Proceedings and Liabilities (i) reflected or reserved
against in full in the balance sheet included in the Agere Balance Sheet or the LSI
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Balance Sheet, as the case may be, (ii) covered by existing insurance policies, (iii) settled
since the respective dates thereof in the ordinary course of business consistent with past
practice, including licensing and other settlements arising out of Agere’s Intellectual Property
Business or (iv) otherwise less than $500,000 individually and $5,000,000 in the aggregate;
(s) except as required by applicable Legal Requirements or GAAP, revalue in any material
respect any of its properties or assets, including writing-off notes or accounts receivable other
than in the ordinary course of business consistent with past practice;
(t) except as required by applicable Legal Requirements, convene any regular or special
meeting (or any adjournment or postponement thereof) of its stockholders; or
(u) enter into a Contract to do any of the foregoing or knowingly take any action which is
reasonably expected to result in any of the conditions to the consummation of the transactions
contemplated hereby not being satisfied, or knowingly take any action which would materially impair
its ability to consummate the transactions contemplated by this Agreement in accordance with the
terms hereof or materially delay such consummation.
5.3 Supplemental Indenture
At the Closing, Agere shall execute and deliver to The Bank of New York, as trustee
(“BONY”) under the Indenture, dated as of June 19, 2002, between Agere and BONY, as
supplemented by that Supplemental Indenture No. 1, dated as of May 27, 2005 between Agere and BONY
(collectively, the “Indenture”) relating to the Agere Subordinated Notes, a supplemental
indenture effective as of the Closing complying with the requirements of the Indenture, in form
and substance satisfactory to LSI.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 No Solicitation.
(a) Immediately following the execution and delivery of this Agreement, each of Agere and LSI
shall immediately cease and cause to be terminated, and will cause their respective officers,
directors, employees, Subsidiaries, controlled affiliates, investment bankers, attorneys and other
advisors or representatives to cease, any and all existing activities, discussions or negotiations
with any Persons conducted heretofore with respect to any Acquisition Proposal relating to Agere
and LSI, respectively, and each of Agere and LSI shall promptly request that all confidential
information with respect thereto furnished by or on behalf of Agere or LSI, as the case may be, be
returned or destroyed.
(b) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, neither Agere nor LSI shall, nor shall either of
them authorize or permit any of its directors, officers or other employees,
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Subsidiaries or controlled Affiliates, or any investment banker, attorney or other advisor or
representative retained by any of them to, directly or indirectly:
(i) solicit, initiate, knowingly encourage or facilitate, or induce the making, submission or
announcement of, an Acquisition Proposal relating to Agere or LSI, respectively;
(ii) furnish to any Person (other than the other party hereto or any designees of such other
party) any non-public information relating to it or any of its Subsidiaries, or afford access to
its business, properties, assets, books or records or the business, properties, assets, books or
records of any of its Subsidiaries (other than to the other party hereto or any designees of such
other party) in a manner intended to assist or facilitate any inquiries or the making of any
proposal that constitutes or would reasonably be expected to lead to an Acquisition Proposal
relating to Agere or LSI, respectively, or take any other action intended to assist or facilitate
any inquiries or the making of any proposal that constitutes or could lead to an Acquisition
Proposal relating to Agere or LSI, respectively;
(iii) participate or engage in discussions or negotiations with any Person (other than the
other party hereto) with respect to an Acquisition Proposal relating to Agere or LSI, respectively;
(iv) approve, endorse or recommend an Acquisition Proposal relating to Agere or LSI,
respectively;
(v) enter into any letter of intent, memorandum of understanding or other Contract
contemplating or otherwise relating to an Acquisition Transaction relating to Agere or LSI,
respectively;
(vi) terminate, amend or expressly waive any rights under any “standstill” or other similar
Contract between it or any of its Subsidiaries and any Person (other than the other party hereto);
or
(vii) propose publicly or agree to any of the foregoing with respect to an Acquisition
Proposal relating to Agere or LSI, respectively.
provided, however, that notwithstanding the foregoing, at any time prior to the receipt of the
Requisite Agere Stockholder Approval in the case of Agere, or receipt of the Requisite LSI
Stockholder Approval in the case of LSI, each of Agere or LSI may, directly or indirectly through
advisors, agents or other intermediaries, subject to compliance with the provisions of this
Section 6.1, (A) engage or participate in discussions or negotiations with any Person that
has made (and not withdrawn) a bona fide, Acquisition Proposal for such party in writing that such
party’s board of directors reasonably determines in good faith (after consultation with a financial
advisor of nationally recognized standing and its outside legal counsel) constitutes or is
reasonably likely to lead to a Superior Proposal in respect of such party, and/or (B) furnish to
any Person that has made (and not withdrawn) a bona fide, Acquisition Proposal for such party in
writing that such party’s board of directors reasonably determines in good faith (after
consultation with a financial advisor of nationally recognized standing and its outside legal
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counsel) constitutes or is reasonably likely to lead to a Superior Proposal in respect of such
party any non-public information relating to such party or any of its Subsidiaries pursuant to a
confidentiality agreement the terms of which are no less favorable to such party than those
contained in the Confidentiality Agreement, provided that in the case of any action taken pursuant
to the foregoing clauses (A) or (B), (1) the board of directors of the party proposing to take such
action reasonably determines in good faith (after consultation with outside legal counsel) that
that the failure to take such action would reasonably be expected to be a breach of its fiduciary
duties under Delaware Law, (2) at least forty-eight (48) hours prior to engaging or participating
in any such discussions or negotiations with, or furnishing any non-public information to, such
Person, the party proposing to take such action gives the other party hereto written notice of the
identity of such Person and the material terms and conditions of such Acquisition Proposal (unless
such Acquisition Proposal is in written form, in which case the party proposing to take such action
shall give the other party hereto a copy of all written materials comprising or relating thereto)
and of such party’s intention to engage or participate in discussions or negotiations with, or
furnish non-public information to, such Person, and (3) contemporaneously with furnishing any
non-public information to such Person, the party proposing to take such action furnishes such
non-public information to the other party hereto (to the extent such information has not been
previously furnished to such other party).
(c) Without limiting the generality of the foregoing, each of Agere and LSI acknowledge and
hereby agree that any breach or violation of the restrictions set forth in this Section 6.1
by any directors, officers or other employees, Subsidiaries or controlled Affiliates, or any
investment banker, attorney or other advisor or representative retained by any of them shall be
deemed to be a breach of this Section 6.1 by such party.
(d) In addition to the obligations of Agere and LSI set forth in Section 6.1(a) and
Section 6.1(b), each of Agere and LSI shall promptly, and in all cases within twenty four
(24) hours of its receipt, advise the other party hereto orally and in writing of (i) any
Acquisition Proposal it receives or (ii) any request for information it receives that would
reasonably be expected to lead to an Acquisition Proposal the material terms and conditions of such
Acquisition Proposal or request (including copies of all written materials comprising or relating
thereto), and the identity of the Person or group making any such Acquisition Proposal or request.
(e) Each of Agere and LSI shall keep the other party hereto reasonably informed on a current
basis of the status of any discussions with respect to any Acquisition Proposal and the material
terms and conditions (including all amendments or proposed amendments) of any Acquisition Proposal,
request or inquiry it receives. In addition to the foregoing, each of Agere and LSI shall provide
the other party hereto with reasonably prompt notice of a meeting of its board of directors (or any
committee thereof) at which its board of directors (or any committee thereof) is reasonably
expected to consider an Acquisition Proposal it has received, and shall inform the other party as
promptly as practicable of any material change in the price, structure, form of consideration or
other material terms and conditions of the Acquisition Proposal.
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6.2 Board Recommendations.
(a) Subject to the terms of Section 6.2(b), (i) the Agere Board shall recommend that
the Agere Stockholders adopt this Agreement in accordance with the applicable provisions of
Delaware Law (the “Agere Board Recommendation”), and (ii) the LSI Board shall recommend
that the LSI Stockholders approve the issuance of shares of LSI Common Stock in the Merger in
accordance with the applicable rules of the NYSE (the “LSI Board Recommendation”).
(b) Subject to the terms of this Section 6.2(b), (x) neither the Agere Board nor any
committee thereof shall withhold, withdraw, amend or modify in a manner adverse to LSI, or publicly
propose to withhold, withdraw, amend, modify, qualify or condition in a manner adverse to LSI, the
Agere Board Recommendation (an “Agere Board Recommendation Change”), and (y) neither the
LSI Board nor any committee thereof shall withhold, withdraw, amend, modify, qualify or condition
in a manner adverse to Agere, or publicly propose to withhold, withdraw, amend or modify in a
manner adverse to Agere, the LSI Board Recommendation (an “LSI Board Recommendation
Change”);
provided, however, that notwithstanding the foregoing, at any time prior to the receipt of the
Requisite Agere Stockholder Approval in the case of Agere, or receipt of the Requisite LSI
Stockholder Approval in the case of LSI, the Agere Board may effect an Agere Board Recommendation
Change and the LSI Board may effect a LSI Board Recommendation Change, in either case if and only
if either:
(i) (A) the party proposing to take such action has received an Acquisition Proposal relating
to it that constitutes a Superior Proposal other than as a result of a breach or violation of the
terms of Section 6.1, (B) neither the party proposing to take such action nor any of its
representatives shall have breached or violated the provisions of Section 6.1 in connection
with such Acquisition Proposal, (C) prior to effecting such Agere Board Recommendation Change or
the LSI Board Recommendation Change, as the case may be, the party proposing to take such action
shall have given the other party hereto at least five (5) days notice thereof and the opportunity
to meet and discuss in good faith a modification of the terms and conditions of this Agreement so
that the transactions contemplated hereby may be effected and (D) the other party hereto shall not
have made, within five (5) days after receipt of such party’s written notice of its intention to
effect an Agere Board Recommendation Change or an LSI Board Recommendation Change, as the case may
be, a counter-offer or proposal that the board of directors of the party proposing to take such
action reasonably determines in good faith, after consultation with a financial advisor of
nationally recognized standing and its outside legal counsel, is at least as favorable to its
stockholders as such Superior Proposal and (E) after such discussions, the board of directors of
the party proposing to take such action reasonably determines in good faith (after consultation
with its outside legal counsel and after considering in good faith any counter-offer or proposal
made by the other party hereto pursuant to the immediately preceding clause (D)) that the failure
to effect such Agere Board Recommendation Change or an LSI Board Recommendation Change, as the case
may be, would reasonably be expected to be a breach of its fiduciary duties under Delaware Law; or
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(ii) (A) prior to effecting the Agere Board Recommendation Change or the LSI Board
Recommendation Change, as the case may be, the party proposing to take such action shall have given
the other party hereto at least five (5) days notice thereof and the opportunity to meet and
discuss in good faith the purported basis for the proposed Agere Board Recommendation Change or
the LSI Board Recommendation Change, as the case may be, the other party’s reaction thereto and any
possible modification of the terms and conditions of this Agreement in response thereto so that the
transactions contemplated hereby may be effected, and (B) after such discussions, the board of
directors of the party proposing to take such action reasonably determines in good faith (after
consultation with outside legal counsel) that the failure to effect such Agere Board Recommendation
Change or LSI Board Recommendation Change, as the case may be, would reasonably be expected to be a
breach of its fiduciary duties under Delaware Law.
