EX-99.1 2 e31104ex99_1.txt SALE AND PURCHASE AGREEMENT Exhibit 99.1 -------------------------------------------------------------------------------- [LOGO] beachcroft -------------------------------------------------------------------------------- DATED 29 February 2008 ----------------------------------------------- (1) ZARLINK SEMICONDUCTOR LIMITED (2) MHS ELECTRONICS UK LIMITED and (3) ZARLINK SEMICONDUCTOR INC -------------------------------------------------------------------------------- AGREEMENT FOR THE SALE AND PURCHASE OF THE SWINDON ANALOG FOUNDRY BUSINESS OF ZARLINK SEMICONDUCTOR -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Table of contents Clause heading and number Page number -------------------------------------------------------------------------------- 1. INTERPRETATION...........................................................1 2. SALE AND PURCHASE........................................................8 3. CONSIDERATION AND ASSUMED LIABILITIES....................................9 4. GUARANTEE AND INDEMNITY..................................................9 5. VALUE ADDED TAX.........................................................10 6. WARRANTIES..............................................................11 7. PURCHASER'S AND GUARANTOR'S WARRANTIES..................................13 8. COVENANTS...............................................................14 9. COMPLETION..............................................................16 10. THE DEBTS AND THE CREDITORS..........................................17 11. ACCRUALS, PREPAYMENTS AND APPORTIONMENTS.............................17 12. LIABILITIES AND CONTRACTS............................................18 13. EMPLOYEES............................................................19 14. ENVIRONMENT..........................................................21 15. FLOOD DAMAGE INSURANCE CLAIM.........................................22 16. INFORMATION, ACCESS AND FUTURE ENQUIRIES.............................22 17. ANNOUNCEMENTS........................................................23 18. COSTS................................................................23 19. NOTICES..............................................................23 20. GENERAL..............................................................23 SCHEDULE 1....................................................................25 THE PROPERTY..................................................................25 CONDITIONS OF SALE............................................................25 SCHEDULE 2....................................................................29 PLANT AND EQUIPMENT...........................................................29 SCHEDULE 3....................................................................43 BUSINESS AND LICENSED IN INTELLECTUAL PROPERTY................................43 SCHEDULE 4....................................................................44 CONTRACTS AND RETAINED SOFTWARE LICENCES......................................44 -------------------------------------------------------------------------------- Table of contents Page (2) SCHEDULE 5....................................................................45 THE EXCLUDED ASSETS...........................................................45 SCHEDULE 6....................................................................46 THE EMPLOYEES.................................................................46 SCHEDULE 7....................................................................47 THE WARRANTIES................................................................47 SCHEDULE 8....................................................................55 ENVIRONMENTAL INDEMNITY.......................................................55 SCHEDULE 9....................................................................60 MOTOR VEHICLES................................................................60 LEASING AGREEMENTS............................................................61 SIGNATURE PAGE................................................................62 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- THIS AGREEMENT is made the 29 day of February 2008 BETWEEN: (1) ZARLINK SEMICONDUCTOR LIMITED (registered number 00705031) whose registered office is at Cheney Manor, Swindon, Wiltshire, SN2 2QW (the "Vendor"); (2) ZARLINK SEMICONDUCTOR INC. whose principal office is at 400 March Road, Ottowa, Ontario, Canada, K2K 3HA (the "Zarlink Guarantor"); and (3) MHS ELECTRONICS UK LIMITED (registered number 6500449) whose registered office is at The Great Barn, Chalford Park Barns, Oxford Road, Old Chalford, Oxfordshire, OX7 5QR (the "Purchaser"). OPERATIVE PROVISIONS 1. INTERPRETATION 1.1 In this Agreement unless the context otherwise requires the following words and expressions shall have the following meanings: "Accounting Date" means 31 March 2007; "Act" means the Companies Act 1985 and shall include any statutory modification or re-enactment thereof for the time being in force and any provisions of the Companies Act 2006 for the time being in force; "Assumed Liabilities" means: (a) the Creditors; (b) all obligations of the Vendor under the Contracts expressed to be assumed by the Purchaser under Clause 12; (c) all actual or contingent liabilities of the Vendor in relation to Environmental Damage with respect to the Property that cannot be recovered by the Purchaser against the Vendor under Schedule 8 or pursuant to any of the Warranties; and (d) all other actual or contingent liabilities or obligations of the Vendor arising in the ordinary and usual course of carrying on the Business prior to Completion which are Disclosed, but excluding the Excluded Liabilities; "Business" means the analog foundry services business carried on by the Vendor at the Property on the Transfer Date; "Business Assets" means: (a) the Goodwill; (b) the Business Intellectual Property; -------------------------------------------------------------------------------- Agreement Page 1 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- (c) the Business Know How; (d) the benefit of the Contracts; (e) the Plant and Equipment; (f) the Property; (g) the Records; (h) the Stock; (i) all (if any) of the other assets, property or rights of the Vendor exclusively relating to or exclusively connected with, or belonging to or exclusively used in, the Business and which are not otherwise described in this Agreement but not any of the Excluded Assets; (j) all of the Vendor's rights against third parties, including rights under any warranties, conditions, guarantees or indemnities or under the Sale of Goods Act 1979 relating exclusively to the Business or any of the Business Assets but not the Excluded Assets; and (k) the benefit of all sums payable to the Vendor or any other member of the Vendor's Group under any insurance policy relating to the Business, any of the Business Assets or the Employees (save for any insurance in relation to the Insured Event referred to in Clause 15) but only to the extent that such insurance provides cover against liabilities which are Assumed Liabilities and provided that conferring the benefit of such policies will not be to the detriment of the Vendor in relation to insurance cover with respect to risks affecting its own business (current or historic). "Business Day" means any day (other than Saturday or Sunday) in which Clearing Banks are open for a full range of banking transactions; "Business Intellectual Property" means all Intellectual Property Rights owned by the Vendor set out in Part 1 of Schedule 3 and the patents listed therein owned by the Zarlink Guarantor excluding, for the avoidance of doubt, any Intellectual Property Rights in the process technologies and licensed in patents set out in Part 2 of Schedule 3 and any Products Rights; "Business Know How" means that Know How in the possession of the Vendor or any Employee as at the Transfer Date which relates exclusively to the Business Intellectual Property; "Carpark Licence" means the licence to occupy part of the carpark adjacent to the Retained Property to be granted by the Vendor in favour of the Purchaser in the agreed form on Completion; -------------------------------------------------------------------------------- Agreement Page 2 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- "Clearing Bank" means a bank which is a member of CHAPS Clearing Company Limited; "Completion" means completion of the sale and purchase in accordance with Clause 9; "Contracts" means the contracts relating to the Business brief particulars of which are set out in Part 1 of Schedule 4 together with the Leasing Agreements; "Contractual Arrangement" means any agreement, arrangement or understanding whether legally binding or not; "Creditors" means all creditors of the Vendor arising from the operation of the Business with respect to goods or services ordered by the Vendor in the ordinary course of business prior to the Transfer Date but which remain to be supplied or performed in whole at the Transfer Date but excluding the Retained Creditors; "Debts" means the aggregate amount owing (inclusive of any applicable VAT) to the Vendor at the Transfer Date in respect of products and services supplied by the Vendor in the course of carrying on the Business prior to the Transfer Date which have been invoiced to the relevant customer; "Deeds of Charge" means the Foundry Charge and the Office Charge; "Disclosed" means fairly disclosed with sufficient explanation to identify the nature and scope of the matter disclosed in the Disclosure Letter or as expressly deemed to be disclosed under the terms of the Disclosure Letter; "Disclosure Letter" means the letter having the same date as this Agreement from the Vendor to the Purchaser qualifying the Warranties; "Employees" means the employees of the Vendor employed in the Business as listed in Schedule 6; "EHS Laws" means any Official Requirements relating to the protection of the Environment or the control or prevention or remedying of Environmental Damage or the control of Hazardous Substances; "Encumbrance" any mortgage, charge (fixed or floating), pledge, lien, hypothecation, guarantee, trust, right of set-off or other third party right or interest (legal or equitable) including any assignment by way of security, reservation of title or other security interest of any kind, howsoever created or arising, or any other agreement or arrangement (including a sale and repurchase agreement) having similar effect; "Environment" means the environment as defined in the Environmental Protection Act 1990, s.1(2) and includes any or all of the following media: air, water and land and the medium of air includes the air within buildings and the air within other -------------------------------------------------------------------------------- Agreement Page 3 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- natural or man-made structures above or below ground and the medium of water includes ground water and acquifiers; "Environmental Damage" means any pollution, contamination, degradation, damage or injury caused by, relating to or arising from or in connection with the presence, generation, use, handling, processing, treatment, storage, transportation, disposal or release of any Hazardous Substance; "Excluded Assets" means the assets listed in Schedule 5; "Excluded Liabilities" means any and all liabilities and obligations (whether contingent or otherwise) in respect of National Insurance, PAYE, VAT or other Taxation attributable to the Vendor in respect of the Business, the Business Assets or the Employees relating to the period ending on the Transfer Date, any liability whether actual or contingent arising from any antecedent breaches of the Contracts by the Vendor prior to the Transfer Date, the Retained Creditors, all bank and other overdrafts and loans owing by the Vendor and all other liabilities and obligations of the Vendor not expressed to be assumed by the Purchaser under the terms of this Agreement; "Fixed Assets" means all of the fixed plant and machinery, furniture, utensils, templates, tooling, implements, chattels and equipment used or intended for use in connection with the Business attached or fixed to the Property as at the Transfer Date; "Foundry Charge" means the legal charge with respect to that part of the Property on which the foundry is located (as more particularly described in that charge) granted by the Purchaser to the Vendor in the agreed form on Completion; "Foundry Site" that part of the Property on which the foundry is located (as more particularly described in the Foundry Charge and defined as the "Property" therein); "Goodwill" means the goodwill and undertaking of the Vendor in relation to the Business together with the exclusive right of the Purchaser to represent itself as carrying on the Business in succession to the Vendor; "Hazardous Substances" means any solid, liquid, gas, noise and any other substance or thing which causes or may cause harm (alone or in combination with any other substance) to the Environment or any structure, thing or living organism within the Environment including any substance regulated under any EHS Law; and "Holding Company" means a holding company as defined in sections 736 and 736A of the Act; -------------------------------------------------------------------------------- Agreement Page 4 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- "Intellectual Property means all patents, trade marks, Rights" copyright, moral rights, rights to prevent passing-off, rights in design and all other intellectual and industrial property rights, in each case whether registered or unregistered and including applications or rights to apply for them and together with all extensions and renewals of them and, in each and every case, all rights or forms of protection having equivalent or similar effect anywhere in the world; "IP Licence Back" means the licence to use the Business Intellectual Property and all Intellectual Property Rights in any improvements and/or developments from time to time of the Business Intellectual Property to be granted by the Purchaser to the Vendor in the agreed form on Completion; "IP Licence In" means the licence to use the Licensed In Intellectual Property to be granted by the Vendor and the Zarlink Guarantor to the Purchaser in the agreed form on Completion; "IT Hardware" all computer hardware (including network and telecommunications equipment and associated user manuals) owned and used exclusively in the Business as at the Transfer Date; "Know How" means all information, concepts, documents, knowledge, techniques, lists, information relating to research and development and other know how (whether or not confidential and in whatever form held); "Lease to Occupy" means the lease to occupy part of the Property to be granted by the Purchaser in favour of the Vendor in the agreed form on Completion; "Leasing Agreements" all those contracts, engagements or orders entered into on or before the Transfer Date in relation to the leasing, lease purchase or hire of the Motor Vehicles which at the Transfer Date remain to be performed in whole or in part, which have been entered into by or for the benefit of the Vendor being those contracts described in Part 2 of Schedule 9; "Licensed In Intellectual means all Intellectual Property Rights owned by or licensed to the Vendor or any member of the Vendor's Group in the process technologies, licensed in patents and sub-licensed in patents particulars of which are set out in Part 2 of Schedule 3 and the patents owned by the Zarlink Guarantor referred to in that section; "Management Accounts" means the unaudited balance sheet of the Business as at, and the unaudited profit and loss account of the Business for the seven month period ended on, the Management Accounts Date, the notes to, and all other documents or statements annexed to or incorporated in, those accounts; "Management Accounts Date" means 31 December 2007; -------------------------------------------------------------------------------- Agreement Page 5 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- "Motor Vehicles" means the motor vehicles listed in part 1 of Schedule 9; "Moveable Assets" the loose plant including moveable plant, machinery and equipment, fittings, desktop computers, spare parts, tooling, and the Office Equipment used or intended for use in connection with the Business; "Office Charge" means the legal charge with respect to that part of the Property on which the office building is located (as more particularly described in that charge) granted by the Purchaser to the Vendor in the agreed form on Completion; "Office Equipment" means all loose or severable items of office equipment , store equipment, furniture and furnishings and the IT Hardware and used or intended for use in connection with the Business; "Official Requirement" means any law, statute, ordinance, pact, decree, treaty, code, rule, regulation, directive, order, notice or official published plan or policy with legal or actual force in any geographical area and/or for any class of persons; "Plant and Equipment" means the Fixed Assets and the Moveable Assets (but not any Excluded Assets); "Product Rights" means any and all Intellectual Property Rights which relates to any masks or associated with any of the products produced by the Vendor prior to selling the Business, except for Intellectual Property Rights in process technologies described in Schedule 3; "Property" means the freehold property specified in Schedule 1 and each and every part of such property; "Purchaser's Solicitors" means White & Black Legal LLP of The Great Barn, Chalford Park Barns, Oxford Road, Old Chalford, Oxfordshire OX7 5QR; "Records" means all files, records and documents containing information relating exclusively to the Business, the Business Assets or the Employees (in whatever form stored), other than those required by the Vendor for VAT purposes and those relating to the Excluded Assets and/or the Excluded Liabilities; "Regulations" means the Transfer of Undertakings (Protection of Employment) Regulations 2006; "Retained Creditors" means all amounts payable to creditors of the Business with respect to goods delivered, and services supplied, to the Vendor in the ordinary course of business prior to the Transfer Date; "Retained Property" means the office premises at Cheney Manor, Swindon Wiltshire SN2 2QW known as "Building 109"; -------------------------------------------------------------------------------- Agreement Page 6 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- "Retained Software Licences" means the licences listed in Part 2 of Schedule 4 to which certain members of the Vendor's Group are a party and pursuant to which members of the Vendors' Group are licensed to use certain software for the purposes of their business where such software is also required for the purposes of carrying on the Business as carried on prior to the Transfer Date; "Special Provisions Order" means the Value Added Tax (Special Provisions) Order 1995; "Stock" means the stock-in-trade of the Business at the Transfer Date (other than any finished goods or work in progress for Zarlink or Intel products) including goods or other assets purchased for resale, consumable stores, raw materials and components, work-in-progress, partly finished and finished goods (and including items supplied by a supplier subject to reservation of title); "Software" means any form of computer program, including applications software and operating systems and in each case whether in source, object or machine code form; "Subsidiary" means a subsidiary as defined in sections 736 and 736A of the Act; "Taxation" means all forms of taxation and statutory, governmental, state, federal, provincial, local, government or municipal charges, duties, imposts, contributions, levies, withholdings or liabilities wherever chargeable and whether of the UK or any other jurisdiction; and any penalty, fine, surcharge, interest, charges or costs relating thereto; "Transfer Date" means the close of business on 28 February, 2008; "Transaction Documents" means this Agreement, the Transitional Services Agreement, the Wafer Supply Agreement, the IP Licence Back, the IP Licence In, the Lease to Occupy, the Deeds of Charge and the Carpark Licence; "Transitional Services means the transitional services Agreement" agreement (TSA) to be entered into on Completion in the agreed form between the Vendor and the Purchaser; "US Employee" means Rick Sepko; "Vendor's Group" means the Vendor and any company which at the relevant time is a holding company of the Vendor or a subsidiary of the Vendor or of any such holding company; "Vendor's Scheme" means the stakeholder defined contribution pension scheme known as the "Zarlink Defined Contribution Pension Scheme", which is registered under Chapter 2 of Part 4 of the Finance Act 2004; "Vendor's Solicitors" means Beachcroft LLP of 10-22 Victoria Street, Bristol, BS99 7UD; -------------------------------------------------------------------------------- Agreement Page 7 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- "VAT" means value added tax; "VATA" means the Value Added Tax Act 1994; "Wafer Supply Agreement" means the agreement to be entered into on Completion in the agreed form between the Vendor and the Purchaser in relation to the supply of goods and services from the Business to the Vendor following Completion; and "Warranties" means the warranties set out or referred to in Clause 6 and Schedule 7. 