Exhibit 10.2

 

 

ASSET PURCHASE AND SALE AGREEMENT

 

 

BY AND AMONG

 

 

SANMINA-SCI CORPORATION

 

SANMINA-SCI SYSTEMS SINGAPORE PTE. LTD.

 

 

AND

 

 

ADAPTEC MANUFACTURING (S) PTE. LTD.

 

 

Dated as of December 23, 2005

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

ARTICLE I DEFINITIONS

1

 

 

 

 

 

1.1

Certain Definitions

1

 

 

 

 

ARTICLE II PURCHASE AND SALE OF ASSETS

8

 

 

 

 

 

2.1

Purchase and Sale of Assets

8

 

2.2

Assumption of Liabilities

10

 

2.3

Closing

12

 

2.4

Post-Closing Purchase Price Adjustments

13

 

2.5

Prorations

15

 

2.6

Taxes

16

 

2.7

Nontransferable Assets

16

 

2.8

Taking of Necessary Action; Further Action

17

 

2.9

Allocation of Purchase Price Consideration

17

 

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

17

 

 

 

 

 

3.1

Organization, Qualification, and Corporate Power

18

 

3.2

Authorization

18

 

3.3

No Conflicts

18

 

3.4

Consents

18

 

3.5

Legal Compliance

18

 

3.6

Tax Matters

19

 

3.7

Title of Properties; Absence of Liens and Encumbrances; Condition of Equipment

19

 

3.8

Intellectual Property

20

 

3.9

Contracts

20

 

3.10

Power of Attorney

21

 

3.11

Insurance

21

 

3.12

Litigation

21

 

3.13

Employees

21

 

3.14

Labor Matters

21

 

3.15

Environment, Health and Safety

22

 

3.16

Fees

23

 

3.17

Complete Copies of Materials

23

 

3.18

Board Approval

23

 

3.19

Inventories

23

 

3.20

Facility and Tangible Personal Property

24

 

3.21

Sufficiency of Purchased Assets

24

 

3.22

Operations Permits

24

 

3.23

ISO Certifications and Non-Governmental Certifications

24

 

3.24

Suppliers

24

 

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Page

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER

25

 

 

 

 

 

4.1

Organization, Qualification, and Corporate Power

25

 

4.2

Authorization

25

 

4.3

No Conflicts

25

 

4.4

Consents

26

 

4.5

Purchase Price

26

 

 

 

 

ARTICLE V PRE-CLOSING COVENANTS

26

 

 

 

 

 

5.1

Operation of Business

26

 

5.2

Access to Information

28

 

5.3

Notice of Developments

28

 

5.4

No Solicitation

29

 

5.5

Reasonable Efforts

29

 

5.6

Notices and Consents

29

 

5.7

Employee Matters

29

 

5.8

Confidentiality

30

 

 

 

 

ARTICLE VI OTHER AGREEMENTS AND COVENANTS

30

 

 

 

 

 

6.1

Additional Documents and Further Assurances

30

 

6.2

Inventory Put and Call; Covenant to Purchase Inventory

30

 

6.3

Repurchase of Inventory and Equipment Under Certain Circumstances

32

 

6.4

Consigned Inventories

33

 

 

 

 

ARTICLE VII CONDITIONS TO THE CLOSING

34

 

 

 

 

 

7.1

Conditions to Parent’s and Buyer’s Obligation to Close

34

 

7.2

Conditions to Seller’s Obligations

36

 

 

 

 

ARTICLE VIII SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

37

 

 

 

 

 

8.1

Representations, Warranties and Covenants

37

 

 

 

 

ARTICLE IX INDEMNIFICATION

37

 

 

 

 

 

9.1

Indemnification by Seller

37

 

9.2

Indemnification by Buyer and Parent

38

 

9.3

Notice and Opportunity to Defend

39

 

9.4

Remedies

40

 

9.5

Certain Limitations

40

 

9.6

Environmental Covenants

41

 

9.7

Escrow

41

 

 

 

 

ARTICLE X TERMINATION

42

 

 

 

 

 

10.1

Termination of the Agreement

42

 

10.2

Effect of Termination

43

 

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Page

 

 

ARTICLE XI MISCELLANEOUS

43

 

 

 

 

 

11.1

Press Releases and Public Announcements

43

 

11.2

No Third-Party Beneficiaries

43

 

11.3

Entire Agreement and Modification

43

 

11.4

Amendment

43

 

11.5

Waivers

43

 

11.6

Successors and Assigns

44

 

11.7

Counterparts

44

 

11.8

Headings

44

 

11.9

Notices

44

 

11.10

Governing Law

45

 

11.11

Severability

46

 

11.12

Expenses

46

 

11.13

Construction

46

 

11.14

Seller Disclosure Letter

46

 

11.15

Attorneys’ Fees

46

 

11.16

Further Assurances

46

 

11.17

Time of Essence

46

 

11.18

Consent to Jurisdiction

47

 

11.19

Schedules and Exhibits

47

 

iii

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EXHIBITS

 

Exhibit A –Transition Services Agreement

Exhibit B – Employee Secondment Agreement

Exhibit C – Facility Transfer Agreement

Exhibit D – Supply Agreement

 

iv

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ASSET PURCHASE AND SALE AGREEMENT

 

THIS ASSET PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered
into as of December 23, 2005, by and among Sanmina-SCI Corporation, a Delaware
corporation (“Parent”), Sanmina-SCI Systems Singapore Pte. Ltd., a company
incorporated in Singapore and a wholly-owned subsidiary of Parent (“Buyer”) and
Adaptec Manufacturing (S) Pte. Ltd., a company incorporated in Singapore
(“Seller”).  Parent, Buyer and Seller are sometimes referred to herein
individually as a “Party” and collectively as the “Parties.”

RECITALS

 

A.            Seller is engaged the Business at the facility listed on
Schedule A (the “Facility”).  For purpose of this Agreement, the “Business”
means the printed circuit board assembly manufacturing and storage system
manufacturing currently conducted by Seller using the Purchased Assets at the
Facility, which Business will be transferred to Buyer pursuant to this
Agreement.

 

B.            Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, on the terms and subject to the conditions set forth herein, the
Purchased Assets of Seller described herein, and Seller desires Buyer to assume
the Assumed Liabilities, which Buyer would agree to assume on the terms and
subject to the conditions set forth herein.

 

C.            The Board of Directors of each of Parent, Buyer and Seller
believes it is in the best interests of its respective corporation and
shareholders that the transactions contemplated hereby be consummated and, in
furtherance thereof, has approved this Agreement and the transactions
contemplated hereby.

 

D.            Parent, Buyer and Seller desire to make certain representations,
warranties, covenants and other agreements in connection with the transactions
contemplated hereby.

NOW, THEREFORE, in consideration of the covenants and representations set forth
herein, and for other good and valuable consideration, the parties agree as
follows:

 

ARTICLE I

DEFINITIONS

 

1.1           Certain Definitions.  As used in this Agreement, the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural and vice versa).  Certain other
terms are defined in the text of this Agreement.

 

(A)           “ACTIONS OR PROCEEDING” MEANS ANY ACTION, SUIT, PROCEEDING, OR
ARBITRATION.

 

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(B)           “AFFILIATE” MEANS ANY PERSON THAT DIRECTLY OR INDIRECTLY, THROUGH
ONE OF MORE INTERMEDIARIES, CONTROLS OR IS CONTROLLED BY OR IS UNDER COMMON
CONTROL WITH THE PERSON SPECIFIED.  FOR PURPOSES OF THIS DEFINITION, CONTROL OF
A PERSON MEANS THE POWER, DIRECT OR INDIRECT, TO DIRECT OR CAUSE THE DIRECTION
OF THE MANAGEMENT AND POLICIES OF SUCH PERSON WHETHER BY VOTING POWER, CONTRACT
OR OTHERWISE AND, IN ANY EVENT AND WITHOUT LIMITATION OF THE PREVIOUS SENTENCE,
ANY PERSON OWNING TEN PERCENT (10%) OR MORE OF THE VOTING SECURITIES OF ANOTHER
PERSON SHALL BE DEEMED TO CONTROL THAT PERSON.

 

(C)           “ASSETS” OF ANY PERSON MEANS ALL ASSETS AND PROPERTIES OF EVERY
KIND, NATURE, CHARACTER AND DESCRIPTION (WHETHER REAL, PERSONAL OR MIXED,
WHETHER TANGIBLE OR INTANGIBLE, WHETHER ABSOLUTE, ACCRUED, CONTINGENT, FIXED OR
OTHERWISE AND WHEREVER SITUATED), INCLUDING THE GOODWILL RELATED THERETO,
OPERATED, OWNED OR LEASED BY SUCH PERSON, INCLUDING WITHOUT LIMITATION, ACCOUNTS
AND NOTES RECEIVABLE, CHATTEL PAPER, DOCUMENTS, INSTRUMENTS, GENERAL
INTANGIBLES, REAL ESTATE, EQUIPMENT, INVENTORY AND GOODS.

 

(D)           “ASSUMED LIABILITIES” HAS THE MEANING SET FORTH IN SECTION 2.2(B).

 

(E)           “BOOKS AND RECORDS” OF ANY PERSON MEANS ALL FILES, DOCUMENTS,
INSTRUMENTS, PAPERS, BOOKS AND RECORDS RELATING TO THE BUSINESS, OPERATIONS,
CONDITION OF (FINANCIAL OR OTHER), RESULTS OF OPERATIONS AND ASSETS OF SUCH
PERSON, INCLUDING WITHOUT LIMITATION FINANCIAL STATEMENTS, TAX RETURNS, BUDGETS,
RELIABILITY AND COST DATA, PRICING GUIDELINES, LEDGERS, JOURNALS, DEEDS, TITLE
POLICIES, MINUTE BOOKS, STOCK CERTIFICATES AND BOOKS, STOCK TRANSFER LEDGERS,
CONTRACTS, PERMITS, CUSTOMER LISTS, COMPUTER FILES AND PROGRAMS, RETRIEVAL
PROGRAMS, OPERATING DATA AND PLANS AND ENVIRONMENTAL STUDIES AND PLANS.

 

(F)            “BUSINESS DAY” SHALL MEAN A DAY OTHER THAN SATURDAY AND SUNDAY OR
ANY DAY ON WHICH BANKS LOCATED IN THE REPUBLIC OF SINGAPORE OR THE STATE OF
CALIFORNIA ARE AUTHORIZED OR OBLIGATED TO CLOSE.

 

(G)           “CLOSING FIXED ASSET AND INVENTORIES STATEMENT” MEANS THE
STATEMENT OF CLOSING NET ASSET VALUE OF FIXED ASSETS AND INVENTORIES BASED ON
THE UNAUDITED PRO FORMA BALANCE SHEET IN RESPECT OF THE BUSINESS AS OF THE
CLOSING DATE, PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES AS CONSISTENTLY APPLIED BY SELLER IN SELLER’S PREPARATION OF ITS
PERIODIC FINANCIAL STATEMENTS IN EACH OF THE THREE QUARTERS WHICH PRECEDE THE
CLOSING DATE (OTHER THAN THE OMISSION OF NOTES AND NORMAL REOCCURRING
ADJUSTMENTS).

 

(H)           “CLOSING DATE” MEANS THE DATE WHICH IS TWO (2) BUSINESS DAYS
FOLLOWING THE SATISFACTION OR, IF PERMITTED PURSUANT TO THE TERMS OF ARTICLE VII
HEREOF, WAIVER OF THE CONDITIONS TO CLOSING SET FORTH IN ARTICLE VII HEREOF, OR
AT SUCH OTHER PLACE AND SUCH OTHER TIME OR DATE AS THE PARTIES HERETO SHALL
MUTUALLY AGREE.

 

(I)            “CLOSING DOCUMENTS” MEANS ALL THOSE DOCUMENTS, DEEDS AND OTHER
INSTRUMENTS WHICH ARE REQUIRED BY THE DEFINITIVE AGREEMENTS OR BY OPERATION OF
LAW FOR THE CONSUMMATION OF THE PURCHASE AND SALE OF THE PURCHASED ASSETS
PURSUANT TO THIS AGREEMENT AND THE ANCILLARY AGREEMENTS AND THE OTHER
TRANSACTIONS CONTEMPLATED THEREBY (THE “TRANSACTION”).

 

2

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(J)            “CLOSING NET ASSET VALUE” SHALL MEAN THE FOLLOWING:

 

(I)            AN AMOUNT EQUIVALENT TO THE STANDARD COST OF INVENTORIES AS OF
NOVEMBER 4, 2005 ON THE BOOKS OF SELLER ON THE CLOSING DATE AND, TO THE EXTENT
INVENTORIES DID NOT HAVE STANDARD COST ON THE BOOKS OF SELLER AS OF NOVEMBER 4,
2005, STANDARD COST AS OF THE CLOSING DATE; PLUS

 

(II)           AN AMOUNT EQUIVALENT TO THE NET BOOK VALUE OF FIXED ASSETS ON THE
BOOKS OF SELLER AS OF THE CLOSING DATE.

 

(K)           “CRITICAL EMPLOYEES” SHALL MEAN THE MEAN THE EMPLOYEES IDENTIFIED
ON SCHEDULE 5.7 HERETO.

 

(L)            “DEFINITIVE AGREEMENTS” MEANS THIS AGREEMENT, THE ANCILLARY
AGREEMENTS AND THE OTHER THE BINDING, DETAILED AND DEFINITIVE AGREEMENTS TO BE
EXECUTED BETWEEN THE PARTIES IN RESPECT OF THE TRANSACTION.

 

(M)          “EMPLOYEE” MEANS EACH EMPLOYEE OR CONSULTANT OF SELLER, INCLUDING
WITHOUT LIMITATION TRANSFERRED EMPLOYEES, WHO IS EMPLOYED IN CONNECTION WITH THE
BUSINESS.

 

(N)           “EMPLOYEE SECONDMENT AGREEMENT” SHALL MEAN THAT CERTAIN AGREEMENT
SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT B HERETO PURSUANT TO WHICH CERTAIN
EMPLOYEES OF SELLER ENGAGED IN THE BUSINESS WILL BE SECONDED TO BUYER.

 

(O)           “EMPLOYMENT LIABILITIES” SHALL MEAN ANY AND ALL CLAIMS, DEBTS,
LIABILITIES, COMMITMENTS AND OBLIGATIONS, WHETHER FIXED, CONTINGENT OR ABSOLUTE,
MATURED OR UNMATURED, LIQUIDATED OR UNLIQUIDATED, ACCRUED OR UNNACCRUED, KNOWN
OR UNKNOWN, WHENEVER OR HOWEVER ARISING, INCLUDING ALL COSTS AND EXPENSES
RELATING THERETO ARISING UNDER LAW, RULE, REGULATION, PERMIT, ACTION OR
PROCEEDING BEFORE ANY GOVERNMENTAL AUTHORITY, ORDER OR CONSENT DECREE OR ANY
AWARD OF ANY ARBITRATOR OF ANY KIND RELATING TO ANY BENEFIT PLAN, EMPLOYMENT
AGREEMENT OR OTHERWISE RELATING TO AN EMPLOYEE AND HIS OR HER EMPLOYMENT WITH
SELLER.

 

(P)           “ESCROW AGREEMENT” SHALL MEAN THE ESCROW AGREEMENT IN THE FORM
REASONABLY AGREED UPON BY BUYER, SELLER AND CITIBANK, N.A. (OR SUCH OTHER ESCROW
AGENT AS SELLER AND BUYER SHALL AGREE), AS ESCROW AGENT (THE “ESCROW AGENT”).

 

(Q)           “EXCLUDED LIABILITIES” HAS THE MEANING SET FORTH IN
SECTION 2.2(C).

 

(R)            “EXECUTION DATE” MEANS THE DATE OF THE SIGNING AND EXECUTION OF
THE DEFINITIVE AGREEMENTS.

 

(S)           “EXPENSED ITEMS” MEANS SUPPLIES AND SIMILAR CONSUMABLE MATERIAL ON
HAND AT THE FACILITY THAT ARE RELATED TO AND OF A NATURE CUSTOMARILY USED IN THE
BUSINESS (OTHER THAN SUCH SUPPLIES AND MATERIALS ASSOCIATED WITH ANY EXCLUDED
ASSETS).

 

(T)            “FACILITY” MEANS THE FACILITY USED IN THE OPERATION OF THE
BUSINESS AND LOCATED AT THE LOCATION SET FORTH ON EXHIBIT A, INCLUDING ALL
LEASEHOLD AND FACILITY IMPROVEMENTS THERETO AND FIXTURES.

 

3

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(U)           “FACILITY TRANSFER AGREEMENT” MEANS THE AGREEMENT SUBSTANTIALLY IN
THE FORM ATTACHED AS EXHIBIT C HERETO PURSUANT TO WHICH OWNERSHIP OF THE
FACILITY WILL BE TRANSFERRED TO BUYER.

 

(V)           “FIXED ASSETS” MEANS ALL ITEMS OF PLANT, EQUIPMENT, MACHINERY,
TOOLS, FURNITURE AND FURNISHINGS, OFFICE MATERIALS AND SUPPLIES AND OTHER FIXED
ASSETS LISTED OR DESCRIBED IN SCHEDULE 1.1(V) AS OF THE CLOSING DATE, PROVIDED,
HOWEVER, THAT AS DEFINED HEREIN FIXED ASSETS SHALL NOT INCLUDE ANY OF THE
EXCLUDED ASSETS AND THE FACILITY, INCLUDING THE FACILITY, LEASEHOLD IMPROVEMENTS
AND FIXTURES OR ANY BUILDINGS OR OTHER STRUCTURES, INFORMATION TECHNOLOGY
SYSTEMS (OTHER THAN PURCHASED IT SYSTEMS) OR CUSTOM EQUIPMENT, INCLUDING BUT NOT
LIMITED TO CUSTOM, BUSINESS-SPECIFIC TEST FIXTURES, THAT CAN ONLY BE USED IN THE
BUSINESS AND IS NOT READILY ADAPTABLE TO ALTERNATIVE USES AND INCLUDING
EQUIPMENT UTILIZED BY THE ASIC AND DESKTOP SOFTWARE GROUP ENGINEERING TEAMS OF
SELLER THAT ARE LOCATED AT THE FACILITY.

 

(W)          “GOVERNMENTAL BODY” MEANS ANY:

 

(I)            NATION, PROVINCE, STATE, COUNTY, CITY, TOWN, VILLAGE, DISTRICT,
OR OTHER JURISDICTION OF ANY NATURE;

 

(II)           FEDERAL, PROVINCIAL, STATE, LOCAL, MUNICIPAL, FOREIGN, OR OTHER
GOVERNMENT;

 

(III)          GOVERNMENTAL OR QUASI-GOVERNMENTAL AUTHORITY OF ANY NATURE
(INCLUDING ANY GOVERNMENTAL AGENCY, BRANCH, DEPARTMENT, OFFICIAL, OR ENTITY AND
ANY COURT OR OTHER TRIBUNAL);

 

(IV)          MULTI-NATIONAL ORGANIZATION OR BODY; OR

 

(V)           BODY EXERCISING, OR ENTITLED TO EXERCISE, ANY ADMINISTRATIVE,
EXECUTIVE, JUDICIAL, LEGISLATIVE, POLICE, REGULATORY, OR TAXING AUTHORITY OR
POWER OF ANY NATURE.

 

(X)            “GST TAX AMOUNT” SHALL MEAN AN AMOUNT EQUAL TO SINGAPORE GOODS
AND SERVICES TAX (“GST”) THAT MAY BE CHARGEABLE IN RESPECT OF THE SALE OF THE
PURCHASED ASSETS UNDER THIS AGREEMENT.

 

(Y)           “INDEBTEDNESS” OF ANY PERSON MEANS ALL MONETARY OBLIGATIONS OF
SUCH PERSON (I) FOR BORROWED MONEY, (II) EVIDENCED BY NOTES, BONDS, DEBENTURES
OR SIMILAR INSTRUMENTS, (III) FOR THE DEFERRED PURCHASE PRICE OF GOODS OR
SERVICES (OTHER THAN TRADE PAYABLES OR ACCRUALS INCURRED IN THE ORDINARY COURSE
OF BUSINESS), (IV) UNDER CAPITAL LEASES OR (V) IN THE NATURE OF GUARANTEES OF
THE OBLIGATIONS DESCRIBED IN CLAUSES (I) THROUGH (IV) ABOVE OF ANY OTHER PERSON.

 

(Z)            “INTELLECTUAL PROPERTY” MEANS ANY OR ALL OF THE FOLLOWING AND ALL
WORLDWIDE COMMON LAW AND STATUTORY RIGHTS IN, ARISING OUT OF, OR ASSOCIATED
THEREWITH: (I) UNITED STATES AND FOREIGN PATENTS AND UTILITY MODELS AND
APPLICATIONS THEREFOR AND ALL REISSUES, DIVISIONS, REEXAMINATIONS, RENEWALS,
EXTENSIONS, PROVISIONALS, CONTINUATIONS AND CONTINUATIONS-IN-PART THEREOF
(“PATENTS”); (II) INVENTIONS (WHETHER PATENTABLE OR NOT), IMPROVEMENTS, TRADE
SECRETS, PROPRIETARY INFORMATION, KNOW-HOW, AND ANY RIGHTS IN TECHNOLOGY,
INVENTION DISCLOSURES,

 

4

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TECHNICAL DATA AND CUSTOMER LISTS, AND ALL DOCUMENTATION RELATING TO ANY OF THE
FOREGOING; (III) COPYRIGHTS, COPYRIGHT REGISTRATIONS AND APPLICATIONS THEREFOR,
AND ALL OTHER RIGHTS CORRESPONDING THERETO THROUGHOUT THE WORLD; (IV) DOMAIN
NAMES, UNIFORM RESOURCE LOCATORS (“URLS”), OTHER NAMES AND LOCATORS ASSOCIATED
WITH THE INTERNET, AND APPLICATIONS OR REGISTRATIONS THEREFOR (“DOMAIN NAMES”);
(V) INDUSTRIAL DESIGNS AND ANY REGISTRATIONS AND APPLICATIONS THEREFOR;
(VI) TRADE NAMES, LOGOS, COMMON LAW TRADEMARKS AND SERVICE MARKS, TRADEMARK AND
SERVICE MARK REGISTRATIONS, RELATED GOODWILL AND APPLICATIONS THEREFOR
THROUGHOUT THE WORLD (“TRADEMARKS”); (VII) ALL RIGHTS IN DATABASES AND DATA
COLLECTIONS; (VIII) ALL MORAL AND ECONOMIC RIGHTS OF AUTHORS AND INVENTORS,
HOWEVER DENOMINATED; AND (IX) ANY SIMILAR OR EQUIVALENT RIGHTS TO ANY OF THE
FOREGOING (AS APPLICABLE).