Each of Agere and LSI acknowledge and hereby agree that any Agere Board Recommendation Change or
LSI Board Recommendation Change effected (or proposed to be effected) in response to or in
connection with a Superior Proposal may be made pursuant to the immediately preceding clause (i)
only, and may not be made pursuant to the immediately preceding clause (ii) and any Agere Board
Recommendation Change or LSI Board Recommendation Change, as the case may be, may only be made
pursuant to this Section 6.2(b).
(c) Nothing in this Agreement shall prohibit the Agere Board or the LSI Board from taking and
disclosing to the Agere Stockholders or the LSI Stockholders, respectively, a position contemplated
by Rule 14e-2(a) under the Exchange Act or complying with the provisions of Rule 14d-9 promulgated
under the Exchange Act, or with fiduciary duties under applicable law; provided, however, that
neither Agere (with respect to statements made by the Agere Board) nor LSI (with respect to
statements made by the LSI Board) pursuant to Rule 14e-2(a) under the Exchange Act or Rule 14(d)-9
under the Exchange Act or as required by fiduciary duties shall make disclosures that would amount
to an Agere Board Recommendation Change or an LSI Board Recommendation Change, other than pursuant
to Section 6.2(b).
(d) Nothing set forth in this Section 6.2 shall (i) permit either party hereto to
terminate this Agreement, (ii) affect any other obligation of the parties hereto under this
Agreement, (iii) limit the obligation of either party hereto to duly call, give notice of, convene
and hold its respective Merger Stockholder Meeting, (iv) relieve either party hereto of its
obligation to submit to a vote of its stockholders the Agere Stockholder Proposal or the LSI
Stockholder Proposal, as applicable, at its respective Merger Stockholder Meeting, or (v) permit
either party hereto to submit for a vote of its respective stockholders at or prior to its
respective Merger Stockholder Meeting any Acquisition Proposal other than the Agere Voting Proposal
and the LSI Voting Proposal, as applicable.
6.3 Merger Stockholder Meetings.
(a) Each of Agere and LSI, acting through its board of directors, shall take all actions in
accordance with applicable Legal Requirements, applicable rules of the NYSE, the Agere Certificate
of Incorporation and the Agere Bylaws in the case of Agere, and the LSI Certificate of
Incorporation and the LSI Bylaws in the case of LSI, to duly call, give notice of,
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convene and hold as promptly as practicable, and in any event within forty-five (45) days
after the declaration of effectiveness of the Registration Statement, a meeting of its stockholders
(the “Agere Stockholder Meeting” in the case of Agere, and the “LSI Stockholder
Meeting” in the case of LSI, and together, the “Merger Stockholder Meetings”) for the
purpose of considering and voting upon the approval of the Agere Voting Proposal in the case of
Agere and the LSI Voting Proposal in the case of LSI. Unless the board of directors of either
party hereto shall effect an Agere Board Recommendation Change in the
case of Agere or an LSI Board
Recommendation Change in the case of LSI, in each case pursuant to and in accordance with
Section 6.2(b), each of Agere and LSI shall use its reasonable best efforts to solicit from
its stockholders proxies in favor of the Agere Voting Proposal in the case of Agere and the LSI
Voting Proposal in the case of LSI, and to secure the Requisite Agere Stockholder Approval in the
case of Agere and the Requisite LSI Stockholder Approval in the case of LSI. Each of Agere and LSI
shall use its reasonable best efforts to ensure that all proxies solicited in connection with its
Merger Stockholder Meeting are solicited in compliance with the DGCL, the rules of the NYSE, the
Agere Certificate of Incorporation and the Agere Bylaws in the case of Agere, and the LSI
Certificate of Incorporation and the LSI Bylaws in the case of LSI, and all other applicable Legal
Requirements.
(b) Each of Agere and LSI shall use its reasonable best efforts to call, give notice of,
convene and hold their respective Merger Stockholder Meetings on the same day and at the same time.
Notwithstanding anything to the contrary set forth in this Agreement, each of Agere or LSI, after
consultation with the other party hereto, may (but shall not be required to) adjourn or postpone
its respective Merger Stockholder Meeting if (and solely to the extent necessary to ensure that)
(i) any required supplement or amendment to the Joint Proxy Statement/Prospectus is provided to its
respective stockholders, (ii) as of the time for which the applicable Merger Stockholder Meeting is
originally scheduled (as set forth in the Joint Proxy Statement/Prospectus), there are insufficient
shares of Agere Common Stock in the case of Agere, or LSI Common Stock in the case of LSI,
represented (either in person or by proxy) at the respective Merger Stockholder meeting to
constitute a quorum necessary to conduct the business of the respective Merger Stockholder Meeting,
or (iii) the other party hereto has adjourned or postponed its Merger Stockholder Meeting for any
of the foregoing reasons.
(c) Following the Merger Stockholder Meetings and at or prior to the Closing, each of Agere
and LSI shall deliver to the corporate secretary of the other party hereto a certificate setting
forth the voting results from the respective Merger Stockholder Meeting.
(d) Agere shall submit the Agere Voting Proposal to the Agere Stockholders at the Agere
Stockholders Meeting for the purpose of acting upon such proposal, and LSI shall submit the LSI
Voting Proposal to the LSI Stockholders at the LSI Stockholders Meeting for the purpose of acting
upon such proposal, in each case whether or not (i) the Agere Board or the LSI Board, as the case
may be, at any time subsequent to the date of this Agreement shall effect an Agere Board
Recommendation Change in the case of Agere or an LSI Board Recommendation Change in the case of LSI,
or (ii) any actual, potential or purported Acquisition Proposal or Superior Proposal has been
commenced, disclosed, announced or submitted to the Agere Board in the case of Agere or the LSI
Board in the case of LSI.
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6.4 Registration Statement; Joint Proxy Statement/Prospectus; Regulation M-A Filings.
(a) As promptly as practicable after the execution and delivery of this Agreement, LSI and
Agere shall prepare, and LSI shall file with the SEC, a Registration Statement on Form S-4 in
connection with the issuance of shares of LSI Common Stock in the Merger (as may be amended or
supplemented from time to time, the “Registration Statement”). The Registration Statement
shall include (i) a prospectus for the issuance of shares of LSI Common Stock in the Merger, (ii) a
proxy statement of LSI for use in connection with the solicitation of proxies for the LSI Voting
Proposal to be considered at the LSI Stockholder Meeting and (iii) a proxy statement of Agere for
use in connection with the solicitation of proxies for the Agere Voting Proposal to be considered
at the Agere Stockholder Meeting (as may be amended or supplemented from time to time, the
“Joint Proxy Statement/Prospectus”). Each of LSI and Agere shall use its reasonable best
efforts to have the Registration Statement declared effective by the SEC under the Securities Act
as promptly as practicable after such filing with the SEC. Without limiting the generality of the
foregoing, each of Agere and LSI shall, and shall cause its respective representatives to, fully
cooperate with the other party hereto and its respective representatives in the preparation of the
Registration Statement and the Joint Proxy Statement/Prospectus, and shall furnish the other party
hereto with all information concerning it and its Affiliates as the other party hereto may deem
reasonably necessary or advisable in connection with the preparation of the Registration Statement
and the Joint Proxy Statement/Prospectus, and any amendment or supplement thereto, and each of LSI
and Agere shall provide the other party hereto with a reasonable opportunity to review and comment
thereon. As promptly as practicable after the Registration Statement is declared effective by the
SEC, LSI and Agere shall cause the Joint Proxy Statement/Prospectus to be mailed to their
respective stockholders.
(b) Except as otherwise set forth in this Agreement, no amendment or supplement (including by
incorporation by reference) to the Joint Proxy Statement/Prospectus or the Registration Statement
shall be made without the approval of LSI and Agere, which approval shall not be unreasonably
withheld or delayed; provided that LSI, in connection with an LSI Board Recommendation Change, and
Agere, in connection with an Agere Board Recommendation Change, may amend or supplement the proxy
statement for LSI, the proxy statement for Agere or the Registration Statement (including by
incorporation by reference) pursuant to a Qualifying Amendment to effect such change, and in such
event, the right of approval set forth in this Section 6.4(b) shall apply only with respect
to such information relating to the other party or its business, financial condition or results of
operations, and shall be subject to the right of each party to have its Board of Directors’
deliberations and conclusions be accurately described. A “Qualifying Amendment” means an
amendment or supplement to the proxy statement for LSI, the proxy statement for Agere or the
Registration Statement (including by incorporation by reference) to the extent it contains (i) an
LSI Board Recommendation Change or an Agere Board Recommendation Change (as the case may be), (ii)
a statement of the reasons of the Board of Directors of LSI or Agere (as the case may be) for
making such LSI Board Recommendation Change or Agere Board Recommendation Change (as the case may
be) and (iii) additional information reasonably related to the foregoing.
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(c) The Registration Statement and the Proxy Statement/Prospectus shall comply in all material
respects as to form and substance with the requirements of the Securities Act and the Exchange Act.
