EXHIBIT 2.1
MASTER SEPARATION AGREEMENT
BETWEEN
LSI LOGIC CORPORATION
AND
LSI LOGIC STORAGE SYSTEMS, INC.
DECEMBER 31, 2003
TABLE OF CONTENTS
PAGE
----
ARTICLE I SEPARATION.............................................. 1
1.1 Separation Date............................................. 1
1.2 Closing of Transactions..................................... 1
ARTICLE II DOCUMENTS AND ITEMS TO BE DELIVERED ON AND AFTER THE
SEPARATION DATE.................................................. 2
2.1 Documents to Be Delivered by LSI Logic on the Separation 2
Date........................................................
2.2 Documents to Be Delivered by SSI on the Separation Date..... 2
2.3 Documents to Be Delivered by LSI Logic after the Separation 2
Date........................................................
2.4 Documents to Be Delivered by SSI after the Separation 2
Date........................................................
ARTICLE III REPRESENTATIONS, WARRANTIES, COVENANTS AND OTHER
MATTERS............................................................ 2
3.1 Other Agreements............................................ 2
3.2 Further Instruments......................................... 2
3.3 Agreement for Exchange of Information....................... 3
3.4 Auditors and Audits; Annual and Quarterly Statements and 4
Accounting..................................................
3.5 Payment of Expenses......................................... 6
3.6 Foreign Subsidiaries........................................ 6
3.7 Dispute Resolution.......................................... 6
3.8 Governmental Approvals...................................... 7
3.9 No Representation or Warranty............................... 7
3.10 Cooperation in Obtaining New Agreements..................... 7
3.11 Assistance Regarding Consents to Assignment, Delegation or 7
Novation....................................................
3.12 Authority................................................... 7
3.13 Confidentiality of Information.............................. 7
ARTICLE IV MISCELLANEOUS.......................................... 9
4.1 Limitation of Liability..................................... 9
4.2 Entire Agreement............................................ 9
4.3 Governing Law............................................... 9
4.4 Termination................................................. 9
4.5 Notices..................................................... 9
4.6 Counterparts................................................ 10
4.7 Binding Effect; Assignment.................................. 10
4.8 Severability................................................ 10
4.9 Failure or Indulgence Not Waiver; Remedies Cumulative....... 10
4.10 Amendment................................................... 10
4.11 Interpretation.............................................. 10
4.12 Conflicting Agreements...................................... 10
ARTICLE V DEFINITIONS............................................. 10
5.1 AAA......................................................... 10
5.2 Affiliated Company.......................................... 10
5.3 Ancillary Agreements........................................ 11
5.4 Assets...................................................... 11
i
PAGE
----
5.5 Confidential Information.................................... 11
5.6 Disclosing Party............................................ 11
5.7 Dispute..................................................... 11
5.8 Dispute Resolution Commencement Date........................ 11
5.9 Exchange Act................................................ 11
5.10 Governmental Approvals...................................... 11
5.11 Governmental Authority...................................... 11
5.12 Information................................................. 11
5.13 Liabilities................................................. 11
5.14 LSI Logic Group............................................. 11
5.15 LSI Logic's Auditors........................................ 11
5.16 Non-US Plan................................................. 11
5.17 Person...................................................... 11
5.18 Receiving Party............................................. 11
5.19 Residual Information........................................ 11
5.20 Xxxxxxxx-Xxxxx Act.......................................... 11
5.21 Separation.................................................. 11
5.22 Separation Date............................................. 11
5.23 SSI Assets.................................................. 11
5.24 SSI Group................................................... 12
5.25 SSI's Auditors.............................................. 12
5.26 Subsidiary.................................................. 12
5.27 WSGR........................................................ 12
EXHIBITS
Exhibit A General Assignment and Assumption Agreement
Exhibit B Intellectual Property Agreement
Exhibit C Employee Matters Agreement
Exhibit D Indemnification and Insurance Matters Agreement
Exhibit E Tax Sharing Agreement
Exhibit F Transition Services Agreement
Exhibit G Real Estate Matters Agreement
Exhibit H Investor Rights Agreement
Exhibit I Reorganization of Operations Outside the United States
(Non-US Plan)
ii
MASTER SEPARATION AGREEMENT
This
Master Separation Agreement (this "Agreement") is entered into as of
December 31, 2003 between LSI Logic Corporation, a Delaware corporation ("LSI
Logic"), and LSI Logic Storage Systems, Inc., a Delaware corporation ("SSI").
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in Article V hereof.
RECITALS
1. LSI Logic currently owns all of the issued and outstanding capital stock
of SSI.
2. Heretofore, LSI Logic and SSI have conducted their businesses
separately.
3. LSI Logic and SSI now desire to enter into certain agreements to
delineate and clarify their relationship and to further separate the businesses
conducted by LSI Logic and SSI (the "Separation").
4. The parties intend in this Agreement, including the exhibits and
schedules hereto, to set forth the principal arrangements between them regarding
the Separation.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
ARTICLE I
SEPARATION
1.1 Separation Date. Unless otherwise provided in this Agreement or any
Ancillary Agreement, or in any exhibit or schedule hereto or thereto, the
effective time and date of the allocation of Assets and Liabilities (and if
necessary, the contribution of Assets and assumption of Liabilities) in
connection with the Separation shall be 12:01 a.m., Pacific Time, December 31,
2003 (the "Separation Date").