1.2 references to any statute, statutory provision or subordinate legislation is a reference to it as it is in force as at the Transfer Date taking account of any amendment or re-enactment and includes any statute, statutory provision or subordinate legislation which it amends or re-enacts and subordinate legislation for the time being in force made under it; 1.3 references to persons will be construed so as to include bodies corporate, unincorporated associations and partnerships; 1.4 references to a document being "in the agreed terms" will be construed as references to that document in the form agreed and initialled by or on behalf of the parties; 1.5 the words "include", "including" and "included" will be construed without limitation unless inconsistent with the context; 1.6 references to Clauses and Schedules are to the clauses of and schedules to this Agreement, and references to paragraphs are to paragraphs in the Schedule in which such references appear; 1.7 the Schedules form part of this Agreement and will have the same effect as if in the body of this Agreement; and 1.8 the headings to the Clauses and paragraphs will not affect its construction. 2. SALE AND PURCHASE 2.1 The Vendor will sell or procure the sale with full title guarantee and free from all Encumbrances (unless otherwise specified in this Agreement or Disclosed) and the Purchaser will buy as at the Transfer Date the Business as a going concern together with the Business Assets. 2.2 If any of the Stock is subject to any reservation of title in favour of any third party the Vendor will not be deemed to sell such Stock with full title guarantee and the Vendor's right to possess, deal in and perfect the title to such Stock will pass to the Purchaser to the greatest extent to which the Vendor is able to pass them on and from Completion. 2.3 There are excluded from the sale and purchase under this Agreement the Excluded Assets. 2.4 The Purchaser will not be obliged to complete the purchase of any of the Business Assets unless the purchase of all the Business Assets is completed in accordance with this Agreement. -------------------------------------------------------------------------------- Agreement Page 8 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 2.5 The Property shall be sold to the Purchaser in accordance with this Clause 2 and Part 2 of Schedule 1. 2.6 The Vendor hereby assigns to the Purchaser with full title guarantee the Goodwill. 3. CONSIDERATION AND ASSUMED LIABILITIES 3.2 The consideration for the sale and purchase of the Business and the Business Assets and the payment by the Vendor to the Purchaser of the amount set out in Clause 9.3 shall be the: 3.2.1 assumption by the Purchaser of the Assumed Liabilities; and 3.2.2 payment by the Purchaser to Vendor of the sum of (pound)1.00 sterling, such sum to be paid to the Vendor in cash at Completion.. 3.3 The Purchaser shall: 3.3.1 with effect from the Transfer Date, assume responsibility for, pay and perform, and indemnify and hold the Vendor harmless against the payment and performance of, the Assumed Liabilities; 3.3.2 use all reasonable endeavours to procure the cancellation of those securities or guarantees given in respect of the Assumed Liabilities by any member of the Vendor's Group or which have been Disclosed; and 3.3.3 pay, satisfy or discharge the Creditors and all other debts, liabilities and obligations incurred by the Purchaser in connection with the Business after Completion. 3.3 Nothing in this Agreement shall pass to the Purchaser, or shall be construed as acceptance by the Purchaser of, any liability, debt or other obligation of the Vendor or the Business (whether accrued, absolute, contingent, known or unknown) for anything done or omitted to be done before Completion in the course of or in connection with the Business or the Business Assets (save to the extent that any such liability is included in the Assumed Liabilities) and the Vendor shall: 3.3.1 indemnify and hold the Purchaser harmless on demand against any and all obligations, liabilities and demands arising from the Excluded Liabilities; and 3.3.2 perform any obligation falling due for performance under any Contract which should have been performed before Completion. 3.4 The Vendor shall as soon as reasonably practicable (and in any event not later than 14 days) following a demand reimburse the Purchaser for the manufacturing costs of any products required to be supplied to customers under warranty by the Purchaser following Completion in relation to defective products which were supplied in the course of carrying on the Business by the Vendor prior to Completion. 4. GUARANTEE AND INDEMNITY 4.1 In consideration of the Purchaser entering into the Transaction Documents, the Zarlink Guarantor unconditionally and irrevocably guarantees, as a primary obligation to the Vendor, the performance by the Vendor of all its obligations under the Transaction Documents. -------------------------------------------------------------------------------- Agreement Page 9 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 4.2 If the Vendor defaults on the payment when due of any amount payable to the Purchaser under this Agreement or arising from the termination of any Transaction Document(s), the Zarlink Guarantor shall immediately on demand by the Purchaser pay that amount to the Purchaser in the manner prescribed in the relevant agreement as if it were the Vendor. 4.3 This guarantee is a continuing guarantee and shall extend to all the obligations of the Vendor under the Transaction Documents, regardless of any part performance. It shall not be affected by an act, omission, matter or thing which, but for this Clause 4.10 would reduce, release or prejudice any of the Zarlink Guarantor's obligations under these Clause 4.1 to 4.7 inclusive (without limitation and whether or not known to it or the Purchaser). 4.4 If the Vendor does not perform any of its obligations under the Transaction Documents as a result of insolvency or any similar event, the liability of the Vendor and Zarlink Guarantor shall continue as if the non-performance had not occurred and the Purchaser shall be entitled to recover for the damages caused by that non-performance. The Zarlink Guarantor waives any right it may have of first requiring the Purchaser (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim performance from any person before claiming from the Zarlink Guarantor under these Clauses 4.1 to 4.7 inclusive. 4.5 Until the Vendor has fully performed all its obligations under or in connection with the Transaction Documents and unless the Purchaser otherwise directs in writing, the Zarlink Guarantor shall not exercise any rights which it may have by reason of performance by it of its obligations under these Clause 4.1 to 4.7. 4.6 The obligations of the Zarlink Guarantor shall be in addition to and independent of all other security which the Purchaser may at any time hold in respect of any of the obligations of the Vendor under the Transaction Documents. 4.7 As an independent and primary obligation, without prejudice to Clause 4.1, the Zarlink Guarantor unconditionally and irrevocably agrees to indemnify and keep indemnified the Purchaser from and against all and any losses, costs, claims, liabilities, damages, demands and expenses suffered or incurred by the Purchaser and arising from failure of the Vendor to comply with any of its obligations, or discharge any of its liabilities, under the Transaction Documents or through any of the guaranteed obligations becoming unenforceable, invalid or illegal (on any grounds whether known to it or the Purchaser or not). 5. VALUE ADDED TAX 5.1 All amounts expressed in this Agreement as being payable by the Purchaser are expressed exclusive of any VAT which may be chargeable. 5.2 The parties intend that section 49 VATA and Article 5 Special Provisions Order will apply to the transfer of the Business Assets and the Vendor and the Purchaser will each use its reasonable endeavours to secure that pursuant to the provisions referred to above the sale of the Business Assets is treated as neither a supply of goods nor as a supply of services for the purposes of VAT but as the transfer of a business as a going concern. 5.3 Each of the Vendor and the Purchaser represents, warrants and undertakes to the other that it is duly and properly registered for the purposes of VAT. 5.4 Following Completion, the Vendor will retain all the records relating to VAT referred to in section 49 VATA and undertakes to preserve such records for such periods as may -------------------------------------------------------------------------------- Agreement Page 10 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- be required by law and to allow the Purchaser and its agents access to, and to take copies of, such records on a reasonable notice during normal business hours. 5.5 If HM Revenue & Customs notify the Vendor that they do not agree that any part of the sale pursuant to this Agreement falls within section 49 VATA and Article 5 Special Provisions Order, the Vendor will forthwith on receipt of such notification or on Completion (whichever is the later) issue to the Purchaser a valid VAT invoice in respect of the sale of the Business Assets (or the relevant part of them). The Purchaser will forthwith on receipt of such invoice pay to the Vendor the VAT charged. 6. WARRANTIES 6.1 The Vendor: 6.1.1 warrants that each of the Warranties is true and accurate on the date of this Agreement, provided that the Purchaser will not be entitled to claim that any fact or combination of facts constitutes a breach of any of the Warranties to the extent Disclosed, and agrees that the Purchaser is entering into this Agreement in reliance on each of the Warranties; 6.1.2 undertakes that, if any claim under this Agreement is made against the Vendor in connection with the sale of the Business or Business Assets to the Purchaser, the Vendor or the Zarlink Guarantor (as the case may be) will not make any claim and hereby waives any and all claims which it might otherwise have against any of the Employees on whom it may have relied before agreeing to any provision of this Agreement or the Disclosure Letter. 6.2 In this Agreement, unless otherwise specified, where any Warranty refers to the knowledge, information, belief or awareness of the Vendor (or similar expression), the Vendor will be deemed to have the actual knowledge of each of Ian Cooper, John Gane, Mike LeGoff, Christopher Lindsey, Scott Milligan, Kevin Ball and James Ryan. 6.3 Each of the Warranties is separate and, unless expressly provided to the contrary, is not limited by reference to any other Warranty or anything in this Agreement. 6.4 In this Clause 6 and Clause 7 "Claim" means any claim which would (but for this Clause 6) be capable of being made against the Vendor for breach of the Warranties (other than the Warranties set out in paragraphs 2 and 4.1 of Schedule 7). 6.5 Except to the extent that any Claim arises by reason of any fraud or dishonest, reckless or wilful misstatement or omission by or on behalf of the Vendor, the liability of the Vendor in respect of any Claim will be limited as follows: 6.5.1 the aggregate liability of the Vendor in respect of all Claims will be limited to (euro)750,000; 6.5.2 the Vendor will be under no liability to make any payment unless its aggregate liability in respect of all Claims is in excess of (euro)75,000, in which event the Vendor will (subject to the other provisions of this Clause 6.5) be liable for the whole amount of such liability and not merely for the excess; 6.5.3 the Vendor shall have no liability whatsoever in respect of any Claim or Claims arising out to the same event or circumstance unless and until the loss thereby sustained with respect to that Claim shall exceed a total sum of (euro)25,000, in which event the Vendor will (subject to the other provisions -------------------------------------------------------------------------------- Agreement Page 11 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- of this Clause 6.5) be liable for the whole amount of such liability and not merely for the excess; 6.5.4 for any Claims other than those referred to in Clause 6.5.5, to claims notified in writing to the Vendor within a period of 18 months following the Transfer Date, provided that the liability of the Vendor for the Claim specified in such notice shall absolutely determine and cease unless the amount payable in respect of such claim has been agreed by the Vendor within 9 months of the date of such written notice or if legal or other proceedings have not been instituted in respect of such claim by the due service of process on the Vendor within the same time period; and 6.5.5 for any Claims under the Warranties relating to Taxation, to claims notified in writing to the Vendor within a period of seven years following the Transfer Date. 6.6 Any claim under Schedule 8 will be limited as set out below and in that Schedule. 6.7 The Vendor will not be liable in respect of any Claim or a claim under Schedule 8 or any other indemnity contained in this Agreement if and to the extent that the loss occasioning it has been recovered from the Vendor pursuant to any other claim. 6.8 Subject to Clause 6.11, where the Purchaser is entitled to recover from some other person any sum in respect of any matter which could give rise to a Claim or a claim under Schedule 8, the Purchaser will, upon the Vendor indemnifying and securing the Purchaser to the Purchaser's satisfaction against all costs or other liabilities, take all reasonable steps to recover that sum, and any sum recovered will reduce the amount of such Claim or a claim under Schedule 8 or any other indemnity contained in this Agreement (and, in the event of the recovery being delayed until after such claim has been satisfied by the Vendor, the sum recovered will, to the extent so satisfied, be repaid to the Vendor, after deduction of all reasonable costs and expenses of recovery). The Purchaser will not be required to take any action pursuant to this clause 6.8 which, in the Purchaser's reasonable opinion, is likely to harm in any material respect its or the Company's respective goodwill or commercial relationships with customers or suppliers. 6.9 The Purchaser shall inform the Vendor in writing of any claim by any third party (a "Third Party Claim") which comes to the notice of the Purchaser whereby it appears that the Vendor is or is likely to become liable under any Claim within 14 days from the day on which such Third Party Claim comes to the notice of the Purchaser and:- 6.9.1 the Purchaser shall take such action and give such information and assistance as the Vendor may reasonably request in writing to avoid, dispute, resist, mitigate, compromise or defend any Third Party Claim and to appeal against any judgment given in respect thereof; and 6.9.2 on the written request of the Vendor, the sole conduct of any legal proceedings of whatsoever nature arising out of any Third Party Claim ("Proceedings") shall be delegated to the Vendor. For this purpose, the Purchaser shall give or procure to be given to the Vendor all such assistance as the Vendor may reasonably require and shall appoint such solicitors and other professional advisers as the Vendor may nominate to act of behalf of the Purchaser in accordance with the Vendor's instructions. 6.10 Where Proceedings are delegated to the Vendor in accordance with Clause 6.9.2: -------------------------------------------------------------------------------- Agreement Page 12 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 6.10.1 the Vendor shall keep the Purchaser fully and promptly informed of the Proceedings, shall consult the Purchaser on any matter which is or is likely to be material in relation to any Proceedings and shall take account of all reasonable requirements of the Purchaser in relation to such Proceedings; 6.10.2 the Vendor shall not take any action which, in the Purchaser's reasonable opinion, is likely to harm in any material respect the Purchaser's or the Company's respective goodwill or commercial relationships with customers or suppliers; and 6.10.3 the Vendor shall not make any settlement or compromise of the Third Party Claim which is the subject of Proceedings, nor agree to any matter in the conduct of such Proceedings which may affect the amount of the liability in connection with such Third Party Claim without the prior approval of the Purchaser, such approval not to be unreasonably withheld or delayed, and provided always that, in the event of the Purchaser refusing approval of any reasonable settlement or compromise, the Vendor shall have no liability in respect of any Claim arising therefrom in excess of the figure at which they could have settled or compromised the relevant Third Party Claim and the Purchaser shall be liable for any costs incurred since the proposed date of settlement or compromise. 