Without limiting the generality of the foregoing, the information supplied or to be supplied by
either party hereto for inclusion or incorporation by reference in the Registration Statement shall
not, at the time the Registration Statement is filed with the SEC or declared effective by the SEC
or at the Effective Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The information
supplied or to be supplied by either party hereto for inclusion or incorporation by reference in
the Joint Proxy Statement/Prospectus shall not, on the date the Joint Proxy Statement/Prospectus
(or any amendment thereof or supplement thereto) is first mailed to stockholders, at the time of
each of the Merger Stockholder Meetings, or as of the Effective Time, contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The information supplied or to be supplied by or on behalf of either party hereto
for inclusion in any filing pursuant to Rule 165 and Rule 425 under the Securities Act or Rule
14a-12 under the Exchange Act (each, a “Regulation M-A Filing”) shall not, at the time any
such Regulation M-A Filing is filed with the SEC, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
Without limiting the generality of the foregoing, prior to the Effective Time (i) Agere and LSI
shall notify each other as promptly as practicable upon becoming aware of any event or circumstance
which should be described in an amendment of, or supplement to, the Registration Statement, Joint
Proxy Statement/Prospectus or any Regulation M-A Filing so that any such document would not include
any misstatement of material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they are made, not misleading, and as
promptly as practicable thereafter, an appropriate amendment or supplement describing such
information shall be promptly filed with the SEC and, to the extent required by applicable Legal
Requirements or the SEC, disseminated to the stockholders of Agere and/or LSI. Agere and LSI
shall each notify the other as promptly as practicable after the receipt by it of any written or
oral comments of the SEC or its staff on, or of any written or oral request by the SEC or its staff
for amendments or supplements to, the Registration Statement, the Joint Proxy Statement/Prospectus
or any Regulation M-A Filing, and shall promptly supply the other with copies of all correspondence
between it or any of its representatives and the SEC or its staff with respect to any of the
foregoing filings.
(d) Agere and LSI shall make any necessary filings with respect to the Merger under the
Securities Act and the Exchange Act and the rules and regulations thereunder. In addition, LSI
shall use reasonable best efforts to take all actions required under any applicable federal or
state securities or Blue Sky Laws in connection with the issuance of shares of LSI Common Stock in
the Merger.
6.5 Rights Plans.
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(a) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, Agere and the Agere Board shall not amend or
modify, or take any other action with regard to the Agere Rights Plan in any manner, or take any
other action so as to render the Agere Rights Plan applicable to LSI, Merger Sub or any of their
Affiliates. At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, Agere and the Agere Board shall not take any action
so as to (i) render the Agere Rights Plan inapplicable to any person other than LSI, Merger Sub or
any of their Affiliates or any transaction other than transactions contemplated by this Agreement,
(ii) permit any Person other than LSI, Merger Sub or any of their Affiliates who would otherwise be
an Acquiring Person within the meaning of the Agere Rights Plan not to be an Acquiring Person
thereunder, (iii) provide that a Distribution Date or a Shares Acquisition Date (as such terms are
defined in the Agere Rights Plan) or similar event shall not occur by reason of the execution of
any Contract other than this Agreement or the consummation of any transaction other than the
transactions contemplated hereby or (iv) except as specifically contemplated by this Agreement and
the Agere Rights Plan Amendment, otherwise affect the rights of holders of Rights (as such term is
defined in the Agere Rights Plan) under the Agere Rights Plan.
(b) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, LSI and the LSI Board shall not amend or modify, or
take any other action with regard to the LSI Rights Plan in any manner, or take any other action so
as to render the LSI Rights Plan applicable to Agere or any of its Affiliates. At all times during
the period commencing with the execution and delivery of this Agreement and continuing until the
earlier to occur of the termination of this Agreement pursuant to Article VIII and the
Effective Time, LSI and the LSI Board shall not take any action so as to (i) render the LSI Rights
Plan inapplicable to any person other than Agere or any of its Affiliates or any transaction other
than transactions contemplated by this Agreement, (ii) permit any Person other than Agere or any of
its Affiliates who would otherwise be an Acquiring Person within the meaning of the LSI Rights Plan
not to be an Acquiring Person thereunder, (iii) provide that a Distribution Date or a Shares
Acquisition Date (as such terms are defined in the LSI Rights Plan) or similar event shall not
occur by reason of the execution of any Contract other than this Agreement or the consummation of
any transaction other than the transactions contemplated hereby or (iv) otherwise affect the rights
of holders of Rights (as such term is defined in the LSI Rights Plan) under the LSI Rights Plan.
6.6 Efforts to Complete Merger; Regulatory Filings.
(a) Upon the terms and subject to the conditions set forth in this Agreement, each of LSI,
Merger Sub and Agere shall use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the other party hereto in
doing, all things reasonably necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this Agreement, including
using reasonable best efforts to:
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(i) cause the conditions to the Merger set forth in Article VII to be satisfied or
fulfilled;
(ii) obtain all necessary or appropriate consents, waivers and approvals under any Contracts
to which Agere or any of its Subsidiaries is a party in connection with this Agreement and the
consummation of the transactions contemplated hereby so as to maintain and preserve the benefits
under such Contracts following the consummation of the transactions contemplated by this Agreement;
(iii) obtain all necessary actions or non-actions, waivers, consents, approvals, Orders and
authorizations from Governmental Authorities, seek the expiration or termination of any applicable
waiting periods under applicable Legal Requirements, and make all necessary registrations,
declarations and filings with Governmental Authorities;
(iv) seek to have vacated or otherwise lifted or removed any Order that has been issued or
granted which is in effect and has the effect of making any of the transactions contemplated by
this Agreement illegal in any jurisdiction in which LSI or Agere have substantial business or
operations or which has the effect of prohibiting, preventing or otherwise restraining the
consummation of the transactions contemplated by this Agreement in any jurisdiction in which LSI or
Agere have substantial business or operations; and
(v) execute or deliver any additional instruments reasonably necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this Agreement.
(b) Without limiting the generality of the foregoing provisions of Section 6.6(a) and
to the extent required by applicable Legal Requirements, as soon as practicable following the
execution and delivery of this Agreement, each of LSI and Agere shall file with the FTC and the
Antitrust Division of the DOJ a Notification and Report Form relating to this Agreement and the
transactions contemplated hereby as required by the HSR Act, and each of LSI and/or Agere shall
file comparable pre-merger or post-merger notification filings, forms and submissions with any
foreign Governmental Authority that may be required by the merger notification or control laws and
regulations (“Antitrust Laws”) of any foreign jurisdiction in which LSI or Agere have
substantial business or operations or in which LSI and Agere mutually agree to make such filing.
Each of LSI and Agere shall promptly (i) cooperate and coordinate with the other in the making of
such filings, (ii) supply the other with any information that may be required in order to
effectuate such filings and (iii) supply any additional information that reasonably may be required
or requested by the FTC, the DOJ or the competition or merger control authorities of any other
jurisdiction and that LSI and Agere reasonably deem necessary and/or appropriate. Each party
hereto shall (i) promptly inform the other party hereto of any communication from any Governmental
Authority regarding any of the transactions contemplated by this Agreement; (ii) if practicable,
permit the other party the opportunity to review in advance all the information relating to LSI and
its Subsidiaries or Agere and its Subsidiaries, as the case may be, that appears in any filing made
with, or written materials submitted to, any third party and/or any Governmental Authority in
connection with the Merger and the other transactions contemplated by this Agreement and
incorporate the other party’s
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reasonable comments; (iii) not participate in any substantive meeting or discussion with any
Governmental Authority in respect of any filing, investigation, or inquiry concerning this
Agreement or the Merger unless it consults with the other party in advance, and, to the extent
permitted by such Governmental Authority, gives the other party the opportunity to attend; and (iv)
furnish the other party with copies of all correspondences, filings, and written communications
between them and their Subsidiaries and representatives, on the one hand, and any Governmental
Authority or its respective staff, on the other hand, with respect to this Agreement and the
Merger, except that any materials concerning valuation of the transaction or internal financial
information may be redacted. If any party hereto or Affiliate thereof receives a request for
additional information or documentary material from any such Governmental Authority with respect to
the transactions contemplated by this Agreement, then such party shall use reasonable best efforts
to make, or cause to be made, as soon as reasonably practicable and after consultation with the
other party, an appropriate response in compliance with such request. Notwithstanding the
foregoing, each of LSI and Agere may, as each deem advisable and necessary, reasonably designate
any competitively sensitive material provided to the other under this Section 6.6 as “counsel only”
and, in such event, such material and the information contained therein shall be given only to the
outside legal counsel of the recipient and shall not be disclosed by such counsel to non-legal
directors, officers, employees or other advisors or representatives of the recipient unless express
permission is obtained in advance from the source of the materials or its legal counsel.
(c) Notwithstanding anything to the contrary set forth in this Agreement, nothing in this
Agreement shall be deemed to require LSI or Agere or any Subsidiary thereof to agree to any
divestiture by itself or any of its Affiliates of shares of capital stock or of any business,
assets or property, or the imposition of any limitation on the ability of any of them to conduct
their business or to own or exercise control of such assets, properties and stock, in each case in
a manner that would be reasonably expected to have a material adverse effect on business,
operations, financial condition or results of operations of the combined business of LSI and Agere
after giving effect to the consummation of the transactions contemplated hereby.
6.7 Access; Notice and Consultation; Confidentiality.
(a) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, upon reasonable notice and subject to applicable
Legal Requirement relating to the exchange of information, each of LSI and Agere shall, and shall
cause its Subsidiaries to, afford to the officers, employees, accountants, counsel and other
representatives of the other party hereto, reasonable access, during normal business hours, to all
of its personnel, properties, facilities, contracts, books, records and other information
concerning its business, properties and personnel as the other may reasonably request.
(b) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, each of LSI and Agere shall, and shall cause its
Subsidiaries to, make available to the other party hereto a copy of each report,
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schedule, proxy or information statement, registration statement and other document to be
filed by it during such period pursuant to the requirements of federal securities laws or federal
or state laws a reasonable period of time prior to the filing of such reports, schedules, proxy or
information statements, registration statements and other documents.
(c) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, each of LSI and Agere shall give prompt notice to
the other party hereto upon becoming aware that any representation or warranty made by it in this
Agreement has become untrue or inaccurate in any material respect, or of any failure of such party
to comply with or satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement.
(d) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, each of LSI and Agere shall give prompt notice to
the other party hereto of (i) any notice or other communication received by it from any
Governmental Authority in connection with the transactions contemplated by this Agreement, (ii) any
notice or other communication received by it from any Person, subsequent to the date of this
Agreement and prior to the Effective Time, alleging any material breach of or material default
under any Agere Material Contract or LSI Material Contract, as the case may be, to which such party
or any of its Subsidiaries is a party or (iii) any notice or other communication received by such
party or any of its Subsidiaries from any Person, subsequent to the date of this Agreement and
prior to the Effective Time, alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement.
(e) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time each of LSI and Agere shall promptly advise the
other party hereto orally and in writing of any litigation commenced after the date hereof against
such party or any of its directors by any of its current or former stockholders (on their own
behalf or on behalf of the company) relating to this Agreement or the transactions contemplated
hereby and shall keep the other party hereto reasonably informed regarding any such litigation.
Each of LSI and Agere shall give the other party hereto the opportunity to consult with such party
regarding the defense or settlement of any such stockholder litigation and shall consider the other
party’s views with respect to such stockholder litigation.