1.2 Closing of Transactions. Unless otherwise provided herein or agreed
by the parties, the closing of the transactions contemplated in Article II shall
occur upon the exchange and delivery of the items required to be delivered
pursuant to Section 2.1 and Section 2.2. The closing shall occur at the offices
of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx ("WSGR"), 000 Xxxx Xxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000.
ARTICLE II
DOCUMENTS AND ITEMS TO BE DELIVERED ON AND AFTER THE SEPARATION DATE
2.1 Documents to Be Delivered by LSI Logic on the Separation Date. On the
Separation Date, unless otherwise agreed by the parties, LSI Logic shall deliver
(and if necessary, shall cause its appropriate Subsidiaries to deliver) to SSI
all of the following items and agreements:
(a) A duly executed General Assignment and Assumption Agreement
substantially in the form attached hereto as EXHIBIT A;
(b) A duly executed Intellectual Property Agreement substantially in the
form attached hereto as EXHIBIT B;
(c) A duly executed Employee Matters Agreement substantially in the form
attached hereto as EXHIBIT C;
(d) A duly executed Indemnification and Insurance Matters Agreement
substantially in the form attached hereto as EXHIBIT D;
(e) To the extent deemed appropriate by LSI Logic, the resignation as an
officer and/or director of LSI Logic of each person who is an officer or
director of LSI Logic or its Subsidiaries immediately prior to the Separation
Date if such person will be an employee of SSI immediately after the Separation
Date; and
(f) Such other agreements, documents or instruments as the parties may
agree are necessary or desirable in order to achieve the purposes hereof.
2.2 Documents to Be Delivered by SSI on the Separation Date. On the
Separation Date, unless otherwise agreed by the parties, SSI shall deliver (and
if necessary, shall cause its appropriate Subsidiaries to deliver) to LSI Logic
all of the following:
(a) With respect to any item or agreement referred to in Section 2.1 to
which SSI is a party, a duly executed counterpart of such item or agreement; and
(b) To the extent requested by LSI Logic, the resignation as an officer
and/or director of SSI of each person who is an officer or director of SSI
immediately prior to the Separation Date if such person will be an employee of
LSI Logic immediately after the Separation Date.
2.3 Documents to Be Delivered by LSI Logic after the Separation Date. As
soon as practicable after the Separation Date, LSI Logic shall deliver (and if
necessary, shall cause its appropriate Subsidiaries to deliver) to SSI all of
the following items and agreements:
(a) A duly executed Tax Sharing Agreement, which shall be attached hereto
as EXHIBIT E at the time of delivery.
(b) A duly executed Transition Services Agreement, which shall be attached
hereto as EXHIBIT F at the time of delivery;
(c) A duly executed Real Estate Matters Agreement, which shall be attached
hereto as EXHIBIT G at the time of delivery;
(d) A duly executed Investor Rights Agreement, which shall be attached
hereto as EXHIBIT H at the time of delivery;
(e) A plan of Reorganization of Operations Outside the United States (the
"Non-US Plan"), which shall be attached hereto as EXHIBIT I at the time of
delivery; and
(f) Such additional agreements, documents or instruments as the parties may
agree are necessary or desirable in order to achieve the purposes hereof.
2.4 Documents to Be Delivered by SSI after the Separation Date. As soon
as practicable after the Separation Date, SSI shall deliver (and if necessary,
shall cause its appropriate Subsidiaries to deliver) to LSI Logic all of the
following:
(a) With respect to any item or agreement referred to in Section 2.3 to
which SSI is a party, a duly executed counterpart of such item or agreement.
ARTICLE III
REPRESENTATIONS, WARRANTIES, COVENANTS AND OTHER MATTERS
3.1 Other Agreements. In addition to the Ancillary Agreements, LSI Logic
and SSI agree to execute or cause to be executed by the appropriate parties and
deliver such other agreements, instruments and documents as may be necessary or
desirable to effect the purposes of this Agreement and the Ancillary Agreements.
3.2 Further Instruments.
(a) At the request of SSI, and without further consideration, LSI Logic
shall execute and deliver, and shall cause its applicable Subsidiaries to
execute and deliver, to SSI and its Subsidiaries such other instruments of
transfer, conveyance, assignment, substitution and confirmation and take such
action as SSI may reasonably deem necessary or desirable to transfer, convey and
assign to SSI and its Subsidiaries and confirm SSI's and its Subsidiaries' title
to all of the Assets contemplated to be transferred to SSI and its Subsidiaries
pursuant to this Agreement, the Ancillary Agreements and any documents referred
to therein, to
2
put SSI and its Subsidiaries in actual possession and operating control thereof
and to permit SSI and its Subsidiaries to exercise all rights with respect
thereto as described or contemplated in this Agreement, the Ancillary Agreements
and any documents referred to therein (including, without limitation, rights
under contracts and other arrangements as to which the consent of any third
party to the transfer thereof shall not have been obtained).