6.11 Where the Vendor takes over the conduct of any Proceedings pursuant to the provisions of Clause 6.8.2, the Vendor shall indemnify and secure the Purchaser to its reasonable satisfaction in respect of all costs, charges and expenses reasonably and properly incurred by the Purchaser as a consequence of any actions taken at the request of the Vendor pursuant to that Clause. 6.12 The Vendor shall not be liable in relation to any Claim or a claim under Schedule 8 or any other indemnity contained in this Agreement to the extent that the losses with respect to that claim are recoverable by the Purchaser under any policy of insurance held by it at the time that the Purchaser becomes aware of the facts or circumstances giving rise to the claim in question. 6.13 The Vendor shall not be liable for any Claim to the extent that it relates to any matter provided for in the Management Accounts to the extent of the relevant provision. 6.14 Without prejudice to Clause 20.10, the Purchaser acknowledges and agrees that the Vendor makes no warranty as to the accuracy of the forecasts, estimates, projections, statements of intent or statements of honestly expressed opinion provided to the Purchaser or the Guarantor or any other person acting on their behalf (howsoever provided) on or prior to the date of this Agreement or in the documents provided to the Purchaser or its advisers in the course of the Purchaser's due diligence exercise. 7. PURCHASER'S AND GUARANTOR'S WARRANTIES 7.1 The Purchaser warrants to the Vendor for itself only that: 7.1.1 it is duly incorporated and validly existing under the laws of the jurisdiction in which it is incorporated and has been in continuous existence since its incorporation; 7.1.2 it has the requisite power and authority to enter into and perform this Agreement and the other documents referred to herein to be entered into by it; -------------------------------------------------------------------------------- Agreement Page 13 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 7.1.3 this Agreement constitutes, and the documents referred to herein to be entered into by it will when executed by the other parties thereto constitute, binding obligations on it in accordance with their respective terms; and 7.1.4 the execution and delivery of, and the performance by it of its obligations under, this Agreement and the other documents referred to herein to which it is a party will not: (a) result in a breach of any provision of its memorandum or articles of association or by-laws or equivalent constitutional documents; (b) result in a breach of, or constitute a default under, any instrument to which it is bound; (c) result in a breach of any order, judgement or decree of any court or governmental agency to which it is a party or by which it is bound; or (d) require it to obtain any consent or approval of, or give any notice to or make any registration with, any governmental or other authority which has not been obtained or made at the date hereof. 7.1.5 it is not actually aware of any fact or circumstance on the Transfer Date in relation to the Business or the Business Assets (such actual awareness being demonstrable by objective evidence) which is known to it to constitute the basis for making a Claim. 8. COVENANTS 8.1 In consideration for the Purchaser agreeing to buy the Business and the Business Assets, the Vendor covenants with the Purchaser that it will not and will procure that each member of the Vendor's Group will not, without the prior written consent of the Purchaser, in any capacity whether directly or indirectly and whether alone or in conjunction with, or on behalf of, any other person and whether as principal, shareholder, director, employee, agent, consultant, partner or otherwise: 8.1.1 for a period of 18 months from Completion solicit or entice, endeavour to solicit or entice, or procure or facilitate the solicitation or enticement, away from the Business or employ any Employee employed in an executive, managerial, supervisory, technical or sales capacity, by, or who is or was a consultant to, the Vendor at Completion or at any time during the period of six months immediately before the date of Completion; or 8.1.2 for a period of 18 months from Completion be engaged, concerned or interested in the business of providing analog foundry services anywhere in the United Kingdom; or 8.1.3 for a period of 18 months from Completion, solicit or entice away from the Business any supplier to the Business who has supplied goods and/or services to the Business at any time during the 12 months immediately preceding the date of Completion if that solicitation or enticement causes or would cause such supplier to cease supplying, or materially reduce its supply of, those goods and/or services to the Business. 8.2 The Purchaser covenants that it will not for a period of 12 months from Completion -------------------------------------------------------------------------------- Agreement Page 14 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- solicit or entice, or endeavour to solicit or entice away or employ any person (other than an Employee) employed in a managerial, supervisory, technical or sales capacity, by, or who is or was a consultant to, the Vendor at Completion or at any time during the period of six months immediately before the date of Completion, other than is allowed under this Agreement. 8.3 The Purchaser undertakes to use its reasonable endeavours from Completion to remove the name "Zarlink" or any other trademarks, logos or trading styles or get up which is confusingly similar to that used by the Vendor or any member of the Vendor's Group (the "Vendor's Marks") from sales and marketing materials, packaging, finished goods, websites and other materials used in or produced by the Business or communications media through which it is conducted. Until such time as the Vendor's Marks are removed, the Vendor grants to the Purchaser a royalty-free, non-transferable, non-exclusive licence to expire on the first anniversary of Completion to use the Vendors' Marks exclusively in relation to the unavoidable uses within the Business as outlined above. 8.4 Subject to Clause 8.3, the Purchaser and the Guarantor undertake that following Completion neither of them will use, in connection with the Business or any other business carried on by them or any subsidiary of either or them, any Vendor's Marks. 8.5 The Vendor undertakes to the Purchaser that, in the event that the Purchaser requires working capital facilities to be made available to it by any reputable bank counterparty at any time after the date falling 90 days from the Transfer Date, it will agree to do or, so far as it is able, procure that there are done, all such reasonable acts, deeds and things and enter into all such documentation as is required for the bank to hold a first ranking charge over the Foundry Site as security for such facilities, ranking prior to the charge created under the Foundry Charge. 8.6 The Vendor hereby agrees that it shall on the request of the Purchaser use all reasonable endeavours at the Purchaser's cost to procure the consent of Kestrel Court Management Workspace ("Kestrel") to sharing the benefit of the lease entered into between the Vendor and Kestrel (the "Kestrel Lease") to the Purchaser. Notwithstanding any other provision to the contrary in this Agreement the obligations placed on the Vendor under this Clause 8.6 shall continue in force after the date of this Agreement. 8.7 Until such time as Kestrel has consented to the sharing arrangements outlined in 8.6 above, the Vendor shall permit the Purchaser to occupy the car park spaces free of charge. 8.8 The Vendor hereby agrees to use all reasonable endeavours at the Purchaser's cost to procure the consent of Air Products plc ("Air Products") to the assignment of the Vendor's interest in the lease entered into between the Vendor and Air Products (the "Air Products Lease"). The Vendor hereby further agrees that it shall forthwith unconditionally and irrevocably assign its interest under the Air Products Lease to the Purchaser upon the receipt by the Vendor of the consent to assign from Air Products. Notwithstanding any other provision to the contrary in this Agreement the obligations placed on the Vendor under this Clause 8.8 shall continue in force after the date of this Agreement. 8.9 The parties agree that each of the undertakings set out in this Clause 8 is considered fair and reasonable by the parties and is separate and severable and enforceable, and if any one or more of the undertakings or part of an undertaking is held to be against the public interest or unlawful the remaining undertakings or part of the undertaking will continue in full force. -------------------------------------------------------------------------------- Agreement Page 15 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 9. COMPLETION Completion of the sale and purchase of the Business and the Business Assets will take place at the office of the Vendor immediately, when: 9.1 The Vendor will deliver, or procure the delivery of, the following to the Purchaser: 9.1.1 a copy of the minutes of a meeting of the directors of the Vendor and the Zarlink Guarantor in the agreed form authorising the execution by the Vendor and the Zarlink Guarantor of the Transaction Documents to which they are a party and any other documentation that may be necessary or desirable arising out of or in connection with the Transaction Documents or the transactions contemplated in them and appointing the relevant signatory or signatories to sign any such other documentation on the relevant company's behalf endorsed with a certificate by the company secretary of the Vendor or the Zarlink Guarantor (as the case may be) that such copy minutes are a true and accurate record of the relevant meeting and that the authority conferred remains valid and outstanding as at Completion; 9.1.2 all of the Business Assets which are capable of transfer by delivery whereupon the title to them will pass to the Purchaser by such delivery; 9.1.3 duly executed assignments of the Business Intellectual Property; 9.1.4 duly executed transfers or conveyances of the freehold title to the Property and counterparts of the Transaction Documents (other than this Agreement) duly executed on behalf of the Vendor, together with all the original title deeds and documents relating to the Property; 9.1.5 all mortgages or charges over any of the Business Assets duly vacated or duly executed releases of any of the Business Assets from such mortgages or charges, together with letters of non-crystallisation, in each case in the agreed terms; 9.1.6 the Disclosure Letter, signed on behalf of the Vendor; 9.1.7 all invoices, policies, premiums, receipts, maintenance contracts, health and safety files and other accounts relating exclusively to the Property; 9.1.8 all documents of title and certificates for the lawful operation and use of, and all service documents pertaining to, the Fixed Assets and the Moveable Assets; 9.1.9 the Contracts; 9.1.10 the Records; 9.1.11 such irrevocable instruction to the bank(s) of the Vendor as may be necessary to procure the automatic transfer to the Purchaser of any payment that any customer of the Business may make to such bank(s) after the Transfer Date; and 9.1.14 each of the Transaction Documents (other than this Agreement) duly executed on behalf of the Vendor (and, where appropriate, any other member of the Vendor's Group). -------------------------------------------------------------------------------- Agreement Page 16 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 9.2 The Purchaser will deliver to the Vendor: 9.2.1 a copy of the minutes of meetings of the directors of the Purchaser and the Guarantor in the agreed form authorising the execution by the Purchaser and the Guarantor of the Transaction Documents to which they are a party and any other documentation that may be necessary or desirable arising out of or in connection with those documents or the transactions contemplated in them and in each case appointing the relevant signatory or signatories to sign any such documentation on its behalf endorsed with a certificate by the company secretary that such copy minutes are a true and accurate record of the relevant meeting and that the authority conferred remains valid and outstanding as at Completion; 9.2.2 each of the Transaction Documents (other than this Agreement) duly executed on behalf of the Purchaser; and 9.2.3 (pound)1.00 (sterling). 9.3 Upon completion of the matters referred to in Clause 9.2 above, the Vendor will pay to the Purchasers' Solicitors on behalf of the Purchaser, (euro)2,000,000 in cash by way of a CHAPS transfer from a Clearing Bank by way of contribution to the working capital requirements and restructuring costs of the Purchaser in relation to the Business. The Purchaser's Solicitors are authorised to receive such monies on behalf of the Purchaser and payment to them will be a good and sufficient discharge to the Vendor. 10. THE DEBTS AND THE CREDITORS 10.1 Subject to Clause 11, the Debts will be excluded from the sale and purchase of the Business and the Vendor will be entitled to claim and collect the Debts for its own account. 10.2 Notwithstanding that the Vendor will be entitled to collect the Debts, if it becomes apparent to the Vendor that recovery of any Debt is not likely to be possible within a reasonable period unless legal proceedings are instituted, the Vendor will advise the Purchaser in writing of this fact and will furnish the Purchaser with full particulars of the steps taken by the Vendor to effect recovery. The Vendor further undertakes to the Purchaser that it will not threaten to issue or issue any legal proceedings against any debtor in relation to any of the Debts without giving at least 20 Business Days' prior written notice of its intention to do so to the Purchaser and consulting with the Purchaser in relation to the debt in question. The Purchaser will have the right to purchase the relevant debt(s) against payment to the Vendor of the full amount that is being claimed by the Vendor from the debtor(s) in question and the Vendor will not threaten to issue or issue any legal proceedings until the expiration of the period of 20 Business Days. 10.3 Any amounts received by the Purchaser after Completion in respect of any Debts shall forthwith be paid to the Vendor and, pending such payment, shall be held in trust by the Purchaser for the Vendor. 10.4 Any amounts received by the Vendor after Completion from debtors of the Business other than with respect to Debts shall forthwith be paid to the Purchaser and pending such payment shall be held in trust by the Vendor for the Purchaser. 11. ACCRUALS, PREPAYMENTS AND APPORTIONMENTS 11.1 Subject to the provisions of Clause 11.2, this Clause 11 will apply to any charges, expenditure and outgoings (including all employment costs and holiday pay (including -------------------------------------------------------------------------------- Agreement Page 17 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- accrued holiday pay)) and receipts and receivables attributable to the use of the Business Assets or the carrying on of the Business during the period both up to and after the Transfer Date. 11.2 This Clause 11 will not apply to any deposit or payment in advance in respect of any of the Contracts which will belong solely to the Purchaser and the Vendor will account to the Purchaser for such deposit or payment in advance on Completion. 11.3 Where any item of expenditure or outgoing, receipt or receivable relates to a period both up to and after the Transfer Date (including, without limitation, any item of expenditure or outgoing that relates to the Creditors) it will be apportioned rateably over the period to which it relates, save that any such item the cost of which can be related to the particular service used will, so far as practicable, be apportioned on the basis of charges actually incurred up to and after the Transfer Date. 11.4 Any such items (or apportioned parts) as are attributable to periods or events up to the Transfer Date will be due to or from (as the case may be) the Vendor and those attributable to periods or events after the Transfer Date will be due to or from (as the case may be) the Purchaser. 11.5 The Vendor and the Purchaser will immediately after the Transfer Date prepare a statement of apportionments showing the net amount due to or from the Vendor from or to the Purchaser. All amounts due will be paid to the Vendor or the Purchaser, as the case may be, within 10 Business Days of completion of the statement of apportionments. 11.6 The parties acknowledge that costs have been incurred by the Vendor through undertaking development work for certain customers of the Business (known as Non-Recurring Engineering Charges ("NREs")) prior to the Transfer Date that are recoverable from customers under the terms of contracts entered into, but only once the development is complete or the next development milestone is achieved. To the extent that such contracts are Contracts, the Purchaser agrees to use all reasonable commercial endeavours to complete such developments in accordance with the terms of the respective Contract(s) and achieve the next payment milestone. 11.7 Any NRE payments recovered by the Purchaser which relate to the period of development and/or manufacture prior to the Transfer Date, shall forthwith be paid to the Vendor and pending such payment shall be held in trust by the Purchaser for the Vendor. 12. LIABILITIES AND CONTRACTS 12.1 Subject to the provisions of this Clause 12, the Purchaser will, with effect from the Transfer Date, adopt, perform and fulfil the Contracts. 12.2 If any of the Contacts cannot be transferred to the Purchaser without the consent of a third party or by way of an agreement or novation: 12.2.1 the Vendor will, at its own expense, use reasonable endeavours (with the co-operation of the Purchaser) to procure such consent, agreement or novation as soon as reasonably practicable; and 12.2.2 unless and until then the Vendor will hold the benefit of such Contracts on trust for the Purchaser absolutely and will account to the Purchaser for any sums or other benefits received by the Vendor in relation to them without any deduction or withholding of any kind. -------------------------------------------------------------------------------- Agreement Page 18 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 12.3 The parties acknowledge and agree that the Retained Software Licences are critical to the Business and to the business of members of the Vendor's Group. 