(f) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, each of LSI and Agere shall cause one or more of
its designated representatives to confer on a regular and frequent basis with representatives of
the other party hereto and report the general status of the ongoing operations of such party and
its Subsidiaries. Each of LSI and Agere shall promptly notify the other party hereto of any
material change in the normal course of business or in the operation of the properties of such
party or any of its Subsidiaries and of any governmental complaints,
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investigations or hearings (or communications indicating that the same may be contemplated),
or the institution or the threat of significant litigation involving such party or any of its
Subsidiaries, and will keep the other party hereto fully informed of such events.
(g) Notwithstanding anything to the contrary set forth herein, neither LSI nor Agere nor any
of their respective Subsidiaries shall be required to provide access to, or to disclose
information, where such access or disclosure would jeopardize the attorney-client privilege of such
party or its Subsidiaries or contravene any Legal Requirement, fiduciary duty or Contract entered
into prior to the date of this Agreement. The parties shall use their reasonable best efforts to
make appropriate substitute arrangements to permit reasonable disclosure under circumstances in
which the restrictions of the preceding sentence apply. Notwithstanding anything to the contrary
set forth herein, no information obtained pursuant to the access granted or notification provided
pursuant to this Section 6.7 shall be deemed to (i) amend or otherwise modify in any
respect any representation or warranty of the party providing such access or notice, (ii) impair or
otherwise prejudice in any manner rights of the party receiving such access or notice to rely upon
the conditions to the obligations of such party to consummate the transactions contemplated by this
Agreement, or (iii) impair or otherwise limit the remedies available to the party receiving such
access or notice.
(h) All information acquired pursuant to the access granted or notice provided pursuant to
this Section 6.7 shall be subject to the provisions of the Mutual Nondisclosure Agreement,
dated August 21, 2006, between LSI and Agere (the “Confidentiality Agreement”), which shall
continue in full force and effect from and after the execution and delivery of this Agreement in
accordance with its terms.
6.8 Public Announcements. Each of LSI and Agere shall consult with the other party hereto
before issuing any press release or making any public announcement or statement with respect to
this Agreement or the transactions contemplated hereby, and shall not issue any such press release
or make any such public announcement or statement without the prior written consent of the other
party hereto, which consent shall not be unreasonably withheld, delayed or conditioned; provided,
however, that a party may, without the prior consent of the other party hereto, issue any such
press release or make any such public announcement or statement as may be required by Legal
Requirement or the rules and regulations of the NYSE if it first notifies and consults with the
other party hereto prior to issuing any such press release or making any such public announcement
or statement; and provided further, however, that no such prior notice or consultation shall be
required in connection with any disclosure or other action expressly permitted pursuant to
Section 6.2(b).
6.9
Agere ESPP. Prior to the Effective Time, Agere shall take all necessary and
appropriate actions so that all outstanding purchase rights under the Agere ESPP shall
automatically be exercised, in accordance with the terms of the Agere ESPP, immediately prior to
the Effective Time. Prior to the Effective Time, Agere shall take all necessary and appropriate
actions so that the Agere ESPP shall terminate with such purchase, and no further purchase rights
shall be granted under the Agere ESPP.
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6.10 Agere Stock Awards. Prior to the Effective Time, Agere shall take all necessary and
appropriate actions to allow for the treatment of Agere Stock Awards in connection with the Merger
as provided in Section 2.7, including (i) obtaining any consents from, and delivering any
notices to, holders of Agere Stock Awards, (ii) amending the terms of its equity incentive plans or
arrangements, to give effect to the provisions of Section 2.7, and (iii) taking all actions
necessary to ensure that LSI is entitled to exercise any repurchase option or other right with
respect to the Common Stock Consideration payable in exchange for Agere Restricted Stock.
6.11 Registration Statements for Assumed Options and Other Awards. As soon a practicable
following the Effective Time, but in no event later than five (5) days following the Effective
Time, LSI shall file a registration statement under the Securities Act on Form X-0, Xxxx X-0 or
another appropriate form (and use its reasonable best efforts to maintain the effectiveness thereof
and maintain the current status of the prospectuses contained therein) relating to shares of LSI
Common Stock issuable with respect to the Assumed Options, Assumed Units and the Common Stock
Consideration payable in exchange for Agere Restricted Stock, and shall use its reasonable best
efforts to cause such registration statement to remain in effect for so long as such Assumed
Options or Assumed Units shall remain outstanding.
6.12 Agere 401(k) Plans. Prior to Closing, LSI and Agere shall cooperate in good faith
with respect to the appropriate treatment following the Closing of any plans of Agere and its ERISA
Affiliates intended to include Code Section 401(k) arrangements (the “Agere 401(k) Plans”)
in order to effectuate orderly transition in respect of such plans and minimize any adverse effect
on participating employees with respect to any such transition.
(b) If, as a result of the determination arrived at by LSI in accordance with Section
6.12(a), LSI provides written notice to Agere requesting termination of one or more Agere
401(k) Plans prior to Closing, then, effective as of the day immediately preceding the Closing
Date, the Agere Board shall adopt a resolution effective immediately prior to Closing, which
resolution shall terminate any such Agere 401(k) Plan. Agere shall provide LSI with evidence that
such Atlas 401(k) Plan(s) have been terminated (effective as of the day immediately preceding the
Closing Date) pursuant to resolutions of the Agere Board (any Agere 401(k) Plans so terminated,
“Agere Terminating Plans”). As soon as administratively practicable following the
Effective Time, all participants in the Agere Terminating Plans shall become participants in the
comparable 401(k) arrangements of LSI and LSI shall establish or designate a comparable 401(k) Plan
arrangement of LSI to receive any rollover distributions from such Agere Terminating Plans,
including rollover of any outstanding loans held by participants of such plans.
6.13 Agere Employee Benefits.
(a) Except as may be required by collective bargaining agreements or agreements with labor
unions, trade unions, labor organizations or works councils or Legal Requirements for a period of
at least two (2) years following the Effective Time, but in no event later than such time as an
Agere Employee (as defined below) ceases to be employed by or provide services to Agere or its
Subsidiaries or the Surviving Corporation, LSI shall, or shall cause the Surviving Corporation to,
provide each employee of Agere or its Subsidiaries as of the
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Effective Time (the “Agere Employees”) compensation (in the aggregate), and health,
welfare and pension benefits (but not including equity awards) that are substantially equivalent,
in the aggregate, to those provided to such Agere Employees immediately prior to the date hereof
(that, with respect to benefits, were paid pursuant to written policies or programs). Nothing
herein requires or obligates LSI to offer or contribute LSI securities or maintain a LSI stock fund
under any 401(k) or pension plan arrangement or retain any employees for any period of time beyond
that required by applicable employment, labor or works council agreements or by applicable Legal
Requirements.
(b) From and after the Effective Time, and to the extent permitted by applicable Legal
Requirements, LSI shall, or shall cause the Surviving Corporation to, recognize the prior service
with Agere or its Subsidiaries of each Agere Employee in connection with all employee benefit
plans, programs or policies (including vacation and severance, but excluding the sabbatical
program) of LSI or its Affiliates in which Agere Employees are eligible to participate following
the Effective Time for purposes of eligibility and vesting and determination of level of benefits
(but not for purposes of benefit accruals or benefit amounts under any defined benefit pension plan
or to the extent that such recognition would result in duplication of benefits). From and after
the Effective Time, LSI shall, or shall cause the Surviving Corporation to, (i) cause any
pre-existing conditions or limitations and eligibility waiting periods (to the extent that such
waiting periods would be inapplicable, taking into account service with Agere) under any group
health plans of LSI or its affiliates to be waived with respect to Agere Employees and their
eligible dependents, and (ii) provide each Agere Employee with credit for any deductibles paid
under any Agere Employee Plan that provides medical, dental or vision benefits in the plan year in
effect as of the Closing Date in satisfying any applicable deductible or out of pocket requirements
under any medical, dental or vision plans of LSI or the Surviving Corporation that such employees
are eligible to participate in after the Effective Time to the same extent that such expenses were
recognized under the comparable Agere Employee Plan.
(c) The provisions of this Section 6.13(a) and (b) are not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder, and nothing herein shall be
deemed to amend any Employee Benefit Plan to reflect the terms of this Section 6.13(a) and
(b).
(d) Without limiting the generality of the foregoing, as of the Effective Time, LSI shall, or
shall cause the Surviving Corporation to, honor in accordance with their terms all employment,
change in control, severance and other compensation and benefits agreements and arrangements
existing prior to the execution of this Agreement which are between Agere or any of its
Subsidiaries and any director, officer or employee thereof and set forth in Section 6.13 of
the Agere Disclosure Letter (each an “Agere Executive Agreement”), and to refrain from
amending or terminating any such agreement or arrangement for a period of at least two (2) years
following the Effective Date, except such amendments as may be necessary to avoid the imposition of
a tax under Section 409A of the Code; provided that, nothing herein shall prevent LSI from amending
any such agreement or plan thereafter in accordance with its terms. LSI hereby agrees that the
occurrence of the Closing shall constitute a “Change in Control” for
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purposes of any Agere Executive Agreement and all Agere Employee Plans and related trusts set
forth in Section 6.13 of the Agere Disclosure Letter.
6.14 Directors’ and Officers’ Indemnification and Insurance.
(a) After the Effective Time, LSI shall, and shall cause the Surviving Corporation to,
indemnify and hold harmless the individuals who on or prior to the Effective Time were officers,
directors and employees of Agere or its Subsidiaries or were serving at the request of Agere as an
officer, director or employee of any other corporation, partnership or joint venture, trust,
employee benefit plan or other enterprise with respect to all acts or omission by them in their
capacities as such or taken at the request of Agere or any of its Subsidiaries at any time prior to
the Effective Time to the fullest extent permitted by law (including with respect to advancement of
expenses).
(b) For a period of six (6) years after the Effective Time, LSI shall, and shall cause the
Surviving Corporation and its Subsidiaries to maintain in effect, honor and fulfill in all respects
the obligations of Agere and its Subsidiaries under any and all indemnification agreements in
effect immediately prior to the Effective Time between Agere or any of its Subsidiaries and any of
its current or former directors and officers and any person who becomes a director or officer of
Agere or any of its Subsidiaries prior to the Effective Time (the “Indemnified Parties”)
and shall not amend, terminate or otherwise modify any such agreements. In addition, for a period
of six (6) years following the Effective Time, LSI shall, and shall cause the Surviving Corporation
and its Subsidiaries to, cause the certificate of incorporation and bylaws (and other similar
organizational documents) of the Surviving Corporation and its Subsidiaries to contain provisions
with respect to indemnification and exculpation that are at least as favorable as the
indemnification and exculpation provisions contained in the certificate of incorporation and bylaws
(or other similar organizational documents) of Agere and its Subsidiaries immediately prior to the
Effective Time, and during such six-year period, such provisions shall not be amended, repealed or
otherwise modified in any respect, except as required by Legal Requirement.