(b) At the request of LSI Logic and without further consideration, SSI
shall execute and deliver, and shall cause its applicable Subsidiaries to
execute and deliver, to LSI Logic and its Subsidiaries all instruments,
assumptions, novations, undertakings, substitutions or other documents and to
take such other actions as LSI Logic may reasonably deem necessary or desirable
to have SSI fully and unconditionally assume and discharge the Liabilities
contemplated to be assumed by SSI under this Agreement, the Ancillary Agreements
and any document referred to therein and to relieve the LSI Logic Group of any
obligation with respect thereto and to evidence the same to third parties.
(c) Neither LSI Logic nor SSI shall be obligated, in connection with the
foregoing, to incur expenses other than reasonable out-of-pocket expenses,
attorneys' fees and recording or similar fees. Furthermore, each party, at the
request of the other party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable to consummate the transactions contemplated hereby.
3.3 Agreement for Exchange of Information.
(a) Generally. Each of LSI Logic and SSI shall provide, or cause to be
provided, to each other, as soon as practicable after written request therefor,
any Information in the possession or under the control of such party that the
requesting party reasonably requests (i) to comply with reporting, disclosure,
filing or other requirements imposed on the requesting party (including under
applicable securities laws) by a Governmental Authority having jurisdiction over
the requesting party, (ii) for use in any other judicial, regulatory,
administrative or other proceeding, (iii) to satisfy audit, accounting,
regulatory, litigation or other similar requirements, (iv) to comply with its
obligations under this Agreement or any Ancillary Agreement or (v) in connection
with the ongoing businesses of the requesting party; provided, however, that in
the event that either party determines that any such provision of Information
could be commercially detrimental to such party, violate any law or agreement,
or waive any attorney-client privilege, the parties shall take all commercially
reasonable measures to permit the compliance with such obligations in a manner
that avoids any such harm or consequence and, if such harm or consequence cannot
be so avoided, the relevant party shall not be required to provide such
Information.
(b) Internal Accounting Controls; Financial Information. Subject to the
other subsections of this Section 3.3 (including but not limited to Section
3.3(d) and Section 3.3(e)), (i) each party shall maintain in effect at its own
cost and expense adequate systems and controls (including internal accounting
and disclosure controls) for its business to the extent necessary to enable the
other party to satisfy its reporting, accounting, audit and other obligations,
and (ii) each party shall provide, or cause to be provided, to the other party
and its Subsidiaries in such form as such requesting party shall reasonably
request, all financial and other data and Information, to the extent such
Information is existing and reasonably available, as the requesting party
determines necessary or advisable in order to prepare its financial statements
and reports or filings with any Governmental Authority. At the time such
Information is requested by a party, the parties shall negotiate in good faith
as to the allocation of the cost of providing such Information. The foregoing
obligations shall include, without limitation, the obligations of each party to
maintain such internal accounting and disclosure controls as are necessary to
enable both parties, and both parties' directors and officers, to meet their
respective certification, disclosure and reporting requirements, without any
qualification, limitation or exception whatsoever, under the federal securities
laws, rules and regulations, the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx
Act") and the laws, rules and regulations promulgated thereunder (including,
without limitation, Sections 302, 404 and 906 of such act) and any other
applicable laws, rules and regulations. In addition, each party shall cause its
officers and other employees, as appropriate, to furnish such certifications and
representations as the other party shall reasonably request in order for such
party, and such party's directors and officers, to meet their respective
certification, disclosure and reporting requirements under any
3
applicable laws, rules or regulations and to have reasonable assurances that any
certifications, disclosures or reports furnished by such party are accurate and
complete in all respects. The foregoing shall include, without limitation, each
party's obligations imposed by any self-regulatory organization (such as The New
York Stock Exchange, Inc., The National Association of Securities Dealers, Inc.
and Nasdaq) and under any applicable state laws.
(c) Ownership of Information. Any Information owned by a party that is
provided to a requesting party pursuant to this Section 3.3 shall be deemed to
remain the property of the providing party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise in any such Information.
(d) Record Retention. To facilitate the possible exchange of Information
pursuant to this Section 3.3 and other provisions of this Agreement after the
Separation Date, each party agrees to use its commercially reasonable efforts to
retain all Information in its respective possession or control on the Separation
Date substantially in accordance with the policies of LSI Logic as in effect on
the Separation Date as set forth in LSI Logic's official records retention
policy. However, except as set forth in the Tax Sharing Agreement, at any time
after the Separation Date, each party may amend its respective record retention
policies at such party's discretion so as to diverge from LSI Logic's policy
with respect to the Information; provided, however, that if a party desires to
effect the amendment within three (3) years after the Separation Date, the
amending party must give thirty (30) days prior written notice of such change in
the policy to the other party to this Agreement. No party shall destroy, or
permit any of its Subsidiaries to destroy, any Information that exists on the
Separation Date (other than Information that is permitted to be destroyed under
the current record retention policies of LSI Logic) and that falls under the
categories listed in Section 3.3(a), without first notifying the other party of
the proposed destruction and giving the other party the reasonable opportunity
to take possession of such Information prior to such destruction.