 

(AA)         “INVENTORIES” MEANS ALL GOOD PRODUCTION READY INVENTORIES OF RAW
MATERIALS AND WORK IN PROCESS LISTED ON SCHEDULE 1.1(AA) AS OF THE CLOSING
DATE.  SCHEDULE 1.1(AA) SHALL INCLUDE INVENTORIES WHICH, BASED ON FIRM,
NON-CANCELABLE CUSTOMER PURCHASE ORDERS OR CUSTOMER FORECASTS, WHICH SELLER
BELIEVES WILL BE USED IN PRODUCTS TO BE DELIVERED TO SELLER WITHIN THE SIX (6)
MONTH PERIOD FOLLOWING THE CLOSING DATE.  FOR PURPOSES OF SECTION 6.2 HEREOF,
THE TERM “INVENTORIES” SHALL ALSO INCLUDE MATERIAL, COMPONENTS AND OTHER
SUPPLIES ACQUIRED BY SELLER PURSUANT TO PURCHASE ORDERS OR OTHER ASSIGNED
CONTRACTS ASSUMED BY SELLERS HEREUNDER AS OF THE CLOSING DATE.  INVENTORIES
SHALL NOT INCLUDE FINISHED GOODS.

 

(BB)         “LAW” MEANS ANY LAW, STATUTE, RULE, REGULATION, ORDINANCE,
EXTENSION ORDER, OR OTHER PRONOUNCEMENT HAVING THE EFFECT OF LAW OF THE UNITED
STATES, ANY FOREIGN COUNTRY OR ANY U.S., SINGAPORE OR FOREIGN STATE, COUNTY,
CITY OR OTHER POLITICAL SUBDIVISION OR OF ANY GOVERNMENTAL BODY.

 

(CC)         “LIABILITY” MEANS ANY INDEBTEDNESS, OBLIGATION OR OTHER LIABILITY
OF A PERSON (WHETHER ABSOLUTE, ACCRUED, CONTINGENT, FIXED OR OTHERWISE, OR
WHETHER DUE OR TO BECOME DUE).

 

(DD)         “LIEN” MEANS ANY MORTGAGE, PLEDGE, LIEN, CHARGE, CLAIM, SECURITY
INTEREST, ADVERSE CLAIMS OF OWNERSHIP OR USE, RESTRICTIONS ON TRANSFER, DEFECT
OF TITLE OR OTHER ENCUMBRANCE OF ANY SORT, OTHER THAN (A) MECHANIC’S,
MATERIALMEN’S, AND SIMILAR LIENS WITH RESPECT TO ANY AMOUNTS NOT YET DUE AND
PAYABLE, AND (B) CUSTOMARY LIENS FOR TAXES NOT YET DUE AND PAYABLE.

 

(EE)         “MATERIAL ADVERSE EFFECT” MEANS WITH RESPECT TO (I) PARENT OR
BUYER, ANY MATERIAL ADVERSE CHANGE IN THE BUSINESS, OPERATIONS, ASSETS
(INCLUDING INTANGIBLE ASSETS), LIABILITIES (CONTINGENT OR OTHERWISE), RESULTS OF
OPERATIONS OR FINANCIAL PERFORMANCE OR CONDITION (FINANCIAL OR OTHERWISE) OF
SUCH PARTY, WHICH IS MATERIAL TO PARENT AND BUYER, TAKEN AS A WHOLE, AND
(II) WITH RESPECT TO SELLER, ANY MATERIAL ADVERSE CHANGE IN THE BUSINESS,
OPERATIONS, ASSETS (INCLUDING INTANGIBLE ASSETS), LIABILITIES (CONTINGENT OR
OTHERWISE), RESULTS OF OPERATIONS OR FINANCIAL PERFORMANCE OR CONDITION
(FINANCIAL OR OTHERWISE) OF SUCH PARTY WHICH IS MATERIAL TO THE BUSINESS TAKEN
AS A WHOLE; PROVIDED, HOWEVER, THAT IN DETERMINING WHETHER A MATERIAL ADVERSE
EFFECT HAS OCCURRED, ANY EFFECT TO THE EXTENT ATTRIBUTABLE TO THE FOLLOWING
SHALL NOT BE CONSIDERED:  (A) CHANGES IN LAWS, RULES OR REGULATIONS OF GENERAL
APPLICABILITY OR INTERPRETATIONS THEREOF BY GOVERNMENTAL ENTITIES, AND (B) ANY
EFFECTS RESULTING FROM THE ANNOUNCEMENT OF THIS AGREEMENT IN ACCORDANCE WITH
THIS AGREEMENT.

 

5

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(FF)           “MULTIEMPLOYER PLAN” SHALL MEAN ANY “PENSION PLAN” WHICH IS A
“MULTIEMPLOYER PLAN,” AS DEFINED IN SECTION 3(37) OF ERISA.

 

(GG)         “ORDER” MEANS ANY WRIT, JUDGMENT, DECREE, INJUNCTION,
ADMINISTRATIVE ORDER, DIRECTIVE OR SIMILAR ORDER OR DIRECTIVE OF ANY
GOVERNMENTAL BODY (IN EACH SUCH CASE WHETHER PRELIMINARY OR FINAL).

 

(HH)         “PERMIT” SHALL MEAN THE LICENSES, PERMITS, AUTHORIZATIONS,
REGISTRATIONS, CERTIFICATES, VARIANCES, APPROVALS, CONSENTS AND FRANCHISES AND
SIMILAR RIGHTS OBTAINED FROM GOVERNMENTS AND ANY GOVERNMENTAL BODY, AND ANY
PENDING APPLICATIONS RELATING TO THE FOREGOING.

 

(II)           “PERSON” MEANS ANY INDIVIDUAL, CORPORATION (INCLUDING ANY
NON-PROFIT CORPORATION), COMPANY, GENERAL OR LIMITED PARTNERSHIP, LIMITED
LIABILITY COMPANY, JOINT VENTURE, ESTATE, TRUST, ASSOCIATION, ORGANIZATION,
LABOR UNION, GOVERNMENTAL BODY OR OTHER ENTITY.

 

(JJ)           “PRELIMINARY FIXED ASSET AND INVENTORIES STATEMENT” MEANS THE
STATEMENT OF PRELIMINARY NET ASSET VALUE OF FIXED ASSETS AND INVENTORIES BASED
UPON SELLER’S GOOD FAITH ESTIMATE OF THE UNAUDITED PRO FORMA BALANCE SHEET IN
RESPECT OF THE BUSINESS AS OF THE CLOSING DATE PREPARED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AS CONSISTENTLY APPLIED BY SELLER IN
SELLER’S PREPARATION OF ITS PERIODIC FINANCIAL STATEMENTS IN EACH OF THE THREE
QUARTERS WHICH PRECEDE THE CLOSING DATE (OTHER THAN THE OMISSION OF NOTES AND
NORMAL REOCCURRING ADJUSTMENTS).

 

(KK)         “PRELIMINARY NET ASSET VALUE” SHALL MEAN THE FOLLOWING:

 

(I)            AN AMOUNT EQUIVALENT TO THE STANDARD COST OF INVENTORIES AS OF
NOVEMBER 4, 2005 ON THE BOOKS OF SELLER ON THE CLOSING DATE AND, TO THE EXTENT
INVENTORIES DID NOT HAVE STANDARD COST ON THE BOOKS OF SELLER AS OF NOVEMBER 4,
2005, STANDARD COST AS OF THE CLOSING DATE; PLUS

 

(II)           AN AMOUNT EQUIVALENT TO THE NET BOOK VALUE OF FIXED ASSETS ON THE
BOOKS OF SELLER AS OF THE CLOSING DATE

 

(LL)           “PURCHASED IT SYSTEMS” ARE THOSE SYSTEMS SET FORTH ON
SCHEDULE 1.1(LL).

 

(MM)       “PURCHASE ORDER” MEANS ALL MATERIAL, COMPONENTS AND OTHER SUPPLIES TO
BE ACQUIRED BY SELLER PURSUANT TO PURCHASE ORDERS LISTED ON SCHEDULE 1.1(MM)
WHICH ARE NOT INVENTORY OR EXPENSED ITEMS.  SCHEDULE 1.1(MM) SHALL INCLUDE
PURCHASE ORDERS FOR MATERIAL, COMPONENTS AND OTHER SUPPLIES WHICH, BASED ON
FIRM, NON-CANCELABLE CUSTOMER PURCHASE ORDERS OR CUSTOMER FORECASTS, SELLER
REASONABLY BELIEVES WILL BE USED IN PRODUCTS TO BE DELIVERED TO SELLER WITHIN
THE SIX (6) MONTH PERIOD FOLLOWING THE CLOSING DATE AFTER TAKING INTO ACCOUNT
THE INVENTORY SET FORTH ON SCHEDULE 1.1(AA).

 

(NN)         “PURCHASE PRICE” MEANS AN AMOUNT EQUAL TO THE PRELIMINARY NET ASSET
VALUE (AS ADJUSTED PURSUANT TO SECTION 2.4) (THE “PRELIMINARY NET ASSET VALUE
AMOUNT”) PLUS THE PURCHASE PRICE OF THE FACILITY (THE “FACILITY PURCHASE PRICE”)
OF $9.5 MILLION.

 

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(OO)         “REPRESENTATIVES” MEANS, WITH RESPECT TO A PERSON, THAT PERSON’S
OFFICERS, DIRECTORS, EMPLOYEES, ACCOUNTANTS, COUNSEL, INVESTMENT BANKERS,
FINANCIAL ADVISORS, AGENTS AND OTHER REPRESENTATIVES.

 

(PP)         “SELLER’S RETAINED ENVIRONMENTAL LIABILITIES” MEANS ANY LIABILITY,
OBLIGATION, JUDGMENT, PENALTY, FINE, COST OR EXPENSE, (INCLUDING REASONABLE
ATTORNEYS’ FEES AND ENVIRONMENTAL CONSULTANT COSTS) OF ANY KIND OR NATURE, OR
THE DUTY TO INDEMNIFY, DEFEND OR REIMBURSE ANY PERSON (AN “ENVIRONMENTAL
LIABILITY”) WITH RESPECT TO: (I) THE PRESENCE ON OR BEFORE THE CLOSING DATE OF
ANY HAZARDOUS MATERIAL IN THE SOIL, GROUNDWATER, SURFACE WATER, AIR OR BUILDING
MATERIALS OF ANY BUSINESS FACILITY (OTHER THAN ANY HAZARDOUS MATERIAL IN
INVENTORY FIXED ASSET AND EXPENSES ITEMS), OR KNOWN BY SELLER TO BE MIGRATING TO
ANY BUSINESS FACILITY AS OF THE CLOSING DATE (“PRE-EXISTING CONTAMINATION”);
(II) THE MIGRATION AT ANY TIME PRIOR TO OR AFTER THE CLOSING DATE OF
PRE-EXISTING CONTAMINATION TO ANY OTHER REAL PROPERTY, OR THE SOIL, GROUNDWATER,
SURFACE WATER, AIR OR BUILDING MATERIALS THEREOF; (III) THE EXPOSURE OF ANY
PERSON TO PRE-EXISTING CONTAMINATION OR TO HAZARDOUS MATERIALS IN THE COURSE OF
OR AS A CONSEQUENCE OF ANY ACTIVITIES OF THE OPERATION OF THE PRINTED CIRCUIT
BOARD ASSEMBLY MANUFACTURING AND STORAGE SYSTEM MANUFACTURING BUSINESS CONDUCTED
BY SELLER IN SINGAPORE PRIOR TO THE CLOSING, WITHOUT REGARD TO WHETHER ANY
HEALTH EFFECT OF THE EXPOSURE HAS BEEN MANIFESTED AS OF THE CLOSING DATE;
(IV) THE VIOLATION OF ANY ENVIRONMENTAL LAWS BY THE SELLER OR ITS AGENTS,
EMPLOYEES, PREDECESSORS IN INTEREST, CONTRACTORS, INVITEES OR LICENSEES PRIOR TO
THE CLOSING DATE OR IN CONNECTION WITH THE OPERATION OF THE BUSINESS PRIOR TO
THE CLOSING DATE; (V) ANY ACTIONS OR PROCEEDINGS BROUGHT OR THREATENED BY ANY
THIRD PARTY WITH RESPECT TO ANY OF THE FOREGOING THAT THEY EXISTED AS OF THE
CLOSING DATE AND (VI)  SECTION 1.1(PP)(IV) TO THE EXTENT IT CONTINUES DURING THE
SIX (6) MONTH PERIOD FOLLOWING THE CLOSING DATE; PROVIDED, HOWEVER, THAT TO THE
EXTENT BUYER BECOMES AWARE OF ANY OF THE FOREGOING DURING THE SIX (6) MONTH
PERIOD FOLLOWING THE CLOSING DATE AND SUCH LIABILITY ARISES FROM BUYER’S
CONTINUED OPERATION OF THE BUSINESS, BUYER SHALL PROMPTLY NOTIFY AND CONFER WITH
SELLER AND SHALL TAKE REASONABLE STEPS TO MITIGATE AND IF APPROPRIATE REMEDIATE
SUCH NONCOMPLIANCE PROVIDED THAT SELLER SHALL REIMBURSE BUYER FOR REASONABLE
COSTS INCURRED THEREFORE.  FOR THE AVOIDANCE OF DOUBT, SUCH REMEDIATION COSTS
SHALL BE INCLUDED IN SELLER’S RETAINED ENVIRONMENTAL LIABILITIES.  THE FOREGOING
NOTWITHSTANDING, AN ENVIRONMENTAL LIABILITY SHALL NOT BE CONSIDERED A SELLER’S
RETAINED ENVIRONMENTAL LIABILITY TO THE EXTENT IT ARISES FROM BUYER’S NEGLIGENT
ACTIONS.

 

(QQ)         “SUBSIDIARIES” MEANS ANY AND ALL CORPORATIONS, PARTNERSHIPS, JOINT
VENTURES, ASSOCIATIONS AND OTHER ENTITIES CONTROLLED BY THE APPLICABLE PERSON
DIRECTLY OR INDIRECTLY THROUGH ONE OR MORE INTERMEDIARIES.

 

(RR)           “SUPPLY AGREEMENT” MEANS THAT CERTAIN SUPPLY AGREEMENT ATTACHED
HERETO AS EXHIBIT D ENTERED INTO BY BUYER AND SELLER AS OF THE DATE HEREOF
RELATING TO THE PROVISION OF MANUFACTURING SERVICES BY BUYER.

 

(SS)         “TRANSFERRED EMPLOYEE” MEANS ANY EMPLOYEE OR OTHER INDIVIDUAL
CURRENTLY PROVIDING SERVICES TO SELLER WHO BECOMES AN EMPLOYEE OF BUYER AS A
RESULT OF THE SECONDMENT AGREEMENT.

 

(TT)           “TRANSITION SERVICES AGREEMENT” MEANS THAT CERTAIN TRANSITION
SERVICES AGREEMENT SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT A TO BE
ENTERED INTO BY BUYER AND

 

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SELLER IN SUBSTANTIALLY THE SAME FORM AT THE CLOSING WITH RESPECT TO THE
PROVISION OF CERTAIN TRANSITION SERVICES WITH RESPECT TO THE BUSINESS FOLLOWING
THE CLOSING DATE.

 

ARTICLE II

PURCHASE AND SALE OF ASSETS

 

2.1           Purchase and Sale of Assets.

 

(A)           PURCHASE AND SALE OF ASSETS PURCHASE AND SALE.  UPON THE TERMS AND
SUBJECT TO THE CONDITIONS SET FORTH HEREIN, AT THE CLOSING (AS DEFINED IN
SECTION 2.3(A) HEREOF), BUYER SHALL PURCHASE FROM SELLER, AND SELLER SHALL
IRREVOCABLY SELL, CONVEY, TRANSFER, ASSIGN AND DELIVER TO BUYER, THE PURCHASED
ASSETS (AS DEFINED IN SECTION 2.1(B) HEREOF), FREE AND CLEAR OF ALL LIENS (OTHER
THAN PERMITTED LIENS).  ALL PAYMENT AMOUNTS EXPRESSED IN THIS AGREEMENT ARE IN
U.S. DOLLARS.

 

(B)           DEFINITION OF PURCHASED ASSETS.  FOR ALL PURPOSES OF AND UNDER
THIS AGREEMENT, THE TERM “PURCHASED ASSETS” SHALL MEAN, REFER TO AND INCLUDE ALL
OF SELLER’S RIGHT, TITLE AND INTEREST IN AND TO ALL OF THE FOLLOWING TANGIBLE
AND INTANGIBLE ASSETS, PROPERTIES AND RIGHTS TO THE EXTENT OWNED, USED OR HELD
FOR USE BY SELLER AS OF THE CLOSING (BUT SPECIFICALLY EXCLUDING THE EXCLUDED
ASSETS (AS DEFINED IN SECTION 2.1(C) HEREOF)):

 

(I)            THE FIXED ASSETS, THE INVENTORIES, PURCHASED IT SYSTEMS, THE
EXPENSED ITEMS AND THE OTHER TANGIBLE PERSONAL PROPERTY USED IN CONNECTION WITH
THE BUSINESS, AND LISTED ON SCHEDULE 2.1(B)(I) HERETO (THE “TANGIBLE PERSONAL
PROPERTY”);

 

(II)           ALL RIGHTS OF SELLER IN, TO OR UNDER (A) THE LEASES OR SUBLEASES
OF TANGIBLE PERSONAL PROPERTY LISTED ON SCHEDULE 2.1(B)(II)(A) AS TO WHICH
SELLER IS THE LESSOR OR SUBLESSOR, AND (B) THE LEASES OF TANGIBLE PERSONAL
PROPERTY LISTED ON SCHEDULE 2.1(B)(II)(B) AS TO WHICH SELLER IS THE LESSEE OR
SUBLESSEE, TOGETHER WITH ANY OPTIONS TO PURCHASE THE UNDERLYING PROPERTY (THE
LEASES AND SUBLEASES DESCRIBED IN SUBCLAUSES (A) AND (B) HEREOF, THE “PERSONAL
PROPERTY LEASES”);

 

(III)          ALL BOOKS AND RECORDS OF SELLER SOLELY RELATING TO THE PURCHASED
ASSETS AND NECESSARY FOR THE CONDUCT OF THE BUSINESS AT THE CLOSING, OTHER THAN
BOOKS AND RECORDS OF SELLER CONCERNING TRADE SECRETS OR OTHER CONFIDENTIAL
INFORMATION OF SELLER, PRIVILEGED INFORMATION, INTERNAL FINANCIAL STATEMENTS AND
RELATED INFORMATION OR RECORDS; AND FILES AND RECORDS OF EMPLOYEES OR RELATED
HUMAN RESOURCE MATTERS PRIOR TO THE CLOSING (THE “SELLER RECORDS”);

 

(IV)          ALL RIGHTS UNDER ANY CONTRACTS, INDENTURES, MORTGAGES,
INSTRUMENTS, LIENS, GUARANTIES OR OTHER AGREEMENTS OF SELLER SET FORTH ON
SCHEDULE 2.1(B)(IV) AND THE PURCHASE ORDERS, OTHER THAN THE EXCLUDED AGREEMENTS
(THE “ASSIGNED CONTRACTS”);

 

(V)           ALL PERMITS (INCLUDING APPLICATIONS THEREFOR) USED IN THE CONDUCT
OF THE BUSINESS SET FORTH IN SCHEDULE 2.1(B)(V) (THE “ASSUMED PERMITS”);

 

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(VI)          ALL PREPAID EXPENSES LISTED IN SCHEDULE 2.1(B)(VI), AND ALL
PREPAID EXPENSES MADE FOLLOWING THE DATE HEREOF AND PRIOR TO THE CLOSING THAT
RELATE EXCLUSIVELY TO THE BUSINESS (THE “PREPAID EXPENSES”); AND

 

(VII)         ALL SECURITY DEPOSITS DEPOSITED BY OR ON BEHALF OF SELLER AS
LESSEE OR SUBLESSEE UNDER THE LEASES FOR THE PERSONAL PROPERTY LEASES (THE
“SECURITY DEPOSITS”).

 

The foregoing notwithstanding, the definition of “Purchased Assets” shall not
include “Expensed Items” for purposes of the representations and warranties set
forth in Article III of this Agreement.