(c) For a period of six (6) years following the Effective Time, LSI and the Surviving
Corporation shall cause to be maintained in effect the existing policy of Agere’s directors’ and
officers’ liability insurance (the “D&O Policy”) covering claims arising from facts or
events that occurred at or prior to the Effective Time (including for acts or omissions occurring
in connection with this Agreement and the consummation of the transactions contemplated hereby to
the extent that such acts or omissions are covered by the D&O Policy) and covering each Indemnified
Party who is covered as of the Effective Time by the D&O Policy on terms with respect to coverage
and amounts that are no less favorable than those terms in effect on the date hereof; provided,
however, that in no event shall LSI or the Surviving Corporation be required to expend in any one
year an amount in excess of 225% of the current annual premium paid by Agere (which annual premium
is set forth on Section 6.14(c) of the Agere Disclosure Letter) for such insurance (such
225% amount, the “Maximum Annual Premium”); and provided further, however, that if the
annual premiums of such insurance coverage exceed such amount, LSI and the Surviving Corporation
shall be obligated to obtain a policy with the greatest coverage available for a cost not exceeding
the Maximum Annual
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Premium. Prior to the Effective Time, notwithstanding anything to the contrary in this
Agreement, in lieu of its obligations under the first sentence of this Section 6.14(c), LSI
may purchase a six-year “tail” prepaid policy on the D&O Policy on terms and conditions no less
advantageous than the D&O Policy, and in the event that LSI shall purchase such a “tail” policy
prior to the Effective Time, LSI and the Surviving Corporation shall maintain such “tail” policy in
full force and effect and continue to honor their respective obligations thereunder, in lieu of all
other obligations of LSI and the Surviving Corporation under the first sentence of this Section
6.14(c) for so long as such “tail” policy shall be maintained in full force and effect.
(d) The obligations under this Section 6.14 shall not be terminated, amended or
otherwise modified in such a manner as to adversely affect any Indemnified Party (or any other
person who is a beneficiary under the D&O Policy or the “tail” policy referred to in Section
6.14(c) (and their heirs and representatives)) without the prior written consent of such
affected Indemnified Party or other person who is a beneficiary under the D&O Policy or the “tail”
policy referred to in Section 6.14(c) (and their heirs and representatives). Each of the
Indemnified Parties or other persons who are beneficiaries under the D&O Policy or the “tail”
policy referred to in Section 6.14(c) (and their heirs and representatives) are intended to
be third party beneficiaries of this Section 6.14, with full rights of enforcement as if a
party thereto. The rights of the Indemnified Parties (and other persons who are beneficiaries
under the D&O Policy or the “tail” policy referred to in Section 6.14(c) (and their heirs
and representatives)) under this Section 6.14 shall be in addition to, and not in
substitution for, any other rights that such persons may have under the certificate or articles of
incorporation, bylaws or other equivalent organizational documents, any and all indemnification
agreements of or entered into by Agere or any of its Subsidiaries, or applicable Legal Requirement
(whether at law or in equity). LSI shall pay all reasonable expenses that may be incurred by the
Indemnified Parties in enforcing the indemnity and other obligations provided in this Section
6.14, provided that such Indemnified Party is successful in enforcing any such claim.
(e) In the event that LSI, the Surviving Corporation or any of their Subsidiaries (or any of
their respective successors or assigns) shall consolidate or merge with any other person and shall
not be the continuing or surviving corporation or entity in such consolidation or merger, or
transfers at least fifty percent (50%) of its properties and assets to any other person, then in
each case proper provision shall be made so that the continuing or surviving corporation or entity
(or its successors or assigns, if applicable), or transferee of such assets, as the case may be,
shall assume the obligations set forth in this Section 6.14.
6.15 Listing of LSI Shares. LSI shall use its reasonable best efforts to have authorized
for listing on the NYSE prior to the Effective Time, upon official notice of issuance, the shares
of LSI Common Stock issuable in the Merger pursuant to this Agreement, the shares of LSI Common
Stock issuable upon the exercise of all Assumed Options and the shares of LSI Common Stock issuable
in respect of all Assumed Units.
6.16 Takeover Statutes. If any Takeover Statute is or may become applicable to the Merger
or any of the other transactions contemplated by this Agreement, Agere and the Agere Board shall
promptly grant such approvals and take such lawful actions as are necessary so that such
transactions may be consummated as promptly as practicable on the terms contemplated by
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this Agreement or the transactions contemplated hereby, as the case may be, and otherwise take
such lawful actions to eliminate or minimize the effects of such statute, and any regulations
promulgated thereunder, on such transactions.
6.17 Section 16 Matters.
(a) The LSI Board, or a committee thereof consisting of non-employee directors (as such term
is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall adopt a resolution in
advance of the Effective Time providing that the receipt by Agere Insiders of LSI Common Stock in
exchange for shares of Agere Common Stock, and of options to purchase LSI Common Stock upon
assumption and conversion of the Agere Stock Awards, in each case pursuant to the transactions
contemplated hereby and to the extent such securities are listed in the Section 16 Information (as
defined below), is intended to be exempt pursuant to Rule 16b-3 under the Exchange Act. In
addition, the Agere Board, or a committee thereof consisting of non-employee directors (as such
term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall adopt a resolution in
advance of the Effective Time providing that the disposition by Agere Insiders of Agere Common
Stock in exchange for shares of LSI Common Stock, and the disposition of their Agere Stock Awards
which will be deemed to occur upon the assumption of those options and their resulting conversion
into options to purchase LSI Common Stock, in each case pursuant to the transactions contemplated
hereby and to the extent such securities are listed in the Section 16 Information, are also
intended to be exempt pursuant to Rule 16b-3 under the Exchange Act.
(b) For purposes of this Agreement, “Section 16 Information” means information
regarding Agere Insiders and (i) the number of shares of Agere Common Stock or other Agere equity
securities deemed to be beneficially owned by each such Agere Insider and expected to be exchanged
for LSI Common Stock and (ii) the number of shares of Agere Common Stock, together with the
applicable exercise price per share, subject to each Agere Stock Award held by Agere Insider which
is to be assumed and converted into options to purchase LSI Common Stock, in each case, in
connection with the Merger, which shall be provided by Agere to LSI within ten (10) Business Days
after the date of this Agreement.
(c) For purposes of this Agreement, “Agere Insiders” means those officers and
directors of Agere who are subject to the reporting requirements of Section 16(a) of the Exchange
Act as listed in the Section 16 Information.
618 Affiliate Agreements; Restrictive Legends. Agere shall use its reasonable best
efforts to cause each person who is at the time of the Agere Stockholder Meeting an “affiliate” for
purposes of Rule 145 under the Securities Act to deliver to LSI a written agreement substantially
in the form attached as Exhibit A hereto (each, an
“Affiliate Agreement”) on or prior to the
Effective Time. LSI shall be entitled to place appropriate legends on the certificates evidencing
any shares of LSI Common Stock to be received by Rule 145 “affiliates” of Agere in the Merger
reflecting the restrictions set forth in Rule 145 promulgated under the Securities Act and to issue
appropriate stop transfer instructions to the transfer agent for LSI Common Stock, provided that
such legends or stop transfer instructions shall be removed upon the request of any
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holder of shares of LSI Common Stock issued in the Merger if such holder’s shares are no
longer subject to Rule 145.
6.19 Tax Matters.
(a) None of LSI, Merger Sub or Agere shall, and they shall not permit any of their respective
Subsidiaries to, take any action prior to or following the Effective Time that would reasonably be
expected to cause the Merger to fail to qualify as a reorganization within the meaning of Section
368(a) of the Code.
(b) Each of LSI and Agere shall use its reasonable best efforts to obtain the Tax opinions
described in Section 7.1(g) (collectively, the “Tax Opinions”). Officers of LSI,
Merger Sub and Agere shall execute and deliver to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, counsel to LSI, and Xxxxxxx Xxxx, Slate, Xxxxxxx & Xxxx, LLP, counsel to Agere,
certificates containing customary representations at such time or times as may be reasonably
requested by such law firms, including the effective date of the Registration and the Effective
Time, in connection with their respective deliveries of opinions with respect to the Tax treatment
of the Merger.
6.20 FIRPTA Certificate. On or prior to the Closing Date, Agere shall deliver to LSI a
properly executed statement in a form reasonably acceptable to LSI for purposes of satisfying LSI’s
obligations under Treasury Regulation Section 1.1445-2(c)(3).
6.21 Obligations of Merger Sub. LSI shall take all action necessary to cause Merger Sub
and the Surviving Corporation to perform their respective obligations under this Agreement and to
consummate the transactions contemplated hereby upon the terms and subject to the conditions set
forth in this Agreement.
6.22 LSI Name. At the Effective Time, LSI shall retain the name “LSI Logic Corporation”.
6.23 LSI Facilities. At the Effective Time, the headquarters and principal executive
offices of LSI and Agere as a combined company shall remain in Milpitas, California. LSI shall,
and shall cause the Surviving Corporation to, maintain Agere’s Allentown, Pennsylvania facilities
as a key location for the combined company’s development activities. The provisions of this
Section 6.24 are not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
6.24 LSI Board. The LSI Board shall take all action necessary such that, effective as of
the Effective Time, the LSI Board shall consist of nine (9) directors, six (6) of whom shall be
designated by the LSI Board and three (3) of whom shall be designated by the Agere Board.
6.25 LSI Chairman and CEO. The LSI Board shall take all action necessary such that,
effective as of the Effective Time, the Chairman of the LSI Board shall be Xxxxx X. Xxxxx, and the
Chief Executive Officer of LSI shall be Xxxxxxx X. Xxxxxxxxx.
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ARTICLE VII
CONDITIONS TO THE MERGER
7.1 Conditions to Obligation of Each Party to Effect the Merger. The respective
obligations of LSI, Merger Sub and Agere to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver (where permissible under applicable Legal
Requirements), at or prior to the Effective Time, of each of the following conditions:
(a) Effectiveness of the Registration Statement. The Registration Statement shall
have been declared effective by the SEC under the Securities Act. No stop order suspending the
effectiveness of the Registration Statement shall have been issued by the SEC and no proceedings
for that purpose and no similar proceeding in respect of the Joint Proxy Statement/Prospectus shall
have been initiated or threatened in writing by the SEC.