(e) Limitation of Liability. Except in the case of gross negligence or
willful misconduct by the party providing such Information, no party shall have
any liability to any other party in the event that any Information exchanged or
provided pursuant to this Section 3.3 is found to be inaccurate. No party shall
have any liability to the other party if any Information is destroyed or lost,
unless such party fails to use commercially reasonable efforts to comply with
the provisions of Section 3.3(d).
(f) Production of Witnesses; Records; Cooperation. After the Separation
Date, except in the case of a legal or other proceeding by one party against the
other party (which shall be governed by such discovery rules as may be
applicable under Section 3.7 or otherwise), each party hereto shall use its
commercially reasonable efforts to make available to the other party, upon
written request, the former, current and future directors, officers, employees,
other personnel and agents of such party and any books, records or other
documents within its control, to the extent that any such person (giving
consideration to business demands of such directors, officers, employees, other
personnel and agents) or books, records or other documents may reasonably be
required in connection with any legal, administrative or other proceeding in
which the requesting party may from time to time be involved, regardless of
whether such legal, administrative or other proceeding is a matter with respect
to which indemnification may be sought hereunder. The requesting party shall
bear all costs and expenses in connection therewith.
3.4 Auditors and Audits; Annual and Quarterly Statements and
Accounting. Each party agrees that, for so long as LSI Logic is required by
United States generally accepted accounting principles to consolidate SSI's
results of operations and financial position:
(a) Selection of Auditors. SSI shall not select a different accounting
firm ("SSI's Auditors") from that used by LSI Logic to serve as its (and its
Subsidiaries') independent certified public accountants ("LSI Logic's Auditors")
for purposes of providing an opinion on its consolidated financial statements;
provided, however, that SSI's Auditors may be different from LSI Logic's
Auditors if necessary to comply with applicable laws regarding auditor
independence and qualifications (provided, however, that SSI shall not take any
actions, and shall use reasonable efforts to cause its directors, officers and
employees not to take any actions, that could reasonably be expected to require
SSI to engage auditors other than LSI Logic's Auditors).
4
(b) Date of Auditors' Opinion and Quarterly Reviews. SSI shall use its
commercially reasonable efforts to cause SSI's Auditors to complete their audit
such that they will date their opinion on SSI's audited annual financial
statements on the same date that LSI Logic's Auditors date their opinion on LSI
Logic's audited annual financial statements, and to enable LSI Logic to meet its
timetable for the printing, filing and public dissemination of LSI Logic's
annual financial statements. SSI shall use its reasonable commercial efforts to
cause SSI's Auditors to complete their quarterly review procedures on SSI's
quarterly financial statements on the same date that LSI Logic's Auditors
complete their quarterly review procedures on LSI Logic's quarterly financial
statements.
(c) Annual and Quarterly Financial Statements. SSI shall promptly provide
to LSI Logic all Information that LSI Logic reasonably requests to prepare,
print, file, and publicly disseminate LSI Logic's annual and quarterly financial
statements in accordance with LSI Logic's obligations under the Exchange Act.
Without limiting the generality of the foregoing, SSI shall provide all required
financial Information with respect to SSI and its Subsidiaries to SSI's Auditors
in a sufficient and reasonable time and in sufficient detail to permit SSI's
Auditors to take all steps and perform all reviews necessary to provide
sufficient assistance to LSI Logic's Auditors with respect to financial
Information to be included or contained in LSI Logic's annual and quarterly
financial statements. Similarly, LSI Logic shall provide to SSI on a timely
basis all financial Information that SSI reasonably requires to meet its
schedule for the preparation, printing, filing, and public dissemination of
SSI's annual and quarterly financial statements. Without limiting the generality
of the foregoing, LSI Logic shall provide all required financial Information
with respect to LSI Logic and its Subsidiaries to LSI Logic's Auditors in a
sufficient and reasonable time and in sufficient detail to permit LSI Logic's
Auditors to take all steps and perform all reviews necessary to provide
sufficient assistance to SSI's Auditors with respect to Information to be
included or contained in SSI's annual and quarterly financial statements. The
Information required to be provided by this Section 3.4(c) shall include such
back-up or similar certificates signed by the appropriate officers or employees
or LSI Logic or SSI, as other party may request, necessary or appropriate to
comply with the certifications required by the Xxxxxxxx-Xxxxx Act and the rules
of the Securities and Exchange Commission promulgated thereunder.
(d) Identity of Personnel Performing the Annual Audit and Quarterly
Reviews. SSI shall instruct SSI's Auditors to make available to LSI Logic's
Auditors both the personnel who performed or will perform the annual audits and
quarterly reviews of SSI and work papers related to the annual audits and
quarterly reviews of SSI, in all cases within a reasonable time prior to SSI's
Auditors' opinion date, so that LSI Logic's Auditors are able to perform the
procedures they consider necessary to take responsibility for the work of SSI's
Auditors as it relates to LSI Logic's Auditors' report on LSI Logic's financial
statements, all within sufficient time to enable LSI Logic to meet its timetable
for the printing, filing and public dissemination of LSI Logic's annual and
quarterly statements in accordance with LSI Logic's obligations under the
Exchange Act.