12.4 With effect from the Transfer Date, the parties will cooperate and each use their respective reasonable endeavours to procure that the Purchaser shall be licensed to use the Software licensed under such of the Retained Software Licences that it wishes on terms for its own use acceptable to the Purchaser and the relevant licensor. 12.5 Until such time as new licences referred to in Clause 12.4 have been granted to the Purchaser, to the extent permitted by the terms of the relevant Retained Software Licence and subject always to the Purchaser reimbursing the Vendor for any incremental costs, fees and/or expenses incurred or paid by the Vendor in relation to the relevant Retained Software Licences that are in addition to any fees required to licence the applicable Software to the Vendor's Group alone, the Vendor shall, so far as it is able, confer on the Purchaser the benefit of any Retained Software Licences. If the benefit of a Retained Software Licence can be so conferred on the Purchaser under its terms, the Purchaser shall observe the terms of any such licence as if it was a party thereto and shall indemnify and hold harmless the Vendor (for itself and as trustee for each member of the Vendor's Group) against any liabilities, costs and expenses incurred or paid by the Vendor arising out of the Purchaser's failure to do so. 12.6 In the event that before or after the date of Completion it is necessary or desirable to transfer or to obtain reissuance or issuance to the Purchaser of any EHS Permit currently held or which is required to be held by the Vendor under or pursuant to EHS Laws regarding the Business, the Vendor shall: 12.6.1 assign and transfer all relevant EHS Permits capable of being assigned or transferred to whomever the Purchaser nominates; 12.6.2 make all transfer applications required under or pursuant to EHS Laws as soon as is reasonably practicable in the correct form as the Purchaser may require; and 12.6.3 fully co-operate with and use all reasonable endeavours to assist the Purchaser in obtaining such transfer, reissuance or issuance (including but not limited to making any joint application, submitting any appeal against refusal, the supply of any information and the execution of any documentation). 12.7 Any costs directly associated with such transfer, reissuance or issuance shall be borne by the Purchaser. 12.8 Pending any such transfer or reissuance the Vendor shall hold on trust for the Purchaser any such EHS Permit and shall allow the Purchaser to carry on to the fullest extent possible the activities so permitted in compliance with their conditions. 12.9 From the date of Completion, the Vendor shall not surrender or seek the change of status or amendment of any EHS Permit nor communicate with any relevant regulatory authority in connection with any transfer, reissuance or issuance of any EHS Permit without the Purchaser's prior consent. 12.10 The Vendor shall indemnify the Purchaser in relation to all and any losses arising from the breach of or any negligent acts or omissions relating to these provisions. 13. EMPLOYEES -------------------------------------------------------------------------------- Agreement Page 19 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 13.1 For the purposes of this clause 13 only, "Employees" shall mean Employees other than the US Employee. The parties acknowledge and agree that, pursuant to the Regulations, the contracts of employment between the Vendor and the Employees (save in so far as they relate to any occupational pension scheme) will have effect after the Transfer Date as if originally made between the Purchaser and the Employees. 13.2 The Vendor will keep the Purchaser indemnified in full against all actions, proceedings, costs, claims, demands, awards, fines, orders, expenses and liabilities (including legal and other professional fees and expenses) which the Purchaser may suffer, sustain, incur, pay or be put to whenever arising, directly or indirectly, in connection with: 13.2.1 the termination of the employment of any of the Employees (whether or not terminated by the giving of notice, and if by the giving of notice, whenever that notice expires) by the Vendor up to and including the Transfer Date or of any other individuals employed or engaged by the Vendor whether before, on or after the Transfer Date; 13.2.2 any act or omission of the Vendor up to and including the Transfer Date in respect of the employment of the Employees by the Vendor and any claim by any person other than an Employee relating to that person's employment or engagement by the Vendor; 13.2.3 any claim by any person who is not one of the Employees that he/she is or was an employee of the Vendor and/or that their contract should be deemed to have been effected between the Purchaser and such person as a result of the provisions of the Regulations (unless the Purchaser agrees that such person will be deemed to be one of the Employees); and 13.2.4 the failure of the Vendor to inform and consult with any appropriate representative (as defined by the Regulations) or Employee with regard to affected employees (as defined in the Regulations) except to the extent that any such action or claim (or any part of such action or claim) arises from any failure by the Purchaser to give the Vendor the information required from the Purchaser to enable the Vendor to comply with its obligations under the Regulations. 13.3 The Purchaser will keep the Vendor indemnified in full against all actions, proceedings, costs, claims, demands, awards, fines, orders, expenses and liabilities (including legal and other professional fees and expenses) which the Vendor may suffer, sustain, incur, pay or be put to whenever arising, directly or indirectly, in connection with: 13.3.1 the termination of the employment of any of the Employees (whether or not terminated by the giving of notice, and if by the giving of notice, whenever that notice expires) by the Purchaser following the Transfer Date or of any other employees of the Purchaser whether before, on or after the Transfer Date; and 13.3.2 any act or omission of the Purchaser following the Transfer Date in respect of the employment of the Employees by the Purchaser and any claim by any person other than an Employee relating to that person's employment by the Purchaser. 13.4 The Purchaser warrants to the Vendor that it does not envisage taking any measures in relation to the Employees (other than those which have been disclosed to the -------------------------------------------------------------------------------- Agreement Page 20 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- Vendor in writing) and, where appropriate, the Purchaser has provided to the Vendor with all information required to be disclosed by the Vendor pursuant to the Regulations. 13.5 Without prejudice to the other provisions of this Clause 13, the Vendor shall, at the Purchaser's cost, give the Purchaser such assistance as the Purchaser may reasonably require to contest any action, award, claim or other legal recourse, complaint, cost, debt, demand, expense, fine, liability, loss, outgoing, penalty or proceeding by any Employee or any other person employed or engaged in the Business at or before the Transfer Date or their representatives resulting from or in connection with this agreement, subject always to the Vendor's obligations under the Data Protection Act 1998. 13.6 The Vendor shall indemnify and keep the Purchaser indemnified against retention bonuses agreed by the Vendor with Mike LeGoff, David McQueen and Paul James. 13.7 The Vendor shall indemnify and keep the Purchaser indemnified against all payments to the Employees in respect of the Vendor's bonus schemes except to the extent that the Purchaser has in any way increased any of the bonus schemes or any applicable targets applicable under their terms. 13.8 The Vendor shall indemnify the Purchaser in respect of any successful claims by any Employees in the period of 12 months following the Transfer Date to the extent that it relates to any loss of benefit suffered by them as a result of the Purchaser failing to fulfil any legal obligation to provide the same or substantially similar benefits under the Regulations as were conferred by the Vendor's stock option scheme as at the Transfer Date. The Purchaser shall not proactively draw to the attention of any Employee any rights which the Employees may have to make a claim in respect of such stock option scheme and, in the event of any claim being made against the Purchaser in respect of any such liability, the Purchaser shall defend such claim to the extent it considers to be commercially appropriate (acting reasonably and taking into account any advice received from the Purchaser's solicitors). The Vendor's aggregate liability under this Clause 13.8 to the Purchaser shall not exceed (pound)50,000. 13.9 The parties acknowledge and agree that it is the Purchaser's intention to offer the US Employee employment with the Purchaser (or a member of its group) in the Business shortly after the Transfer Date. The Purchaser shall indemnify the Vendor with respect to the employment and termination of employment of the US Employee after the Transfer Date (which shall be effected in accordance with the Purchaser's reasonable instructions). 14. ENVIRONMENT 14.1 The provisions of Schedule 8 apply in this Agreement. 14.2 The Vendor and the Purchaser agree that the provisions in Schedule 8 shall constitute an "Agreement on Liabilities" for the purpose of paragraphs D.38 to D.39 of Annex 3 of Defra Circular 01/2006 entitled "Environmental Protection Act 1990: Part 2A: Contaminated land". 14.3 Notwithstanding the provisions in Clause 17 (Announcements), the Vendor and the Purchaser agree that they shall jointly bring the Agreement on Liabilities referred to in this Clause 14 to the attention of the relevant enforcement authority in the event that any such authority asserts that the provisions of Part IIA of the Environmental Protection Act 1990 apply to the Property. If either the Vendor or the Purchaser fail to comply with the terms of this Clause 14.3, the other party may (acting alone) bring -------------------------------------------------------------------------------- Agreement Page 21 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- Schedule 8 (as the "Agreement on Liabilities") to the attention of the relevant enforcement authority. 14.4 After Completion the Vendor (in the name of the Purchaser) shall make and pursue such application at the Vendor's cost as is required by the Purchaser to extend to the Purchaser and its successors and assigns the benefit of the planning permission (without necessarily requiring challenge to the restrictions as to use only in conjunction with adjoining land) granted pursuant to application number T95.1288 /PG. If such application is made and subsequently refused in circumstances where the Purchaser as a result is liable to any civil or criminal sanctions or penalties or if any enforcement action is taken at any time by any relevant planning authority in relation to Building 14 at the Property, the Vendor shall forthwith vacate and deliver up vacant possession of the Office Area (as defined in the Lease to Occupy) to the Purchaser and shall do whatever is necessary to allow the Purchaser to take occupation of the Office Area. In the Event that any such refusal decision is subsequently appealed successfully, the parties shall reinstate the prior arrangements as soon as reasonably practicable following judgement. 15. FLOOD DAMAGE INSURANCE CLAIM 15.1 The Vendor undertakes to the Purchaser to use its reasonable endeavours to (a) recover the full costs of replacement and initial installation (but not any subsequent re-installation) of the plant and equipment listed in Part 2 of Schedule 2 (the "Specified Insurance Proceeds") or (b) procure the replacement and installation of the same (if the relevant insurer elects to do so), in either case under its policies of insurance with AIG, GCAN and ARCH in connection with its insurance claim with respect to damage to such plant and equipment following flooding in July 2007 (the "Insurance Event"). The parties agree that in the circumstances described in Clause 15.1(b), upon purchase and installation of any item of plant and equipment listed in Part 2 of Schedule 2, such plant and/or equipment shall automatically become the property of the Purchaser. 15.2 The parties agree that in the circumstances described in Clause 15.1(a), the Specified Insurance Proceeds (insofar as recovered, and specifically relating to the plant and equipment listed in Part 2 of Schedule 2) shall be used by the Vendor to purchase and install such plant and equipment as soon as reasonably practicable following the Vendor's receipt of the Specified Insurance Proceeds at any premises nominated by the Purchaser. The parties agree that upon purchase and installation of any item of plant and equipment listed in Part 2 of Schedule 2, such plant and/or equipment shall automatically become the property of the Purchaser. 15.3 The Vendor shall indemnify and keep the Purchaser indemnified against all costs associated with all works contracted by the Vendor in relation to the flood defences works and whether carried out before or after the Transfer Date. 16. INFORMATION, ACCESS AND FUTURE ENQUIRIES 16.1 Without prejudice to any other provision of this Agreement, the Purchaser and its officers, employees, advisers and agents will be entitled until 31 December 2009 on giving reasonable notice to have access during normal business hours and to take copies (at its own expense) of any books, documents or other records (including computer records) relating (whether wholly or partly) to the Business and the Business Assets and which have not been delivered to the Purchaser and the Vendor and its officers, employees, advisers and agents will have like rights of access to and to take copies of any of the Records. 16.2 Any books, documents or records referred to in this Clause 16 will be retained by the Vendor or the Purchaser as the case may be in the United Kingdom until at least 31 December 2009. -------------------------------------------------------------------------------- Agreement Page 22 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 16.3 The Vendor will promptly refer all enquiries relating to the Business to the Purchaser and assign to the Purchaser all orders relating to the Business which the Vendor may receive after the Transfer Date. 17. ANNOUNCEMENTS 17.1 Subject to Clause 17.2, no announcement concerning the transactions contemplated by this Agreement will (save as required by law) be made by the Vendor or the Purchaser (except with the prior written approval of the other party). 17.2 The Parties acknowledge and agree that immediately following Completion they will issue a joint customer communication in a mutually acceptable form. 18. COSTS Each party to this Agreement will bear its own costs and expenses relating to this Agreement except where otherwise expressly stated. 19. NOTICES 19.1 Any demand, notice or other communication in connection with this Agreement will be in writing and will, if otherwise given or made in accordance with this Clause 19, be deemed to have been duly given or made as follows: 19.1.1 if sent by pre-paid first class post, on the second Business Day after the date of posting; 19.1.2 if delivered by hand upon delivery at the address provided for in this Clause 19; or 19.1.3 if sent by facsimile, on the day of transmission provided that a confirmatory copy is, on the same Business Day that the facsimile is transmitted, sent by pre-paid first class post in the manner provided in this Clause 19, provided that if it is delivered by hand or sent by facsimile on a day which is not a Business Day or after 4.00 pm on a Business Day, it will instead by deemed given or made on the next Business Day. 19.2 Any such demand, notice or other communication will, in the case of service by post or delivery by hand, be addressed to the recipient at the recipient's address stated in this Agreement or such other address as may from time to time be notified in writing by the recipient to the sender as being the recipient's address for service and will, in the case of service by facsimile, be sent to the recipient using a facsimile number then used by the recipient. 20. GENERAL 20.1 This Agreement will be binding on and enure for the benefit of each party's successors and assigns. 20.2 Except in so far as they have been fully performed at Completion, the provisions of this Agreement will continue in full force and effect notwithstanding Completion. 20.3 Each party will (at its own expense) promptly execute and deliver all such documents and do all such things as the other parties or any of them may reasonably require on or after Completion from time to time to give full effect to the terms of this Agreement. -------------------------------------------------------------------------------- Agreement Page 23 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 20.4 Failure or delay by any party in exercising any right or remedy under this Agreement will not operate as a waiver of it. 20.5 Any waiver of any breach of this Agreement will not be deemed a waiver of any subsequent breach and will in no way affect the other terms of this Agreement. 20.6 The rights and remedies expressly provided for by this Agreement will not exclude any rights or remedies provided by law. 20.7 This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, each of which so executed and delivered will be an original, but all the counterparts will together constitute one and the same agreement. 20.8 The formation, existence, construction, performance, validity and all aspects whatsoever of this Agreement or any terms of this Agreement will be governed by English law. The English courts will have non-exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement. 20.9 The parties to this Agreement do not intend that any of its terms will be enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 by any person not a party to this Agreement. 20.10 This Agreement and any other documents entered into pursuant to this Agreement constitute the whole and only agreement between the parties relating to the sale and purchase of the Business and the Business Assets and supersede and extinguish any prior drafts, agreements, undertakings, representations, warranties and arrangements of any nature whatsoever, whether or not in writing, relating thereto (but without prejudice to any right of any of the parties hereto to rectify this Agreement). 