(b) Requisite Stockholder Approval. The Requisite Agere Stockholder Approval and the
Requisite LSI Stockholder Approval shall have been obtained.
(c) Antitrust Approvals. (i) All waiting periods (and all extensions thereof)
applicable to the consummation of the Merger under the HSR Act shall have terminated or expired,
(ii) the European Commission shall have issued a decision under Article 6(1)(b) or 8(1) or 8(2) of
the EC Merger Regulation (or shall have been deemed to have done so under Article 10(6) thereof)
declaring the transactions contemplated hereby compatible with the EC common market, and (iii) all
antitrust and competition approvals, consents (other than those specified in (i) and (ii)) have
been received and all antitrust or competition notices or filings have been made other than those
notices, approvals and consents, the failure of which to obtain or make would not result in a
material adverse effect on LSI, Agere and their Subsidiaries, taken as a whole, following the
Effective Time.
(d) No Prohibitive Legal Requirements. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, entered, enforced or deemed applicable to the
Merger any Legal Requirement that is in effect and has the effect of making the Merger illegal in
any jurisdiction in which LSI or Agere have substantial business or operations or which has the
effect of prohibiting, preventing or otherwise restraining the consummation of the Merger in any
jurisdiction in which LSI or Agere have substantial business or operations.
(e) No Prohibitive Orders. No Governmental Authority of competent jurisdiction shall
have issued or granted any Order (whether temporary, preliminary or permanent) that has the effect
of making the Merger illegal in any jurisdiction in which LSI or Agere have substantial business or
operations or which has the effect of prohibiting, preventing or otherwise restraining the
consummation of the Merger.
(f) NYSE Listing. The shares of LSI Common Stock issuable in the Merger, the shares
of LSI Common Stock issuable upon the exercise of all Assumed Options and the shares of LSI Common
Stock issuable in respect of all Assumed Units, shall have been authorized for listing on the NYSE
upon official notice of issuance.
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(g) Tax Opinions. LSI shall have received an opinion of Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, Professional Corporation, and Agere shall have received an opinion of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, each dated as of the Effective Time and each to the effect that the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code. The issuance of such
opinions shall be conditioned upon the receipt by such counsel of customary representation letters
from each of LSI, Merger Sub and Agere, in each case, in form and substance reasonably satisfactory
to such counsel. Each such representation letter shall be dated on or before the date of such
opinion and shall not have been withdrawn or modified in any material respect.
7.2 Additional Conditions to Obligations of LSI and Merger Sub. The obligations of LSI
and Merger Sub to consummate the transactions contemplated by this Agreement are also subject to
the satisfaction or waiver, on or prior to the Effective Time, of each the following additional
conditions (each of which conditions may be waived solely by LSI and Merger Sub in their sole
discretion):
(a) Representations and Warranties. The representations and warranties of Agere set
forth in this Agreement (i) shall have been true and correct as of the date of this Agreement and
(ii) shall be true and correct on and as of the Closing Date with the same force and effect as if
made on and as of such date, except, in the case of the foregoing clauses (i) and (ii), (A) for any
failure to be so true and correct which has not had and would not reasonably be expected to have,
individually or in the aggregate, an Agere Material Adverse Effect, (B) for changes contemplated by
this Agreement and (C) for those representations and warranties which address matters only as of a
particular date (which representations shall have been true and correct as of such particular date,
except for any failure to be so true and correct which has not had and would not reasonably be
expected to have, individually or in the aggregate, an Agere Material Adverse Effect); provided,
however, that for purposes of determining the accuracy of the representations and warranties of
Agere set forth in the Agreement for purposes of this Section 7.2(a), (1) all “Agere
Material Adverse Effect” and materiality qualifications and other qualifications based on the word
“material” or similar phrases contained in such representations and warranties shall be disregarded
(it being understood and hereby agreed that (x) the phrase “similar phrases” as used in this
proviso shall not be deemed to include any dollar thresholds contained in any such representations
and warranties, (y) the representation and warranty set forth in clause (i) of Section 3.10
shall not be disregarded pursuant to the terms of this proviso, (2) any update of or modification
to the Agere Disclosure Letter made or purported to have been made after the date hereof shall be
disregarded; and LSI shall have received a certificate signed for and on behalf of Agere by an
authorized executive officer of Agere to the foregoing effect, and (3) the representations and
warranties set forth in Section 3.4(a) shall be true in all material respects as of the date
specified in such representation and warranty.
(b) Agreements and Covenants. Agere shall have performed or complied in all material
respects with all agreements and covenants required by this Agreement to be performed or complied
with by it at or prior to the Closing Date; and LSI and Merger Sub shall have received a
certificate signed by the chief executive officer and the chief financial officer of Agere to such
effect.
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(c) No Agere Material Adverse Effect. Since the date hereof, there shall not have
occurred any Agere Material Adverse Effect that is continuing.
7.3 Additional Conditions to Obligation of Agere. The obligation of Agere to consummate
the transactions contemplated by this Agreement is also subject to the satisfaction or waiver, at
or prior to the Closing Date, of each of the following additional conditions (each of which
conditions may be waived solely by Agere in its sole discretion):
(a) Representations and Warranties. The representations and warranties of LSI and
Merger Sub set forth in this Agreement (i) shall have been true and correct as of the date of this
Agreement and (ii) shall be true and correct on and as of the Closing Date with the same force and
effect as if made on and as of such date, except, in the case of the foregoing clauses (i) and
(ii), (A) for any failure to be so true and correct which has not had and would not reasonably be
expected to have, individually or in the aggregate, an LSI Material Adverse Effect, (B) for changes
contemplated by this Agreement and (C) for those representations and warranties which address
matters only as of a particular date (which representations shall have been true and correct as of
such particular date, except for any failure to be so true and correct which has not had and would
not reasonably be expected to have, individually or in the aggregate,
an LSI Material Adverse
Effect); provided, however, that for purposes of determining the accuracy of the representations
and warranties of Agere set forth in the Agreement for purposes of this
Section 7.3(a), (1)
all “LSI Material Adverse Effect” and materiality qualifications and other qualifications based on
the word “material” or similar phrases contained in such representations and warranties shall be
disregarded (it being understood and hereby agreed that (x) the phrase “similar phrases” as used in
this proviso shall not be deemed to include any dollar thresholds contained in any such
representations and warranties, (y) the representation and warranty set forth in clause (i) of
Section 4.10 shall not be disregarded pursuant to the terms of this proviso, (2) any update
of or modification to the LSI Disclosure Letter made or purported to have been made after the date
hereof shall be disregarded; and Agere shall have received a certificate signed for and on behalf
of LSI and Merger Sub by an authorized executive officer of LSI and Merger Sub to the foregoing
effect, and (3) the representations and warranties set forth in Section 4.4(a) shall be true in all
material respects as of the date specified in such representation and warranty.
(b) Agreements and Covenants. LSI and Merger Sub shall have performed or complied in
all material respects with all agreements and covenants required by this Agreement to be performed
or complied with by them at or prior to the Closing Date; and Agere shall have received a
certificate signed by the chief executive officer and the chief financial officer of LSI to such
effect.
(c) No LSI Material Adverse Effect. Since the date hereof, there shall not have
occurred any LSI Material Adverse Effect that is continuing.
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ARTICLE VIII
TERMINATION
8.1 Termination. Notwithstanding the prior receipt of the Requisite Agere Stockholder
Approval and/or the Requisite LSI Stockholder Approval, this Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (it being agreed that the party
hereto terminating this Agreement pursuant to this Section 8.1 shall give prompt written
notice of such termination to the other party hereto):
(a) by mutual written consent duly authorized by the Agere Board and the LSI Board;
(b) by either LSI or Agere if any Governmental Authority of competent jurisdiction shall have
(i) enacted, issued, promulgated, entered, enforced or deemed applicable to the Merger any Legal
Requirement that is in effect and has the effect of making the consummation of the Merger illegal
in any jurisdiction in which LSI or Agere have substantial business or operations, or which has the
effect of prohibiting, preventing or otherwise restraining the consummation of the Merger in any
jurisdiction in which LSI or Agere have substantial business or operations or (ii) issued or
granted any Order that is in effect and has the effect of making the Merger illegal in any
jurisdiction in which LSI or Agere have substantial business or operations or which has the effect
of prohibiting, preventing or otherwise restraining the Merger in any jurisdiction in which LSI or
Agere have substantial business or operations, and such Order has become final and non-appealable,
provided that the party seeking to terminate this Agreement pursuant to this Section 8.1(b)
shall have complied with its obligations under Section 6.6 to have any such Order vacated
or lifted or removed;
(c) by either LSI or Agere if the Merger shall have not been consummated by May 15, 2007 (the
“Initial Termination Date”); provided, however, that in the event a condition to the Merger
set forth in Section 7.1(c) shall not have been satisfied on or prior to the Initial
Termination Date and all of the other conditions to the consummation of the transactions
contemplated hereby set forth in Article VII shall have been satisfied on or prior to the
Initial Termination Date (other than those conditions that by their terms contemplate satisfaction
at the Closing, provided that such conditions are then capable of being satisfied at such time),
either LSI or Agere may elect to extend the Initial Termination Date, by written notice to the
other party hereto prior to or on the Initial Termination Date, until August 31, 2007 (the
“Extended Termination Date”); and provided further, however, that the right to terminate
this Agreement pursuant to this Section 8.1(c) shall not be available to any party hereto
whose action or failure to fulfill any covenant or obligation under this Agreement has been the
proximate cause of or resulted in any of the conditions to the consummation of the transactions
contemplated hereby set forth in Article VII having failed to be satisfied or fulfilled on
or prior to the Initial Termination Date or the Extended Termination Date, as applicable, and such
action or failure to fulfill any covenant or obligation constitutes a material breach of this
Agreement;
(d) by either LSI or Agere if (i) the Requisite LSI Stockholder Approval shall not have been
obtained at the LSI Stockholder Meeting (or any adjournment or postponement
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thereof) at which a vote was taken on the LSI Voting Proposal, or (ii) if the Requisite Agere
Stockholder Approval shall not have been obtained at the Agere Stockholder Meeting (or any