(e) Access to Books and Records. SSI shall provide LSI Logic's internal
auditors and their designees access to SSI's and its Subsidiaries' books and
records so that LSI Logic may conduct reasonable audits relating to the
financial statements provided by SSI pursuant hereto as well as to the internal
accounting controls and operations of SSI and its Subsidiaries.
(f) Notice of Change in Accounting Principles. SSI shall give LSI Logic as
much prior notice as reasonably practical of any proposed determination of, or
any significant changes in, its accounting estimates or accounting principles
from those in effect on the Separation Date. SSI shall consult with LSI Logic
and, if requested by LSI Logic, SSI shall consult with LSI Logic's independent
public accountants with respect thereto.
(g) Conflict with Third-Party Agreements. Nothing in Section 3.3 or
Section 3.4 shall require either party to violate any confidentiality agreement
with any third party; provided, however, that in the event that either party is
required under Section 3.3 or Section 3.4 to disclose any such Information, such
party shall use all commercially reasonable efforts to seek to obtain such third
party's consent to the disclosure of such Information; and provided further,
that if disclosure is required by law, it may be disclosed.
5
3.5 Payment of Expenses. Except as otherwise provided in this Agreement,
the Ancillary Agreements or any other agreement between the parties relating to
the Separation, SSI and LSI Logic shall each be responsible for their own fees,
costs and expenses incurred in connection with the Separation
3.6 Foreign Subsidiaries. LSI Logic and SSI shall cause each of their
foreign subsidiaries to execute such local transfer agreements, assignments,
assumptions, novations and other documents as shall be necessary to carry out
the Non-US Plan.
3.7 Dispute Resolution.
(a) If a dispute, controversy or claim ("Dispute") arises between the
parties relating to the interpretation or performance of this Agreement or the
Ancillary Agreements, appropriate senior executives of each party who shall have
the authority to resolve the matter shall attempt in good faith to negotiate a
resolution of the Dispute prior to pursuing other available remedies. The
initial meeting between the appropriate senior executives shall be referred to
herein as the "Dispute Resolution Commencement Date." Discussions and
correspondence relating to the resolution of such Dispute shall be exempt from
discovery or production and shall not be admissible in any court or arbitration
proceeding. If the senior executives are unable to resolve the Dispute within
thirty (30) days from the Dispute Resolution Commencement Date, and either party
wishes to pursue its rights relating to such Dispute, then the Dispute shall be
mediated by a mutually acceptable mediator appointed pursuant to the mediation
rules of JAMS/Endispute within thirty (30) days after written notice by one
party to the other demanding non-binding mediation. Neither party may
unreasonably withhold consent to the selection of a mediator or the location of
the mediation. The parties shall share the costs of the mediation equally,
except that each party shall bear its own costs and expenses, including
attorneys' fees, witness fees, travel expenses, and preparation costs. The
parties may agree to replace mediation with some other form of non-binding or
binding alternative dispute resolution.
(b) Any Dispute that the parties cannot resolve through mediation (or other
form of non-binding or binding alternative dispute resolution) within ninety
(90) days of the Dispute Resolution Commencement Date, unless otherwise mutually
agreed, shall be submitted to final and binding arbitration under the then
current Commercial Arbitration Rules of the American Arbitration Association
("AAA"), by three (3) arbitrators in Santa Xxxxx County,
California. Such
arbitrators shall be selected by the mutual agreement of the parties or, failing
such agreement, shall be selected according to the AAA's Commercial Arbitration
Rules. The arbitrators shall be instructed to prepare and deliver a written,
reasoned opinion stating their decision within thirty (30) days of the
completion of the arbitration. The prevailing party in such arbitration shall be
entitled to expenses, including costs and reasonable attorneys' and other
professional fees, incurred in connection with the arbitration (but excluding
any costs and fees associated with prior negotiation or mediation or the
Dispute). The decision of the arbitrator shall be final and non-appealable and
may be enforced in any court of competent jurisdiction. The use of any
alternative dispute resolution procedures shall not be construed under the
doctrine of laches, waiver or estoppel to adversely affect the rights of either
party.
(c) Any Dispute regarding the following is not required to be negotiated,
mediated or arbitrated prior to seeking relief from a court of competent
jurisdiction:
(i) breach of any obligation of confidentiality; or
(ii) any other claim pursuant to which interim relief from the court
is sought to prevent serious and irreparable injury to one of the parties
or to others. However, the parties to the Dispute shall make a good faith
effort to negotiate and mediate such Dispute, according to the above
procedures, while such court action is pending.
(d) Unless otherwise agreed in writing, the parties shall continue to be
bound by and to perform each party's obligations under this Agreement and each
Ancillary Agreement during the course of dispute resolution pursuant to the
provisions of this Section 3.7 with respect to all matters not subject to the
pending Dispute.
3.8 Governmental Approvals. To the extent that the Separation requires
any Governmental Approvals, the parties shall use their commercially reasonable
efforts to obtain any such Governmental Approvals.