20.11 The Guarantor irrevocably appoints the Purchaser as its agent to receive on its behalf in England or Wales service of any proceedings arising out of or in connection with this Agreement. 20.12 The Zarlink Guarantor irrevocably appoints the Vendor as its agent to receive on its behalf in England or Wales service of any proceedings arising out of or in connection with this Agreement. -------------------------------------------------------------------------------- Agreement Page 24 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- SCHEDULE 1 The Property Part 1 - Description Description: The freehold land known as 107/108 Cheney Manor Industrial Estate, Swindon, Wiltshire, SN2 2QW. Title Holder: Mitel Semiconductor Limited (now Zarlink Semiconductor Limited). Title number and WT137058 Title Absolute. quality of title: Use: Analog foundry services including the manufacture and shipment of silicon wafers. Part 2 - Conditions of Sale 1. INTERPRETATION In this Schedule (unless the context requires otherwise) the following words and expressions have the following meanings: "2002 Act" means the Land Registration Act 2002; "Actual Completion Date" means the date upon which the Property is transferred, to the Purchaser; "Transfer" means the transfer of the Property to the Purchaser; "Competent Authority" means a local authority or other body exercising statutory powers or duties; "Completion" means completion of the sale and purchase of the Business Assets in accordance with Clause 9 of this Agreement; "Consideration" means the consideration referred to in Clause 3 of this Agreement; "Law" means an Act of Parliament, statutory instrument, regulation, bye-law, requirement of a competent authority, statutory body, utility company or authority, common law or regulation, directive or mandatory requirement of the European Union; -------------------------------------------------------------------------------- Agreement Page 25 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- "Liability" means all actions, proceedings, costs, claims, demands, losses, expenses and liabilities; "Part 1 Standard Conditions" means the conditions in Part 1 of the Standard Commercial Property Conditions (Second Edition) and "Condition" means any one of them; and "Undertaker" means any authority, body or person authorised to supply services for electricity, water, gas, sewerage, telecommunications, television or data transmission for the public. 2. INCORPORATION OF STANDARD CONDITIONS 2.1 The Part 1 Standard Conditions (as varied in paragraph 2.2) are incorporated in this Schedule in relation to any transfer, assignment or underletting of the Property insofar as they are not varied or excluded by or inconsistent with other terms of this Schedule. 2.2 Standard Condition Variation 1.1.3(b) Add "or if reasonable evidence is produced that the property would be released from all such mortgages" after "freed of all mortgages". 1.4 Does not apply. 2.2 Does not apply. 3.1.2(c) Delete and substitute: "those of which the Vendor does not have actual knowledge". 3.1.3 Does not apply. 3.3 Does not apply. 6.4.1 Delete "further than it may be able to do from information in its possession". 6.4.2 Does not apply. 6.6.2 Does not apply. 7.1.2(c) Does not apply. 7.1.2(d) Does not apply. 7.1.4(b) Does not apply. 8.3.5 Delete "according to the best estimate available" and replace with "by the Vendor". 8.7 Add at the end: "Money due by direct credit is to be paid in pounds sterling". -------------------------------------------------------------------------------- Agreement Page 26 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 9.1.3 Add at the end: "but the Purchaser is not entitled to rescind where he knew about the error or omission". 9.2 Add: "(d) this does not prejudice the Vendor's accrued claims against the Purchaser". 10.2.4 Does not apply. 3. TRANSFER 3.1 The Vendor shall transfer and the Purchaser shall accept a transfer of the Property. 3.2 The Transfer shall contain (where applicable) a covenant by the Purchaser with the Vendor that the Purchaser and its successors in title will observe and perform the covenants and obligations on the part of the Vendor or its predecessors in title contained or referred to in the entries appearing in the registers at H.M. Land Registry relating to the Property in so far as they are still subsisting and capable of being enforced and will indemnify and keep indemnified the Vendor against all Liability suffered or sustained by the Vendor as a result of any breach, non performance and non observance of them. 3.3 The Transfer will be prepared and executed by the Purchaser in duplicate and the duplicate will be handed over to the Vendor's Solicitors on the Actual Completion Date. 4. COMPLETION 4.1 The sale and purchase of the Property will be completed on Completion. 4.2 On the Actual Completion Date immediately after the transfer of the Property to the Purchaser the Purchaser will grant to the Vendor the Lease to Occupy and the Vendor will grant to the Purchaser the Car Park Licence. 5. POSSESSION Subject to the other terms of this Schedule, the Property is sold with vacant possession on completion. 6. TITLE The Vendor shall not be obliged to deduce further title to the Property than that deduced as at the date of this Agreement. 7. MATTERS WHICH AFFECT THE PROPERTIES 7.1 The Property is sold subject to and (where appropriate) with the benefit of: 7.1.1 matters contained or referred to in matters contained or referred to in the entries on the property and charges registers of title number WT137058 subsisting at 16:00 on 8 January 2008; 7.1.2 (in addition to the matters referred to in Condition 3.1.2): (a) all matters registrable by any Competent Authority pursuant to statute; -------------------------------------------------------------------------------- Agreement Page 27 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- (b) all requirements, demands, notices, orders or proposals (whether or not subject to confirmation) of any Competent Authority; (c) all notices served by the owner or occupier of any adjoining or neighbouring property; (d) all agreements with any Competent Authority; (e) all those interests listed in schedule 3 to the 2002 Act and any interests which fall within section 11(4)(c) of the 2002 Act all those interests inserted into those schedules by schedule 12 to the 2002 Act; and (f) any matters of which the Purchaser may already have actual knowledge so far as they relate to the Property and are enforceable at the Actual Completion Date. 7.2 The Purchaser shall not make or raise any objection or requisition in respect of any matter referred to in paragraph 7.1. 7.3 The Purchaser or the Purchaser's Solicitors have been supplied with copies of the entries on the registered title to the Property before the date of this Agreement and the Purchaser will be deemed to purchase with full knowledge of the title and shall not raise or make any requisitions or objections in relation to such title or matters. 7.4 All matters set out in the Disclosure Letter will be deemed to be within the actual knowledge of the Purchaser for the purposes of section 6(2)(a) of the Law of Property (Miscellaneous Provisions) Act 1994 and the Vendor's liability under the title covenants. 7.5 The Purchaser is deemed to buy with knowledge in all respects of the authorised use of the Property for the purposes of town and country planning legislation. 7.6 The Purchaser acknowledges that the Vendor has given to the Purchaser and others authorised by the Purchaser permission and the opportunity to inspect and survey and carry out investigations as to the condition of the Property and the Purchaser has formed its own view as to the condition of the Property and its suitability for the Purchaser's purposes. -------------------------------------------------------------------------------- Agreement Page 28 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- SCHEDULE 2 Plant and Equipment Part 1 - Purchase value in excess of $250k AG4100 RAPID THERMAL PROCESSOR & ANC. AME8320A POLY ETCHER R.O. SKID AM5000E ETCH SYSTEM (EX CASWELL) DIFFUSION CLEAN ROOM DAINIPPON COATER/DEVELOPER SYSTEM 60A NOVELLUS CONCEPT 1-150 CVD SYSTEM PARAMETRIC TEST SYSTEM EPSILON E-2 RP EPITAXY SYSTEM WJ-TEOS 999R VAPOUR DEPOSITION SYSTEM (95% COST) AME 8330A METAL ETCH SYSTEM 9500XR ION IMPLANTER EPSILON E-SRP EPITAXY SYSTEM FALCON COATER SYSTEM FOR POSITIVE RESIST FALCON DEVELOPER SYSTEM FOR POSITIVE RESIST PRECISION 5000 Mk.2 ETCH SYSTEM HORIZONTAL FURNACE 5204 (FOUR CHAMBER) SIGMA 203 SPUTTER SYSTEM OMEGA 201 PERIE ETCHER OMEGA 201 PERIE ETCHER UV1250SE THIN FILM MEASUREMENT SYSTEM NOVELLUS CONCEPT 1-150 PE CVD SYSTEM INC COLLING S EPSILON 1 E2RP EPITAXY SYSTEM 9500XR ION IMPLANTER PRECISION 5000 Mk.2 ETCH SYSTEM INC. DELIVERY/SITI 8330A METAL ETCHING SYSTEM [CLEAN ROOM] BULK GASES, INCLUDING HYDROGEN, NITROGEN AND OXYGEN. SIGMA 203 SPUTTER SYSTEM SEMITHERM VERTICAL FURNACE (6" DIFFUSION ROOM 3) SUSRFSCAN 6420 FILM SURFACE ANALYSIS SYSTEM SURFSCAN 7700 WAFER INSPECTION SYSTEM (PE ROOM 13) FSI SATURN ACID PROCESSOR (FSI7) -------------------------------------------------------------------------------- Agreement Page 29 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- LAM 384T TRIODE ETCHER (LAM2) AME 5000 Mk.II POLY ETCH SYSTEM AME 5000 Mk.II TRENCH ETCH SYSTEM SPRAY SOLVENT SYSTEM TOOL SST-C-421-280-P LAM DRYTEK 384T PLASMA ETCH SYSTEM (REFURBISHED) TENCOR CRS1010 DEFECT REVIEW STATION ASM PAS5500 100/B STEPPER AME P5000 PLASMA ETCHER (EX JARFALLA) WATKINS JOHNSON TEOS 999 SYSTEM SCHLUMBERGER IVS-135 METROLOGY SYSTEM S-4700-II SCANNING ELECTRON MICROSCOPE DI WATER PLANT UPGRADE/REPLACEMENT WATER CHILLER PROJECT, CLIMAVENETA DAIKEN UPGRADES WET METAL ETCH LANE Fixtures and Fittings MECHANICAL/ELECTRICAL SERVICES BLDG. MGMT. SYSTEM (FAB 6) -------------------------------------------------------------------------------- Agreement Page 30 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- Part 2 - Subject to Flood Insurance Claim Description Tool ID System /Tool Repair MFCs (UFC 1100) MFCS Mass Flow Controllers Repair TMP 340MC Pump 6DTE-3 Turbo Pump for AMAT P5000 Etcher MFC 200 SCCM BCL3 MFCs Mass Flow Controllers FURNACE 6F-21, 6F-22 & ELEMENT,THERMCO 6F-25 Horizontal Furnaces (3) Shield Cleaning 6DOE-7 & 8 AMAT P5000 Dry Oxide Etchers(2) HEATING ELEMENT HIGH TEMPERATURE General Horizontal Furnace FILTER IMPACT Plus OM 6s9-1 & 6S9-2 Multiple Developer/Coater Tracks 0.1um calibrate manomter & controller 6DME-1 AMAT 8330 Dry Metal Etcher Repair HP1 tester 6HP-1 Aglient HP1 Tester Ferrule front and Back 6ST-4 Semitool 4 Canon FPA-1550 MIV-W Fine Pattern Motor 6FPA-5 Aligner (Stepper) Pump QDP40 Pumps Vacuum Pumps for Various Tools Pump QMB250 Pumps Vacuum Pumps for Various Tools Pump QMB500 Pumps Vacuum Pumps for Various Tools Pump QMB1200 Pumps Vacuum Pumps for Various Tools Pump E2M80 Pumps Vacuum Pumps for Various Tools Pump iQDP80 Pumps Vacuum Pumps for Various Tools Pump QDP80/QMb500 Pumps Vacuum Pumps for Various Tools Pump QDP80 Pumps Vacuum Pumps for Various Tools Pump QMB500 Pumps Vacuum Pumps for Various Tools TMP450 Pump (Refurbed) 6DME-3 Turbo Pump for AMAT 8330 DME 24v PSU 6IMP-1 AMAT Precision Implanter 9500XR Varistor 6EPSIL-1 ASM Epsilon Epitaxial Tool Relay Phase Monitor 6EPSIL-1 ASM Epsilon Epitaxial Tool Hitachi S-8640 Scanning Electron Tip Change - labour 6SEM-5 Microscope (SEM) Hitachi S-8640 Scanning Electron Gasket 6SEM-5 Microscope (SEM) Hitachi S-8640 Scanning Electron TFE Tip 6SEM-5 Microscope (SEM) Hitachi S-8640 Scanning Electron AV Aperture 6SEM-5 Microscope (SEM) Hitachi S-8640 Scanning Electron Obj Aperture 6SEM-5 Microscope (SEM) Repairs UV1280 General KLA Tencor Metrology Tools Labour and Travel 6PAS-1 & 6PAS-2 ASML PAS5500/100 Steppers (PAS-1 & PAS-2)) Pump Turbovac1100c 6IMP-1 & 6IMP-2 Turbo Pumps Within Various Tools Pump Turbovac 361C 6IMP-1 & 6IMP-2 Turbo Pumps Within Various Tools Pump Mag400 Pump Mag400 Turbo Pumps Within Various Tools Duplicate Replacement Air Con unit PAS-2 ASML PAS5500/100 Steppers (PAS-2) Hitachi S-8640 Scanning Electron Replacement Ion Pump SEM-5 Microscope (SEM) Hitachi S-8640 Scanning Electron Replacement AV1 Valve SEM-5 Microscope (SEM) Gasket SEM-5 Hitachi S-8640 Scanning Electron Microscope (SEM) -------------------------------------------------------------------------------- Agreement Page 31 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- Labour for flood 6IMP-1 & investigation of 9500s 6IMP-2 AMAT Precision Implanter 9500XR Computer Upgrade 6ST-4 Semitool 4 Bracket 6ST-4 Semitool 4 Arm Kit 6SIGMA-3 Trikon Sigma Metal Deposition Systems Spatula Assy 6SIGMA-3 Trikon Sigma Metal Deposition Systems Valve Kit 6SIGMA-3 Trikon Sigma Metal Deposition Systems Service 6SIGMA-3 Trikon Sigma Metal Deposition Systems O Ring seal 6SIGMA-3 Trikon Sigma Metal Deposition Systems Seal Ring 6SIGMA-3 Trikon Sigma Metal Deposition Systems Vertical Element 6VTP-1 Semitool Vertical Furnace Gas Cabinet Interim Repair Package Gas Cabinets Gas Cabinets Gas Cabinet Replacement Final Package Gas Cabinets Gas Cabinets Manage permanent repairs to gas cabinets Gas Cabinets Gas Cabinets Manometer for calibration 6dme-3 AMAT 8330 Dry Metal Etchers Horizontal Thread Insert 6f-21 Furnace F21 Filter Convac ID water 6S9-1 & S9-2 Apex Developer / Coaters MFC FC2900 100SCCM 6DME-4 AMAT 8330 Dry Metal Etchers Engineering Work SIGMAS Trikon Sigma Sputterers (3) Air Freight Cost - US to UK 6F-21 & 6F-22 Horizontal Furnaces F21 and F22 Service Engineer - hours Pumps Vacuum Pumps for Various Tools Filters (6) Wayne Perkins Photo Tracks Multiple Developer/Coater Tracks Novellus Concept One Chemical Vapor Clean and Recal MFCs (3) 6NOV-1 Deposition System Watkins Johnson TEOS99 Chemical Phosphorus content analysis 6NOV-2 Vapor Deposition Systems Flex Lines (30) SIGMAS Trikon Sigma Metal Deposition Systems O Rings General AMAT Fan Unit (6) 6PAS-1 ASML PAS5500 PAS-1 LS Demodulator Board Set 6PAS-2 ASML PAS5500 PAS-2 Arc Module 6IMP-2 AMAT Precision Implanter 9500XR QUARTZ TUBE 6" Horizontal ATMOSPHERIC 6F-23 Furnaces QUARTZ TUBE 6" POLY Horizontal (TYLAN) 6F-32 Furnaces Horizontal QUARTZ SHAFT SUPPORT 6F-21 Furnaces QUARTZ SLEEVE SVG FOR Horizontal PROCESS FURNACE 6F-21 Furnaces CGA660 Kel-F per pack Gas Cabinets Gas Cabinets AMAT Etch Mxp Precision 5000 Mark II Chiller BOM 388216041606 65000-4 Dry Oxide Etcher Multiple AMAT UFC-1660 Metal Seal MFC's MFCs Etch Tools Multiple AMAT FC2900M Metal Seal MFC's MFCs Etch Tools Multiple AMAT UFC-1100 MFC MFCs Etch Tools Multiple AMAT UFC-1100 MFC MFCs Etch Tools Watkins Johnson TEOS99 Chemical Replacement Vector 6wj999-1 Vapor Deposition Systems Ultra 3000 16021648 DAQ type H for implanter (2 off) 6IMP-2 AMAT Precision Implanter 9500XR -------------------------------------------------------------------------------- Agreement Page 32 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- PSU 457-3754 -Wayne Perkins 6S9-1 & S9-2 Multiple Developer/Coater Tracks 0.1u EMPLON filter 6S9-1 & S9-2 Multiple Developer/Coater Tracks Watkins Johnson TEOS99 Chemical etch exit 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical ustank 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical us roller shaft 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical us roller bearings 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical us tank exit 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical cooling roller 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical rotating union 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical next to cooling roller 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical muffle exit 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical cooling muffle entry 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical hi temp bearings 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical cooling muffle exit 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical cooling muffle middle bottom 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical lag roller 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical pinch roller unsleeved 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical slack roller 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical 2" sleeved slack roller 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical SRFWB upgrade 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical UPS CE version 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical Labour per hour 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical Travel per hour 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical per diem 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical flight cost est 6WJ999-1 & 2 Vapor Deposition Systems Fuses-Wayne Perkins 6S9-1 & S9-2 Developer Coaters Manometer for Calibration 6DME-1 AMAT AME-8110 Metal Etcher Fomblin Oil Pump oil Vacuum Pumps for Various Tools SS Pipework 6EPSIL-1, 2 & 3 ASM Epsilon Epitaxial Tools SRAM PCB 6DME-1 AMAT 8300 DMEs VGA Video PCB 6DME-1 AMAT 8300 DMEs Fan Tray 6DME-1 AMAT 8300 DMEs Freight Charge 6DME-1 AMAT 8300 DMEs Freight Charge 6DME-1 AMAT 8300 DMEs Isolation valves 6EPSIL-1, 2 & 3 ASM Epsilon Epitaxial Tools (Epi 1 & 3) Plug Baffle 6F-22 Furnaces -------------------------------------------------------------------------------- Agreement Page 33 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- Atmospheric Tube 6F-22 Furnaces Replacement Airco Unit 6PAS-1 & 6PAS-2 ASML PAS5500/100 Steppers (PAS-2) Pump iQDP80 (new) Pumps ASM Epsilon Epitaxial Tool IQ Gas System Module Series 2 Pumps ASM Epsilon Epitaxial Tool IQ Gas System Module Series 2 Pumps ASM Epsilon Epitaxial Tool FCO Put Filter in LS ILL unit 6PAS-1 & 6PAS-2 ASML PAS5500/100 Steppers (PAS-1) LS Demod Set 6PAS-1 & 6PAS-2 ASML PAS5500/100 Steppers (PAS-1) Priority Shipment Fee 6PAS-1 & 6PAS-2 ASML PAS5500/100 Steppers (PAS-1) CO SEAL NW40 Pumps Vacuum Pumps for Various Tools Saw/insp fast track of 13678G-20 lot# See Martin 9094302 Warrington Wafer Sawing Multiple AMAT Re-calibration of 127AA-00001B 6DME-4 Etch Tools Watkins Johnson TEOS99 Chemical Vector PCB repair ref # K30141 6WJ999-1 Vapor Deposition Systems Fast track for lot # See Martin 9091162,13746H3S-PR Warrington Wafer Sawing CEA Board Convac 6S9-2 Apex Developer / Coaters (S9-2) CSMS Board Convac 6S9-2 Apex Developer / Coaters (S9-2) CPU for OEBR Module 6S9-2 Apex Developer / Coaters (S9-2) Inspection Visit : 27th July 6S9-2 Apex Developer / Coaters (S9-2) Repair Visit : 6 -8th August 6S9-2 Apex Developer / Coaters (S9-2) Repair visit: 30th August 6S9-2 Apex Developer / Coaters (S9-2) Software package Upgrade 8.9 6PAS-1 & 6PAS-2 ASML PAS5500/100 Steppers (PAS-1 & PAS-2)) OCU Mark IV inc ULtra 10UF 6PAS-1 & 6PAS-2 ASML PAS5500/100 Steppers (PAS-1 & PAS-2)) Stand Alone Workstation 6PAS-1 & 6PAS-2 ASML PAS5500/100 