adjournment or postponement thereof) at which a vote was taken on the Agere Voting Proposal;
(e) by either LSI or Agere (provided it is not then in material breach of any of its
agreements or other covenants under this Agreement) in the event of (i) a breach of any covenant or
agreement set forth in this Agreement by the other party hereto or (ii) any inaccuracy in the
representations and warranties of the other party hereto set forth in this Agreement when made or
at any time prior to the Effective Time, in either case such that the conditions to the
consummation of the transactions contemplated hereby set forth in Section 7.2(a) or
Section 7.2(b) in the case of LSI, or Section 7.3(a) or Section 7.3(b) in
the case of Agere, would not be satisfied as of the time of such breach or as of the time such
representation and warranty became inaccurate; provided, however, that notwithstanding the
foregoing, in the event that any such breach or inaccuracy is curable through the exercise of
commercially reasonable efforts by the party committing such breach or making such inaccurate
representations and warranties, then the party seeking to terminate this Agreement pursuant to this
Section 8.1(e) shall not be permitted to terminate this Agreement pursuant to this
Section 8.1(e) until the expiration of a forty five (45) calendar day period after delivery
of written notice of such breach or inaccuracy to the party committing such breach or making such
inaccurate representations and warranties (it being understood that the party seeking to terminate
this Agreement pursuant to this Section 8.1(e) may not terminate this Agreement pursuant to
this Section 8.1(e) if such breach or inaccuracy is cured by the other party hereto within
such forty five (45) calendar day period); or
(f) by either LSI or Agere in the event that a Triggering Event shall have occurred with
respect to the other party hereto, whether promptly after the Triggering Event giving rise to
either party’s right to terminate this Agreement pursuant to Section 8.1(f) or at any time
thereafter. For all purposes of and under this Agreement, a “Triggering Event” shall be
deemed to have occurred with respect to LSI or Agere if, prior to the Effective Time, any of the
following shall have occurred with respect to such party: (i) such party shall have failed to duly
call, give notice of, convene and hold the Agere Stockholder Meeting or LSI Stockholder Meeting, as
applicable, or such party shall have failed to take a vote on the Agere Voting Proposal or the LSI
Voting Proposal, as applicable, at its respective Merger Stockholder Meeting, all in accordance
with Section 6.3; (ii) the Agere Board or any committee thereof shall have for any reason
effected an Agere Board Recommendation Change in the case of Agere, or the LSI Board shall have
effected an LSI Board Recommendation Change in the case of LSI; (iii) Agere shall have failed to
include the Agere Board Recommendation in the Joint Proxy Statement/Prospectus in the case of
Agere, or LSI shall have failed to include the LSI Board Recommendation in the Joint Proxy
Statement/Prospectus in the case of LSI; (iv) the Agere Board or any committee thereof shall have
for any reason approved, or recommended that the Agere Stockholders approve, any Acquisition
Proposal or Acquisition Transaction other than the transactions contemplated by this Agreement
(whether or not a Superior Proposal) in the case of Agere, or the LSI Board or any committee
thereof shall have for any reason approved, or recommended that the LSI Stockholders approve, any
Acquisition Proposal or Acquisition Transaction other than the transactions contemplated by this
Agreement (whether or not a Superior Proposal) in the case of LSI; (v) except for a confidentiality
agreement expressly permitted by Section 6.1, such party shall have entered into a letter
of intent, memorandum of
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understanding or other Contract accepting any Acquisition Proposal or Acquisition Transaction
(whether or not a Superior Proposal); or (vi) an Acquisition Proposal (whether or not a Superior
Proposal) shall have been made in respect of such party by a Person unaffiliated with the other
party hereto and, within ten (10) Business Days after notice of such Acquisition Proposal is first
published, sent or given to such party’s stockholders, and, if requested by the other party hereto,
such party shall not have sent to its stockholders, pursuant to Rule 14e-2 under the Exchange Act,
a statement unconditionally reaffirming the Agere Board Recommendation in the case of Agere, or the
LSI Board Recommendation in the case of LSI, and unconditionally recommending that the its
stockholders reject such Acquisition Proposal and not tender any shares of its capital stock into
such Acquisition Proposal if made in the form of a tender or exchange offer.
8.2 Effect of Termination. In the event of the termination of this Agreement pursuant to
Section 8.1, this Agreement shall forthwith become void and there shall be no liability on
the part of any party hereto or any of its directors, officers, affiliates or stockholders except
(i) that the provisions of this Section 8.2, Section 8.3 and Article IX
shall survive any termination of this Agreement and (ii) nothing herein shall relieve any party
from liability for any willful breach of this Agreement. The Confidentiality Agreement shall
survive termination of this Agreement as provided therein.
8.3 Fees and Expenses.
(a) General. Except as set forth in this Section 8.3, all fees and expenses
(as defined below) incurred in connection with this Agreement and the transactions contemplated
hereby (including all fees and expenses incurred in connection with the preparation, printing and
filing, as applicable, of the Registration Statement (including any preliminary materials related
thereto and all amendments and supplements thereto, as well as any financial statements and
schedules thereto), the Joint Proxy Statement/Prospectus (including any preliminary materials
related thereto and all amendments and supplements thereto, as well as any financial statements and
schedules thereto), and filings by LSI and Agere under the HSR Act, the EC Merger Regulation or any
similar filing requirement of any Governmental Authority applicable to this Agreement and the
transactions contemplated hereby) shall be paid by the party incurring such Expenses, whether or
not the transactions contemplated hereby are consummated.
(b) Agere Payments.
(i) Agere shall pay to LSI a fee equal to $120,000,000 (the “Termination Fee Amount”),
by wire transfer of immediately available funds to an account or accounts designated in writing by
LSI, within one Business Day after demand by LSI, in the event that (A) either LSI or Agere
terminate this Agreement pursuant to Section 8.1(d)(ii) (or after the Agere Stockholder
Meeting has been held and a vote taken on the Agere Voting Proposal and there has been a failure to
obtain the Requisite Agere Stockholder Approval, and this Agreement thereby becomes terminable
pursuant to Section 8.1(d)(ii) as a result, Agere terminates this Agreement for another
reason) (B) following the execution and delivery of this Agreement and prior to the Agere
Stockholder Meeting (or any adjournment or postponement thereof) at which a vote is taken on the
Agere Stockholder Proposal, an Acquisition Proposal in
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respect of Agere shall have been made to Agere or the Agere Board, or shall have been directly
communicated or otherwise made known to Agere Stockholders, or shall have been publicly announced
or shall have become publicly known, or any Person shall have publicly announced an intention
(whether or not conditional and whether or not withdrawn) to make an Acquisition Proposal in
respect of Agere, and (C) within twelve (12) months following the termination of this Agreement,
either an Acquisition Transaction in respect of Agere (whether or not the Acquisition Transaction
referenced in the preceding clause (B)) is consummated or Agere enters into a letter of intent,
memorandum of understanding or other Contract providing for an Acquisition Transaction in respect
of Agere (whether or not the Acquisition Transaction referenced in the preceding clause (B) is
consummated).
(ii) Agere shall pay to LSI a fee equal to the Termination Fee Amount, by wire transfer of
immediately available funds to an account or accounts designated in writing by LSI, within one
Business Day after demand by LSI, in the event that (A) LSI terminates this Agreement pursuant to
Section 8.1(e) as a result of a knowing or intentional breach intended to facilitate,
assist or otherwise benefit an Acquisition Proposal or the Person making an Acquisition Proposal
(or after a breach occurs, and this Agreement thereby becomes terminable pursuant to Section
8.1(e) as a result, Agere terminates this Agreement for another reason), (B) following the
execution and delivery of this Agreement and prior to the breach forming the basis of such
termination, an Acquisition Proposal in respect of Agere shall have been made to Agere or the Agere
Board, or shall have been directly communicated or otherwise made known to Agere Stockholders, or
shall have been publicly announced or shall have become publicly known, or any Person shall have
publicly announced an intention (whether or not conditional and whether or not withdrawn) to make
an Acquisition Proposal in respect of Agere, and (C) within twelve (12) months following the
termination of this Agreement, either an Acquisition Transaction in respect of Agere (whether or
not the Acquisition Transaction referenced in the preceding clause (B)) is consummated or Agere
enters into a letter of intent, memorandum of understanding or other Contract providing for an
Acquisition Transaction in respect of Agere (whether or not the Acquisition Transaction referenced
in the preceding clause (B) is consummated).
(iii) Agere shall pay to LSI a fee equal to the Termination Fee Amount, by wire transfer of
immediately available funds to an account or accounts designated in writing by LSI within one
Business Day after demand by LSI, in the event that LSI terminates this Agreement pursuant to
Section 8.1(f) (or after a Triggering Event occurs with respect to Agere, and this
Agreement thereby becomes terminable pursuant to Section 8.1(f) as a result, Agere
terminates this Agreement for another reason) (it being understood and hereby agreed that the
failure to terminate this Agreement pursuant to Section 8.1(f) promptly following a
Triggering Event shall not prejudice or otherwise limit or impair such party’s ability to terminate
this Agreement pursuant to Section 8.1(f) at any subsequent point in time and collect the
fee contemplated by this Section 8.3(b)(iii)).
(iv) In no event shall Agere be required to pay the Termination Fee pursuant to this
Section 8.3(b) on more than one occasion.
(c) LSI Payments.
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(i) LSI shall pay to Agere a fee equal to the Termination Fee Amount, by wire transfer of
immediately available funds to an account or accounts designated in writing by Agere, within one
Business Day after demand by Agere, in the event that (A) either Agere or LSI terminate this
Agreement pursuant to Section 8.1(d)(i) (or after the LSI Stockholder Meeting has been held
and a vote taken on the LSI Voting Proposal and there has been a failure to obtain the Requisite
LSI Stockholder Approval, and this Agreement thereby becomes terminable pursuant to Section
8.1(d)(i) as a result, LSI terminates this Agreement for another reason) (B) following the
execution and delivery of this Agreement and prior to the LSI Stockholder Meeting (or any
adjournment or postponement thereof) at which a vote is taken on the LSI Voting Proposal, an
Acquisition Proposal in respect of LSI shall have been made to LSI or the LSI Board, or shall have
been directly communicated or otherwise made known to LSI Stockholders, or shall have been publicly
announced or shall have become publicly known, or any Person shall have publicly announced an
intention (whether or not conditional and whether or not withdrawn) to make an Acquisition Proposal
in respect of LSI, and (C) within twelve (12) months following the termination of this Agreement,
either an Acquisition Transaction in respect of LSI (whether or not the Acquisition Transaction
referenced in the preceding clause (B)) is consummated or LSI enters into a letter of intent,
memorandum of understanding or other Contract providing for an Acquisition Transaction in respect
of LSI (whether or not the Acquisition Transaction referenced in the preceding clause (B) is
consummated).