6
3.9 No Representation or Warranty. LSI Logic does not, in this Agreement
or any other agreement, instrument or document contemplated by this Agreement,
make any representation as to, warranty of or covenant with respect to:
(a) the value of any Asset to be contributed or transferred to SSI;
(b) the freedom from encumbrance of any Asset to be contributed or
transferred to SSI;
(c) the absence of defenses or freedom from counterclaims with respect to
any claim to be transferred to SSI; or
(d) the legal sufficiency of any assignment, document or instrument
delivered hereunder to convey title to any Asset upon its execution, deliver and
filing.
Except as set forth herein or in any Ancillary Agreement, all Assets to be
transferred to SSI shall be transferred "AS IS, WHERE IS," and SSI shall bear
the economic and legal risk that any conveyance shall prove to be insufficient
to vest in SSI good and marketable title to such Asset, free and clear of any
lien, claim, equity or other encumbrance.
3.10 Cooperation in Obtaining New Agreements. LSI Logic understands that,
prior to the Separation Date, SSI has derived benefits under certain agreements
and relationships between LSI Logic and its third-party service providers and
suppliers, which agreements and relationships are not being assigned or
transferred to SSI in connection with the Separation. Upon the request of SSI
and for a period of one (1) year hereafter, LSI Logic agrees to make
introductions of appropriate SSI personnel to LSI Logic's contacts at such
third-party service providers and suppliers and agrees to provide reasonable
assistance to SSI so that SSI may enter into agreements or relationships with
such third-party service providers and suppliers.
3.11 Assistance Regarding Consents to Assignment, Delegation or
Novation. LSI Logic understands that certain agreements between LSI Logic and
third parties that are being assigned to SSI in connection with the Separation
may require the consent of the applicable third party. Subject to any similar
provisions contained in the Ancillary Agreements, LSI Logic shall assist SSI in
seeking and obtaining the consent of such third parties to the assignment,
delegation or novation of such agreements (to the extent such consents have not
been obtained prior to the Separation).
3.12 Authority. Each of the parties hereto represents to the other that:
(a) it has the corporate or other requisite power and authority to execute,
deliver and perform this Agreement, the Ancillary Agreements and the exhibits
and schedules attached hereto and thereto, (b) the execution, delivery and
performance of this Agreement, the Ancillary Agreements that will be signed
concurrently herewith and the exhibits and schedules attached hereto and thereto
by it have been duly authorized by all necessary corporate or other actions, (c)
it has duly and validly executed and delivered this Agreement, the Ancillary
Agreements that will be signed concurrently herewith and the exhibits and
schedules attached hereto and thereto, and (d) each of this Agreement, the
Ancillary Agreements that will be signed concurrently herewith and the exhibits
and schedules attached hereto and thereto is a legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and general equity principles.
3.13 Confidentiality of Information.
(a) Confidential Information. Information shall be deemed to be
"Confidential Information" if such Information: (i) is disclosed by one party
(the "Disclosing Party") to the other (the "Receiving Party"), and which, if in
written, graphic, machine-readable or other tangible form is marked as
"confidential" or "proprietary," or (ii) is reasonably understood to be
proprietary and confidential to either SSI or LSI Logic, or (iii) is otherwise
deemed to be "confidential" in this Agreement or the Ancillary Agreements.
(b) Confidential Information Exclusions. Notwithstanding the provisions of
Section 3.13(a), Confidential Information excludes Information that the
Receiving Party can demonstrate: (i) was independently developed by the
Receiving Party without any use of the Disclosing Party's Confidential
Information or by the Receiving Party's employees or other agents (or
independent contractors hired by the Receiving Party) who
7
have not been exposed to the Disclosing Party's Confidential Information; (ii)
becomes known to the Receiving Party, without restriction, from a source (other
than the Disclosing Party) that had a right to disclose it without breach of
this Agreement or the Ancillary Agreements; (iii) was in the public domain at
the time it was disclosed or enters the public domain through no act or omission
of the Receiving Party; or (iv) was rightfully known to the Receiving Party,
without restriction, at the time of disclosure.
(c) Confidentiality Obligations. The Receiving Party shall treat as
confidential all of the Disclosing Party's Confidential Information and shall
not use that Confidential Information except as expressly permitted under this
Agreement or the Ancillary Agreements. Without limiting the foregoing, the
Receiving Party shall use at least the same degree of care that it uses to
prevent the disclosure of its own confidential Information of like importance,
but in no event with less than reasonable care, to prevent the disclosure of the
Disclosing Party's Confidential Information.
(d) Residuals. The restrictions set forth in Section 3.13(c) do not apply
to a Receiving Party's use of Residual Information, and Residual Information is
not considered Confidential Information. "Residual Information" means
Information that is retained in the unaided memories of the Receiving Party's
employees who have had access to Confidential Information of the Disclosing
Party or which otherwise constitutes the general knowledge or skills of those
employees.
(e) Disclosure to LSI Logic or SSI. Except as explicitly provided in this
Agreement, one party shall not disclose to the other party any Information that
the Disclosing Party considers Confidential Information prior to obtaining the
Receiving Party's consent to receive such Information as Confidential
Information. Each party consents to receive any Information that the other party
is required to disclose under Section 3.3 or Section 3.4 of this Agreement as
Confidential Information. Any Information disclosed by SSI to LSI Logic, or by
LSI Logic to SSI, without that consent is not considered Confidential
Information of the Disclosing Party, and the Receiving Party is free to use and
disclose that Information without restriction.