 

(C)           DEFINITION OF EXCLUDED ASSETS.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY SET FORTH IN THIS SECTION 2.1 OR ELSEWHERE IN THIS AGREEMENT, THE TERM
“PURCHASED ASSETS” SHALL NOT MEAN, REFER TO OR INCLUDE THE FOLLOWING
(COLLECTIVELY, THE “EXCLUDED ASSETS”) TO THE EXTENT OWNED, USED OR HELD FOR USE
BY SELLER AS OF THE CLOSING:

 

(I)            CASH, CASH EQUIVALENTS, INVESTMENTS IN CASH, SECURITIES OR
OTHERWISE AND ALL SELLER BANK ACCOUNTS;

 

(II)           ALL REFUNDS OF TAXES WITH RESPECT TO TAXES PAID OR ACCRUED BY
SELLER AND NOT REIMBURSED OR PAID BY BUYER;

 

(III)          ALL CLAIMS, ACTIONS, DEPOSITS, PREPAYMENTS, REFUNDS, CAUSES OF
ACTION, CHOSES IN ACTION, RIGHTS OF RECOVERY, RIGHTS OF SET OFF, AND RIGHTS OF
RECOUPMENT OF ANY KIND OR NATURE (INCLUDING ANY SUCH ITEM RELATING TO TAXES) TO
THE EXTENT ATTRIBUTABLE TO THE EXCLUDED AGREEMENTS, EXCLUDED ASSETS OR THE
EXCLUDED LIABILITIES;

 

(IV)          ALL RIGHTS OF SELLER UNDER THIS AGREEMENT AND ANCILLARY AGREEMENT,
OR ANY OTHER AGREEMENT, CERTIFICATE, INSTRUMENT OR OTHER DOCUMENT EXECUTED AND
DELIVERED BY SELLER OR BUYER IN CONNECTION WITH THE TRANSACTION OR ANY SIDE
AGREEMENT BETWEEN SELLER AND BUYER ENTERED INTO ON OR AFTER THE DATE HEREOF;

 

(V)           ALL BOOKS AND RECORDS OF SELLER WHICH RELATE TO THE TAXES,
EXCLUDED AGREEMENTS OR EXCLUDED ASSETS; PROVIDED, HOWEVER, SELLER AGREES THAT IT
SHALL PROVIDE BUYER WITH COPIES OF, OR REASONABLE ACCESS TO, SUCH BOOKS AND
RECORDS TO THE EXTENT THAT ANY SUCH BOOKS AND RECORDS (I) RELATE TO ANY OF THE
BUSINESS, THE PURCHASED ASSETS OR ASSUMED LIABILITIES; AND (II) DO NOT REFLECT
CONFIDENTIAL INFORMATION OR PRIVILEGED MATERIALS;

 

(VI)          ALL ACCOUNTS RECEIVABLE AND ALL NOTES, BONDS AND OTHER EVIDENCES
OF INDEBTEDNESS, AND ALL SECURITY AGREEMENTS RELATED THERETO, INCLUDING ANY
RIGHTS WITH RESPECT TO ANY THIRD PARTY COLLECTION PROCEDURES OR ANY OTHER
ACTIONS OR PROCEEDINGS WHICH HAVE BEEN COMMENCED IN CONNECTION THEREWITH;

 

(VII)         ALL INTELLECTUAL PROPERTY OF SELLER, INCLUDING THE TRADE NAME
ADAPTEC AND DERIVATIVES THEREOF AND LOGOS ASSOCIATED THEREWITH AND ALL RELATED
TRADEMARKS AND SERVICE MARKS, AND SOFTWARE LICENSES.

 

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(VIII)        ALL ASSETS OTHER THAN PURCHASED ASSETS, INCLUDING BUT NOT LIMITED
TO LAND, BUILDINGS, LEASEHOLD IMPROVEMENTS, INFORMATION TECHNOLOGY SYSTEMS,
HARDWARE AND SOFTWARE (AND OTHER RELATED INTELLECTUAL PROPERTY) AND CUSTOM
EQUIPMENT INCLUDING SPECIFICALLY CUSTOM TEST FIXTURES SPECIFIC TO THE BUSINESS
AND INCLUDING EQUIPMENT AND ASSETS UTILIZED BY THE ASIC AND DESKTOP SOFTWARE
GROUP ENGINEERING TEAMS OF SELLER.

 

(IX)           ALL CAPITAL STOCK, OPTIONS AND OTHER SECURITIES OF SELLER, AND
ALL CORPORATE MINUTES AND STOCK BOOKS OF ACCOUNT OF SELLER, BLANK STOCK
CERTIFICATES, QUALIFICATIONS TO CONDUCT BUSINESS AS A FOREIGN CORPORATION,
ARRANGEMENTS WITH REGISTERED AGENTS RELATING TO FOREIGN QUALIFICATIONS, TAXPAYER
AND OTHER IDENTIFICATION NUMBERS, SEALS AND OTHER DOCUMENTS RELATING TO THE
ORGANIZATION, MAINTENANCE AND EXISTENCE OF SELLER AS A CORPORATION;

 

(X)            ALL AGREEMENTS AND CONTRACTS TO WHICH SELLER IS A PARTY OR IS
BOUND OR TO WHICH ITS ASSETS ARE SUBJECT THAT ARE NOT ASSIGNED CONTRACTS; AND

 

(XI)           ALL ASSETS OR RIGHTS THAT RELATE TO THE EMPLOYEE PLANS OF SELLER,
ALL BOOKS AND RECORDS RELATING TO THE EMPLOYEES OF SELLER AS OF THE CLOSING.

 

2.2           Assumption of Liabilities.

 

(A)           ASSUMPTION.  UPON THE TERMS AND SUBJECT TO THE CONDITIONS SET
FORTH HEREIN, AT THE CLOSING, BUYER SHALL ASSUME FROM SELLER, AND SELLER SHALL
IRREVOCABLY CONVEY, TRANSFER AND ASSIGN TO BUYER, ALL OF THE ASSUMED LIABILITIES
(AS DEFINED IN SECTION 2.2(B) HEREOF).  BUYER SHALL NOT ASSUME ANY LIABILITIES
OF SELLER PURSUANT HERETO, OTHER THAN THE ASSUMED LIABILITIES.

 

(B)           DEFINITION OF ASSUMED LIABILITIES.  FOR ALL PURPOSES OF AND UNDER
THIS AGREEMENT, THE TERM “ASSUMED LIABILITIES” SHALL MEAN, REFER TO AND INCLUDE
THE FOLLOWING LIABILITIES OF SELLER (BUT SPECIFICALLY EXCLUDING THE EXCLUDED
LIABILITIES (AS DEFINED IN SECTION 2.2(C) HEREOF)):

 

(I)            ALL LIABILITIES UNDER ASSUMED PERMITS ARISING AFTER THE CLOSING
DATE; AND

 

(II)           ALL LIABILITIES RELATED TO THE PURCHASED ASSETS OR THE OPERATION
OF THE BUSINESS TO THE EXTENT ARISING FROM OR RELATED TO ANY FACTS OR
CIRCUMSTANCES OCCURRING AFTER THE CLOSING DATE;

 

(III)          ALL LIABILITIES RELATING TO EMPLOYEES THAT ARE HIRED BY BUYER OR
PARENT FOR ACTIONS THAT OCCUR AFTER THE DATE OF HIRE.

 

(C)           DEFINITION OF EXCLUDED LIABILITIES.  NOTWITHSTANDING ANYTHING TO
THE CONTRARY SET FORTH IN THIS SECTION 2.2 OR ELSEWHERE IN THIS AGREEMENT, THE
TERM “ASSUMED LIABILITIES” SHALL NOT MEAN, REFER TO OR INCLUDE THE FOLLOWING
(COLLECTIVELY, “EXCLUDED LIABILITIES”):

 

(I)            ALL LIABILITIES RELATING TO AGREEMENTS NOT ASSUMED BY BUYER (THE
“EXCLUDED AGREEMENTS”);

 

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(II)           ANY AND ALL LIABILITIES OR OBLIGATIONS OF SELLER ARISING FROM THE
BREACH BY SELLER OF ANY TERM, COVENANT OR PROVISIONS OF ANY OF THE ASSIGNED
CONTRACTS PRIOR TO THE CLOSING;

 

(III)          SUBJECT TO SECTION 2.6, ALL LIABILITIES FOR TAXES OF SELLER OR
TAXES ATTRIBUTABLE TO THE OWNERSHIP OR OPERATION OF THE PURCHASED ASSETS FOR ANY
TAXABLE PERIOD (OR PORTION OF ANY PERIOD) ENDING ON OR PRIOR TO THE CLOSING DATE
AND, INCLUDING, WITHOUT LIMITATION, ALL LIABILITIES FOR TAXES ATTRIBUTABLE TO
THE TRANSACTION;

 

(IV)          ALL LIABILITIES RELATING TO OPTIONS, WARRANTS AND OTHER RIGHTS TO
PURCHASE OR OTHERWISE ACQUIRE SHARES OF CAPITAL STOCK OF SELLER OR ANY AFFILIATE
OF SELLER;

 

(V)           ALL LIABILITIES TO SHAREHOLDERS OF SELLER OR ANY AFFILIATE OF
SELLER IN THEIR CAPACITY AS SUCH;

 

(VI)          ALL LIABILITIES OF SELLER UNDER THE DEFINITIVE AGREEMENTS OR ANY
OTHER CERTIFICATE, INSTRUMENT OR OTHER AGREEMENT ENTERED INTO BY THE PARTIES IN
CONNECTION WITH THE TRANSACTION;

 

(VII)         EXCEPT AS SET FORTH IN SECTION 2.2(B), ALL EMPLOYMENT LIABILITIES
AND ALL LIABILITIES ARISING UNDER OR WITH RESPECT TO ANY PENSION PLAN;

 

(VIII)        SELLER’S RETAINED ENVIRONMENTAL LIABILITIES;

 

(IX)           ALL LIABILITIES FOR LEGAL, ACCOUNTING, AUDIT AND INVESTMENT
BANKING FEES, BROKERAGE COMMISSIONS, AND ANY OTHER EXPENSES INCURRED BY THE
SELLER IN CONNECTION WITH THE TRANSACTION;

 

(X)            ALL LIABILITIES FOR OR RELATED TO INDEBTEDNESS OF SELLER, ON ITS
OWN BEHALF OR ON BEHALF OF OTHER PERSONS, TO BANKS, FINANCIAL INSTITUTIONS OR
OTHER PERSONS WITH RESPECT TO BORROWED MONEY, AND INCLUDING ANY ACCRUED INTEREST
PAYABLE IN RESPECT THEREOF;

 

(XI)           ALL LIABILITIES THAT ARE ATTRIBUTABLE TO ANY OF THE EXCLUDED
ASSETS;

 

(XII)          ALL LIABILITIES OF SELLER WITH RESPECT TO ACCOUNTS PAYABLE;

 

(XIII)         ALL LIABILITIES OF SELLER FOR INJURY TO OR DEATH OF PERSONS
(INCLUDING, WITHOUT LIMITATION, WORKERS’ COMPENSATION CLAIMS) OR DAMAGES TO OR
DESTRUCTION OF PROPERTIES OR ASSETS, ARISING FROM THE SALE OR DISTRIBUTION OF
PRODUCTS DISTRIBUTED, OR BUSINESS SERVICES PROVIDED, BY SELLER ON OR BEFORE THE
CLOSING DATE, WHETHER OR NOT ANY SUCH LIABILITY ARISES BEFORE OR AFTER THE
CLOSING DATE, INCLUDING, WITHOUT LIMITATION, LIABILITY FOR CONSEQUENTIAL AND
PUNITIVE DAMAGES IN CONNECTION WITH THE FOREGOING; AND

 

(XIV)        ALL LIABILITIES OTHER THAN ASSUMED LIABILITIES.

 

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2.3           Closing.

 

(A)           THE CONSUMMATION OF THE PURCHASE AND SALE OF THE PURCHASED ASSETS
(THE “CLOSING”) SHALL TAKE PLACE AT SUCH PLACE AS BUYER AND SELLER MUTUALLY
AGREE, AT 10:00 A.M. LOCAL TIME, ON THE CLOSING DATE UNLESS OTHERWISE MUTUALLY
AGREED BY BUYER AND SELLER.  THE CLOSING SHALL BE DEEMED TO BE EFFECTIVE AS OF
12:01 A.M., LOCAL TIME, AT THE PLACE WHERE THE PURCHASED ASSETS ARE LOCATED ON
THE APPLICABLE CLOSING DATE (THE “CLOSING TIME”).

 

(B)           AS SOON AS PRACTICABLE FOLLOWING THE DATE HEREOF AND AT ALL TIMES
UNTIL THE CLOSING OF THE PURCHASE BY BUYER OF ALL OF THE PURCHASED ASSETS LISTED
OR DESCRIBED IN SECTION 2.1(B), BUYER AND SELLER SHALL COOPERATE IN GOOD FAITH
TO (I) FORMULATE AND EFFECT A PLAN AND CLOSING SCHEDULE FOR THE TRANSFER OF THE
PURCHASED ASSETS AND THE BUSINESS TO BUYER PURSUANT TO THIS AGREEMENT, AND
(II) IDENTIFY THE PURCHASED ASSETS TO BE PURCHASED BY BUYER PURSUANT TO THIS
AGREEMENT AT THE CLOSING, AND (III) IDENTIFY THE ASSUMED LIABILITIES TO BE
ASSUMED BY BUYER PURSUANT TO THIS AGREEMENT AT THE CLOSING.

 

(C)           AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO THE CLOSING DATE, SELLER
SHALL FURNISH TO BUYER THE PRELIMINARY FIXED ASSET AND INVENTORIES STATEMENT
INDICATING THE PRELIMINARY NET ASSET VALUE AS OF SUCH DATE.  BUYER SHALL HAVE
BEEN GIVEN FULL ACCESS TO THE RELEVANT RECORDS AND WORKING PAPERS USED BY SELLER
TO PREPARE THE PRELIMINARY FIXED ASSET AND INVENTORIES STATEMENT.  THE
PRELIMINARY FIXED ASSET AND INVENTORIES STATEMENT SHALL BE REASONABLY ACCEPTABLE
TO BUYER; PROVIDED, HOWEVER, THAT THE PRELIMINARY FIXED ASSET AND INVENTORIES
STATEMENT SHALL BE DEEMED TO BE REASONABLY ACCEPTABLE TO BUYER IF PREPARED IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

 

(D)           AT THE CLOSING, ON THE TERMS AND SUBJECT TO THE CONDITIONS SET
FORTH IN THIS AGREEMENT, AS FULL PAYMENT FOR THE TRANSFER OF THE PURCHASED
ASSETS BY SELLER TO BUYER, PARENT AND/OR BUYER SHALL PAY TO SELLER THE PURCHASE
PRICE (AS DEFINED BELOW) AND THE GST TAX AMOUNT BY WIRE TRANSFER OF IMMEDIATELY
AVAILABLE FUNDS IN UNITED STATES DOLLARS TO SUCH ACCOUNT OR ACCOUNTS AS SELLER
MAY DIRECT BY WRITTEN NOTICE DELIVERED TO BUYER BY SELLER AT LEAST TWO (2)
BUSINESS DAYS PRIOR TO THE APPLICABLE CLOSING DATE, SUBJECT TO SECTION 2.3(F)
BELOW WITH RESPECT TO THE ESCROW.

 

(E)           AT THE CLOSING, AND SIMULTANEOUSLY WITH THE PAYMENT OF THE
PURCHASE PRICE AND THE GST TAX AMOUNT PAYABLE IN CONNECTION THEREWITH PURSUANT
TO SECTION 2.3(D), (I) SELLER SHALL ASSIGN AND TRANSFER TO BUYER GOOD AND VALID
TITLE IN AND TO THE PURCHASED ASSETS (FREE AND CLEAR OF ALL LIENS, OTHER THAN
PERMITTED LIENS) BY DELIVERY OF (A) A GENERAL ASSIGNMENT AND BILL OF SALE IN
FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO BUYER AND SELLER (THE “GENERAL
ASSIGNMENT”), DULY EXECUTED BY SELLER; (B) THE FACILITY TRANSFER AGREEMENT DULY
EXECUTED BY SELLER; AND SUCH OTHER INSTRUMENTS OF CONVEYANCE, ASSIGNMENT AND
TRANSFER AS BUYER SHALL REASONABLY REQUEST, IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO BUYER AND SELLER, AS SHALL BE EFFECTIVE TO VEST IN BUYER GOOD AND
VALID TITLE TO THE APPLICABLE PURCHASED ASSETS AS CONTEMPLATED BY THIS AGREEMENT
(THE GENERAL ASSIGNMENT AND THE OTHER INSTRUMENTS BEING COLLECTIVELY REFERRED TO
HEREIN AS THE “ASSIGNMENT INSTRUMENTS”); AND (II) BUYER SHALL ASSUME FROM SELLER
THE DUE PAYMENT, PERFORMANCE AND DISCHARGE OF THE ASSUMED LIABILITIES BY
DELIVERY OF (A) AN ASSUMPTION AGREEMENT IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO SELLER AND BUYER (THE “ASSUMPTION AGREEMENT”), DULY EXECUTED BY
BUYER AND (B) SUCH OTHER INSTRUMENTS OF

 

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ASSUMPTION AS SELLER SHALL REASONABLY REQUEST, IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO SELLER AND BUYER, AS SHALL BE EFFECTIVE TO CAUSE BUYER TO ASSUME
THE ASSUMED LIABILITIES AS AND TO THE EXTENT PROVIDED IN SECTION 2.2(B) (THE
ASSUMPTION AGREEMENT AND SUCH OTHER INSTRUMENTS REFERRED TO IN CLAUSE (II)(B)
BEING COLLECTIVELY REFERRED TO HEREIN AS THE “ASSUMPTION INSTRUMENTS”).  AT THE
CLOSING, THERE SHALL ALSO BE DELIVERED TO SELLER AND BUYER THE CERTIFICATES AND
OTHER CONTRACTS, DOCUMENTS AND INSTRUMENTS REQUIRED TO BE DELIVERED PURSUANT TO
ARTICLE VII HEREOF.

 

(F)            ESCROW.  AT THE CLOSING, TEN PERCENT (10%) OF THE PURCHASE PRICE
BEING PAID UNDER SECTION 2.3(D) ABOVE SHALL BE PAID TO THE ESCROW AGENT TO BE
HELD AND ADMINISTERED BY THE ESCROW AGENT IN ESCROW AS SECURITY FOR THE
INDEMNIFICATION OBLIGATIONS OF SELLER FOR DAMAGES UNDER ARTICLE IX (THE
“ESCROW”) PURSUANT TO THE TERMS OF THE ESCROW AGREEMENT; PROVIDED THAT TO THE
EXTENT THE PURCHASE PRICE IS ADJUSTED PURSUANT TO SECTION 2.4, (I) UPWARD, THEN
TEN PERCENT OF SUCH INCREASE AMOUNT PAYABLE BY BUYER UNDER SECTION 2.4(F)(I)
SHALL BE PAID INTO ESCROW AND HELD PURSUANT TO THE ESCROW AGREEMENT, OR
(II) DOWNWARD, THEN TEN PERCENT (10%) OF SUCH DECREASE AMOUNT WILL BE PAID BY
THE ESCROW AGENT TO BUYER.  IN ADDITION, TO THE EXTENT THAT BUYER AND/OR PARENT
EXERCISES ITS PUT RIGHT UNDER SECTIONS 6.2 OR 6.3 OF THE PURCHASE AGREEMENT, AND
THE SELLER PURCHASES CERTAIN UNUSED INVENTORIES OR INVENTORIES FROM THE BUYER
AND/OR PARENT, ALL OR A PORTION OF THE PURCHASE PRICE OF SUCH UNUSED INVENTORIES
OR INVENTORIES SHALL BE PAID BY THE RELEASE OF AN AMOUNT EQUAL TO SUCH PURCHASE
PRICE OF SUCH INVENTORIES (CALCULATED IN ACCORDANCE WITH SECTIONS 6.2 AND 6.3)
FROM THE ESCROW ACCOUNT TO THE BUYER AND/OR PARENT (THE “INVENTORY ESCROW
AMOUNT”); PROVIDED, HOWEVER, THAT THE INVENTORY ESCROW AMOUNT SHALL NOT EXCEED
TEN (10%) PERCENT OF THE PORTION OF THE PURCHASE PRICE PAID FOR THE INVENTORIES
AS DETERMINED IN SECTION 1.1(J)(I).  ANY AMOUNTS THEN HELD IN ESCROW AND NOT
PREVIOUSLY PAID IN RESPECT OF ANY CLAIMS FOR INDEMNIFICATION UNDER ARTICLE IX
OR, RELEASED IN CONNECTION WITH SELLER’S PURCHASE OF INVENTORY UNDER SECTIONS
6.2 OR 6.3, OR SUBJECT TO ANY PENDING CLAIMS UNDER ARTICLE IX, SHALL BE RELEASED
TO SELLER NOT MORE THAN FIVE (5) DAYS AFTER THE TWELVE MONTH ANNIVERSARY OF THE
CLOSING (THE “ESCROW RELEASE DATE”).  ANY AMOUNTS EARNED IN RESPECT OF THE
ESCROW SHALL BE CONSIDERED A PART OF THE ESCROW AND HELD PURSUANT TO THE ESCROW
AGREEMENT.

 

2.4           Post-Closing Purchase Price Adjustments.

 

(A)           PREPARATION OF CLOSING NET ASSET VALUE STATEMENT.  AS SOON AS
REASONABLY PRACTICABLE AFTER THE CLOSING DATE (WITHIN THIRTY FIVE (35) DAYS IF
COMMERCIALLY REASONABLE BUT, IN ANY EVENT, NOT LATER THAN FORTY-FIVE (45) DAYS
AFTER THE CLOSING DATE), SELLER SHALL PREPARE AND DELIVER TO BUYER AT SELLER’S
EXPENSE AN UNAUDITED CLOSING FIXED ASSET AND INVENTORIES STATEMENT INDICATING
THE CLOSING NET ASSET VALUE AS OF THE CLOSING DATE (THE “CLOSING NET ASSET VALUE
STATEMENT”).  THE DATE SELLER DELIVERS THE CLOSING NET ASSET VALUE STATEMENT
SHALL BE REFERRED TO AS THE “NOTICE DATE”.  BUYER SHALL REASONABLY COOPERATE
WITH SELLER’S FINANCE ORGANIZATION IN ORDER TO ENABLE THE PREPARATION OF THE
CLOSING FIXED ASSET AND INVENTORIES STATEMENT.