(ii) LSI shall pay to Agere a fee equal to the Termination Fee Amount, by wire transfer of
immediately available funds to an account or accounts designated in writing by Agere, within one
Business Day after demand by Agere, in the event that (A) Agere terminates this Agreement pursuant
to Section 8.1(e) as a result of a knowing or intentional breach intended to facilitate,
assist or otherwise benefit an Acquisition Proposal or the Person making an Acquisition Proposal
(or after a breach occurs, and this Agreement thereby becomes terminable pursuant to Section
8.1(e) as a result, LSI terminates this Agreement for another reason), (B) following the
execution and delivery of this Agreement and prior to the breach forming the basis of such
termination, an Acquisition Proposal in respect of LSI shall have been made to LSI or the LSI
Board, or shall have been directly communicated or otherwise made known to LSI Stockholders, or
shall have been publicly announced or shall have become publicly known, or any Person shall have
publicly announced an intention (whether or not conditional and whether or not withdrawn) to make
an Acquisition Proposal in respect of LSI, and (C) within twelve (12) months following the
termination of this Agreement, either an Acquisition Transaction in respect of LSI (whether or not
the Acquisition Transaction referenced in the preceding clause (B)) is consummated or LSI enters
into a letter of intent, memorandum of understanding or other Contract providing for an Acquisition
Transaction in respect of LSI (whether or not the Acquisition Transaction referenced in the
preceding clause (B) is consummated).
(iii) LSI shall pay to Agere a fee equal to the Termination Fee Amount, by wire transfer of
immediately available funds to an account or accounts designated in writing by Agere within one
Business Day after demand by Agere, in the event that Agere terminates this Agreement pursuant to
Section 8.1(f) (or after a Triggering Event occurs with respect to LSI, and this Agreement
thereby becomes terminable pursuant to Section 8.1(f) as a result, LSI terminates this
Agreement for another reason) (it being understood and hereby agreed that the
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failure to terminate this Agreement pursuant to Section 8.1(f) promptly following a
Triggering Event shall not prejudice or otherwise limit or impair such party’s ability to terminate
this Agreement pursuant to Section 8.1(f) at any subsequent point in time and collect the
fee contemplated by this Section 8.3(c)(iii)).
(iv) In no event shall LSI be required to pay the Termination Fee pursuant to this
Section 8.3(c)(iv) on more than one occasion.
(d) Enforcement. Each of LSI and Agere hereby acknowledge and agree that the
covenants and agreements set forth in this Section 8.3 are an integral part of the
transactions contemplated by this Agreement and, without these covenants and agreements, the
parties hereto would not have entered into this Agreement. Accordingly, if either LSI or Agere
shall fail to pay in a timely manner the amounts due pursuant to Section 8.3(b), and, in
order to obtain such payment, the other party hereto shall make a claim that results in a judgment
against the non-paying party, the non-paying party shall pay to the claimant its reasonable costs
and expenses (including its reasonable attorneys’ fees and expenses) incurred in connection with
such suit, together with interest on the amounts set forth in Section 8.3(b) or Section
8.3(c), as the case may be, at the prime rate of Citibank N.A. in effect on the date such
payment was required to be made. Payment of the fees described in Section 8.3(b) or
Section 8.3(c), as the case may be, shall not be in lieu of, or replacement or substitution
for, damages incurred in the event of any willful breach of this Agreement.
ARTICLE IX
GENERAL PROVISIONS
9.1 Nonsurvival of Representations, Warranties, Covenants and Agreements. None of the
representations, warranties, covenants or agreements set forth in this Agreement or in any
certificate or instrument delivered pursuant hereto shall survive the Effective Time, except for
any covenants or other agreements that expressly contemplate performance after the Effective Time,
each of which shall survive the Effective Time in accordance with their respective terms. The
Confidentiality Agreement shall survive the execution and delivery of this Agreement or the
termination of this Agreement in accordance with the provisions of this Agreement, as the case may
be, pursuant to its terms and conditions.
9.2 Notices. All notices and other communications given or made pursuant hereto shall be
in writing and shall be deemed to have been duly given or made if and when delivered personally or
by overnight courier to the parties at the following addresses or sent by electronic transmission,
with confirmation received, to the telecopy numbers specified below (or at such other address or
telecopy number for a party as shall be specified by like notice):
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(a) |
If to LSI or Merger Sub: | |||||||
| LSI Logic Corporation | ||||||||
| 0000 Xxxxxx Xxxx, X/X X-000 | ||||||||
| Xxxxxxxx, Xxxxxxxxxx 00000-0000 | ||||||||
| Attention: General Counsel | ||||||||
| ` | Facsimile No.: (000) 000-0000 | |||||||
| With a copy (which shall not constitute notice) to: | ||||||||
| Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx | ||||||||
| Professional Corporation | ||||||||
| 000 Xxxx Xxxx Xxxx | ||||||||
| Xxxx Xxxx, Xxxxxxxxxx 00000-0000 | ||||||||
| Attention: Xxxxx X. Xxxxxxx, Esq. | ||||||||
| Xxxxxxx Xxxxxxx, Esq. | ||||||||
| Facsimile No.: (000) 000-0000 | ||||||||
| ` | and: | |||||||
| Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx | ||||||||
| Professional Corporation | ||||||||
| Xxx Xxxxxx Xxxxxx | ||||||||
| Xxxxx Xxxxx, Xxxxx 0000 | ||||||||
| Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 | ||||||||
| Attention: Xxxxxxx X. Xxxxxxx, Esq. | ||||||||
| Facsimile No.: (000) 000-0000 | ||||||||
(b) |
If to Agere: | |||||||
| Agere Systems Inc. | ||||||||
| 0000 Xxxxxxxx Xxxxxxx X.X. | ||||||||
| Xxxxxxxxx, Xxxxxxxxxxxx 00000 | ||||||||
| Attention: Xxxx Xxxxxx, General Counsel | ||||||||
| Facsimile No.: (000) 000-0000 | ||||||||
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| With a copy (which shall not constitute notice) to: | ||||||||
| Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP | ||||||||
| Xxxx Xxxxx Xxxxxx | ||||||||
| Xxx Xxxx, Xxx Xxxx 00000 | ||||||||
| Attention: Xxxxxxx X. Xxxxxx, Esq. | ||||||||
| Xxx Xxxx Xxxxxxxx, Esq. | ||||||||
| Facsimile No.: (000) 000-0000 | ||||||||
Any such notice or communication shall be deemed to have been delivered and received (i) in the
case of personal delivery, on the date of such delivery, (ii) in the case of facsimile, on the date
sent if confirmation of receipt is received and such notice is also promptly mailed by registered
or certified mail (return receipt requested), (iii) in the case of a nationally-recognized
overnight courier in circumstances under which such courier guarantees next business day delivery,
on the next business day after the date when sent and (iv) in the case of mailing, on the third
(3rd) business day following that on which the piece of mail containing such communication is
posted.
9.3 Amendment. Subject to applicable Legal Requirements and the other provisions of this
Agreement, this Agreement may be amended by the parties hereto by action taken by their respective
boards of directors at any time prior to the Effective Time by execution of an instrument in
writing signed on behalf of each of LSI, Merger Sub and Agere; provided, however, that, after the
adoption of this Agreement by the Agere Stockholders or the issuance of LSI Common Stock by the LSI
Stockholders, no amendment may be made to this Agreement that requires further approval by such
stockholders under applicable Legal Requirements.
9.4 Extension; Waiver. At any time and from time to time prior to the Effective Time, any
party or parties hereto may, to the extent legally allowed and except as otherwise set forth
herein, (a) extend the time for the performance of any of the obligations or other acts of the
other party or parties hereto, as applicable, (b) waive any inaccuracies in the representations and
warranties made to such party or parties hereto contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or conditions for the benefit
of such party or parties hereto contained herein. Any agreement on the part of a party or parties
hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party or parties, as applicable. Any delay in exercising any right under
this Agreement shall not constitute a waiver of such right.
9.5 Severability. If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any Legal Requirement, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as possible in an
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acceptable manner to the end that the transactions contemplated hereby are fulfilled to the
fullest extent possible.
9.6 Entire Agreement. This Agreement (including the documents and instruments referred to
herein, including the Confidentiality Agreement) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the parties, or any of them,
with respect to the subject matter hereof.
9.7 No Third Party Beneficiaries. Nothing in this Agreement is intended to confer upon
any person other than the parties hereto any rights or remedies hereunder, other than (i) the
Indemnified Parties intended to be third party beneficiaries the provisions of Section
6.14, who shall have the right to enforce such provisions directly, (ii) the rights of Agere
Stockholders to the Merger consideration in accordance with Article II upon consummation of
the Merger, and (iii) the rights of directors, officers and employees who are covered by an Agere
Executive Agreement to pursue damages as a result of a breach by LSI of Section 6.13(d).
9.8 Assignment. This Agreement shall not be assigned by operation of law or otherwise,
except that LSI and Merger Sub may assign all or any of their rights hereunder to any wholly owned
subsidiary thereof; provided, however, that no such assignment pursuant to this Section 9.8 shall
relieve LSI of its obligations hereunder.
9.9 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the
part of any party hereto in the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.
9.10 Governing Law. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of Delaware, without regard to the conflict of law provisions
thereof.
9.11 Consent to Jurisdiction. Each of the parties hereto irrevocably consents to the
exclusive jurisdiction and venue of any state court located within New Castle County, State of
Delaware in connection with any matter based upon or arising out of this Agreement or the
transactions contemplated hereby, agrees that process may be served upon them in any manner
authorized by the laws of the State of Delaware for such persons and waives and covenants not to
assert or plead any objection which they might otherwise have to such jurisdiction, venue and
process. Each party hereto hereby agrees not to commence any legal proceedings relating to or
arising out of this Agreement or the transactions contemplated hereby in any jurisdiction or courts
other than as provided herein.
9.12 Waiver of Jury Trial. EACH OF LSI, MERGER SUB AND AGERE HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
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TRANSACTIONS CONTEMPLATED HERBY OR THE ACTIONS OF LSI, MERGER SUB OR AGERE IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.
9.13 Specific Performance. The parties agree that irreparable damage would occur and that
the parties would not have any adequate remedy at law in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement, this being in addition to any other remedy to which they are entitled
at law or in equity.
9.14 Counterparts. This Agreement may be executed in two or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed shall be deemed to
be an original but all of which taken together shall constitute one and the same agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, LSI, Merger Sub and Agere have caused this Agreement to be executed as of
the date first written above by their respective officers thereunto duly authorized.
| LSI LOGIC CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| ATLAS ACQUISITION CORP. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| AGERE SYSTEMS INC. |
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