(f) Remedies. Unauthorized use by a party of the other party's
Confidential Information will diminish the value of that Information. Therefore,
if a party breaches any of its obligations with respect to confidentiality or
use of Confidential Information, the other party may seek both equitable relief
(including injunctive relief) and money damages to protect its interest in that
Confidential Information.
(g) Required Disclosure. Notwithstanding anything to the contrary in this
Agreement or any Ancillary Agreement, the Receiving Party is permitted to
disclose the Disclosing Party's Confidential Information to the extent required
by applicable law or regulation (including, without limitation, any rule,
regulation or policy statement of any national securities exchange, market or
automated quotation systems on which any of the Receiving Party's securities are
listed or quoted) or under the order or requirement of a court, administrative
agency, or other Governmental Authority. If the Receiving Party must disclose
the Disclosing Party's Confidential Information under the order or requirement
of a court, administrative agency, or other Governmental Authority, the
Receiving Party shall provide prompt notice thereof to the Disclosing Party and
shall use its reasonable efforts to obtain a protective order or otherwise
prevent public disclosure of such Information.
(h) Public Announcements. Neither SSI nor LSI Logic shall make any initial
public announcement relating to this Agreement or the Ancillary Agreements until
both SSI and LSI Logic approve the timing, form and content of a public
announcement, which approval may not unreasonably be withheld or delayed.
ARTICLE IV
MISCELLANEOUS
4.1 Limitation of Liability. IN NO EVENT SHALL ANY MEMBER OF THE LSI
LOGIC GROUP OR SSI GROUP BE LIABLE TO ANY OTHER MEMBER OF THE LSI LOGIC GROUP OR
SSI GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE
DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY
(INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT,
8
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES;
PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EITHER PARTY'S
INDEMNIFICATION OBLIGATIONS AS SET FORTH IN THE INDEMNIFICATION AND INSURANCE
MATTERS AGREEMENT.
4.2 Entire Agreement. This Agreement, the Ancillary Agreements and the
exhibits and schedules referenced or attached hereto and thereto, constitute the
entire agreement between the parties with respect to the subject matter hereof
and thereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof and thereof.
4.3 Governing Law. This Agreement shall be construed in accordance with,
and all Disputes hereunder shall be governed by, the laws of the State of
California, excluding its conflict of law rules, and the United Nations
Convention on Contracts for the International Sale of Goods. The Superior Court
of Santa Xxxxx County and/or the United States District Court for the Northern
District of
California shall have jurisdiction and venue over all Disputes
between the parties that are permitted to be brought in a court of law pursuant
to Section 3.7 above.
4.4 Termination. This Agreement and all Ancillary Agreements may be
terminated at any time prior to any issuance of SSI stock to persons other than
LSI Logic, LSI Logic Affiliated Companies, or employees, consultants or
directors of LSI Logic or SSI by and in the sole discretion of LSI Logic without
the approval of SSI. This Agreement and all Ancillary Agreements may be
terminated at any time after any issuance of SSI stock to persons other than LSI
Logic, LSI Logic Affiliated Companies, or employees, consultants or directors of
LSI Logic or SSI by mutual consent of LSI Logic and SSI. In the event of
termination pursuant to this Section 4.4, no party shall have any liability of
any kind to the other party.
4.5 Notices. Notices, offers, requests or other communications required
or permitted to be given by either party pursuant to the terms of this Agreement
shall be given in writing to the respective parties at the following addresses:
if to LSI Logic: LSI Logic Corporation
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
if to SSI: LSI Logic Storage Systems, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also be
sent via certified mail, return receipt requested. All other notices may also be
sent by fax, confirmed by first class mail. All notices shall be deemed to have
been given and received on the earlier of actual delivery or three (3) days from
the date of postmark.
4.6 Counterparts. This Agreement, the Ancillary Agreements and the
exhibits and schedules attached hereto and thereto may be executed in
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
4.7 Binding Effect; Assignment. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective legal
representatives and successors in interest, and nothing in this Agreement,
express or implied, is intended to confer upon any other Person any rights or
remedies of any nature whatsoever under or by reason of this Agreement. This
Agreement may be enforced separately by each member of the LSI Logic Group and
each member of the SSI Group. Neither party may assign this
9
Agreement or any rights or obligations hereunder, without the prior written
consent of the other party, and any such assignment shall be void. Any permitted
assignee shall agree to perform the obligations of the assignor of this
Agreement, and this Agreement shall inure to the benefit of and be binding upon
any permitted assignee.
4.8 Severability. If any term or other provision of this Agreement or the
exhibits or schedules attached hereto is determined by a nonappealable decision
by a court, administrative agency or arbitrator to be invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to either
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the fullest extent possible.
4.9 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of either party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise or waiver of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies existing under
this Agreement or the exhibits or schedules attached hereto are cumulative to,
and not exclusive of, any rights or remedies otherwise available.
4.10 Amendment. No change or amendment shall be made to this Agreement or
the exhibits or schedules attached hereto except by an instrument in writing
signed on behalf of each of the parties to such agreement.