 

(B)           VERIFICATION.  AS SOON AS REASONABLY PRACTICABLE AFTER THE NOTICE
DATE (BUT NOT LATER THAN THIRTY (30) DAYS AFTER THE NOTICE DATE), BUYER SHALL
VERIFY (I) THAT THE FIXED ASSETS AND THE INVENTORIES STATED IN THE PRELIMINARY
FIXED ASSET AND INVENTORIES STATEMENT AND THE STATEMENT OF THE PRELIMINARY NET
ASSET VALUE ACCURATELY REFLECT THE FIXED ASSETS AND INVENTORIES DELIVERED TO
BUYER AS PART OF THE PURCHASED ASSETS AT THE CLOSING AND (II) THAT THE CLOSING
NET

 

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ASSET VALUE IS ACCURATELY REFLECTED ON THE CLOSING FIXED ASSET AND INVENTORIES
STATEMENT (THE “VERIFICATION”).  SELLER SHALL REASONABLY COOPERATE WITH BUYER IN
ORDER TO ENABLE BUYER TO PERFORM THE VERIFICATION.

 

(C)           REVIEW OF PRELIMINARY CLOSING.  BUYER SHALL BE GIVEN FULL ACCESS,
DURING REGULAR BUSINESS HOURS, TO THE RELEVANT RECORDS AND WORKING PAPERS USED
BY SELLER TO PREPARE THE CLOSING FIXED ASSET AND INVENTORIES STATEMENT AND THE
CLOSING NET ASSET VALUE STATEMENT AND TO REVIEW THE RESULTS OF THE VERIFICATION
IN RELATION TO THE CLOSING FIXED ASSET AND INVENTORIES STATEMENT AND THE CLOSING
NET ASSET VALUE STATEMENT.  IF BUYER BELIEVES THAT ANY CHANGES ARE REQUIRED TO
BE MADE TO THE CLOSING FIXED ASSET AND INVENTORIES STATEMENT AND THE CLOSING NET
ASSET VALUE (INCLUDING BUT NOT LIMITED TO CHANGES BASED ON DIFFERENCES BETWEEN
THE CLOSING FIXED ASSET AND INVENTORIES STATEMENT THE RESULTS OF THE
VERIFICATION) (A “MATERIAL UNCERTAINTY”), BUYER SHALL, WITHIN THE LATER OF
SEVENTY-FIVE (75) DAYS FOLLOWING THE CLOSING DATE OR THIRTY (30) DAYS FOLLOWING
THE RECEIPT BY IT OF THE CLOSING FIXED ASSET AND INVENTORIES STATEMENT AND THE
CLOSING NET ASSET VALUE STATEMENT (THE “DISPUTE PERIOD”), GIVE WRITTEN NOTICE TO
SELLER (A “DISPUTE NOTICE”) OF ANY SUCH PROPOSED CHANGE OR MATERIAL UNCERTAINTY,
DESCRIBING THE CHANGE OR MATERIAL UNCERTAINTY AND THE BASIS FOR THE CHANGE OR
MATERIAL UNCERTAINTY IN REASONABLE DETAIL.  THE CLOSING FIXED ASSET AND
INVENTORIES STATEMENT AND THE CLOSING NET ASSET VALUE STATEMENT SHALL BE BINDING
AND CONCLUSIVE UPON, AND DEEMED ACCEPTED BY, BUYER UNLESS BUYER SHALL HAVE
TIMELY DELIVERED A DISPUTE NOTICE TO SELLER DURING THE DISPUTE PERIOD.

 

(D)           DISPUTES.  DISPUTES BETWEEN BUYER AND SELLER RELATING TO THE
CLOSING FIXED ASSET AND INVENTORIES STATEMENT AND THE CLOSING NET ASSET VALUE
STATEMENT THAT CANNOT BE RESOLVED BY THEM THROUGH NEGOTIATION WITHIN THIRTY (30)
DAYS AFTER RECEIPT BY SELLER OF A DISPUTE NOTICE SHALL BE REFERRED TO AN
INDEPENDENT ACCOUNTING FIRM REASONABLY AGREED UPON BY THE PARTIES FOR
ARBITRATION (THE “INDEPENDENT ACCOUNTANT”) WITH RESPECT TO THE DISPUTE NOTICE. 
THE INDEPENDENT ACCOUNTANT WILL BE INSTRUCTED TO SELECT, IN ITS DISCRETION, THE
INDIVIDUALS WITHIN ITS ORGANIZATION WHO WILL HAVE PRIMARY RESPONSIBILITY FOR
THIS MATTER AND TO REACH A DETERMINATION WITHIN FORTY-FIVE (45) DAYS FROM THE
DATE OF REFERRAL.  THE INDEPENDENT ACCOUNTANT DETERMINATION HEREUNDER SHALL BE
LIMITED TO DETERMINING THE CLOSING NET ASSET VALUE.  THE INDEPENDENT ACCOUNTANT
WILL NOT HAVE THE AUTHORITY ALTER OR VARY THIS AGREEMENT.  THE DECISION OF THE
INDEPENDENT ACCOUNTANT WILL BE FINAL AND BINDING UPON THE PARTIES.  THE
ENGAGEMENT OF THE INDEPENDENT ACCOUNTANT SHALL BE PAID ONE-HALF BY SELLER AND
ONE-HALF BY BUYER.  THE CLOSING FIXED ASSET AND INVENTORIES STATEMENT AND THE
CLOSING NET ASSET VALUE STATEMENT AS ADJUSTED BY THE INDEPENDENT ACCOUNTANT IN
ACCORDANCE WITH THIS SECTION 2.4(D), SHALL BE FINAL AND BINDING ON THE PARTIES. 
IT IS UNDERSTOOD AND AGREED THAT THE DECISION OF THE INDEPENDENT ACCOUNTANT
SHALL NOT BE SUBJECT TO JUDICIAL REVIEW BY ANY COURT OR TRIBUNAL UNDER ANY
CIRCUMSTANCES WHATSOEVER AND THE PARTIES HEREBY EXPRESSLY WAIVE ANY RIGHT TO
APPEAL OR OTHERWISE SEEK JUDICIAL REVIEW OF ANY DECISION OF THE INDEPENDENT
ACCOUNTANT UNDER THIS SECTION 2.4(D).

 

(E)           FINAL CLOSING FIXED ASSET AND INVENTORIES STATEMENT.  THE CLOSING
FIXED ASSET AND INVENTORIES STATEMENT AND THE CLOSING NET ASSET VALUE STATEMENT
SHALL BECOME FINAL WITH RESPECT TO ALL OR ANY PORTION THEREOF, AND BINDING UPON
BUYER AND SELLER UPON THE EARLIER OF (I) THE FAILURE BY BUYER TO TIMELY OBJECT
TO ALL OR ANY PORTION THEREOF DURING THE DISPUTE PERIOD, (II) AN AGREEMENT
BETWEEN BUYER AND SELLER WITH RESPECT THERETO, OR (III) THE DECISION BY THE
INDEPENDENT ACCOUNTANT WITH RESPECT TO ANY DISPUTED MATTERS PURSUANT TO
SECTION 2.4(D).  THE

 

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CLOSING FIXED ASSET AND INVENTORIES STATEMENT AND THE CLOSING NET ASSET VALUE
STATEMENT AS FINALLY DETERMINED UNDER THIS SECTION 2.4, SHALL BE REFERRED TO
HEREIN AS THE “FINAL CLOSING FIXED ASSET AND INVENTORIES STATEMENT” AND THE
“FINAL CLOSING NET ASSET VALUE,” RESPECTIVELY.

 

(F)            ADJUSTMENT TO THE CLOSING NET ASSET VALUE.  THE PRELIMINARY NET
ASSET VALUE AMOUNT PAID AT THE CLOSING SHALL BE SUBJECT TO ADJUSTMENT PURSUANT
TO THE FOLLOWING PROVISIONS OF THIS SECTION 2.4(F):

 

(I)            IF THE FINAL CLOSING NET ASSET VALUE AS REFLECTED IN THE FINAL
CLOSING FIXED ASSET AND INVENTORIES STATEMENT IS LESS THAN THE PRELIMINARY NET
ASSET VALUE AS REFLECTED IN THE APPLICABLE PRELIMINARY FIXED ASSET AND
INVENTORIES STATEMENT, THEN THE FINAL CLOSING NET ASSET VALUE SHALL BE DECREASED
ON A DOLLAR-FOR-DOLLAR BASIS BY AN AMOUNT (THE “DECREASE AMOUNT”) EQUAL TO THE
AMOUNT BY WHICH THE FINAL CLOSING NET ASSET VALUE AS REFLECTED IN THE FINAL
CLOSING FIXED ASSET AND INVENTORIES STATEMENT IS LESS THAN THE PRELIMINARY NET
ASSET VALUE AS REFLECTED IN THE PRELIMINARY FIXED ASSET AND INVENTORIES
STATEMENT, AND THE DECREASE AMOUNT SHALL BE PAYABLE NINETY PERCENT (90%) FROM
SELLER TO BUYER AND TEN PERCENT (10%) RELEASED FROM THE ESCROW BY THE ESCROW
AGENT TO BUYER IN IMMEDIATELY AVAILABLE FUNDS PURSUANT TO SECTION 2.4(G).  IN
THE EVENT OF A DECREASE AMOUNT, THERE SHALL BE A CORRESPONDING ADJUSTMENT TO THE
GST TAX AMOUNT.

 

(II)           IF THE FINAL CLOSING NET ASSET VALUE AS REFLECTED IN THE FINAL
CLOSING FIXED ASSET AND INVENTORIES STATEMENT IS GREATER THAN THE PRELIMINARY
NET ASSET VALUE AS REFLECTED IN THE PRELIMINARY FIXED ASSET AND INVENTORIES
STATEMENT, THEN THE FINAL CLOSING NET ASSET VALUE SHALL BE INCREASED ON A
DOLLAR-FOR-DOLLAR BASIS BY AN AMOUNT (THE “INCREASE AMOUNT”) EQUAL TO THE AMOUNT
BY WHICH THE FINAL CLOSING NET ASSET VALUE AS REFLECTED IN THE FINAL CLOSING
FIXED ASSET AND INVENTORIES STATEMENT IS GREATER THAN THE PRELIMINARY NET ASSET
VALUE AS REFLECTED IN THE PRELIMINARY FIXED ASSET AND INVENTORIES STATEMENT, AND
NINETY PERCENT (90%) OF THE INCREASE AMOUNT SHALL BE PAYABLE BY BUYER TO SELLER
IN IMMEDIATELY AVAILABLE FUNDS PURSUANT TO SECTION 2.4(G), AND TEN PERCENT (10%)
OF THE INCREASE AMOUNT SHALL BE PAYABLE BY BUYER TO THE ESCROW AGENT TO BE HELD
IN ESCROW PURSUANT TO THE ESCROW AGREEMENT.  IN THE EVENT OF AN INCREASE AMOUNT,
THERE SHALL BE A CORRESPONDING ADJUSTMENT TO THE GST TAX AMOUNT.

 

(G)           PAYMENTS OF ADJUSTMENT AMOUNT.  AS SOON AS PRACTICABLE (BUT NOT
MORE THAN TEN (10) BUSINESS DAYS) AFTER ALL OR ANY PORTION OF A CLOSING NET
ASSET VALUE SHALL BECOME FINAL AND BINDING PURSUANT TO SECTION 2.4(E) HEREOF,
BUYER OR SELLER, AS THE CASE MAY BE, SHALL MAKE THE PAYMENT CONTEMPLATED BY
SECTION 2.4(F) IN RESPECT OF ALL OR SUCH PORTION OF SUCH CLOSING NET ASSET VALUE
THAT HAS BECOME FINAL AND BINDING (IT BEING THE INTENTION OF THE PARTIES THAT
THE PAYMENT OF ALL UNDISPUTED AMOUNTS SET FORTH IN THE FINAL CLOSING FIXED ASSET
AND INVENTORIES STATEMENT THAT BECOME FINAL AND BINDING PURSUANT TO
SECTION 2.4(E) SHALL NOT BE CONTINGENT UPON THE RESOLUTION OF ANY DISPUTED
AMOUNTS SET FORTH IN SUCH FINAL CLOSING FIXED ASSET AND INVENTORIES STATEMENT ).

 

2.5           Prorations.  The following prorations relating to the Purchased
Assets and the ownership and conduct of the Business shall be made as of the
Closing Date, with Seller liable to the extent such items relate to any time
period up to the Closing Date, and Buyer liable to the extent such items relate
to periods beginning at and immediately after the applicable Closing Date:

 

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(A)           GOVERNMENTAL PROPERTY OR SIMILAR TAXES OR LEVYS ON OR WITH RESPECT
TO THE PURCHASED ASSETS;

 

(B)           RENTS, ADDITIONAL RENTS, OPERATING EXPENSE PASS THROUGHS, TAXES
AND OTHER ITEMS PAYABLE BY SELLER UNDER ANY PERSONAL PROPERTY LEASES; AND

 

Except as otherwise agreed by the parties, the net amount of all such pro
rations will be settled and paid on the Closing Date.

 

2.6           Taxes.  Buyer and Seller shall bear equally any sales, use,
value-added, gross receipts, excise, registration, stamp duty or other similar
taxes or governmental fees arising out of the transfer of the Purchased Assets
to Buyer pursuant hereto (“Transfer Taxes”); provided Buyer shall pay GST that
may be chargeable in respect of the sale of the Purchased Assets under this
Agreement subject to Seller issuing and delivering to Buyer a tax invoice
relating to such GST and provided that GST is chargeable or payable with respect
to the sale of the Purchased Assets under this Agreement and such sale is not
considered by the relevant tax authorities in Singapore to be a sale of a
business as a going concern.  To the extent permitted by applicable law, Parent,
Buyer and Seller shall cooperate in minimizing Transfer Taxes.

 

(A)           STRADDLE PERIOD TAXES.  IN THE CASE OF ANY REAL OR PERSONAL
PROPERTY TAXES OR ANY SIMILAR AD VALOREM TAXES ATTRIBUTABLE TO THE PURCHASED
ASSETS FOR WHICH TAXES ARE REPORTED ON A TAX RETURN COVERING A PERIOD COMMENCING
BEFORE THE CLOSING AND ENDING THEREAFTER (A “STRADDLE PERIOD TAX”), ANY SUCH
STRADDLE PERIOD TAXES SHALL BE PRORATED BETWEEN BUYER AND SELLER ON A PER DIEM
BASIS.  THE PARTY REQUIRED BY LAW TO FILE A TAX RETURN WITH RESPECT TO STRADDLE
PERIOD TAXES SHALL DO SO WITHIN THE TIME PERIOD PRESCRIBED BY LAW.

 

(B)           TAX RETURNS.  TO THE EXTENT RELEVANT TO THE BUSINESS OR THE
PURCHASED ASSETS, EACH PARTY SHALL (I) PROVIDE THE OTHER WITH SUCH ASSISTANCE AS
MAY REASONABLY BE REQUIRED IN CONNECTION WITH THE PREPARATION OF ANY TAX RETURN
AND THE CONDUCT OF ANY AUDIT OR OTHER EXAMINATION BY ANY GOVERNMENTAL AUTHORITY
OR IN CONNECTION WITH JUDICIAL OR ADMINISTRATIVE PROCEEDINGS RELATING TO ANY
LIABILITY FOR TAXES AND (II) RETAIN AND PROVIDE THE OTHER WITH ALL RECORDS OR
OTHER INFORMATION THAT MAY BE RELEVANT TO THE PREPARATION OF ANY TAX RETURNS, OR
THE CONDUCT OF ANY AUDIT OR EXAMINATION, OR OTHER PROCEEDING RELATED TO TAXES.

 

2.7           Nontransferable Assets.  To the extent that any Purchased Asset or
Assumed Liability to be sold, conveyed, assigned, transferred, delivered or
assumed to or by Buyer pursuant hereto, or any claim, right or benefit arising
thereunder or resulting therefrom, is not capable of being sold, conveyed,
assigned, transferred or delivered without the approval, consent or waiver of
the issuer thereof or the other party thereto, or any third person (including a
Governmental Body), or if such sale, conveyance, assignment, transfer or
delivery or attempted sale, conveyance, assignment, transfer or delivery would
constitute a breach or termination right thereof or a violation of any law,
decree, order, regulation or other governmental edict, except as expressly
otherwise provided herein, this Agreement shall not constitute a sale,
conveyance, assignment, transfer or delivery thereof, or an attempted sale,
conveyance, assignment, transfer or delivery thereof absent such approvals,
consents or waivers.  If any such approval, consent or waiver shall not be
obtained, or if an attempted assignment of any such Purchased Asset or the
assumption of any Assumed Liability by Buyer would be ineffective so that Buyer
would not in

 

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fact receive all such Purchased Assets or assume all such Assumed Liabilities
pursuant hereto, Seller, Buyer and Parent shall cooperate in a mutually
agreeable arrangement and use reasonable diligent efforts to provide Buyer with
the benefits and assume the obligations of such Purchased Assets and Assumed
Liabilities in accordance with this Agreement, including subcontracting,
sub-licensing, or sub-leasing to Buyer, or under which Seller, at Buyer’s
expense, would enforce for the benefit of Buyer, with Buyer assuming all of
Seller’s obligations thereunder, any and all rights of Seller against a third
party thereto; provided that in no event shall Seller be required to make a cash
payment to a third-party (other than as required under any agreement with such
third-party) or to Buyer or Parent solely in connection with its obligations
under this Section 2.6.  Buyer and Parent agree to reasonably cooperate with
Seller and supply relevant information to such party or parties or such
third-party in order to assist Seller in its obligations under this Section 2.6.

 

2.8           Taking of Necessary Action; Further Action.  From time to time
after the Closing Date, at the request of any Party hereto and at the expense of
such Party, the Parties hereto shall execute and deliver such other instruments
of sale, transfer, conveyance, assignment and confirmation and take such action
as Parent or Buyer may reasonably determine is necessary to transfer, convey and
assign to Buyer, and to confirm Buyer’s title to or interest in the Purchased
Assets pursuant to this Agreement, to put Buyer in actual possession and
operating control of such Purchased Assets as contemplated by this Agreement and
to assist Buyer in exercising all rights with respect thereto.

 

2.9           Allocation of Purchase Price Consideration.  The sum of the
Purchase Price and the Assumed Liabilities (except to the extent that such
Assumed Liabilities are not required to be capitalized for income tax purposes)
shall be allocated among the Purchased Assets as of the Closing Date in
accordance with Schedule 2.9, which shall be delivered by Buyer three (3)
business days prior to the Closing Date and shall be reasonably acceptable to
the Seller.  Any subsequent adjustments to the sum of the Purchase Price and
Assumed Liabilities (except to the extent that such Assumed Liabilities are not
required to be capitalized for income tax purposes) shall be reflected by Buyer
in the allocation hereunder in a manner consistent with Section 1060 of the Code
and the regulations thereunder.  For all Tax purposes, Purchaser and Seller
agree to report the transactions contemplated in this Agreement in a manner
consistent with the terms of this Agreement, including the allocation under
Schedule 2.9, and that none of them will take any position inconsistent
therewith in any Tax Return, in any refund claim, in any related litigation, or
other related dispute.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Subject to such exceptions as are specifically disclosed in the disclosure
letter supplied by Seller to Parent and Buyer (the “Seller Disclosure Letter”),
Seller hereby represents and warrants to Parent and Buyer that the statements
contained in this Article III are true and correct as of the date of this
Agreement and will be true and correct as of the Closing (as though made at the
Closing ); provided, that the representations and warranties made as of a
specified date will be true and correct as of such date.

 

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3.1           Organization, Qualification, and Corporate Power.  Seller is a
corporation duly organized and validly existing under the laws of Singapore. 
Seller has all necessary corporate power and authority to enter into this
Agreement and all agreements and instruments delivered pursuant hereto (the
“Ancillary Agreements”), to carry out its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby.  Seller is
duly licensed or qualified to do business and are in good standing in each
jurisdiction in which the properties owned or leased by them or the operation of
the Business makes such licensing or qualification necessary, except to the
extent that the failure to be so licensed or qualified would not (i) adversely
affect the ability of Seller to carry out its obligations under, and to
consummate the transactions contemplated by, this Agreement and the Ancillary
Agreements and (ii) result in a Material Adverse Effect on the Business or the
Purchased Assets.

 

3.2           Authorization.  The execution and delivery of this Agreement and
the Ancillary Agreements by Seller, the performance by Seller of its obligations
hereunder and thereunder and the consummation by Seller of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
action on the part of Seller and its subsidiaries and no other corporate
proceedings on the part of Seller are necessary to authorize this Agreement or
the Ancillary Agreements, or to consummate the transactions contemplated hereby
and thereby.  This Agreement and the Ancillary Agreements to which Seller is a
party have been duly and validly executed and constitute the valid and legally
binding obligations of Seller, enforceable against Seller in accordance with
their respective terms and conditions, except as such enforceability may be
limited by principles of public policy and subject to the laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies.  Except as set forth in Section 3.2 of the Seller Disclosure
Letter, Seller does not own and has never owned any subsidiaries.