Steppers (PAS-1 & PAS-2)) Photo area work after flood Photo Tracks Developer Coaters Re-install CDM cabinets Semitool 3&4 6ST-3/ 6ST-4 Developer Coaters Gas Detector Head Units Gas Cabinets Gas Cabinets Phosphorus content analysis 6EPSIL-1, 2 & 3 ASM Epsilon Epitaxial Tool Labour hours 6EPSIL-1, 2 & 3 ASM Epsilon Epitaxial Tool Equipment Spares 6EPSIL-1, 2 & 3 ASM Epsilon Epitaxial Tool Gas Cabinet Installation Gas Cabinets Gas Cabinets Canon FPA-1550 MIV-W Fine Canon Wafer Stepper 6FPA-6 Pattern Aligner (Stepper) Phase 1 Canon Stepper Canon FPA-1550 MIV-W Fine Installation 6FPA-6 Pattern Aligner (Stepper) Phase 2 Canon Stepper Canon FPA-1550 MIV-W Fine Installation 6FPA-6 Pattern Aligner(Stepper) Additional Cost Phase 2 Canon FPA-1550 MIV-W Fine Canon Stepper 6FPA-6 Pattern Aligner (Stepper) On-Site Support 6ST-4 Semitool 4 Additional coverage - actual costs 6ST-4 Semitool 4 Carrier sensor 6PAS-1 SMIF PODs / ASML PAS1 Stepper Analysis for heavy metal contamionation 6EPSIL-1, 2 & 3 ASM Epsilon Epitaxial Tool Analysis (SPV test) 6EPSIL-1, 2 & 3 ASM Epsilon Epitaxial Tool ASM Epsilon Epitaxial Tool Flat Screen LCD Monitor 6EPSIL-3 (Epi 3) Repair to GRC 6DME-3 AMAT Dry Metal Etch 8300 DME-3 -------------------------------------------------------------------------------- Agreement Page 34 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- LONG ONE MF8 BOARD 6PAS-1 & 6PAS-2 ASM Epsilon Epitaxial Tool DIPOD HALL ASSY 6PAS-1 & 6PAS-2 ASM Epsilon Epitaxial Tool Emergency Fee 6PAS-1 & 6PAS-2 ASM Epsilon Epitaxial Tool PA Valve 68110-2 AMAT 8110 Dry Oxide Etcher Inverter 6EPSIL-1, 2 & 3 ASM Epsilon Epi Tools Watkins Johnson TEOS99 Chemical PCB repair 6WJ999-1 & 2 Vapor Deposition Systems KLA 2132 lamp 6KLA-1 KLA 2132 KLA 2132 lamp 6KLA-1 KLA 2132 pcb 6F-29 Furnace Stack 8 (F29 - 32) Installation & testing of Invertors 6EPSIL-1 & 2 & 3 Epsilon Epi Tools Watkins Johnson TEOS99 Chemical Filter 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical Filter 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical Purifier 6WJ999-1 & 2 Vapor Deposition Systems Watkins Johnson TEOS99 Chemical Purifier 6WJ999-1 & 2 Vapor Deposition Systems Canon Stepper Replacement, Sept 2007 6FPA-6 Canon Stepper Replacement FPA5 Hitachi S-8640 Scanning Electron SIP Unit Repair 6SEM-5 Microscope(SEM) TMP450C turbo Pump 6DME-1 Turbo Pumps for 8300 DME TMP450C turbo Pump 6DME-3 & 4 Turbo Pumps for 8300 DME Airgard Wet Scrubber 6DME-3 AMAT DME-3 Courier Delivery Charge 6DME-3 AMAT DME-3 PAS5500/100 Special Gradient Filter 6PAS-1 & 6PAS-2 6PAS-1 & 6PAS-2 Assy-Refl-S-Side-Water Cooled LH 6PAS-1 & 6PAS-2 6PAS-1 & 6PAS-2 Assy-Refl-S-Side-Water Cooled RH 6PAS-1 & 6PAS-2 6PAS-1 & 6PAS-2 Chamber Process Quartz ASM Epsilon Epitaxial Tool 150mm RP 6EPSIL-1 (Epi 1) Phosphorus content analysis 6NOV-2 Nevellus 2 Blade Driver Board 4022.502.35417 6PAS-1 & 6PAS-2 6PAS-1 & 6PAS-2 Canon i3 Stepper Audit 6FPA-7 New Canon Stepper Canon FPA 2500i3 Stepper 6FPA-8 New Canon Stepper Membranes and O Rings N/A Reverse Osmosis System Bearing Replacements N/A Multiple Facility Systems AHU Belts N/A Air Handling Units (AHUs) BMS System N/A Building Management System GRAC repairs and replacements N/A Grac Compressors & Site Chiller Plant Filters N/A DI Water System Recovery of compressed air filters N/A Compressed Dry Air (CDA) System Repairs to Nitrogen plant N/A Nitrogen Plant Tannoy system repairs N/A Tannoy System Parts for RO units N/A Reverse Osmosis System CCTV & Alarms Replacement CCTV Equipment N/A (Bldg 114) UV LAMPS, QUARTZ SLEEVES & O RINGS N/A UV Filters -------------------------------------------------------------------------------- Agreement Page 35 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- REPLACEMENT AIR HANDLING FILTERS N/A Air Handling Units (AHUs) Supply and replacement of pumps N/A Hose Vacuum System Facilitisation of Fab to receive Steppers N/A Cannon Steppers FPA 7&8 SubFab (AHU's, Flooring, Walling, Painting, Spares) N/A Facilities Subfab Building 114 Office (Refurbishment) N/A Building 114 Office -------------------------------------------------------------------------------- Agreement Page 36 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- Part 3 - Retained (on the site leased for MOD contract fulfilment) 1722A INSTRUMENT CONTROLLER 1GB SCSI DISK RZ57-EF 2 x 16MB MEMORY EXPANSION X116W 2019A SIGNAL GENERATOR 20GHZ DIGITISING OSCILLATOR 54120T 2740BV SHOCK CHARGE AMPLIFIER 4.2G BYTE DISK PACK X569A 4700 MULTIFUNCTION CALIBRATOR 545B MICROWAVE COUNTER 10HZ-18GHZ 6100/01-8 SYNTHESISED GENERATOR 10MHZ - 8GHZ 625A MICROWAVE COUNTER 64MB MEMORY EXPANSION X164F 64MB MEMORY EXPANSION X164P 64MB RAM BOARD S-SIMMS20 6960B RF POWER METER 7060G BENCH VOLTMETER 7060G BENCH VOLTMETER (EX DEMO) 72 inch SmartBoard and Toshiba projector A370 ALSI TEST SYSTEM A530-00 ALSI TEST SYSTEM (PART COST) A58-AZB1-9C-1GB-DL Sun W1100z w/s ACS LIQUID TO LIQUID THERMAL SHOCK CHAMBER CSTL12 Acterna - ANT20 SDH Acterna - ANT5 ADD COST (10%) A530-00 ALSI TEST SYSTEM ADD COST (FINAL 20%) - S170 TRI TEMP HANDLER ADD COST SPORTS GROUND (KINGSDOWN) AIR CONDITIONING PLANT (TEST AREA) AIR CONDITIONING UNIT FOR TEST PACKING AREA Ansoft MP-HFSS, Q3D, FWS Suite ANTI-STATIC RAISED FLOOR Anville Insrumentst, 425/TC Datalogger ASECO S130/2 TRI-TEMP HANDLER ASECO S170 TRI TEMP HANDLER #2 (80% OF COST) AUDIO SYSTEM FOR NEW RESTAURANT AUTOCAL 1061A MULTIMETER B109 Assets Held for Resale CED217 BASSAIRE CLASS 100 VLF ENCLOSURE 4'6 x 3'6 x 6'6 BENCHES/CUPBOARDS BIBTEST 51 CABLE/BURN-IN BOARD TESTER BIBTEST 51 TEST PROBES BRUMBY BSL3C OVEN + PSU D21 BRUMBY BSL3C OVEN + PSU D22 BRUMBY BSL3C OVEN + PSU D23 BRUMBY BSL3C OVEN C/W POWER SUPPLIES (D25) BURN IN CTI PROBES BURN IN LIFE TEST CHAMBER BSL3D/AL/CL/250 DEG BURN IN LIFE TEST SYSTEM BSL3C Canon LV-X2 video projector w/ screen -------------------------------------------------------------------------------- Agreement Page 37 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- CAT 5 CABLING FOR TEST AREA CHAIRS/TABLES (ex 3B2 BLDG.) CHALLENGE CH340TC CLIMATIC CHAMBER CLIMATIC CHAMBER HCC310-PF4J CLIMATIC TEST CHAMBER MODEL HC4033 COMPASS BLADE CARD STN CONTINUUS SOFTWARE (BASE & C/CM LICENCES) CONVERSION KIT SO 150 (MT8704 HANDLER #3) CONVERSION KIT SO WIDE (MT8704 HANDLER #3) D430 Intel Core duo U7600 1.2Ghz with Standard tou D600 Laptop (English v) DATA NETWORK (TEST/QA AREA) Dell D610 Pentium M Processor Dell D410 Latitude Dell D600 Laptop + Docking Station + stand Dell D600 portable PC and Base Station Dell D610 Laptop Dell D610 Laptop & docking station Dell D610 Portable Computer and Base Station Dell D610 with Base Station Dell Laptop D410 Dell Latitude C400 Compact Laptop DELL LATITUDE C400 LAPTOP PC (SWPC224) DELL LATITUDE C810 LAPTOP PC Dell Latitude D420 and peripherals Dell Latitude D610 Dell Latitude D610 Laptop Dell Latitude D620 Core 2 Duo DELL LATITUDE L400 LAPTOP PC (SWPC181) Dell Latitude Laptop PC Dell Lattitude D610 Dell Optiplex 170L PC Dell Optiplex Desktop PC Dell Optiplex GX270 Desktop PC with P4 2.8GHz Int Dell PE750 - SATA - Pentium 4 Dell PowerEdge 2850 Disk Server Dell Poweredge 2850, Overland Powerloader DESKING WORKSTATIONS DESKSIDE CHASSIS INC. 3 4.3GB SCSI-2 DISKS DIGITAL TRANSMISSION ANALYSER ME5208 DISTURBANCE ANALYSER MODEL 626 DLT-2500 TAPE BACKUP DEVICE Dragon 3 Temperature Forcing System DT3010 MULTIFUNCTION CARD/DAP116 D/A BOARD/SBENCH ELECTRICAL UPGRADE TO PAVILION EMERGENCY LIGHTING (TEST AIR CONDITIONING) E-PROM UPGRADE/SIMPATI DATALOG SOFTWARE (Y2K) FISHERSCOPE XR-1010 X-RAY FLUORESCENCE SYSTEM FISONS HUMIDITY CHAMBER F5 FLUKE 6061A SIGNAL GENERATOR FLUKE CABLE ANALYSER DSP-2000 FMA MODULATION ANALYZER ACE-9020 GPIB-120A BUS EXPANDER/ISOLATOR -------------------------------------------------------------------------------- Agreement Page 38 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- HAST 6000X STRESS TEST SYSTEM HAST CLEAN BENCH LE-EX (INC. AQUA-SOL CONTROL SYST HEATERSTREAM 6KG HUMIDIFIER HERAEUS THERMAL SHOCK TEMPERATURE CYCLER HT7012-52 HF 4 WAY SWITCHING MATRIX FOR A530 TESTER HITACHI CPX-970 VIDEO PROJECTOR HP 1661C LOGIC ANALYSER HP 8110A PULSE GENERATOR HP E2900A MAINFRAME HP ERGO 1600 21in DISPLAY HP LASERJET 4Si MX PRINTER HP11713A PROG.ATTENUATOR HP16500C PATTERN GENERATOR + 16501A EXPANSION FRAM HP1663C LOGIC ANALYSER (ex MUNICH) HP1918B 4 CHANNEL SCOPE HP3458A MULTIMETER HP436A POWER METER HP437B POWER METER HP54118A 18GHZ TRIGGER HP54701A ACTIVE PROBE HP54720 OSCILLOSCOPE HP6624A DC POWER SUPPLY (DCS No.1) HP6625A DC POWER SUPPLY HP71603B B.E.R. TESTER HP8130A PULSE GENERATOR HP8160A PULSE GENERATOR HP8161A PROGRAMMABLE PULSE GENERATOR HP8347A RF AMPLIFIER HP83480A OSCILLOSCOPE HP8508A VECTOR VOLTMETER HP8562A SPECTRUM ANALYSER HP8562A SPECTRUM ANALYSER 9KHZ - 22GHZ HP8562A SPECTRUM ANALYZER HP8563A SPECTRUM ANALYZER 9KHZ - 26.5GHZ HP8563E SPECTRUM ANALYSER HP8653E SPECTRUM ANALYSER HP8656B SIGNAL GENERATOR (DCS No.2) HP8656B SYNTH SIGNAL GENERATOR - DCS No.1 HP8901B MODULATION ANALYSER HP8902A MEASURING RECEIVER HP8904A SYNTHESIZED WAVEFORM GENERATOR HP98580C CONTROLLER MODEL 332 HS BER UPGRADE (OPT 801 & 804) HYPERFORMIX WORKBENCH SOFTWARE IEEE 488 INTERFACE SYSTEM INSTALL/RECONFIGURE HTA TESTER SOFTWARE ETC. Interactive Computer Farm for Swindon INTERMEC EASYCODER 3400D TT PRINTER JITTER MEASUREMENT SYSTEM 7150B JITTER MODULATION OSCILLATOR MH370A JOHNSTECH UPGRADE KIT FOR 0.3 28 LEAD SOIC'S LAMINAR FLOW UNIT 2 LAMINAR FLOW UNIT 3 -------------------------------------------------------------------------------- Agreement Page 39 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- LAMINAR FLOW UNIT 4 LAMINAR FLOW UNIT 5 LAMINAR FLOW UNIT 6 LAND - SPORTS GROUND (KINGSDOWN) Latitude D600 - quote re. 54265277/4 Latitude D600 Pentium M 1.5GHZ with Ethernet Latitude D620 Latitude D630, monitor and dock LIFE TEST BOARDS TYPE HDN24-100QFP/FXD/CLA65001 LIFE TEST SYSTEM (SLIC) BSL3D/AL/CL/250OC/9 LIGHTING - PACKING ROOM (27 RECESSED 1200 x 300) LIGHTING - SHIPPING/BURN IN ROOM (SURFACE MOUNTED) LING VIBRATION SYSTEM M3Z LEICA OPTICLE UNIT MICROLIFT MODEL 100A MICROWAVE COUNTER 10HZ - 18GHZ MIL COOL DOWN UNDER BIAS RACK MINTECH SOLDER DIP TESTER MPC8260 DEVELOPMENT BOARD MT8501 BASE HANDLER No.9 (TRANSFERRED FROM LINCOLN MT8501-8503 UPGRADE MT8503 TEST HANDLER (2ND HAND) MT8704 HANDLER #4 MT8704I SOIC HANDLER MT8704iHF HANDLER #6 MT8704iHF HANDLER #7 MT9308/4 AMBIENT/HOT HANDLER #2 MT9510 6mmx6mm mlp/mlf handler kit MT9510 AMBIENT/HOT HANDLER #1 MUST SYSTEM II SOLDERABILITY TESTER NETCOM X1000 100MB FAST ETHERNET TESTER Network Enabled Scope Oscilliscope NETWORTH 10/100 HUB New Dell Laptop Computer and interface OFFICE FURNITURE OMEGA BURN IN LIFE TEST SYSTEM OPERATORS CHAIRS WITH ARMS (11) OptiPlex 170L Small Mini Tower Celeron OptiPlex GX270 Small Desktop - P4 OptiPlex GX620 Mini Tower P4 521 ORION DELTA DATA LOGGER (SOLARTRON) PATH TEST HEAD - A530-AL TEST SYSTEM PC licences for MATLAB, Simulink, Communications B PCI 2.2 COMPLIANCE TEST CARD PJ311 OPTICAL COMPARATOR PLL FAMILY BOARD Plymouth Small Servers # 2 Plymouth Small Servers #3 PM6654/011 TIMER COUNTER 120MZ PM6681/016 TIMER/COUNTER 300MHZ/50PS PM9625 4.5GHz OPTION FOR PM6681/016 TIMER/COUNTER POWER BUSS/MONITORING SYSTEM FOR 85/85 HERAEUS CHA POWER SUPPLY TCR80S13-2 -------------------------------------------------------------------------------- Agreement Page 40 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- PPMC8260 DEVELOPMENT BOARD QUISCENT CURRENT CHECKER (TEST STATION) DUAL VOLTA READING FREQUENCY METER Refurbished Autoclave for Environmental Stress RONEO CHALLENGER TAMBOUR DOOR STORAGE CUPBOARDS SBC 8260 H PROCESSOR CARD & BSP SBC 860 H PROCESSOR CARD & BSP SCORPIO DATALOGGER 3535D SEHO 4036 / 1.7 Convection Reflow oven SHOCK TEST MACHINE SIGNODE STRAPPING M/C KRT SE200 Small European Sites Disk Upgrades SMHU 4.3 GHZ SIGNAL GENERATOR SMHU 4.3 GHZ SIGNAL GENERATOR (EX DEMO) SMHU 52 SIGNAL GENERATOR SMHU 58 WIDE BAND SIGNAL GENERATOR SPARC 10 MODEL 40 (16in MONITOR) S10FX1-40-32-P46 SPARC 10/30 WORKSTATION SPARC 20 (20in MONITOR) S20TX1-50-32-P46 (PSUPW73) SPARC 20 (20in MONITOR) S20TX1-50-32-P46 (PSUPW75) SPARC 20 SERVER S205-50-32-P69 SPARC 20/50 S20TXI-50-32-P46 SPARCCLASSIC 4/15 EC-32-P44 SPARCSERVER 10 MODEL 41 S10S-41-32-P43 SPARCSTATION 10 (16in MONITOR) S10FGX-40-32-P46 SPARCSTATION 10 MODEL 30 SPARCSTATION 2 4/75 + 16MB MEMORY EXP.& SCSI DISK SPARCSTATION 2 4/75 + 16MB MEMORY EXPANSION SPARCSTATION 2 4/75GX-32-P43 SPARCSTATION 4/65FGX 8MB SPARES FOR A370 TEST SYSTEM Spirent - AX4000 network traffic generator/analyse SPM19 SELECT LEVEL METER SSOP KIT MT8704IHF K-R STORAGE UNITS (9) STORAGE UNITS (ex 3B2 BLDG.) STORAGEWORKS CHASSIS INC. 2 2.1GB DISK DRIVES STORAGEWORKS CHASSIS INC. 4.3GB & 2.1GB DISKS STULZ CCU 300 W AIR CONDITIONING UNIT SUMMIT CHAIRS Sun Blade 1500 workstation for Roborough SUN BLADE 2000 DESKTOP WORKSTATION Sun Fire V20z,Red Hat Enterprise Linux 3 AMD 64 SUN MODEL 2200 WORKSTATION SUN ULTRA 1 MODEL 170E BASE UNIT SUN ULTRA 1 MODEL 170E INC.20in COLOUR MONITOR SUN ULTRA 10 WORKSTATION SUN ULTRA 10 WORKSTATION (INC. 19in MONITOR) SUN ULTRA 10 WORKSTATION INC. 21in MONITOR SUN ULTRA 140 WORKSTATION (SV ASSET No. #6404) SUPPORT STEELWORK (AIR CONDITIONING - TEST AREA) SYNTHESIZED SIGNAL GENERATOR 100KHZ - 4.32GHZ SYNTHESIZED SIGNAL GENERATOR 100KHZ TO 4.32GHZ -------------------------------------------------------------------------------- Agreement Page 41 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- TDS540 OSCILLOSCOPE TEK 2465A OSCILLOSCOPE TEK 2465B OSCILLOSCOPE 400MHZ TEK 492BP SPECTRUM ANALYSER TEK P6245 ACTIVE PROBE 1.5GHZ TEMP. HUMIDITY BIAS SYSTEM TEMP. HUMIDITY BIAS SYSTEM (REFURBISHED) TERADYNE A312 TEST SYSTEM TESEC 8510-TH SO PACKAGE HANDLER TEST OFFICE ACCOMODATION THERMOSPOT TP27D SYSTEM TORNADO SOFTWARE (STANDARD/PROFESSIONAL) TSD MAX DIRECT SERVER TSK UF200 PROBER #1 TSK UF200 PROBER #2 TSK UF200 PROBER #3 TUS RANGE 25mm BEAM DESKING (GREY LAMINATE) ULTRASPARC 30 MODEL 250 Upgrade to CAT 2 Teradyne Catalyst Tester VAXSTATION 3100 VAXSTATION 3100 8MB PV41A-BA VAXSTATION 4000 MOD 60 DH-PV61B-AA VX4730 12 CHANNEL DAC VXWORKS OEM SOFTWARE LICENCES (2) WAFER MANIPULATOR/SORTER + OCR WAVETEK 2002B SWEEP GENERATOR WORKSTATION FURNITURE WORKSTATION FURNITURE (ex 3B2 BLDG.) ZOOM MASTER 65 STEREO ZOOM MICROSCOPE ZPV VECTOR ANALYSER Office Furniture Stationary -------------------------------------------------------------------------------- Agreement Page 42 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- SCHEDULE 3 Business and Licensed In Intellectual Property Note: this schedule has been omitted as its disclosure would be seriously prejudicial to the interests of Zarlink Semiconductor Inc. The schedule includes a list of intellectual property rights owned by Zarlink Semiconductor Limited and a list of intellectual property rights owned by or licensed to Zarlink Semiconductor Limited or certain of its affiliates in the process technologies, licensed in patents and sub-licensed in patents. -------------------------------------------------------------------------------- Agreement Page 43 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- SCHEDULE 4 Contracts and Retained Software Licences Note: this schedule has been omitted as its disclosure would be seriously prejudicial to the interests of Zarlink Semiconductor Inc. The schedule includes a list and brief particulars of contracts relating to the analog foundry services business carried on by Zarlink Semiconductor Limited and certain of its affiliates are a party and pursuant to which Zarlink Semiconductor Limited and certain of its affiliates are licensed to use certain software for the purposes of their business where such software is also required for the purposes of carrying on the analog foundry services business carried on by Zarlink Semiconductor Limited. -------------------------------------------------------------------------------- Agreement Page 44 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- SCHEDULE 5 The Excluded Assets The following assets are excluded from the sale and purchase under this Agreement: 1. cash-in-hand held as at the Transfer Date and at bank (whether as current or deposit account) relating to the Business including uncleared cheques received by the Vendor at the Transfer Date; 2. the Debts; 3. any contracts, agreements or arrangements to which the Vendor or any other member of the Vendor's Group is a party other than the Contracts (including, for the avoidance of doubt, the Retained Software Licences save to the extent specifically provided in this Agreement); 4. all Intellectual Property Rights (including Product Rights) other than the Business Intellectual Property Rights; 5. amounts recoverable in respect of United Kingdom corporation tax relating to the Business attributable to periods ended, or transactions occurring, on or before Completion; and 6. all Plant and Equipment situated as at Completion in the part of the Property to be licensed to the Vendor under the Lease to Occupy following Completion (which, for identification, is marked in red on the plan contained in the schedule to that licence), all material items being listed in Part 3 of Schedule 2. -------------------------------------------------------------------------------- Agreement Page 45 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- SCHEDULE 6 The Employees Note: this schedule has been omitted as its disclosure would violate confidentiality provisions. The schedule includes a list of employees, their date of birth, their date of commencement of employment and the type of employment contract. -------------------------------------------------------------------------------- Agreement Page 46 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- SCHEDULE 7 The Warranties 1. Schedules The information contained in Part 1 of Schedule 4 and in Schedule 6 is accurate in all material respects. 2. Validity of the Transaction Documents 2.1 Each of the Vendor, the Zarlink Guarantor and any other member of the Vendor's Group has full power and authority to enter into and perform such of the Transaction Documents and all ancillary documents to which it is a party. 2.2 The signature, execution and performance of each of the Transaction Documents and all documents ancillary to them by the Vendor have been duly authorised by all necessary acts of the Vendor and its board of directors. 2.3 The signature, execution and performance of each of the Transaction Documents and all documents ancillary to them to which a member of the Vendor's Group is a party by that member have been duly authorised by all necessary acts of that member and its board of directors. 2.4 The Transaction Documents to which a member of the Vendor's Group is a party, constitute (or shall when executed constitute) valid and binding obligations on the Vendor and the relevant member of the Vendor's Group and are enforceable in accordance with their respective terms. 