4.11 Interpretation. The headings contained in this Agreement, in any
exhibit or schedule attached hereto and in the table of contents to this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Any capitalized term used in any
exhibit or schedule but not otherwise defined therein, shall have the meaning
assigned to such term in this Agreement. When a reference is made in this
Agreement to an article, section, exhibit or schedule, such reference shall be
to an article or section of, or an exhibit or schedule to, this Agreement,
unless otherwise indicated.
4.12 Conflicting Agreements. In the event of conflict between this
Agreement and any Ancillary Agreement, the provisions of such Ancillary
Agreement shall prevail.
ARTICLE V
DEFINITIONS
5.1 AAA. "AAA" has the meaning set forth in Section 3.7(b) hereof.
5.2 Affiliated Company. "Affiliated Company" of any Person means any
entity that controls, is controlled by, or is under common control with such
Person; provided, however that neither LSI Logic nor any other entity that is an
Affiliated Company of LSI Logic but not a Subsidiary of SSI shall be an
"Affiliated Company" of SSI. As used herein, "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such entity, whether through ownership of voting
securities or other interests, by contract or otherwise.
5.3 Ancillary Agreements. "Ancillary Agreements" means the items and
agreements (together with all documents attached thereto) referred to in Section
2.1 and Section 2.3 hereof.
5.4 Assets. "Assets" has the meaning set forth in the General Assignment
and Assumption Agreement.
5.5 Confidential Information. "Confidential Information" has the meaning
set forth in Section 3.13(a) hereof.
5.6 Disclosing Party. "Disclosing Party" has the meaning set forth in
Section 3.13(a) hereof.
10
5.7 Dispute. "Dispute" has the meaning set forth in Section 3.7(a)
hereof.
5.8 Dispute Resolution Commencement Date. "Dispute Resolution
Commencement Date" has the meaning set forth in Section 3.7(a) hereof.
5.9 Exchange Act. "Exchange Act" means Securities Exchange Act of 1934,
as amended.
5.10 Governmental Approvals. "Governmental Approvals" means any notices,
reports or other filings to be made, or any consents, registrations, approvals,
permits or authorizations to be obtained from, any Governmental Authority.
5.11 Governmental Authority. "Governmental Authority" means any federal,
state, local, foreign or international court, government, department,
commission, board, bureau, agency, official or other regulatory, administrative
or governmental authority.
5.12 Information. "Information" means information, whether or not
patentable or copyrightable, in written, oral, electronic or other tangible or
intangible forms, stored in any medium, including studies, reports, records,
books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.
5.13 Liabilities. "Liabilities" has the meaning set forth in the General
Assignment and Assumption Agreement.
5.14 LSI Logic Group. "LSI Logic Group" means LSI Logic, each Subsidiary
and Affiliated Company of LSI Logic (other than any member of the SSI Group)
immediately after the Separation Date and each Person that becomes a Subsidiary
or Affiliated Company of LSI Logic after the Separation Date.
5.15 LSI Logic's Auditors. "LSI Logic's Auditors" has the meaning set
forth in Section 3.4(a) hereof.
5.16 Non-US Plan. "Non-US Plan" has the meaning set forth in Section 2.3
hereof.
5.17 Person. "Person" means an individual, a partnership, a corporation,
a limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
5.18 Receiving Party. "Receiving Party" has the meaning set forth in
Section 3.13(a) hereof.
5.19 Residual Information. "Residual Information" has the meaning set
forth in Section 3.13(d) hereof.
5.20 Xxxxxxxx-Xxxxx Act. "Xxxxxxxx-Xxxxx Act" has the meaning set forth
in Section 3.3(b) hereof.
5.21 Separation. "Separation" has the meaning set forth in the Recitals
hereof.
5.22 Separation Date. "Separation Date" has the meaning set forth in
Section 1.1 hereof.
5.23 SSI Assets. "SSI Assets" has the meaning set forth in the General
Assignment and Assumption Agreement.
5.24 SSI Group. "SSI Group" means SSI, each Subsidiary and Affiliated
Company of SSI immediately after the Separation Date and each Person that
becomes a Subsidiary or Affiliated Company of SSI after the Separation Date.
5.25 SSI's Auditors. "SSI's Auditors" has the meaning set forth in
Section 3.4(a) hereof.
5.26 Subsidiary. "Subsidiary" of any Person means a corporation or other
organization whether incorporated or unincorporated of which at least a majority
of the securities or interests having by the terms thereof ordinary voting power
to elect at least a majority of the board of directors or others performing
similar
11
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries; provided,
however, that no Person that is not directly or indirectly wholly-owned by any
other Person shall be a Subsidiary of such other Person unless such other Person
controls, or has the right, power or ability to control, that Person.
5.27 WSGR. "WSGR" has the meaning set forth in Section 1.2 hereof.
[remainder of the page intentionally left blank]
12
IN WITNESS WHEREOF, the parties have signed this
Master Separation
Agreement effective as of the date first set forth above.
LSI LOGIC CORPORATION
By: /s/ XXXXXXX X. XXXXXXXX
-----------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman/C.E.O.
LSI LOGIC STORAGE SYSTEMS, INC.
By: /s/ XXXXXX XXXXXXXX
-----------------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
13