 

3.3           No Conflicts.  Neither the execution and the delivery of this
Agreement and the Ancillary Agreements by Seller nor the consummation of the
Transaction will (A) violate any material constitution, Law, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Seller is subject, (B) violate or
conflict with any provision of the charter documents, bylaws or organizational
documents of the Seller, or (C) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice or consent
under, any Assigned Contract or any Assumed Permit (or result in the imposition
of any Lien upon any of the Purchased Assets).

 

3.4           Consents.  Except as set forth in Section 3.4 of the Seller
Disclosure Letter, no consent, waiver, approval, order, license, permit,
certificates, filing or authorization of, or registration, declaration or filing
with, any Governmental Body or any third party is required by or with respect to
Seller in connection with the execution and delivery of this Agreement or the
consummation of the Transaction, except for such consents, waivers, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable securities laws.

 

3.5           Legal Compliance.  The Business as being conducted by Seller has
been and at the Closing will be in material compliance with all applicable Laws
(including without limitation rules, regulations, codes, plans, injunctions,
judgments, orders, extension orders, decrees, rulings,

 

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and charges thereunder).  No Action, or to the knowledge of Seller,
investigation, charge, complaint, claim, demand, notice or inquiry, is pending,
or to the knowledge of Seller, is threatened against Seller by any Governmental
Body alleging any failure to so comply in any material respect.  Seller has all
material Permits that are necessary to operate the Business and hold the
Purchased Assets as of the Closing.

 

3.6           Tax Matters.  For purposes of this Agreement, (i) “Tax” or,
collectively, “Taxes”, means (i) any and all, regardless of country, national,
federal, state, local and foreign taxes, assessments and other governmental
charges, duties, impositions and liabilities, including taxes based upon or
measured by gross receipts, income, profits, sales, use and occupation, and
value added (including GST), ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes, stamp duties and
customs and other import and export duties together with all interest, penalties
and additions imposed with respect to such amounts; (ii) any liability for the
payment of any amounts of the type described in clause (i) as a result of being
or ceasing to be a member of an affiliated, consolidated, combined or unitary
group for any period (including, without limitation, any liability under Treas.
Reg. Section 1.1502-6 or any comparable provision of foreign, state or local
law); and (iii) any liability for the payment of any amounts of the type
described in clause (i) or (ii) as a result of any express or implied obligation
to indemnify any other person or as a result of any obligations under any
agreements or arrangements with any other person with respect to such amounts
and including any liability for taxes of a predecessor or transferor entity.

 

Except to the extent not relevant to the Purchased Assets or the Business:

 

(A)           SELLER HAS TIMELY FILED ALL RETURNS, ESTIMATES, INFORMATION
STATEMENTS AND REPORTS WITH RESPECT TO ANY MATERIAL TAXES (“TAX RETURNS”) THAT
IT WAS REQUIRED TO FILE.  ALL SUCH TAX RETURNS ARE CORRECT AND COMPLETE IN ALL
MATERIAL RESPECTS AND HAVE BEEN COMPLETED IN ACCORDANCE WITH APPLICABLE LAW. 
ALL TAXES OWED BY SELLER (WHETHER OR NOT SHOWN ON ANY TAX RETURN) WERE PAID IN
FULL WHEN DUE.

 

(B)           SELLER HAS TIMELY WITHHELD OR PAID WITH RESPECT TO ITS EMPLOYEES
OR OTHER THIRD PARTIES AND TIMELY PAID OVER ANY WITHHELD AMOUNTS TO THE
APPROPRIATE TAXING AUTHORITY ALL SINGAPOREAN AND U.S. FEDERAL AND STATE INCOME
TAXES, FEDERAL INSURANCE CONTRIBUTION ACT, FEDERAL UNEMPLOYMENT TAX ACT AND
OTHER TAXES REQUIRED TO BE WITHHELD OR PAID.

 

(C)           SELLER HAS MADE AVAILABLE TO PARENT COPIES OF ALL TAX RETURNS
RELATING TO THE BUSINESS OR THE PURCHASED ASSETS FOR ALL PERIODS SINCE THE
SELLER’S INCORPORATION.

 

(D)           SELLER HAS PAID ALL TAXES FOR WHICH SELLER IS LIABLE TO PAY IN
RESPECT OF THE PURCHASED ASSETS.

 

3.7           Title of Properties; Absence of Liens and Encumbrances; Condition
of Equipment.

 

(A)           ALL CURRENT LEASES RELATED TO THE BUSINESS ARE IN FULL FORCE AND
EFFECT, ARE VALID AND EFFECTIVE IN ACCORDANCE WITH THEIR RESPECTIVE TERMS, AND
THERE IS NOT, UNDER ANY OF SUCH LEASES, ANY EXISTING DEFAULT OR EVENT OF DEFAULT
(OR EVENT WHICH WITH NOTICE OR LAPSE OF TIME, OR

 

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BOTH, WOULD CONSTITUTE A DEFAULT) ON THE PART OF SELLER AND, TO THE KNOWLEDGE OF
SELLER, ON THE PART OF ANY OTHER PARTY THERETO.

 

(B)           SELLER HAS GOOD AND VALID TITLE TO, OR, IN THE CASE OF LEASED
PROPERTIES AND ASSETS VALID LEASEHOLD INTERESTS IN, ALL OF THE PURCHASED ASSETS,
FREE AND CLEAR OF ANY LIENS, EXCEPT (I) AS REFLECTED IN THE SELLER DISCLOSURE
LETTER, AND (II) SUCH IMPERFECTIONS OF TITLE AND ENCUMBRANCES, IF ANY, WHICH DO
NOT DETRACT FROM THE VALUE OR INTERFERE WITH THE PRESENT USE OF, IN ANY MATERIAL
RESPECT, ASSETS SUBJECT THERETO (THE “PERMITTED LIENS”).  SELLER IS A PARTY TO
AND ENJOYS THE RIGHT TO THE BENEFITS OF ALL ASSIGNED CONTRACTS.

 

(C)           ALL OF THE FIXED ASSETS ARE IN GOOD OPERATING CONDITION AND REPAIR
(NORMAL WEAR AND TEAR EXCEPTED) AND ARE SUITABLE FOR THE PURPOSES FOR WHICH THEY
ARE CURRENTLY USED.

 

(D)           SELLER HAS THE COMPLETE POWER AND RIGHT TO SELL, ASSIGN, TRANSFER,
CONVEY AND DELIVER THE PURCHASED ASSETS TO BUYER PURSUANT TO THIS AGREEMENT. 
FOLLOWING THE CONSUMMATION OF THE TRANSACTION AND THE EXECUTION OF THE
INSTRUMENTS OF TRANSFER CONTEMPLATED BY THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS, BUYER WILL OWN, WITH GOOD AND VALID TITLE TO, OR OTHERWISE ACQUIRE
THE INTERESTS OF SELLER AND ITS SUBSIDIARIES IN, THE PURCHASED ASSETS, FREE AND
CLEAR OF ANY LIENS, OTHER THAN THE PERMITTED LIENS.

 

3.8           Intellectual Property.  Other than Intellectual Property Rights
included in the Purchased Assets and Assumed Liabilities and Intellectual
Property Rights related to the Excluded Assets, no transfer of Intellectual
Property Rights from Seller to Buyer or Parent is required for Buyer and/or
Parent to conduct the Business as currently conducted by Seller.  The
manufacturing processes of the Business as currently conducted by the Seller at
the Closing and continued by Buyer or Parent pursuant to the Supply Agreement do
not infringe or misappropriate any Intellectual Property of any third party. 
For the avoidance of doubt, the foregoing sentence shall take prevail in the
event of a conflict between such sentence and the Supply Agreement.

 

3.9           Contracts.  Section 3.9 of Seller Disclosure Letter lists all
written or oral contracts, agreements, commitments and other arrangements
(including any amendment thereto) outstanding as of the date hereof to which
Seller is a party and that relates to the Business, other than bids submitted to
customers, purchase orders and sales orders in the ordinary course of business
(collectively, the “Business Contracts”).  Seller has delivered to Parent a
correct and complete copy of each Business Contract, and any written
modification, amendment or additional terms (and a written summary setting forth
the terms and conditions of any oral modification, amendment or additional
terms) to the Business Contracts.  With respect to each Business Contract:
(A) the Business Contract, with respect to Seller and, to Seller’s knowledge,
all other parties thereto, is legal, valid, binding, enforceable, and in full
force and effect in all respects; (B) neither Seller nor, to Seller’s knowledge,
any other party is in breach or default, and no event has occurred, which with
notice or lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the Business Contract; and
(C) Seller has not received notice that any party has repudiated any provision
of the Business Contract.  Except as set forth on Section 3.4 of the Seller
Disclosure Letter, Seller has obtained or will obtain prior to the Closing Date,
all necessary consents, waivers and approvals of parties to any Assigned
Contract as are required thereunder in connection with the transactions
contemplated by this

 

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Agreement or to remain in effect without modification after the Closing. 
Following the Closing, Buyer will be permitted to exercise all of Seller’s
rights under such Assigned Contracts to the same extent in all material respects
that Seller would have been able to had the Transaction not occurred.

 

3.10         Power of Attorney.  There are no outstanding powers of attorney
executed on behalf of Seller and related to the Business, the Purchased Assets
or the Assigned Contracts.

 

3.11         Insurance.  Seller has delivered to Parent copies of each insurance
policy (including policies providing property, casualty, liability, and workers’
compensation coverage and bond and surety arrangements) related to the Business
with respect to which Seller is a party.  With respect to each such insurance
policy: (A) the policy is legal, valid, binding, enforceable, and in full force
and effect (and there has been no notice of cancellation or nonrenewal of the
policy received); (B) Seller is not in breach or default (including with respect
to the payment of premiums or the giving of notices), and no event has occurred
which, with notice or the lapse of time, would constitute such a breach or
default by Seller, or permit termination, modification, or acceleration, under
the policy; (C) Seller has not received notice that any party to the policy has
repudiated any provision thereof; and (D) there has been no failure by Seller to
give any notice or present any claim under the policy in due and timely fashion.
Section 3.11 of Seller Disclosure Letter describes any self-insurance
arrangements presently maintained by Seller.

 

3.12         Litigation.  Section 3.12 of Seller Disclosure Letter sets forth
each instance in which to the Business or the Purchased Assets (i) is subject to
any outstanding injunction, judgment, order, decree, ruling, or charge or
(ii) is or has been, or, to the knowledge of Seller, is threatened to be made a
party, to any action, suit, proceeding, hearing, mediation, arbitration, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
mediator or arbitrator.

 

3.13         Employees. Schedule 3.13 contains a complete and accurate list of
all current Employees as of the date hereof, showing for each such Employee the
following: employee name, position held, annual base salary and visa status.

 

3.14         Labor Matters.  No Employee has advised any officer of Seller that
he or she plans to terminate employment with Seller or within the twelve (12)
months from the date of the Closing.  The Seller is not a party to any special
collective bargaining agreement and no special collective bargaining agreement
is being negotiated with respect to the Business.  There are no collective
relations in any Facility.  The Employees are not organized, and there is no
Employees’ committee or collective representation of any kind.  There is no
material unfair labor practice, charge or complaint pending against the Seller
with respect to the Business, nor is there any material labor strike, work
stoppage, grievance or other labor dispute pending or, to the knowledge of the
Seller, threatened in writing or orally against the Seller with respect to the
Business.  The Seller: (i) is in compliance in all material respects with all
applicable Laws respecting employment and wage and hours, and with all terms and
conditions of employment, agreements with third parties, codes of conduct,
visas, work permits, in each case, with respect to Employees; (ii) have
withheld, paid and reported all amounts required by Law or by agreement to be
withheld, reported and paid with respect to wages, salaries and other payments
to Employees; (iii) are not liable for any arrears of wages or any taxes or any
penalty for failure to

 

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comply with any of the foregoing; and (iv) are not liable for any payment to any
Governmental Body, any trust or other fund governed by or maintained by or on
behalf of any Governmental Body, with respect to unemployment compensation
benefits, social security or other benefits or obligations for Employees (other
than routine payments to be made in the normal course of business and consistent
with past practice).  There are no pending, or to the knowledge of Seller,
threatened against the Seller under any employment policy or disability policy.

 

3.15         Environment, Health and Safety.  For purposes of this Agreement,
the following terms shall have the meanings ascribed to them below:

 

(A)           DEFINITIONS:

 

(I)            “HAZARDOUS MATERIAL” IS ANY MATERIAL, CHEMICAL, SUBSTANCE OR
WASTE THAT HAS BEEN DESIGNATED BY ANY GOVERNMENTAL BODY TO BE RADIOACTIVE,
TOXIC, HAZARDOUS OR OTHERWISE A DANGER TO HEALTH, REPRODUCTION OR THE
ENVIRONMENT OR THE DISPOSAL, TREATMENT, TRANSFER, STORAGE OR MANUFACTURE OF
WHICH IS REGULATED IN ANY MANNER BY A GOVERNMENTAL BODY.

 

(II)           “BUSINESS FACILITY” IS ANY PROPERTY INCLUDING THE LAND, THE
IMPROVEMENTS THEREON, THE GROUNDWATER THEREUNDER AND THE SURFACE WATER THEREON,
THAT IS OR AT ANY TIME HAS BEEN OWNED, OPERATED, OCCUPIED, CONTROLLED OR LEASED
BY THE SELLER IN CONNECTION WITH THE OPERATION OF THE PRINTED CIRCUIT BOARD
ASSEMBLY MANUFACTURING AND STORAGE SYSTEM MANUFACTURING BUSINESS CONDUCTED BY
SELLER IN SINGAPORE.

 

(III)          “ENVIRONMENTAL LAWS” ARE ALL APPLICABLE LAWS, RULES, REGULATIONS,
ORDERS, TREATIES, STATUTES, AND CODES PROMULGATED BY ANY GOVERNMENTAL BODY WHICH
PROHIBIT, REGULATE OR CONTROL ANY HAZARDOUS MATERIAL OR ANY HAZARDOUS MATERIAL
ACTIVITY, INCLUDING, WITHOUT LIMITATION, THE FACTORIES ACT (CAP 104) OF
SINGAPORE, THE FIRE SAFETY ACT (CAP 109A) OF SINGAPORE, THE ENVIRONMENTAL
POLLUTION CONTROL ACT (CAP 94A) OF SINGAPORE, THE ENVIRONMENTAL PUBLIC HEALTH
ACT (CAP 95) OF SINGAPORE, AND ANY OTHER LAWS AND REGULATIONS IN SINGAPORE
PERTAINING TO OCCUPATIONAL HEALTH AND SAFETY, OR POLLUTION CONTROL, THE
REGULATIONS PROMULGATED TO ANY OF THE FOREGOING, AND ALL AMENDMENTS AND
MODIFICATIONS OF ANY OF THE FOREGOING.

 

(IV)          “HAZARDOUS MATERIALS ACTIVITY” IS THE TRANSPORTATION, TRANSFER,
RECYCLING, STORAGE, USE, TREATMENT, MANUFACTURE, REMOVAL, REMEDIATION, RELEASE
(OR THREAT OF RELEASE), EXPOSURE OF OTHERS TO, SALE, OR DISTRIBUTION OF ANY
HAZARDOUS MATERIAL OR ANY PRODUCT CONTAINING A HAZARDOUS MATERIAL.

 

(V)           “ENVIRONMENTAL PERMIT” IS ANY APPROVAL, PERMIT, LICENSE, CLEARANCE
OR CONSENT REQUIRED TO BE OBTAINED FROM ANY PRIVATE PERSON OR ANY GOVERNMENTAL
BODY WITH RESPECT TO A HAZARDOUS MATERIALS ACTIVITY WHICH IS OR WAS CONDUCTED BY
THE SELLER.

 

(B)           CONDITION OF PROPERTY:  AS OF THE CLOSING, EXCEPT IN COMPLIANCE
WITH ENVIRONMENTAL LAWS AND IN A MANNER THAT COULD NOT REASONABLY BE EXPECTED TO
SUBJECT THE SELLER TO LIABILITY, TO KNOWLEDGE OF SELLER, NO HAZARDOUS MATERIALS,
UNDERGROUND STORAGE TANKS, ASBESTOS WHICH IS FRIABLE OF POLYCHLORINATED
BIPHENYLS (PCBS), ARE PRESENT ON ANY BUSINESS FACILITY OR WERE PRESENT ON ANY
OTHER BUSINESS FACILITY AT THE TIME IT CEASED TO BE OWNED, OPERATED, OCCUPIED,
CONTROLLED OR LEASED BY THE SELLER.  TO THE KNOWLEDGE OF THE SELLER, THERE ARE
NO

 

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UNDERGROUND STORAGE TANKS, ASBESTOS WHICH IS FRIABLE OR LIKELY TO BECOME FRIABLE
OR PCBS PRESENT ON ANY BUSINESS FACILITY.

 

(C)           HAZARDOUS MATERIALS ACTIVITIES:  THE SELLER HAS CONDUCTED ALL
HAZARDOUS MATERIAL ACTIVITIES RELATING TO THE BUSINESS IN COMPLIANCE IN ALL
MATERIAL RESPECTS WITH ALL APPLICABLE ENVIRONMENTAL LAWS.  THE HAZARDOUS
MATERIALS ACTIVITIES OF THE SELLER PRIOR TO THE CLOSING HAVE NOT RESULTED IN THE
EXPOSURE OF ANY PERSON TO A HAZARDOUS MATERIAL IN A MANNER WHICH HAS CAUSED OR
COULD REASONABLY BE EXPECTED TO CAUSE AN ADVERSE HEALTH EFFECT TO ANY SUCH
PERSON.

 

(D)           PERMITS:  SELLER HOLDS ALL ENVIRONMENTAL PERMITS NECESSARY FOR THE
CONDUCT OF THE SELLER’S BUSINESS AS CURRENTLY BEING CONDUCTED BY SELLER.

 

(E)           ENVIRONMENTAL LITIGATION:  NO ACTION, PROCEEDING, REVOCATION
PROCEEDING, AMENDMENT PROCEDURE, WRIT, INJUNCTION OR CLAIM IS PENDING, OR TO THE
BEST OF THE SELLER’S KNOWLEDGE, THREATENED, CONCERNING OR RELATING TO ANY
ENVIRONMENTAL PERMIT OR ANY HAZARDOUS MATERIALS ACTIVITY OF THE SELLER RELATING
TO ITS BUSINESS, OR ANY BUSINESS FACILITY.

 

(F)            REPORTS AND RECORDS:  THE SELLER HAS DELIVERED TO BUYER OR MADE
AVAILABLE FOR INSPECTION BY BUYER AND ITS AGENTS, REPRESENTATIVES AND EMPLOYEES
ALL RECORDS IN THE SELLER’S POSSESSION CONCERNING THE HAZARDOUS MATERIALS
ACTIVITIES OF THE SELLER RELATING TO ITS BUSINESS AND ALL ENVIRONMENTAL AUDITS
AND ENVIRONMENTAL ASSESSMENTS OF ANY BUSINESS FACILITY CONDUCTED AT THE REQUEST
OF, OR OTHERWISE IN THE POSSESSION OF THE SELLER.  THE SELLER HAS COMPLIED WITH
ALL ENVIRONMENTAL DISCLOSURE OBLIGATIONS IMPOSED BY APPLICABLE LAW WITH RESPECT
TO THIS TRANSACTION.

 

3.16         Fees.  Seller has no liability or obligation to pay any fees or
commissions to any broker, finder, agent or attorney, with respect to the
transactions contemplated by this Agreement.

 

3.17         Complete Copies of Materials.  Seller has delivered or made
available true and complete copies of each document (or summaries of same) that
has been requested by Parent, Buyer or their counsel.

 

3.18         Board Approval.  The Board of Directors of Seller has (i) approved
this Agreement, the Ancillary Agreements and the Transaction, (ii) determined
that the Transaction is in the best interests of the shareholders of Seller and
is on terms that are fair to such shareholders, and (iii) if required by
applicable Law, recommended that the shareholders of Seller approve this
Agreement, the Ancillary Agreements and the Transaction.

 

3.19         Inventories.  The Inventories are in all material respects similar
in quality to the raw materials, supplies and work-in-process generally included
in the inventory of the Business in the past.  Seller has good and valid title
to the Inventories free and clear of all Liens, other than Permitted Liens.  The
Inventories do not consist of, in any material amount, items that are obsolete
or damaged.  The Inventories do not consist of any items held on consignment. 
Seller is not under any obligation or liability with respect to accepting
returns of items of Inventories or merchandise in the possession of its
customers other than in the ordinary course of the Business consistent with past
practice.  Seller has not changed the price of any Inventories except for
(i) reductions to reflect any reduction in the cost thereof to Seller,
(ii) reductions and increases

 

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responsive to normal competitive conditions and consistent with Seller’s past
sales practices, (iii) increases to reflect any increase in the cost thereof to
Seller and (iv) increases and reductions made with the written consent of
Parent.  All of the Inventories are located at the Facility.

 

3.20         Facility and Tangible Personal Property.  Subject to the lease
relating to the Facility, the Facility is owned by the Seller free and clear of
any Liens except for Permitted Liens.  The Seller is in peaceful and undisturbed
possession of the Facility.  There are no structural, electrical, mechanical,
plumbing, roof, paving or other defects in any improvements located on the
Facility (normal wear and tear excepted) as would, in any one instance, result
in an expenditure in excess of US$100,000 to rectify or, in the aggregate,
US$300,000 to rectify.  There are no outstanding written or, to the Seller’s
knowledge, oral contracts made by Seller for any alterations or improvements on
or to the Property which have not been fully paid.  The Seller has caused the
Purchased Assets to be maintained in accordance with good business practice, and
all the Purchased Assets are in good operating condition and repair and (normal
wear and tear excepted) are suitable for the purposes for which they are used
and intended.