2.5 The documents annexed to the Disclosure Letter are true and complete copies of the originals. 2.6 Neither the Vendor not any member of the Vendor's Group requires the consent, approval or authority of any other person to enter into or perform their respective obligations under the Transaction Documents or any documents ancillary to any of them. The entry by the Vendor or any member of the Vendor's Group into and performance of the Transaction Documents or any documents ancillary to any of them will not constitute any breach of or default under any contractual, governmental or public obligation binding on them. 3. Management Accounts and Records 3.1 The Management Accounts have been prepared in accordance with the disclosed accounting policies of the Vendor and on a consistent basis with the previous monthly management accounts of the Vendor. 3.2 The accounting and other Records of the Business are accurate and up to date. 4. Unencumbered title 4.1 All of the Business Assets: (a) are in the legal and beneficial ownership of the Vendor, free from any third party right and from any Contractual Arrangement to grant the same; and -------------------------------------------------------------------------------- Agreement Page 47 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- (b) in the case of tangible assets, are situated at the Property and are all the tangible assets used in the Business as it is carried on as at the Transfer Date. 5. Plant, Equipment and Work in Progress 5.1 The Plant and Equipment listed in Part 1 of Schedule 2 is in a safe state of repair and condition and satisfactory working order given its age and has been maintained and serviced to a reasonable standard and in accordance with safety regulations. 5.2 The Vendor's records showing the work in progress of the Business as at the 25 February 2008 have been Disclosed and are materially accurate as of that date. 6. Property 6.1 The particulars of the Property shown in Schedule 1 (including the class of title and title number) are true, complete and correct. The use of the Property for the purpose stated in Schedule 1 corresponds to the use to which it is in fact put. 6.2 The Vendor is in occupation of the whole of the Property for the purpose of the Business and no other person is in occupation of the whole or any part of the Property. 6.3 The replies given by the Vendor's Solicitors to the Purchaser's Solicitors' written enquiries concerning the Property are true and accurate in all material respects. 6.4 Neither the Vendor nor a relevant associate (within the meaning of paragraph 3 Schedule 10 VATA) of the Vendor has made an election to waive exemption under paragraph 2 of Schedule 10 VATA in respect of the Property. 7. Environmental/Health and Safety (EHS) Matters 7.1 Environmental definitions 7.1.1 For the purposes of this paragraph 7, the following terms shall have the meanings ascribed to them below: "EHS Permits" means any permit, licence, authorisation, consent or other approval obtained or which ought to have been obtained pursuant to any EHS Laws in the 10 year period ending on Completion by the Vendor in relation to the Business; and "EHS Matters" means any of the following (1) any generation, deposit, keeping, treatment, transportation, transmission, handling or manufacture of any Hazardous Substances; (2) damage to property, nuisances, noise, defective premises or health and safety at work or elsewhere; (3) the carrying out of a development (as defined in the Town and Country Planning act 1990, s.55(1)); and (4) the pollution, conservation or protection of the Environment whether relating to man or any living organisms supported by the Environment or any other matter whatsoever affecting the Environment or any part of it. 7.2 EHS Permits -------------------------------------------------------------------------------- Agreement Page 48 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 7.2.1 The Vendor has lawfully obtained all EHS Permits. Each EHS Permit is in full force and effect and the Vendor complies and has complied at all times and in all material respects with each EHS Permit. 7.2.2 True copies of all EHS Permits obtained by the Vendor (including any variation notices applicable thereto) are attached to the Disclosure Letter. 7.2.3 The Vendor has not received any communication in any form in respect of any EHS Permit varying, modifying, revoking, suspending or cancelling the same or indicating an intention or threatening so to dol. 7.3 Compliance with EHS Law 7.3.1 In relation to the carrying on by the Vendor of the Business and the state and use of the Property: (i) so far as the Vendor is aware, the Vendor and its officers, agents and employees comply and have at all times complied with EHS Law in all material respects; (ii) the Vendor has not received any communication in any form from any relevant authority from which it appears that it may be or is alleged to be in material breach of EHS Law, or failure to comply with which could constitute a material breach of EHS Law, or compliance with which could be secured by further proceedings. The Vendor is not aware of any intention on the part of any such authority to give such communication. 7.4 Liability 7.4.1 In relation to the carrying on by the Vendor of the Business and the state and use of the Property: (i) so far as the Vendor is aware, there are no facts or circumstances which may give rise to any material actual or potential liability (whether civil or criminal) on the part of the Vendor in relation to EHS Matters; (ii) the Vendor has not received any notice or intimation of any complaint or claim from any person in respect of EHS Matters; (iii) the Vendor is not and has not been engaged in any action, litigation, arbitration or dispute resolution proceedings and is not subject to any investigation under EHS Law or otherwise in relation to EHS Matters and the Vendor is not aware of any such matters pending or being threatened or of any circumstances or facts likely to give rise to any such matters. 8. Intellectual Property Rights 8.1 The processes and patents listed in Schedule 3 are all the processes and patents used in the Business as it is carried on as at Completion. 8.2 The Business Intellectual Property is legally and beneficially owned by the Vendor free from any liens, security interests of other encumbrances. The Business -------------------------------------------------------------------------------- Agreement Page 49 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- Intellectual Property and the Licensed In Intellectual Property together comprise all the Intellectual Property used in the Business as it is carried on at the Transfer Date. 8.3 All Business Intellectual Property which is registered or the subject of application for registration is listed and briefly described in Schedule 3 and all unregistered trade marks forming part of the Business Intellectual Property are listed and briefly described in Schedule 3. 8.4 So far as the Vendor is aware, there is, and has been, no infringement of or dispute as to the ownership or validity of any of the Business Intellectual Property and none is pending or threatened. 8.5 Complete and accurate copies of all written licences, sub-licences and other agreements whereby the Vendor is licensed or otherwise authorised to use the Intellectual Property Rights of Know How of a third party in relation to the Business or whereby the Vendor licences or otherwise authorises a third party to use Business Intellectual Property or Business Know How and which, in any such case, are material to the Business, are attached to the Disclosure Letter. All of them are in full force and effect, no notice has been given to terminate them and the obligations of all parties under them have been complied with in all material respects and no disputes have arisen in respect of them. 9. Software Full details of all Software held by the Vendor and which is material in relation to the Business and used in the Business in which the Intellectual Property Rights are owned by a third party are set out in the Disclosure Letter. Copies of all licences, escrow agreements and development agreements in respect of such Software are attached to the Disclosure Letter. The licences of such Software are complied with in all material respects in the operation of the Business. 10. Remuneration and employees 10.1 The Employees comprise all the persons employed or engaged by the Vendor in relation to the Business at the date of this Agreement. 10.2 Full particulars of the identities, dates of commencement of employment (or appointment to office), dates of birth, terms and conditions of employment and remuneration, benefits and emoluments (including any loan arrangement, bonus, commission, profit sharing, share and other incentive schemes) and collective or workforce agreements of all the Employees are set out in the Disclosure Letter. 10.3 There are no amounts owing to any present or former officers, workers or employees of the Vendor in relation to the Business, other than remuneration accrued (but not yet due for payment) in respect of the calendar month in which this Agreement is executed or for reimbursement of business expenses incurred during such month, and none of them is entitled to accrued but unpaid holiday pay or accrued but untaken holiday leave in respect of the current or previous holiday year of the Business. 10.4 All contracts of employment between the Vendor and the Employees are terminable by the Vendor by giving the applicable minimum period of notice specified in section 86 Employment Rights Act 1996, and the Vendor is not obliged to make any payment as a consequence of the termination of any such contract. 10.5 The Vendor has not: 10.5.1 employed or engaged nor made any offers to employ or engage any person in the Business: -------------------------------------------------------------------------------- Agreement Page 50 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- (i) since the Accounting Date; or (ii) where such employment or engagement will take effect after the date of this Agreement; or 10.5.2 given or received notice to terminate the employment or engagement of any person employed or engaged in the Business and no person has ceased to be employed or engaged in the Business; (i) since the Accounting Date; or (ii) where such notice has not yet expired; or 10.5.3 made, agreed or proposed or is party to any contractual arrangement to make any change of terms and conditions of employment or engagement of any of the Employees: (i) since the Accounting Date; or (ii) where such change of terms and conditions has not yet taken effect. 10.6 There is no person previously employed or engaged by the Vendor in the Business who now has or may have a statutory or contractual right to return to work or to be re-instated or re-engaged by the Vendor in the Business. 10.7 Full details of all Employees who have been absent from work for more than four weeks (whether on maternity leave, unpaid leave, long-term sickness, secondment, authorised annual leave or otherwise) in the 12 month period ending on the date of this Agreement are contained in the Disclosure Letter. 10.8 The Vendor has not recognised, and has not done any act which might be construed as recognition of, a trade union in relation to the Business or any part of it and the Vendor is not party to any agreement or understanding with any trade union or organisation of employees or workers in relation to the Business or any part of it nor are any steps being taken by any of the Employees to ensure trade union recognition. 10.9 The Vendor is not involved, and has not during the 12 months prior to the date of this Agreement been involved, in any strike, lock-out, industrial or trade dispute or any negotiations with any trade union or body of employees or workers in connection with the Business. 10.10 There are no homeworking, part-time, job share, flexitime or flexible working arrangements or early retirement schemes applicable to any of the Employees. There are no schemes or programmes for the employment or training or inward or outward secondment of workers by the Vendor in relation to the Business other than under its full control. 10.11 The Vendor does not operate or intend to operate and has not operated any short time working scheme or arrangement or any redundancy or redeployment scheme or arrangement in relation to the Business, whether formal or informal, contractual or non-contractual, which provides for payments greater than those required by statute or for notice periods greater than those set out in contracts of employment or engagement. -------------------------------------------------------------------------------- Agreement Page 51 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 10.12 The Vendor does not use the services of outworkers, agency or other self-employed persons, contracted labour or agents in the Business. 10.13 The Vendor has, in relation to all present and former employees and workers, complied with all statutes, regulations, orders and codes of conduct relating to employment and relations with employees and trade unions and has maintained adequate and suitable records, whether or not required to do so by law, regarding the service of each of its employees and has complied with all agreements for the time being having effect as regards such relations or the conditions of service of its employees (whether collectively or individually). 10.14 None of the Employees are subject to any disciplinary action or are engaged in any grievance procedure and there is no matter or fact which can be reasonably foreseen as likely to give rise to the same. 11. Pension 11.1 Full details of the Vendor's Scheme are set out in the Disclosure Letter, including copies of all documentation governing the Vendor's Scheme and of any announcements and explanatory booklets relating to it and a complete, accurate and up-to-date list of all Employees who are members of the Vendor's Scheme. 11.2 Other than in relation to the Vendor's Scheme, there is not in existence, and no proposal has been announced to establish, any retirement, death or disability benefit scheme or obligation to present or former officers or employees or their dependents pursuant to which the Vendor is or may become liable to make payments. No proposal or announcement has been made to any Employee about the introduction, continuance, increase or improvement of, or payment of a contribution towards any other pension, lump sum, death, ill-health, disability or accident benefit. 11.3 The Vendor is not under any legal or moral obligation or ex-gratia arrangement to pay pensions, gratuities, superannuation allowances or the like to present or former officers or employees or their dependents. 11.4 No claims or complaints have been made or are pending or, so far as the Vendor is aware, threatened in relation to the Vendor's Scheme or in respect of the provision of (or failure to provide) pension, lump sum, death or ill-health benefits by the Vendor in relation to any of the Employees. 12. Material contracts 12.1 None of the Contracts: 12.1.1 involves agency, distributorship, franchising or manufacturing rights; 12.1.2 involves partnership, joint venture, consortium or similar arrangements; 12.1.3 involves hire purchase, conditional sale, credit sale, leasing, hiring or similar arrangements; 12.1.4 commits the Business to capital expenditure in excess of (euro)100,000; 12.1.5 is of a long term nature, being incapable of complete performance in accordance with its terms within 12 months after the date on which it was entered into; 12.1.6 involves or is likely to involve an aggregate consideration payable by or to the Business in excess of (euro)250,000; or -------------------------------------------------------------------------------- Agreement Page 52 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 12.1.7 is not on arm's length terms. 12.2 No threat or claim of default under any Contract or Contractual Arrangement to which the Vendor is a party relating to the Business or the Business Assets has been made and is outstanding against the Vendor and, so far as the Vendor is aware, there is no fact or circumstance existing whereby any Contract or Contractual Arrangement may be terminated or rescinded by any other party as a result of anything done or omitted or permitted to be done by the Vendor. 12.3 No material customer of the Business has given to the Vendor any indication that it intends to cease to deal with the Business or to reduce materially the existing level of such dealings as a result of the change in ownership of the Business that will take place on Completion pursuant to the transaction contemplated by this Agreement. 13. General legal compliance 13.1 There are attached to the Disclosure Letter copies of all necessary licences, consents permits and authorities which are necessary for the conduct of the Business as now carried on and all of them are valid and subsisting and have been complied with in all material respects and the Vendor is not aware of any reason why any of them should be suspended or cancelled. 13.2 The Vendor has conducted the Business in all material respects in accordance with all applicable laws and regulations of the United Kingdom. 14. Fair trading 14.1 No agreement, transaction, practice or arrangement carried on or proposed to be carried on by the Vendor in respect of the Business (or by any person for whose acts or defaults the Vendor may contractually or vicariously liable), whether unilaterally or with others: 14.1.1 has been the subject of an enquiry, investigation, reference, request for information, notification, report or proceeding under the Competition Act 1998, the Enterprise Act 2002, Articles 81 to 83 of the Treaty establishing the European Union or any other competition, anti-restrictive trade practice, anti-trust or consumer protection law or legislation; 14.1.2 contravenes the provisions of the Trade Descriptions Acts 1968 and 1972. 14.2 The Vendor is not aware of any undertaking or assurance being given to, or order made by, any court, person or body in relation to the Business under any of the legislation referred to in paragraph 14.1. 14.3 The Business has not been the subject of any complaint, investigation or prosecution by any trading standards officer or other consumer protection authority and the Vendor is not aware of any circumstance likely to give rise to the same. 15. Litigation 15.1 Neither the Vendor nor any person for whose acts or defaults the Vendor may be liable, is involved in any civil, criminal, tribunal, arbitration or any other proceedings which relate to the Business and the Vendor is not aware of any such proceedings being pending or threatened or of any facts likely to give rise to any such proceedings. -------------------------------------------------------------------------------- Agreement Page 53 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 15.2 There is no unsatisfied judgment or unfulfilled order outstanding against the Vendor in relation to the Business and the Vendor is not party to any undertaking or assurance given to a court, tribunal or any other person in connection with the determination or settlement of any claim or proceedings. 