 

3.21         Sufficiency of Purchased Assets.  Other than the Excluded Assets
and the Employees, and subject any assets or services being provided pursuant to
the Ancillary Agreements, the sale of the Purchased Assets and the Facility
pursuant to this Agreement and the Ancillary Agreements will effectively convey
to Buyer all of the Assets necessary to operate the Business, as heretofore
conducted by Seller prior to the Closing.

 

3.22         Operations Permits.  Section 3.23 of the Seller Disclosure Letter
sets forth each License held by Seller as of the date hereof and that relates,
directly or indirectly, and whether or not exclusively related, to the Business
(collectively, the “Business Permits”).

 

(A)           SELLER IS NOT IN MATERIAL DEFAULT (OR WITH THE GIVING OF NOTICE OR
LAPSE OF TIME, OR BOTH, WOULD BE IN MATERIAL DEFAULT) UNDER, OR VIOLATION IN ANY
MATERIAL RESPECT OF, ANY BUSINESS LICENSE.

 

(B)           THE PERMITS TO BE ASSUMED BY BUYER IN THE TRANSACTION ARE
SUFFICIENT TO ENABLE BUYER TO CONDUCT THE BUSINESS AS HERETOFORE CONDUCTED BY
THE SELLER IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE LAWS.

 

3.23         ISO Certifications and Non-Governmental Certifications.

 

(A)           THE FACILITY IS CURRENTLY CERTIFIED ISO 9002/ ISO 14001.  THE
MANUFACTURING OPERATIONS CONDUCTED AT THE FACILITY ARE IN MATERIAL COMPLIANCE
WITH THE EUROPEAN UNION DIRECTIVES REGARDING ROHS.

 

(B)           SECTION 3.24 OF THE SELLER’S DISCLOSURE LETTER CONTAINS A COMPLETE
AND ACCURATE LIST OF ALL CUSTOMER, SUPPLIER AND OTHER NON-GOVERNMENTAL ENTITIES
THAT HAVE ISSUED CERTIFICATIONS OR QUALITY ASSURANCE CRITERIA REGARDING THE
PURCHASED ASSETS OR FACILITY.

 

3.24         Suppliers.  Listed in Section 3.25 of the Seller Disclosure Letter
are the names and addresses of each of the ten most significant suppliers of raw
materials, supplies, merchandise and other goods for the Business for the
twelve-month period ended September 30, 2005 and the amount for which each such
supplier invoiced Seller and its subsidiaries during

 

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such period.  Except as disclosed in Section 3.25 of the Disclosure Letter,
neither Seller nor any of its subsidiaries has received any notice that any such
supplier will not sell raw materials, supplies, merchandise and other goods to
Seller or any of its subsidiaries at any time after the Closing Date on terms
and conditions similar to those imposed on current sales to the Business,
subject only to general and customary price increases and existing agreements
with such suppliers.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER

 

Subject to such exceptions as are specifically disclosed in the disclosure
letter supplied by the Parent to Seller (the “Parent Disclosure Letter”), each
of Parent and Buyer, jointly and severally, hereby represents and warrants to
Seller that the statements contained in this Article IV are true and correct as
of the date of this Agreement and will be true and correct as of the Closing (as
though made at the Closing); provided, that the representations and warranties
made as of a specified date will be true and correct as of such date.

 

4.1           Organization, Qualification, and Corporate Power.  Parent is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware.  Buyer is a corporation duly organized, validly existing, and
in good standing under the laws of Singapore.  Parent and Buyer are duly
authorized to conduct business and are in good standing under the laws of each
other jurisdiction where such qualification is required and in which the failure
to so qualify would not (i) in the aggregate have a Material Adverse Effect on
Parent or Buyer, taken as a whole, or (ii) adversely affect the ability of
Parent or Buyer to execute and deliver this Agreement and the Ancillary
Agreements, or consummate the Transactions.

 

4.2           Authorization.  Parent and Buyer have full power and authority to
enter into, execute and deliver this Agreement and the Ancillary Agreements to
which they are parties, and to consummate the Transaction and to perform their
obligations hereunder and thereunder.  This Agreement and the Ancillary
Agreements to which they are parties constitute the valid and legally binding
obligations of Parent or Buyer, enforceable against Parent or Buyer in
accordance with their respective terms and conditions, except as such
enforceability may be limited by principles of public policy and subject to the
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies.

 

4.3           No Conflicts.  Neither the execution and the delivery of this
Agreement nor the consummation of the transactions contemplated hereby, will
(A) violate any material constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Parent or Buyer is subject, (B) violate
or conflict with any provision of the charters, bylaws or organizational
documents of Parent or Buyer, or (C) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under, any agreement, contract, lease, license, instrument, or other arrangement
to which Parent or Buyer is a party or by which either is bound or to which

 

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any of their assets is subject, other than any of the foregoing which would not
in the aggregate have a Material Adverse Effect on Parent or Buyer, taken as a
whole, or (ii) adversely affect the ability of Parent or Buyer to execute and
deliver this Agreement and the Ancillary Agreements, or consummate the
Transactions.

 

4.4           CONSENTS.  NO CONSENT, WAIVER, APPROVAL, ORDER, LICENSE, PERMIT,
CERTIFICATES, FILING OR AUTHORIZATION OF, OR REGISTRATION, DECLARATION OR FILING
WITH, ANY GOVERNMENTAL BODY OR ANY THIRD PARTY, IS REQUIRED BY OR WITH RESPECT
TO PARENT OR BUYER IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS
AGREEMENT OR THE CONSUMMATION OF THE TRANSACTION, EXCEPT FOR (I) SUCH CONSENTS,
WAIVERS, APPROVALS, ORDERS, AUTHORIZATIONS, REGISTRATIONS, DECLARATIONS AND
FILINGS AS MAY BE REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS,
(II) ANY APPLICABLE FILINGS REQUIRED UNDER THE NONCOMPETITION LAWS, AND
(IV) SUCH CONSENTS, WAIVERS, APPROVALS, ORDERS, AUTHORIZATIONS, REGISTRATIONS,
DECLARATIONS AND FILINGS IN WHICH THE FAILURE OF WHICH TO OBTAIN WOULD NOT
(I) IN THE AGGREGATE HAVE A MATERIAL ADVERSE EFFECT ON PARENT OR BUYER, OR
(II) ADVERSELY AFFECT THE ABILITY OF PARENT OR BUYER TO EXECUTE AND DELIVER THIS
AGREEMENT AND THE ANCILLARY AGREEMENTS, OR CONSUMMATE THE TRANSACTIONS.

 

4.5           PURCHASE PRICE.  BUYER HAS AND WILL HAVE SUFFICIENT CASH ON HAND
TO PAY THE PURCHASE PRICE AND THE GST TAX AMOUNT THAT MAY BE CHARGEABLE IN
RESPECT OF THE SALE OF THE PURCHASED ASSETS UNDER THIS AGREEMENT AT THE CLOSING.

 

ARTICLE V

PRE-CLOSING COVENANTS

 

With respect to the period between the execution of this Agreement and the
earlier of the termination of this Agreement in accordance with its terms and
the Closing (the “Pre-Closing Period”):

 

5.1           OPERATION OF BUSINESS.

 

(A)           SELLER AGREES THAT, DURING THE PRE-CLOSING PERIOD, EXCEPT AS
CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR THE TRANSACTIONS, OR
AS OTHERWISE CONSENTED TO OR APPROVED IN ADVANCE BY PARENT OR BUYER, SELLER
SHALL:

 

(I)            USE ALL COMMERCIALLY REASONABLE EFFORTS TO (I) PRESERVE INTACT
THE PRESENT BUSINESS ORGANIZATION, REPUTATION, CONTRACTUAL AND OTHER
ARRANGEMENTS OF THE BUSINESS THEN UNDER THE CONTROL OF SELLER, (II) KEEP
AVAILABLE (SUBJECT TO DISMISSALS AND RETIREMENTS IN THE ORDINARY COURSE OF
BUSINESS CONSISTENT WITH PAST PRACTICE) THE SERVICES OF THE PRESENT EMPLOYEES OF
THE BUSINESS, (III) MAINTAIN THE PURCHASED ASSETS IN GOOD WORKING ORDER AND
CONDITION, ORDINARY WEAR AND TEAR EXCEPTED, (IV) MAINTAIN THE GOODWILL OF
CUSTOMERS, SUPPLIERS, DISTRIBUTORS AND OTHER PERSONS TO WHOM SELLER SELLS GOODS
OR PROVIDES SERVICES OR WITH WHOM SELLER OTHERWISE HAS SIGNIFICANT BUSINESS
RELATIONSHIPS IN CONNECTION WITH THE BUSINESS, AND (V) CONTINUE ALL CURRENT
SALES, SERVICE, MARKETING, PROMOTIONAL, PRODUCT DEVELOPMENT AND OTHER ACTIVITIES
RELATING TO THE BUSINESS;

 

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(II)           EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE LAW AND CONSISTENT
WITH PAST PRACTICE, (I) CAUSE THE BOOKS AND RECORDS OF THE BUSINESS TO BE
MAINTAINED IN THE USUAL, REGULAR AND ORDINARY MANNER, AND (II) NOT PERMIT ANY
CHANGE IN ANY PRICING, INVESTMENT, ACCOUNTING, FINANCIAL REPORTING, INVENTORY,
CREDIT, ALLOWANCE OR TAX PRACTICE, POLICY OR ELECTION OR SELLER THAT WOULD
MATERIALLY AND ADVERSELY AFFECT THE BUSINESS, THE PURCHASED ASSETS OR INCREASE
THE ASSUMED LIABILITIES;

 

(III)          USE ALL COMMERCIALLY REASONABLE EFFORTS TO CONTINUE IN FULL FORCE
AND EFFECT ALL MATERIAL INSURANCE POLICIES (OR COMPARABLE INSURANCE POLICIES)
INSURING THE BUSINESS AND ITS ASSETS; AND

 

(IV)          COMPLY IN ALL MATERIAL RESPECTS WITH ALL LAWS AND ORDERS
APPLICABLE TO THE BUSINESS, AND PROMPTLY FOLLOWING RECEIPT THEREOF DELIVER TO
BUYER COPIES OF ANY WRITTEN NOTICE RECEIVED FROM ANY GOVERNMENTAL BODY OR OTHER
PERSON ALLEGING ANY VIOLATION OF ANY SUCH LAW OR ORDER.

 

(B)           SELLER AGREES THAT, DURING THE PRE-CLOSING PERIOD, EXCEPT AS
CONTEMPLATED BY THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR THIS TRANSACTION OR
AS OTHERWISE CONSENTED TO OR APPROVED IN ADVANCE BY PARENT OR BUYER, SELLER
SHALL NOT:

 

(I)            EXCEPT FOR ANY EXISTING BENEFIT PLAN OR PROGRAM OR CONTRACT, MAKE
ANY REPRESENTATION OR PROMISE, ORAL OR WRITTEN, TO ANY EMPLOYEE CONCERNING ANY
EMPLOYEE BENEFIT PLAN, EXCEPT FOR STATEMENTS AS TO THE RIGHTS OR ACCRUED
BENEFITS OF ANY EMPLOYEE UNDER THE TERMS OF ANY EMPLOYEE BENEFIT PLAN OR
AGREEMENTS, OR OTHERWISE REQUIRED BY LAW;

 

(II)           EXCEPT FOR ANY EXISTING BENEFIT PLAN OR PROGRAM OR CONTRACT, MAKE
ANY INCREASE IN THE SALARY, WAGES OR OTHER COMPENSATION (CASH, EQUITY OR
OTHERWISE) OF ANY EMPLOYEE WHOSE ANNUAL SALARY IS OR, AFTER GIVING EFFECT TO
SUCH CHANGE, WOULD BE THE EQUIVALENT INDIVIDUALLY TO IN EXCESS OF US$50,000 AND
IN THE AGGREGATE IN EXCESS OF US$100,000;

 

(III)          ADOPT, ENTER INTO OR BECOME BOUND BY ANY EMPLOYEE BENEFIT PLAN,
ANY EMPLOYMENT-RELATED CONTRACT OR ANY COLLECTIVE BARGAINING AGREEMENT WITH
RESPECT TO THE BUSINESS OR ANY OF THE EMPLOYEES, OR, AMENDING, MODIFYING OR
TERMINATING (PARTIALLY OR COMPLETELY) ANY SUCH EMPLOYEE BENEFIT PLAN,
EMPLOYMENT-RELATED CONTRACT OR COLLECTIVE BARGAINING AGREEMENT, EXCEPT TO THE
EXTENT REQUIRED BY APPLICABLE LAW OR EXISTING CONTRACTUAL OBLIGATION AND, IN THE
EVENT COMPLIANCE WITH LEGAL REQUIREMENTS PRESENTS OPTIONS, ONLY TO THE EXTENT
THAT THE OPTION WHICH SELLER REASONABLY BELIEVES TO BE THE LEAST COSTLY IS
CHOSEN, EXCEPT IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE;

 

(IV)          TERMINATE THE EMPLOYMENT OF ANY EMPLOYEE, EXCEPT FOR CAUSE,
PROVIDED SELLER PROVIDES NOTICE TO PARENT OR BUYER PRIOR TO ANY SUCH
TERMINATION, OR

 

(V)           ENTER INTO ANY CONTRACT TO DO OR ENGAGE IN ANY OF THE FOREGOING
ITEMS SET FORTH IN THIS
SECTION 5.1(B).

 

(C)           SELLER AGREES THAT, DURING THE PRE-CLOSING PERIOD, EXCEPT AS
PERMITTED BY THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR THIS TRANSACTION, OR AS
OTHERWISE CONSENTED TO OR APPROVED IN ADVANCE BY PARENT OR BUYER, SELLER SHALL
NOT:

 

27

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(I)            ACQUIRE, LEASE, LICENSE OR DISPOSE OF OR AGREE TO ACQUIRE LEASE,
LICENSE OR DISPOSE OF ANY ASSETS THAT WOULD CONSTITUTE PURCHASED ASSETS
HEREUNDER, OTHER THAN IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE, OR CREATE OR INCUR ANY MATERIAL LIEN, OTHER THAN A PERMITTED LIEN, ON
ANY ASSETS THAT WOULD CONSTITUTE PURCHASED ASSETS HEREUNDER;

 

(II)           ENTER INTO, AMEND, MODIFY, TERMINATE (PARTIALLY OR COMPLETELY),
GRANT ANY WAIVER UNDER OR GIVE ANY CONSENT WITH RESPECT TO ANY BUSINESS CONTRACT
OR ANY ASSUMED PERMIT, IN EACH CASE OTHER THAN IN THE ORDINARY COURSE OF
BUSINESS CONSISTENT WITH PAST PRACTICE;

 

(III)          VIOLATE, BREACH OR DEFAULT IN ANY MATERIAL RESPECT UNDER, OR TAKE
OR FAIL TO TAKE ANY ACTION THAT (WITH OR WITHOUT NOTICE OR LAPSE OF TIME OR
BOTH) WOULD CONSTITUTE A MATERIAL VIOLATION OR BREACH OF, OR MATERIAL DEFAULT
UNDER, ANY TERM OR PROVISION OF ANY ASSIGNED CONTRACT OR ANY ASSUMED PERMIT;

 

(IV)          MAKE ANY MATERIAL CHANGES IN THE CONDUCT OF THE BUSINESS, EXCEPT
AS SPECIFICALLY CONTEMPLATED OR PERMITTED BY THIS AGREEMENT, OR ANY ANCILLARY
AGREEMENT OR THIS TRANSACTION; OR

 

(V)           ENTER INTO ANY CONTRACT TO DO OR ENGAGE IN ANY OF THE FOREGOING
ITEMS SET FORTH IN THIS
SECTION 5.1(C).

 

5.2           ACCESS TO INFORMATION.  THE SELLER SHALL PERMIT THE BUYER AND ITS
REPRESENTATIVES DURING THE PRE-CLOSING PERIOD TO HAVE REASONABLE ACCESS DURING
NORMAL BUSINESS HOURS, UPON REASONABLE ADVANCE NOTICE, TO THE BOOKS AND RECORDS,
EMPLOYEES AND ASSETS OF THE BUSINESS (INCLUDING THE TESTING AND INVESTIGATION OF
ANY FACILITY AS THE BUYER DEEMS REASONABLY NECESSARY PRIOR TO THE CLOSING) THEN
UNDER THE CONTROL OF SELLER FOR THE PURPOSES OF, AMONG OTHER THINGS, IDENTIFYING
AND VERIFYING THE VALUE OF THE PURCHASED ASSETS TO BE PURCHASED AT THE CLOSING;
PROVIDED, HOWEVER, THAT SUCH ACCESS SHALL BE CONDUCTED BY THE BUYER AND ITS
REPRESENTATIVES IN SUCH A MANNER AS NOT TO INTERFERE UNREASONABLY WITH THE
BUSINESSES OR OPERATIONS OF THE SELLER OR THE BUSINESS.  IN ORDER TO FACILITATE
THE RESOLUTION OF ANY CLAIMS MADE BY OR AGAINST OR INCURRED BY PARENT OR BUYER
AFTER THE CLOSING OR FOR ANY OTHER REASONABLE PURPOSE, FOR A PERIOD OF FIVE
YEARS FOLLOWING THE CLOSING, SELLER SHALL, AND SHALL CAUSE ITS SUBSIDIARIES TO,
(I) RETAIN ALL BOOKS AND RECORDS WHICH ARE NOT TRANSFERRED TO BUYER PURSUANT TO
THIS AGREEMENT AND WHICH RELATE TO THE BUSINESS FOR PERIODS PRIOR TO THE CLOSING
AND WHICH SHALL NOT OTHERWISE HAVE BEEN DELIVERED TO BUYER AND (II) UPON
REASONABLE NOTICE, AFFORD THE OFFICERS, EMPLOYEES AND AUTHORIZED AGENTS AND
REPRESENTATIVES OF PARENT OR BUYER, REASONABLE ACCESS (INCLUDING THE RIGHT TO
MAKE PHOTOCOPIES AT PARENT OF BUYER’S EXPENSE), DURING NORMAL BUSINESS HOURS, TO
SUCH BOOKS AND RECORDS, ALL SUBJECT TO SECTION 5.8 REGARDING CONFIDENTIALITY.

 

5.3           NOTICE OF DEVELOPMENTS.  DURING THE PRE-CLOSING PERIOD, SELLER
SHALL GIVE PROMPT NOTICE TO BUYER OF (I) THE OCCURRENCE OR NON-OCCURRENCE OF ANY
EVENT OF WHICH SELLER HAS KNOWLEDGE, THE OCCURRENCE OR NON-OCCURRENCE OF WHICH
IS REASONABLY LIKELY TO CAUSE ANY REPRESENTATION OR WARRANTY OF SELLER CONTAINED
IN THIS AGREEMENT TO BE UNTRUE OR INACCURATE AT OR PRIOR TO THE CLOSING AND
(II) ANY FAILURE OF SELLER TO COMPLY WITH OR SATISFY ANY COVENANT, CONDITION OR
AGREEMENT TO BE COMPLIED WITH OR SATISFIED BY IT HEREUNDER; PROVIDED, HOWEVER,
THAT

 

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THE DELIVERY OF ANY NOTICE PURSUANT TO THIS SECTION 5.3 SHALL NOT LIMIT OR
OTHERWISE AFFECT ANY REMEDIES AVAILABLE TO THE PARTY RECEIVING SUCH NOTICE.

 

5.4           NO SOLICITATION.  DURING THE PRE-CLOSING PERIOD, NEITHER SELLER
NOR ANY SUBSIDIARY OF SELLER SHALL (NOR SHALL IT PERMIT ITS REPRESENTATIVES TO)
DIRECTLY OR INDIRECTLY TAKE ANY OF THE FOLLOWING ACTIONS WITH ANY PERSON OTHER
THAN PARENT, BUYER AND THEIR DESIGNEES: (A) SOLICIT, INITIATE, CONSIDER,
ENCOURAGE OR ACCEPT ANY PROPOSALS OR OFFERS FROM, OR CONDUCT DISCUSSIONS WITH OR
ENGAGE IN NEGOTIATIONS WITH, ANY PERSON RELATING TO ANY POSSIBLE ACQUISITION
PROPOSAL WITH SELLER OR ANY OF ITS SUBSIDIARIES (WHETHER SUCH SUBSIDIARIES ARE
IN EXISTENCE ON THE DATE HEREOF OR ARE HEREAFTER ORGANIZED), (B) PROVIDE
INFORMATION WITH RESPECT TO SELLER TO ANY PERSON, OTHER THAN PARENT OR BUYER,
RELATING TO, OR OTHERWISE COOPERATE WITH, FACILITATE OR ENCOURAGE ANY EFFORT OR
ATTEMPT BY ANY SUCH PERSON WITH REGARD TO, ANY POSSIBLE ACQUISITION PROPOSAL
WITH SELLER OR ANY SUBSIDIARY OF SELLER (WHETHER SUCH SUBSIDIARIES ARE IN
EXISTENCE ON THE DATE HEREOF OR ARE HEREAFTER ORGANIZED), EXCEPT AS REQUIRED BY
LAW, (C) ENTER INTO A CONTRACT OR AGREEMENT (WHETHER ORAL OR WRITTEN) WITH ANY
PERSON, OTHER THAN PARENT OR BUYER, PROVIDING FOR AN ACQUISITION PROPOSAL WITH
SELLER OR ANY SUBSIDIARY (WHETHER SUCH SUBSIDIARIES ARE IN EXISTENCE ON THE DATE
HEREOF OR ARE HEREAFTER ORGANIZED), OR (D) MAKE OR AUTHORIZE ANY STATEMENT,
RECOMMENDATION OR SOLICITATION IN SUPPORT OF ANY POSSIBLE ACQUISITION PROPOSAL
WITH SELLER OR ANY SUBSIDIARY (WHETHER SUCH SUBSIDIARY IS IN EXISTENCE ON THE
DATE HEREOF OR ARE HEREAFTER ORGANIZED) OTHER THAN BY PARENT OR BUYER.  SELLER
SHALL, AND SHALL CAUSE ITS REPRESENTATIVES TO, IMMEDIATELY CEASE AND CAUSE TO BE
TERMINATED ANY SUCH CONTACTS OR NEGOTIATIONS WITH ANY PERSON RELATING TO ANY
ACQUISITION PROPOSAL.  AS USED IN THIS SECTION 5.4, “ACQUISITION PROPOSAL” SHALL
MEAN A PROPOSAL OR OFFER FOR (I) A MERGER, CONSOLIDATION OR OTHER BUSINESS
COMBINATION INVOLVING AN ACQUISITION OF THE BUSINESS OR THE PURCHASED ASSETS OR
(II) ANY EXTRAORDINARY BUSINESS TRANSACTION INVOLVING OR OTHERWISE RELATING TO
THE BUSINESS OR PURCHASED ASSETS.

 

5.5           REASONABLE EFFORTS.  DURING THE PRE-CLOSING PERIOD, EACH OF THE
PARTIES WILL USE THEIR REASONABLE EFFORTS TO TAKE ALL ACTION AND TO DO ALL
THINGS NECESSARY, PROPER, OR ADVISABLE IN ORDER TO CONSUMMATE AND MAKE EFFECTIVE
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (INCLUDING SATISFACTION, BUT NOT
WAIVER, OF THE CLOSING CONDITIONS SET FORTH IN ARTICLE VII BELOW).

 

5.6           NOTICES AND CONSENTS.  DURING THE PRE-CLOSING PERIOD, SELLER WILL
GIVE ANY NOTICES TO THIRD PARTIES AND USE REASONABLE COMMERCIAL EFFORTS TO
OBTAIN ANY THIRD PARTY CONSENTS THAT ARE REQUIRED IN CONNECTION WITH THE MATTERS
IDENTIFIED IN SECTIONS 3.3 AND 3.4 OF SELLER DISCLOSURE LETTER OR OTHERWISE
REQUIRED IN CONNECTION WITH THE TRANSACTION SO AS TO PRESERVE ALL MATERIAL
RIGHTS OF OR BENEFITS TO SELLER.  DURING THE PRE-CLOSING PERIOD, EACH OF THE
PARTIES WILL GIVE ANY NOTICES TO, MAKE ANY FILINGS WITH, AND USE ITS
COMMERCIALLY REASONABLE EFFORTS TO OBTAIN ANY AUTHORIZATIONS, CONSENTS, AND
APPROVALS OF GOVERNMENTAL BODIES IN CONNECTION WITH THE MATTERS IDENTIFIED IN
SECTIONS 3.3 AND 3.4 OF SELLER DISCLOSURE LETTER OR AS OTHERWISE REQUIRED IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

5.7           EMPLOYEE MATTERS.  IN THE EVENT THAT ANY OF THE CRITICAL EMPLOYEES
TERMINATE THEIR EMPLOYMENT WITH THE SELLER PRIOR TO THE CLOSING OR DURING THAT
PORTION OF THE TRANSITION PERIOD IN WHICH SUCH CRITICAL EMPLOYEES HAVE
SIGNIFICANT REMAINING TRANSITION RELATED FUNCTIONS, THE BUYER AND SELLER WILL
USE REASONABLE COMMERCIAL EFFORTS TO SEEK TO IMPLEMENT A MUTUALLY AGREED
ALTERNATIVE SOLUTION FOR THE FULFILLMENT OF SUCH FUNCTIONS.  ANY COSTS
ASSOCIATED WITH THESE MATTERS, INCLUDING ANY COMPENSATION INCENTIVES PAID TO
CRITICAL EMPLOYEES TO ENCOURAGE THEM TO

 

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REMAIN EMPLOYED AFTER THE CLOSING THROUGH THE END OF THE TRANSITION PERIOD AS
PROVIDED IN THE SECONDMENT AGREEMENT, WILL BE SHARED EQUALLY BY BUYER AND
SELLER; AS MUTUALLY AGREED BY THEM; PROVIDED THAT PARENT AND BUYER WILL BE
RESPONSIBLE ONLY FOR COSTS APPROVED BY THEM IN ADVANCED; PROVIDED FURTHER THAT
PARENT AND BUYER WILL BE SOLELY RESPONSIBLE FOR ANY COMPENSATION FOR WORK AFTER
THE DATE OF TRANSFER OF ANY TRANSFERRED EMPLOYEE HIRED BY EITHER OF THEM.

 

5.8           CONFIDENTIALITY.  ALL BOOK AND RECORDS OF SELLER, AND OTHER
CONFIDENTIAL AND/OR PROPRIETARY INFORMATION OF A PARTY TO THIS AGREEMENT ARE
HEREINAFTER REFERRED TO AS “CONFIDENTIAL INFORMATION.”  A PARTY WHO OWNS AND
DISCLOSES ITS CONFIDENTIAL INFORMATION IS REFERRED TO BELOW AS A “DISCLOSING
PARTY” AND A PARTY WHO RECEIVES OR IS GIVEN ACCESS TO A DISCLOSING PARTY’S
CONFIDENTIAL INFORMATION IS REFERRED TO BELOW AS A “RECEIVING PARTY.”  EACH
PARTY HERETO AGREES THAT ALL CONFIDENTIAL INFORMATION OF ANOTHER PARTY THAT IS
DISCLOSED TO SUCH PARTY IN THE COURSE OF NEGOTIATING THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR CONDUCTING DUE DILIGENCE IN CONNECTION
HEREWITH WILL BE HELD IN CONFIDENCE, AND WILL NOT BE USED OR DISCLOSED BY THE
RECEIVING PARTY EXCEPT FOR THE PURPOSES RELATING TO OR PERMITTED BY THIS
AGREEMENT FOR WHICH SUCH CONFIDENTIAL INFORMATION WAS DISCLOSED, AND UPON
TERMINATION OF THIS AGREEMENT OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY, WILL BE PROMPTLY DESTROYED BY THE RECEIVING PARTY OR
RETURNED TO THE DISCLOSING PARTY, UPON THE DISCLOSING PARTY’S WRITTEN REQUEST. 
NO PARTY’S EMPLOYEES WILL BE GIVEN ACCESS TO CONFIDENTIAL INFORMATION OF ANOTHER
PARTY EXCEPT ON A “NEED TO KNOW” BASIS AND SUCH EMPLOYEES SHALL BE INFORMED OF
THE NEED TO KEEP SUCH CONFIDENTIAL INFORMATION CONFIDENTIAL.  IT IS AGREED THAT
CONFIDENTIAL INFORMATION WILL NOT INCLUDE INFORMATION THAT: (I) WAS KNOWN TO
SUCH RECEIVING PARTY BEFORE RECEIPT OF SUCH INFORMATION FROM THE DISCLOSING
PARTY; (II) IS OR BECOMES GENERALLY KNOWN TO THE PUBLIC THROUGH NO BREACH OF
THIS SECTION OR ANY ACT OR OMISSION ON THE PART OF THE RECEIVING PARTY; (III) IS
DISCLOSED BY A THIRD PARTY HAVING THE LEGAL RIGHT TO DISCLOSE SUCH INFORMATION
WITH NO OBLIGATION OF CONFIDENCE TO THE DISCLOSING PARTY, OR IS REQUIRED TO BE
DISCLOSED AS A RESULT OF COURT ORDER OR SIMILAR PROCESS; OR (IV) IS
INDEPENDENTLY DEVELOPED BY THE RECEIVING PARTY WITHOUT USE OF ANY OF THE
DISCLOSING PARTY’S CONFIDENTIAL INFORMATION (AS EVIDENCED BY A CONTEMPORANEOUS
WRITING).

 

ARTICLE VI
OTHER AGREEMENTS AND COVENANTS

 

6.1           ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES.  EACH PARTY HERETO,
AT THE REASONABLE REQUEST OF ANOTHER PARTY HERETO, SHALL EXECUTE AND DELIVER
SUCH OTHER INSTRUMENTS AND DO AND PERFORM SUCH OTHER ACTS AND THINGS AS MAY BE
REASONABLY NECESSARY OR DESIRABLE FOR EFFECTING COMPLETELY THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY (PROVIDED THAT THE FOREGOING WILL NOT
REQUIRE ANY PARTY TO MAKE ANY PAYMENT OF CONSIDERATION TO ANY OTHER PERSON).

 

6.2           INVENTORY PUT AND CALL; COVENANT TO PURCHASE INVENTORY.  FOR A
PERIOD OF THIRTY (30) DAYS FOLLOWING THE THREE (3) MONTH ANNIVERSARY OF THE
CLOSING (THE “FIRST EXERCISE PERIOD”), (I) BUYER SHALL HAVE THE OPTION TO SELL
TO SELLER AND SELLER SHALL HAVE TO OBLIGATION TO PURCHASE FROM BUYER (THE “PUT
RIGHT”) ALL INVENTORIES THAT BUYER AND SELLER REASONABLY AGREE WILL REASONABLY
BE EXPECTED TO NOT HAVE BEEN USED IN THE MANUFACTURE AND SALE OF PRODUCTS OF THE
BUSINESS DURING THE 6-MONTH PERIOD FOLLOWING THE CLOSING DATE (COLLECTIVELY, THE
“ESTIMATED

 

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UNUSED INVENTORIES”) AND (II) FOR A PERIOD OF THIRTY (30) DAYS FOLLOWING THE SIX
(6) MONTH ANNIVERSARY OF THE CLOSING (THE “SECOND EXERCISE PERIOD”), BUYER SHALL
HAVE A PUT RIGHT WITH RESPECT TO ALL INVENTORIES THAT HAVE NOT BEEN USED IN THE
MANUFACTURE AND SALE OF PRODUCTS OF THE BUSINESS DURING THE 6-MONTH PERIOD
FOLLOWING THE CLOSING DATE (COLLECTIVELY, AND TOGETHER WITH THE ESTIMATED UNUSED
INVENTORIES, THE “UNUSED INVENTORIES”) AND; PROVIDED, HOWEVER, THAT THE UNUSED
INVENTORIES SHALL BE DEEMED TO BE REDUCED BY THE FOLLOWING:

 

(A)           THE AMOUNT OF ANY INVENTORIES OF THE SAME KIND, OR SUITABLE FOR
THE SAME PURPOSES, AS ANY UNUSED INVENTORIES, IF ANY, PURCHASED BY BUYER AND ITS
AFFILIATES AND USED IN SUBSTITUTION FOR SUCH UNUSED INVENTORIES DURING SUCH
6-MONTH PERIOD, UNLESS SUCH SUBSTITUTED INVENTORIES ARE USED BY BUYER OR SUCH
AFFILIATES AT THE REQUEST OF SELLER;

 

(B)           THE AMOUNT OF ANY UNUSED INVENTORIES, IF ANY, LOST, STOLEN,
DESTROYED OR OTHERWISE DAMAGED DURING SUCH 6-MONTH PERIOD; AND

 

(C)           THE AMOUNT OF ANY UNUSED INVENTORIES, IF ANY, TO BE USED BY BUYER
OR ITS AFFILIATES AFTER SUCH 6-MONTH PERIOD PURSUANT TO BINDING, NONCANCELLABLE
PURCHASE ORDERS RECEIVED OR ASSUMED BY BUYER OR SUCH AFFILIATES DURING SUCH
6-MONTH PERIOD TO BE SHIPPED WITHIN 30 DAYS AFTER THE END OF SUCH 6-MONTH
PERIOD.

 

(D)           FOR PURPOSES OF THE IDENTIFICATION OF ANY UNUSED INVENTORIES, THE
INVENTORIES SHALL BE DEEMED TO BE USED PRIOR TO ANY OTHER INVENTORIES OF THE
SAME KIND, OR SUITABLE FOR THE SAME PURPOSES, AS SUCH UNUSED INVENTORIES
ACQUIRED BY BUYER OR ITS AFFILIATES AFTER THE DATE OF THIS AGREEMENT.

 

(E)           BUYER MAY EXERCISE ITS PUT RIGHT DESCRIBED IN SECTION 6.2(A)
SOLELY BY THE DELIVERY, WITHIN THE FIRST EXERCISE PERIOD OR THE SECOND EXERCISE
PERIOD, AS THE CASE MAY BE, TO SELLER OF NOTICE TO SUCH EFFECT THAT (I) SETS
FORTH (A) A SPECIFIC DESCRIPTION OF ANY UNUSED INVENTORIES AND (B) THE ORIGINAL
PURCHASE PRICE LESS ANY AMOUNT PAID BY SELLER TO BUYER WITH RESPECT TO SUCH
UNUSED INVENTORY FOLLOWING THE CLOSING DATE (SUCH AS A “BUY DOWN”) OF SUCH
INVENTORIES AS OF THE CLOSING DATE (THE “INVENTORY REPURCHASE PRICE”) AND
(II) IS ACCOMPANIED BY AN OFFICER’S CERTIFICATE OF BUYER THAT CERTIFIES THAT
SUCH UNUSED INVENTORIES HAVE BEEN IDENTIFIED, AND THE INVENTORY REPURCHASE PRICE
THEREOF HAS BEEN CALCULATED, IN ACCORDANCE WITH THIS SECTION 6.2.  WITHIN TEN
(10) BUSINESS DAYS AFTER THE RECEIPT SELLER OF SUCH NOTICE, SELLER SHALL, IF IT
OBJECTS TO SUCH NOTICE, DELIVER TO BUYER NOTICE THAT SELLER DISPUTES BUYER’S
IDENTIFICATION OF THE UNUSED INVENTORIES OR THE CALCULATION OF THE INVENTORY
REPURCHASE PRICE.  IF SELLER FAILS TO TIMELY DELIVER TO BUYER SUCH NOTICE WITHIN
SUCH 10 BUSINESS DAY PERIOD, THEN SELLER SHALL BE DEEMED TO HAVE ACCEPTED THE
EXERCISING PARTY’S IDENTIFICATION OF THE UNUSED INVENTORIES AND CALCULATION OF
THE INVENTORY REPURCHASE PRICE.  IF SELLER TIMELY DELIVERS TO THE BUYER SUCH
NOTICE WITHIN SUCH 10 BUSINESS DAY PERIOD, THEN THE PARTIES SHALL ATTEMPT IN
GOOD FAITH TO REACH A RESOLUTION OF SUCH DISAGREEMENT.  IF SUCH DISAGREEMENT IS
NOT RESOLVED WITHIN FIVE (5) DAYS AFTER DELIVERY OF SELLER’S NOTICE, THE
INDEPENDENT ACCOUNTANTS SHALL BE DIRECTED TO COMPUTE THE AMOUNT OF THE UNUSED
INVENTORIES AND THE INVENTORY REPURCHASE PRICE AS PROMPTLY AS PRACTICABLE AND
SUCH COMPUTATION SHALL BE BINDING UPON THE PARTIES HERETO.  THE EXPENSES OF
INDEPENDENT ACCOUNTANT IN CONNECTION WITH SUCH COMPUTATION SHALL BE BORNE
EQUALLY BY BUYER AND SELLER.

 

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(F)            PAYMENT.  SELLER SHALL PAY TO BUYER THE AMOUNT OF THE INVENTORY
REPURCHASE PRICE AS FINALLY DETERMINED IN THIS SECTION WITHIN FIVE (5) BUSINESS
DAYS OF ANY SUCH DETERMINATION AND BUYER SHALL TRANSFER TITLE OF THE UNUSED
INVENTORY TO SELLER.  THE UNUSED INVENTORY SHALL BE IN SUBSTANTIALLY THE SAME
CONDITION (OTHER THAN CHANGES DUE TO THE PASSAGE OF TIME) AS WHEN PURCHASED BY
BUYER FREE AND CLEAR OF ANY LIENS (EXCEPT FOR PERMITTED LIENS).  EXCEPT AS SET
FORTH IN THE FOREGOING SENTENCE, BUYER MAKES NO REPRESENTATIONS OR WARRANTIES
WITH RESPECT TO THE UNUSED INVENTORIES.

 

6.3           REPURCHASE OF INVENTORY AND EQUIPMENT UNDER CERTAIN CIRCUMSTANCES.

 

(A)           IN THE EVENT THAT DURING THE TERM OF THE SUPPLY AGREEMENT,
(I) SELLER SELLS, TRANSFERS OR OTHERWISE DISPOSES OF ITS DSG BUSINESS, ITS
SYSTEMS BUSINESS OR ANY OTHER BUSINESS UNIT OF SELLER BEING SUPPLIED BY BUYER
PURSUANT TO THE SUPPLY AGREEMENT TO A THIRD PARTY, OTHER THAN BUYER OR PARENT,
OR AN AFFILIATE OF EITHER (IN EACH CASE, AN “AFFECTED BUSINESS”) AND (II) BOTH
(1) THE ACQUIRER OF THE AFFECTED BUSINESS DOES NOT AGREE TO BE BOUND BY AND
SUBJECT TO THE TERMS OF THE SUPPLY AGREEMENT AS IN EFFECT ON THE DATE OF CLOSING
OF THE TRANSACTION INVOLVING THE AFFECTED BUSINESS AND (2) ADAPTEC, INC.
(“ADAPTEC”) DOES NOT REMAIN PRIMARILY LIABLE FOR ITS OBLIGATIONS UNDER THE
SUPPLY AGREEMENT OR ADAPTEC OR THE ACQUIRER OF THE AFFECTED BUSINESS TERMINATES
THE SUPPLY AGREEMENT IN CONNECTION WITH THE SALE OF THE AFFECTED BUSINESS,
SELLER AGREES TO REPURCHASE ANY FIXED ASSETS OR INVENTORIES SOLD TO BUYER
HEREUNDER AND THEN HELD BY BUYER ON THE DATE OF SUCH REPURCHASE THAT ARE
ASSOCIATED WITH THE AFFECTED BUSINESS NECESSARY TO SUPPORT ADAPTEC’S
REQUIREMENTS UNDER THE SUPPLY AGREEMENT ASSOCIATED WITH THE AFFECTED BUSINESS
(AND ANY CAPITAL EQUIPMENT AND ANY RAW MATERIAL OR WORK IN PROCESS PURCHASED BY
PARENT OR BUYER NECESSARY TO SUPPORT ADAPTEC’S REQUIREMENTS UNDER THE SUPPLY
AGREEMENT THAT ARE ASSOCIATED WITH THE AFFECTED BUSINESS) (THE “REPURCHASED
ASSETS”).  IN CONNECTION WITH ANY REPURCHASE OF THE REPURCHASED ASSETS, BUYER
SHALL REPRESENT TO SELLER THAT BUYER IS DULY AND VALIDLY ORGANIZED UNDER THE
LAWS OF THE JURISDICTION IN WHICH IT IS INCORPORATED, THAT THE REPURCHASE HAS
BEEN DULY AUTHORIZED BY ALL REQUISITE ACTION ON THE PART OF BUYER, THAT SUCH
TRANSFER AND PURCHASE DOES NOT VIOLATE ANY APPLICABLE LAW OR REQUIRE THE CONSENT
OR AUTHORIZATION OF ANY THIRD PARTY, THAT BUYER HAS GOOD AND VALID TITLE TO THE
REPURCHASED ASSETS, FREE AND CLEAR OF ANY LIENS, EXCEPT PERMITTED LIENS, AND
THAT BUYER HAS THE COMPLETE AUTHORITY, POWER AND RIGHT TO SELL, ASSIGN,
TRANSFER, CONVEY AND DELIVER THE REPURCHASED ASSETS TO SELLER PURSUANT TO THE
REPURCHASE.  THE REPURCHASE PRICE FOR ANY INVENTORIES SOLD TO SELLER PURSUANT TO
THIS SECTION 6.3(A) SHALL BE (I) IF THE SELLER’S OBLIGATION TO REPURCHASE THE
REPURCHASED ASSETS UNDER THIS SECTION 6.3 IS TRIGGERED PRIOR TO THE EXPIRATION
OR EXERCISE OF THE PUT RIGHT IN SECTION 6.2, DETERMINED IN THE SAME MANNER AS
THE INVENTORY REPURCHASE PRICE IS DETERMINED PURSUANT TO SECTION 6.2 HEREOF, AND
(II) IF THE SELLER’S OBLIGATION TO REPURCHASE THE REPURCHASED ASSETS UNDER THIS
SECTION 6.3 IS TRIGGERED AFTER THE EXPIRATION OR EXERCISE OF THE PUT RIGHT IN
SECTION 6.2, THEN THE REPURCHASE PRICE SHALL BE THE STANDARD COST OF SUCH
INVENTORIES AS SHOWN ON THE BOOKS AND RECORDS OF BUYER.  THE REPURCHASE PRICE
FOR FIXED ASSETS SHALL EQUAL THE DEPRECIATED VALUE OF SUCH FIXED ASSETS THAT
WOULD BE SHOWN ON THE BOOKS AND RECORDS OF SELLER IF SELLER HAD CONTINUED TO OWN
SUCH FIXED ASSETS ON THE DATE OF THE CLOSING OF THE DIVESTITURE OF THE AFFECTED
BUSINESS.  THE REPURCHASE PRICE FOR THE FIXED ASSETS AND INVENTORIES PURSUANT TO
THIS SECTION 6.3(A) SHALL BE DETERMINED BY BUYER WITHIN FIFTEEN (15) DAYS OF THE
OCCURRENCE OF AN EVENT THAT GIVES BUYER THE RIGHT TO TRIGGER A REPURCHASE
PURSUANT TO THIS SECTION.  THEREAFTER, SELLER OR PARENT MAY OBJECT TO SUCH
DETERMINATION USING THE SAME FRAMEWORK AS SET FORTH IN

 

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SECTION 6.2(E) HEREOF AND PAYMENT SHALL BE MADE BY SELLER OR PARENT PURSUANT TO
THE PROVISIONS OF SECTION 6.2(F) HEREOF.