16. Insolvency No petition has been presented, no order has been made and no resolution has been passed for the winding up of the Vendor, no administrative receiver, receiver and/or manager has been appointed of the whole or any part of the property of the Vendor, no administration order has been made appointing an administrator in respect of the Vendor, no petition has been presented for an administration order in respect of the Vendor and there are no facts known to the Vendor which could give rise to any of the events or circumstances referred to in this paragraph 16. 17. Taxation and grants 17.1 All documents in the possession of or under the control of the Vendor or to the production of which the Vendor is entitled which are necessary to establish the title of the Vendor to any of the Business Assets and which attract stamp duty in the UK or elsewhere have been properly stamped and no such documents which are outside the UK would attract stamp duty if they were brought into the UK. 17.2 The Inland Revenue, HM Revenue & Customs or any other fiscal or other regulatory authority have not conducted any investigation into the Business (or any part of it) and neither the Vendor nor its agents has received any written notification that any such investigation is pending or threatened. At the date of this Agreement no dispute exists between the Vendor and any such authority in relation to the Business nor, so far as the Vendor is aware, are there are circumstances in existence which may give rise to such a dispute. 18. VAT The Vendor is a registered person for the purposes of the VATA. 19. Guarantee There is not now outstanding in respect of the Business any guarantee or agreement for indemnity or for suretyship given by or for the accommodation of the Business otherwise than by the Vendor and all such guarantees or agreements have been disclosed in the Disclosure Letter. 20. Insurance Claim for Flooding All material facts of which the Vendor is aware relating to the prospects of recovery in relation to the equipment which is subject to the insurance claim referred to in clause 15.1 and listed in part 2 of Schedule 2 have been Disclosed. -------------------------------------------------------------------------------- Agreement Page 54 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- SCHEDULE 8 Environmental Indemnity 1. INTERPRETATION 1.1 The definitions in this paragraph apply in this Schedule 8. "Demand" means any action, award, claim or other legal recourse, complaint, cost, debt, demand, expense, fine, liability, loss, outgoing, penalty or proceeding; "Environmental Disclosure" means the disclosure, notification or reporting of information in relation to any Soil or Groundwater Contamination by or on behalf of the Purchaser to any Environmental Authority or Third Party other than: (a) between the Purchaser and its professional advisers; or (b) with the prior agreement of the Vendor; "Emergency" means any sudden and catastrophic event after the Transfer Date which would be likely to result in significant Soil or Groundwater Contamination or in significant Environmental Loss or a significant increase in any Environmental Loss; "Environmental Authority" means any governmental or other authority having jurisdiction under any Environmental Laws for Soil or Groundwater Contamination; "Environmental Claim" means a claim made under the indemnity contained in paragraph 2 of this Schedule 8; "Environmental Laws" means all applicable laws, statutes, regulations, secondary legislation, bye-laws, common law, directives, treaties and other measures, judgments and decisions of any court or tribunal, codes of practice and guidance notes which are legally binding and in force as at the date of this agreement in so far as they relate to or apply to the Environment, including Part IIA of the Environmental Protection Act 1990 and any regulations and guidance made or issued thereunder; "Environmental Loss" means any Demand which arises directly from any Soil or Groundwater Contamination under Environmental Laws (excluding any Demand to the extent that relates to any interruption or disruption to the business carried on by the Purchaser after the Transfer Date or any other losses incidental or consequential to Soil or Groundwater Contamination) of which the Vendor had knowledge prior to Completion; "Environmental Proceedings" means any lawful criminal, civil, judicial, administrative or regulatory proceedings, action, suit or claim of any Environmental Authority or Third Party or any Environmental Requirement of any Environmental Authority or Third Party in relation to Soil or Groundwater Contamination at the Property; -------------------------------------------------------------------------------- Agreement Page 55 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- "Environmental Requirement" means a notice, judgment, order or other requirement which is lawful; "Investigative Works" means inspections, investigations, assessments, audits, sampling or monitoring; "Remedial Works" means any works undertaken for the purpose of preventing, removing, remedying, cleaning up, abating, containing or ameliorating any Soil or Groundwater Contamination; "Soil or Groundwater means any contamination: Contamination" (a) in soil or groundwater at or under the Property at the Transfer Date; or (b) in any other soil or groundwater at the Transfer Date and resulting from migration from the Property; "Third Party" means a person other than an Environmental Authority, the Purchaser, the Guarantor or any person connected with the Purchaser or the Guarantor; and "Trigger Condition" means: (a) an Environmental Requirement issued by any Environmental Authority under Environmental Law against the Purchaser in relation to any Soil or Groundwater Contamination; or (b) an Environmental Requirement obtained by or for a Third Party under Environmental Law against the Purchaser in relation to any Soil or Groundwater Contamination. 1.2 Unless the contrary intention appears, words and expressions defined in this Agreement have the same meaning in this Schedule 8 and any provisions in this Agreement concerning matters of construction or interpretation also apply in this Schedule 8. 1.3 Where there is any inconsistency between this paragraph 1 or this Schedule 8 and any other provision of this Agreement, in so far as the inconsistency relates to an Environmental Loss, the provisions of this Schedule 8 shall prevail. 1.4 For the purposes of the definition of Environmental Loss, the knowledge of the Vendor shall be the actual knowledge of each of Ian Cooper, John Gane, Mike LeGoff, Christopher Lindsey, Scott Milligan, Kevin Ball, James Ryan, Chris Joliffe and David McQueen and shall further be deemed to include knowledge of any information which is disclosed in the any files, records or documents containing information relating to the Business, the Business Assets or the Employees (in whatever form stored). -------------------------------------------------------------------------------- Agreement Page 56 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 2. INDEMNITY Subject to the following provisions of this Schedule 8, the Vendor undertakes to indemnify the Purchaser and to hold it harmless for itself on an after tax basis against any and all Environmental Losses actually incurred or sustained by the Purchaser. 3. LIMITATIONS ON ENVIRONMENTAL CLAIMS 3.1 The Purchaser cannot make an Environmental Claim unless a Trigger Condition has occurred in relation to the Soil or Groundwater Contamination in respect of which that Environmental Claim is made. 3.2 Except to the extent that any Environmental Claim arises by reason of any fraud or dishonest, reckless or wilful misstatement or omission by or on behalf of the Vendor, the liability of the Vendor in respect of any Environmental Claim will be limited as follows: (a) the Vendor shall not be liable under paragraph 2 for any Environmental Loss incurred or sustained in relation to the Property unless the Purchaser has given the Vendor notice of the Environmental Claim in accordance with paragraph 5.2 of this Schedule 8 and the relevant Trigger Condition has occurred before the fourth anniversary of the Transfer Date; and (b) the aggregate liability of the Vendor in respect of all Environmental Claims will be limited to (euro)2,500,000. 3.3 The Vendor shall not be liable under paragraph 2 to the extent that any Environmental Loss arises out of steps taken by the Purchaser which go beyond the minimum that is reasonably necessary to meet the Environmental Requirement obtained by a Third Party or issued by an Environmental Authority to prevent, remove, remedy, clean up, abate, contain, ameliorate or compensate for the Soil or Groundwater Contamination. 3.4 If the Environmental Claim arises in respect of the use or proposed use of any Property for a purpose other than that for which it is used at the Transfer Date, the Vendor shall not be liable under paragraph 2 for that proportion of the Environmental Loss which exceeds that which would have been suffered or sustained by the Purchaser had the Property in question continued to be used for the purpose for which it was used at the Transfer Date. 3.5 The Vendor shall not be liable under paragraph 2 of this Schedule 8 to the extent that any Environmental Loss would not have arisen but for, results from or is increased by, any act or omission of any person (other than the Vendor) taking place after the Transfer Date. 3.6 The Vendor shall not be liable under paragraph 2 of this Schedule 8 to the extent that any Environmental Loss would not have arisen but for, results from or is increased by, any Environmental Disclosure made by or on behalf of the Purchaser, except where such Environmental Disclosure is the minimum legally required to be made pursuant to a mandatory order made by an Environmental Authority acting lawfully or by order of a court of law. 3.7 The Vendor shall not be liable under paragraph 2 of this Schedule 8 to the extent that any Environmental Loss would not have arisen but for, results from or is increased by, any change in Environmental Laws after the Transfer Date. 4. DUTY TO MITIGATE Where any Soil or Groundwater Contamination is or is anticipated to be the subject of an Environmental Claim or may result in a Demand to the Vendor in relation to Soil or Groundwater Contamination under Environmental Law, the Purchaser shall use its reasonable -------------------------------------------------------------------------------- Agreement Page 57 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- endeavours to avoid in whole or in part and to minimise the liability of the Vendor in respect thereof. For the avoidance of doubt, complying with such obligation shall not be a pre-condition to the Vendor's liability under this Schedule 8. 5. CONDUCT OF ENVIRONMENTAL CLAIMS 5.1 As soon as reasonably practicable after becoming aware of any Soil or Groundwater Contamination which is likely to give rise to any Environmental Claim, the Purchaser shall give written notice of that fact to the Vendor. 5.2 If the Purchaser wishes to make an Environmental Claim in respect of any Soil or Groundwater Contamination, it shall notify the Vendor in writing and in sufficient detail to enable the Vendor to understand the grounds upon which the Environmental Claim is based. 5.3 The Purchaser shall have conduct of any Environmental Proceedings or of any works (including Investigative Works or Remedial Works) relating to any Soil or Groundwater Contamination which is or is anticipated to be the subject of an Environmental Claim. 5.4 Subject to paragraph 5.5, in conducting any Environmental Proceedings or works pursuant to paragraph 5.3, the Purchaser shall ensure that (subject to appropriate arrangements to maintain confidentiality and privilege): (a) a reasonably detailed description of proposed works is provided to the Vendor prior to commencement; (b) reasonably frequent and detailed reports are provided to the Vendor regarding the progress of any Environmental Proceedings or works; (c) copies of all material correspondence and documents passing between the parties to such Environmental Proceedings or in relation to such works are provided to the Vendor; (d) reasonable instructions and requests of the Vendor in relation to such Environmental Proceedings and any works are complied with; (e) no settlement or admission (including any failure to appeal or decision not to do so) shall be agreed or made in an Environmental Proceedings without the Vendor's prior written consent, such consent not to be unreasonably withheld or delayed; and (f) the Vendor is allowed to attend meetings with the relevant Environmental Authority or Third Party as an observer. 5.5 Where any works (including Investigative Works or Remedial Works) are required urgently in order to prevent or ameliorate the effects of an Emergency, the Purchaser shall comply with the provisions of paragraph 5.4 to the maximum extent possible, and to the extent that it is unable to do so as a result of the said Emergency, it shall notify the Vendor as soon as is reasonably practicable after the occurrence of the Emergency of the measures that have been taken and any contact with any Environmental Authority or Third Party. 5.6 The Vendor shall give to the Purchaser, and shall procure that each member of the Vendor's Group shall give to the Purchaser, all reasonable information and access to personnel, premises, chattels, documents and records as the Purchaser reasonably requests for the conduct of any such Environmental Proceedings or works. -------------------------------------------------------------------------------- Agreement Page 58 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- 5.7 Nothing in this paragraph 5 or in any other provision of this Schedule 8 shall require either party to provide any materials in breach of any confidentiality obligation or in respect of which legal privilege could be claimed. Both parties shall treat any information provided by the other party pursuant to this paragraph 5 as confidential. 5.8 Except in relation to paragraph 5.2, any failure on the part of the Purchaser to comply with the terms of this paragraph 5 will not prejudice the rights of the Purchaser in relation to any Environmental Claim except to the extent that such failure prejudices the Vendor. 6. DISPUTE RESOLUTION 6.1 Where the Purchaser and the Vendor fail to agree upon any matter (other than a matter of law) relating to the application of this Schedule 8, they shall jointly instruct an independent consultant with relevant experience to act as an expert (the "Expert") to determine that matter. 6.2 The Expert shall have at least five years' experience relevant to the matter being referred to him and neither the Expert nor any firm with which the Expert is associated shall have been retained by either party for at least five years prior to the Expert's appointment. 6.3 If the Purchaser and the Vendor cannot agree upon the appointment of an Expert, either of them may apply to the Chief Executive for the time being of the Institute of Environmental Management and Assessment to select an Expert. 6.4 The terms of appointment of the Expert will include a provision that neither party will engage the Expert or any firm with which he is associated for two years after his appointment without the written consent of the other party. 6.5 The Purchaser and the Vendor shall each provide the Expert with copies of all relevant data, reports, advice, statements, opinions, correspondence and other relevant documentation and the Expert shall be entitled to carry out or commission such other investigations or reports as the Expert shall consider necessary. 6.6 The determination of the Expert shall be final and binding on the parties save in the case of manifest error. 6.7 The costs of the Expert shall be within his determination. -------------------------------------------------------------------------------- Agreement Page 59 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- SCHEDULE 9 Note: reference to individual employee names has been omitted from schedule 9 as such disclosure would violate confidentiality provisions. Part 1 - Motor Vehicles -------------------------------------------------------------------------------- Driver Description Registration Original Number Expiry -------------------------------------------------------------------------------- Audi A4 Diesel Saloon 1.9 Tdi Tdv Se 4d DA06 HVD 08/04/2009 -------------------------------------------------------------------------------- Volvo S60 Diesel Saloon D5 Se 4dr [185] FV06 FLJ 13/06/2009 -------------------------------------------------------------------------------- Volkswagen Jetta 2.0 Se Tdi Pd 4dr Dsg LR06 OAG 04/10/2009 -------------------------------------------------------------------------------- Volkswagen Passat Estate 2.0 Se Tdi 5dr LS56 JFY 12/07/2009 -------------------------------------------------------------------------------- BMW 5 Series Saloon 523i Se 4dr Auto RV06 TWD 13/03/2009 -------------------------------------------------------------------------------- BMW 5 Series 4dr 520d Se SB07 YOG 21/05/2010 -------------------------------------------------------------------------------- Mercedes C220 Cdi Elegance Se Sal 4dr Au ST04 WBM 08/09/2007 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Agreement Page 60 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- Part 2 - Leasing Agreements Title Third Party Date ----- ----------- ---- Master Hire Agreement Number 5 July 2002 CH0334 -------------------------------------------------------------------------------- Agreement Page 61 Zarlink Semiconductor Limited Beachcroft LLP -------------------------------------------------------------------------------- SIGNATURE PAGE EXECUTED as a Deed on the date set out at the head of this Deed. EXECUTED AS A DEED by Zarlink Semiconductor Limited ACTING BY: [Name of First Director] /s/ Scott Milligan ------------------ (Signature) [Name of Second Director/Secretary] /s/ Ian Cooper -------------- (Signature) EXECUTED AS A DEED by MHS Electronics UK Limited ACTING BY: Duly authorized attorney [Name of First Director] /s/ Pierre Tauzinet ------------------- in the presence of John Williams (Signature) [Name of Second Director/Secretary] __________________ (Signature) EXECUTED AS A DEED by Zarlink Inc ACTING BY: /s/ Scott Milligan ------------------ (Signature) Duly authorised /s/ Gary Tanner ------------------ (Signature) -------------------------------------------------------------------------------- Agreement Page 62