 

(B)           IN THE EVENT THAT DURING THE TERM OF THE SUPPLY AGREEMENT,
(I) SELLER IS ACQUIRED BY A THIRD PARTY MERGER, OR OTHER BUSINESS COMBINATION
TRANSACTION IN WHICH THE SHAREHOLDERS OF ADAPTEC IMMEDIATELY PRIOR TO SUCH
TRANSACTION OWN IMMEDIATELY AFTER SUCH TRANSACTION LESS THAN 50% OF THE
OUTSTANDING VOTING SECURITIES OF THE ACQUIRING OR SURVIVING ENTITY (OR ITS
ULTIMATE CORPORATE PARENT) OR THE SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF THE
SELLER OR ADAPTEC’S, OTHER THAN AN ACQUISITION, MERGER, BUSINESS COMBINATION OR
SALE TO BUYER OR PARENT, OR AN AFFILIATE OF EITHER, AND (II) BOTH (1) THE
ACQUIRER OF ADAPTEC OR ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF SELLER OR
ADAPTEC DOES NOT AGREE TO BE BOUND BY AND SUBJECT TO THE TERMS OF THE SUPPLY
AGREEMENT AS IN EFFECT ON THE DATE OF CLOSING OF THE TRANSACTION AND (2) ADAPTEC
DOES NOT REMAIN PRIMARILY LIABLE FOR ITS OBLIGATIONS UNDER THE SUPPLY AGREEMENT
OR TERMINATES THE SUPPLY AGREEMENT PRIOR TO ITS EXPIRATION DATE IN CONNECTION
WITH SUCH TRANSACTION, SELLER AGREES TO REPURCHASE ANY FIXED ASSETS OR
INVENTORIES SOLD TO BUYER AND HELD BY BUYER ON THE DATE OF SUCH REPURCHASE
NECESSARY TO SUPPORT ADAPTEC’S REQUIREMENTS UNDER THE SUPPLY AGREEMENT
ASSOCIATED WITH THE BUSINESS OR ASSETS BEING SOLD (AND ANY CAPITAL EQUIPMENT AND
ANY RAW MATERIAL OR WORK IN PROCESS PURCHASED BY PARENT OR BUYER NECESSARY TO
SUPPORT ADAPTEC’S REQUIREMENTS UNDER THE SUPPLY AGREEMENT ASSOCIATED WITH THE
BUSINESS OR ASSETS BEING SOLD) (THE “ACQUISITION ASSETS”).  BUYER SHALL
REPRESENT TO SELLER THAT BUYER IS DULY AND VALIDLY ORGANIZED UNDER THE LAWS OF
THE JURISDICTION IN WHICH IT IS INCORPORATED, THAT THE REPURCHASE HAS BEEN DULY
AUTHORIZED BY ALL REQUISITE ACTION ON THE PART OF BUYER THAT SUCH TRANSFER AND
PURCHASE DOES NOT VIOLATE ANY APPLICABLE LAW OR REQUIRE THE CONSENT OR
AUTHORIZATION OF ANY THIRD PARTY, THAT BUYER HAS GOOD AND VALID TITLE TO THE
ACQUISITION ASSETS, FREE AND CLEAR OF ANY LIENS, EXCEPT PERMITTED LIENS, AND
THAT BUYER HAS THE COMPLETE AUTHORITY, POWER AND RIGHT TO SELL, ASSIGN,
TRANSFER, CONVEY AND DELIVER THE ACQUISITION ASSETS TO SELLER PURSUANT TO THE
SALE OF THE ACQUISITION ASSETS.  THE REPURCHASE PRICE FOR ANY INVENTORIES SOLD
TO SELLER OR PARENT PURSUANT TO THIS SECTION 6.3(B) SHALL BE (I) IF THE SELLER’S
OBLIGATION TO REPURCHASE THE REPURCHASED ASSETS UNDER THIS SECTION 6.3 IS
TRIGGERED PRIOR TO THE EXPIRATION OR EXERCISE OF THE PUT RIGHT IN SECTION 6.2,
DETERMINED IN THE SAME MANNER AS THE INVENTORY REPURCHASE PRICE IS DETERMINED
PURSUANT TO SECTION 6.2 HEREOF, AND (II) IF THE SELLER’S OBLIGATION TO
REPURCHASE THE REPURCHASED ASSETS UNDER THIS SECTION 6.3 IS TRIGGERED AFTER THE
EXPIRATION OR EXERCISE OF THE PUT RIGHT IN SECTION 6.2, THEN THE REPURCHASE
PRICE SHALL BE THE STANDARD COST OF SUCH INVENTORIES AS SHOWN ON THE BOOKS AND
RECORDS OF BUYER.  THE REPURCHASE PRICE FOR FIXED ASSETS SHALL EQUAL THE
DEPRECIATED VALUE OF SUCH FIXED ASSETS THAT WOULD BE SHOWN ON THE BOOKS AND
RECORDS OF SELLER IF SELLER HAD CONTINUED TO OWN SUCH FIXED ASSETS ON THE DATE
OF THE CLOSING OF THE DIVESTITURE OF THE ACQUISITION ASSETS.  THE REPURCHASE
PRICE FOR THE FIXED ASSETS AND INVENTORIES PURSUANT TO THIS SECTION 6.3(B) SHALL
BE DETERMINED BY BUYER WITHIN FIFTEEN (15) DAYS OF THE OCCURRENCE OF AN EVENT
THAT GIVES BUYER THE RIGHT TO TRIGGER A REPURCHASE PURSUANT TO THIS SECTION. 
THEREAFTER, PARENT MAY OBJECT TO SUCH DETERMINATION USING THE SAME FRAMEWORK AS
SET FORTH IN SECTION 6.2(E) HEREOF AND PAYMENT SHALL BE MADE BY PARENT PURSUANT
TO THE PROVISIONS OF SECTION 6.2(F) HEREOF.  A TRANSACTION INVOLVING THE SALE OF
AN AFFECTED BUSINESS OR A SALE OF ACQUISITION ASSETS SUBJECT TO THE REPURCHASE
OBLIGATIONS OF SELLER PURSUANT TO SECTIONS 6.3(A) OR (B), IS REFERRED TO AS A
“DISPOSITION TRANSACTION”.

 

6.4           CONSIGNED INVENTORIES.  IN THE EVENT SELLER HAS IN BUYER’S
DETERMINATION A REASONABLE AMOUNT OF INVENTORIES RELATED TO THE BUSINESS AS OF
THE CLOSING DATE IN EXCESS OF THE INVENTORIES, THE PARTIES MAY REASONABLY AGREE
THAT SUCH INVENTORY (THE “CONSIGNED INVENTORY”)

 

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SHALL REMAIN AT THE FACILITY FOLLOWING THE CLOSING DATE WITHOUT CHARGE TO SELLER
OR ADAPTEC AND SELLER AND ADAPTEC SHALL BE GIVEN REASONABLE ACCESS TO SUCH
INVENTORY.  FOLLOWING EACH EXERCISE OF THE PUT RIGHT, ANY UNUSED INVENTORY SHALL
REMAIN AT THE FACILITY FOLLOWING SUCH EXERCISE AND THEREAFTER BE TREATED AS
CONSIGNED INVENTORY WITHOUT CHARGE TO SELLER OR ADAPTEC AND SELLER AND ADAPTEC
SHALL BE GIVEN REASONABLE ACCESS TO SUCH INVENTORY.  DURING THE PERIOD
REASONABLY DETERMINED BY THE BUYER (THE “CONSIGNMENT PERIOD”), BUYER AGREES
THAT, IN THE EVENT BUYER REQUIRES INVENTORIES OF THE SAME KIND AND NATURE AS,
AND IN ADDITION TO, THE INVENTORIES PURCHASED ON THE CLOSING DATE FOR THE
MANUFACTURE OF THE PRODUCTS OF THE BUSINESS FOR DELIVERY TO SELLER, PARENT AND
BUYER SHALL USE THE CONSIGNED INVENTORIES TO THE EXTENT REASONABLY POSSIBLE.  IN
THE EVENT PARENT OR BUYER USE THE CONSIGNED INVENTORIES TO MANUFACTURE PRODUCTS
FOR SELLER, PARENT OR BUYER SHALL PAY SELLER THE THEN STANDARD COSTS OF SUCH
INVENTORIES ON THE DATE OF PURCHASE THEREOF.  FOLLOWING THE CONSIGNMENT PERIOD,
SELLER MAY REMOVE THE CONSIGNED INVENTORY FROM THE FACILITY UPON REASONABLE
PRIOR WRITTEN NOTICE TO BUYER AND PARENT, AND SELLER SHALL REMOVE SUCH CONSIGNED
INVENTORY WITHIN A REASONABLE TIME FOLLOWING BUYER’S REQUEST TO SELLER TO REMOVE
SUCH CONSIGNED INVENTORY.

 

ARTICLE VII

CONDITIONS TO THE CLOSING

 

7.1           CONDITIONS TO PARENT’S AND BUYER’S OBLIGATION TO CLOSE.  THE
OBLIGATIONS OF PARENT AND BUYER HEREUNDER ARE SUBJECT TO THE FULFILLMENT OR
SATISFACTION ON, AND AS OF THE CLOSING, OF EACH OF THE FOLLOWING CONDITIONS (ANY
ONE OR MORE OF WHICH MAY BE WAIVED BY PARENT, BUT ONLY IN A WRITING SIGNED BY
PARENT):

 

(A)           REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND
WARRANTIES OF SELLER SET FORTH IN ARTICLE III THAT ARE QUALIFIED AS TO
MATERIALITY OR MATERIAL ADVERSE EFFECT, OR IN SECTIONS 3.1, 3.2 OR 3.3 SHALL BE
TRUE AND CORRECT, AND THOSE THAT ARE NOT SO QUALIFIED SHALL BE TRUE AND CORRECT
IN ALL MATERIAL RESPECTS, IN EACH CASE AS OF THE DATE OF THIS AGREEMENT, AND AS
OF THE CLOSING WITH THE SAME FORCE AND EFFECT AS IF MADE ON AND AS OF THE
CLOSING (EXCEPT TO THE EXTENT EXPRESSLY MADE AS OF A PARTICULAR DATE, IN WHICH
CASE AS OF SUCH DATE).

 

(B)           COVENANTS.  SELLER SHALL HAVE PERFORMED OR COMPLIED IN ALL
MATERIAL RESPECTS WITH ALL AGREEMENTS AND COVENANTS REQUIRED BY THIS AGREEMENT
TO BE PERFORMED OR COMPLIED WITH BY SELLER ON OR PRIOR TO THE CLOSING.

 

(C)           NO ACTIONS.  NO ACTION, SUIT, OR PROCEEDING SHALL BE THREATENED OR
PENDING BEFORE ANY COURT OR QUASI-JUDICIAL OR ADMINISTRATIVE AGENCY OF ANY
NON-U.S. OR ANY U.S. FEDERAL, STATE OR LOCAL JURISDICTION OR BEFORE ANY
ARBITRATOR WHEREIN AN UNFAVORABLE INJUNCTION, JUDGMENT, ORDER, DECREE, RULING,
OR CHARGE WOULD, IF SUCCESSFUL, (A) PREVENT CONSUMMATION OF ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR (B) RESULT IN A MATERIAL ADVERSE
EFFECT TO SELLER OF THE PURCHASED ASSETS.

 

(D)           CLOSING CERTIFICATES.  SELLER SHALL HAVE DELIVERED TO PARENT AN
OFFICER’S CERTIFICATE TO THE EFFECT THAT EACH OF THE CONDITIONS SPECIFIED ABOVE
IN SECTION 7.1(A) TO 7.1(C) (INCLUSIVE) IS SATISFIED IN ALL RESPECTS.

 

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(E)           THIRD PARTY CONSENTS.  ALL CONSENTS (OR WAIVERS IN LIEU THEREOF)
TO THE PERFORMANCE BY PARENT, BUYER AND SELLER OF THEIR RESPECTIVE OBLIGATIONS
UNDER THIS AGREEMENT AND THE ANCILLARY AGREEMENTS OR TO THE CONSUMMATION OF THE
TRANSACTION, LISTED ON SCHEDULE 7.1(E), (I) SHALL HAVE BEEN OBTAINED, (II) SHALL
BE IN FORM AND SUBSTANCE SATISFACTORY TO PARENT, AND (III) SHALL BE IN FULL
FORCE AND EFFECT.

 

(F)            DELIVERY OF DOCUMENTS.  SELLER WILL HAVE DELIVERED TO BUYER THE
FOLLOWING DOCUMENTS:

 

(I)            THE ASSUMPTION INSTRUMENTS, THE TRANSITION SERVICES AGREEMENT,
THE ESCROW AGREEMENT AND THE EMPLOYEE SECONDMENT AGREEMENT;

 

(II)           ALL DOCUMENTS NECESSARY TO EFFECT THE TRANSFER OF THE PURCHASED
ASSETS AND THE ASSUMED LIABILITIES AS LISTED IN 7.1(F)(II);

 

(III)          THE SELLER BOOKS AND RECORDS;

 

(IV)          ASSIGNMENT INSTRUMENTS WITH REGARD TO THE ASSIGNED CONTRACTS AND
THE ASSUMED PERMITS, INCLUDING, TO THE EXTENT REQUIRED, CONSENTS TO THE
ASSIGNMENTS FROM ALL PERSONS WHOSE CONSENT IS REQUIRED FOR SUCH ASSIGNMENT;

 

(V)           CONSENTS FROM ALL PERSONS TO DISCHARGE ANY LIEN (OTHER THAN
PERMITTED LIENS) EXISTING AS OF THE CLOSING ON THE PURCHASED ASSETS, THE
BUSINESS OR THE FACILITY SET FORTH IN SCHEDULE 7.1(F)(V); AND

 

(G)           MATERIAL ADVERSE EFFECT.  THERE SHALL NOT HAVE BEEN A MATERIAL
ADVERSE EFFECT ON THE BUSINESS OR THE PURCHASED ASSETS, TAKEN AS A WHOLE, NOR
SHALL THERE HAVE OCCURRED ANY EVENT OR DEVELOPMENT THAT COULD REASONABLY BE
EXPECTED TO RESULT IN THE FUTURE IN A MATERIAL ADVERSE EFFECT ON THE PURCHASED
ASSETS, TAKEN AS A WHOLE.

 

(H)           SCHEDULES.  SELLER SHALL HAVE DELIVERED TO BUYER SCHEDULE 1.1(V),
SCHEDULE 1.1(AA) AND SCHEDULE 1.1(MM) AT LEAST THREE (3) BUSINESS DAYS PRIOR TO
THE CLOSING DATE.

 

(I)            BOARD OF DIRECTORS.  BUYER SHALL HAVE RECEIVED A CERTIFIED COPY
OF THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF SELLER EXECUTED BY AN OFFICER OF
SELLER APPROVING THIS AGREEMENT, THE SALE AND TRANSFER OF THE PURCHASED ASSETS
TO BUYER PURSUANT TO THIS AGREEMENT, AND THE ANCILLARY AGREEMENTS.

 

(J)            PRELIMINARY FIXED ASSET AND INVENTORIES STATEMENT.  SELLER SHALL
HAVE EXECUTED AND DELIVERED TO BUYER THE PRELIMINARY FIXED ASSET AND INVENTORIES
STATEMENT AND A STATEMENT INDICATING THE PRELIMINARY NET ASSET VALUE.

 

(K)           DELIVERY OF DOCUMENTS.  SELLER WILL HAVE DELIVERED TO BUYER THE
FOLLOWING DOCUMENTS:

 

(I)            THE ANCILLARY AGREEMENTS EXECUTED BY SELLER; AND

 

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(II)           ASSUMPTION INSTRUMENTS WITH REGARD TO THE ASSIGNED CONTRACTS AND
THE ASSUMED LICENSES.

 

(L)            NO ACTIONS.  NO ACTION, SUIT, OR PROCEEDING SHALL BE THREATENED
OR PENDING BEFORE ANY COURT OR QUASI-JUDICIAL OR ADMINISTRATIVE AGENCY OF ANY
NON-U.S. OR ANY U.S. FEDERAL, STATE OR LOCAL JURISDICTION OR BEFORE ANY
ARBITRATOR WHEREIN AN UNFAVORABLE INJUNCTION, JUDGMENT, ORDER, DECREE, RULING,
OR CHARGE WOULD, IF SUCCESSFUL, (A) PREVENT CONSUMMATION OF ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR (B) RESULT IN A MATERIAL ADVERSE
EFFECT TO THE BUSINESS OR THE PURCHASED ASSETS.

 

7.2           CONDITIONS TO SELLER’S OBLIGATIONS.  THE OBLIGATIONS OF SELLER
HEREUNDER ARE SUBJECT TO THE FULFILLMENT OR SATISFACTION ON, AND AS OF THE
CLOSING, OF EACH OF THE FOLLOWING CONDITIONS (ANY ONE OR MORE OF WHICH MAY BE
WAIVED BY SELLER, BUT ONLY IN WRITING SIGNED BY SELLER):

 

(A)           REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND
WARRANTIES OF PARENT AND BUYER SET FORTH IN ARTICLE IV THAT ARE QUALIFIED AS TO
MATERIALITY OR MATERIAL ADVERSE EFFECT, OR IN SECTIONS 4.1, 4.2 OR 4.3 SHALL BE
TRUE AND CORRECT, AND THOSE THAT ARE NOT SO QUALIFIED SHALL BE TRUE AND CORRECT
IN ALL MATERIAL RESPECTS, IN EACH CASE AS OF THE DATE OF THIS AGREEMENT, AND AS
OF THE CLOSING WITH THE SAME FORCE AND EFFECT AS IF MADE ON AND AS OF THE
CLOSING (EXCEPT TO THE EXTENT EXPRESSLY MADE AS OF A PARTICULAR DATE, IN WHICH
CASE AS OF SUCH DATE).

 

(B)           COVENANTS.  PARENT AND BUYER SHALL HAVE PERFORMED OR COMPLIED IN
ALL MATERIAL RESPECTS WITH ALL AGREEMENTS AND COVENANTS REQUIRED BY THIS
AGREEMENT TO BE PERFORMED OR COMPLIED WITH BY THEM ON OR PRIOR TO THE CLOSING.

 

(C)           CLOSING CERTIFICATE.  PARENT SHALL HAVE DELIVERED TO SELLER AN
OFFICER’S CERTIFICATE TO THE EFFECT THAT EACH OF THE CONDITIONS SPECIFIED ABOVE
IN SECTION 7.2(A) AND 7.2(B) IS SATISFIED IN ALL RESPECTS.

 

(D)           BOARD OF DIRECTORS.  SELLER SHALL HAVE RECEIVED A CERTIFIED COPY
OF THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF BUYER APPROVING THIS AGREEMENT,
THE SALE AND TRANSFER OF THE PURCHASED ASSETS TO BUYER, AND THE ANCILLARY
AGREEMENTS.

 

(E)           PURCHASE PRICE.  SELLER SHALL HAVE RECEIVED THE PURCHASE PRICE AND
THE GST TAX AMOUNT.

 

(F)            DELIVERY OF DOCUMENTS.  BUYER WILL HAVE DELIVERED TO SELLER THE
FOLLOWING DOCUMENTS:

 

(I)            THE ASSUMPTION INSTRUMENTS, THE TRANSITION SERVICE AGREEMENT, THE
ESCROW AGREEMENT AND THE EMPLOYEE SECONDMENT AGREEMENT; AND

 

(II)           ASSUMPTION INSTRUMENTS WITH REGARD TO THE ASSIGNED CONTRACTS AND
THE ASSUMED LICENSES.

 

(G)           MATERIAL ADVERSE EFFECT.  THERE SHALL NOT HAVE BEEN A MATERIAL
ADVERSE EFFECT ON PARENT OR BUYER, TAKEN AS A WHOLE, NOR SHALL THERE HAVE
OCCURRED ANY EVENT OR

 

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DEVELOPMENT THAT COULD REASONABLY BE EXPECTED TO RESULT IN THE FUTURE IN A
MATERIAL ADVERSE EFFECT ON PARENT OR BUYER, TAKEN AS A WHOLE.

 

(H)           NO ACTIONS.  NO ACTION, SUIT, OR PROCEEDING SHALL BE THREATENED OR
PENDING BEFORE ANY COURT OR QUASI-JUDICIAL OR ADMINISTRATIVE AGENCY OF ANY NON
U.S. OR ANY U.S. FEDERAL, STATE OR LOCAL JURISDICTION OR BEFORE ANY ARBITRATOR
WHEREIN AN UNFAVORABLE INJUNCTION, JUDGMENT, ORDER, DECREE, RULING, OR CHARGE
WOULD, IF SUCCESSFUL, (A) PREVENT CONSUMMATION OF ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, OR (B) RESULT IN A MATERIAL ADVERSE EFFECT TO
PARENT OR BUYER.

 

ARTICLE VIII

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

 

8.1           REPRESENTATIONS, WARRANTIES AND COVENANTS.  THE COVENANTS
CONTAINED IN THIS AGREEMENT SHALL SURVIVE THE APPLICABLE CLOSING DATE IN
ACCORDANCE WITH THEIR TERMS.  THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS SHALL SURVIVE THE APPLICABLE CLOSING
DATE FOR A PERIOD OF TWELVE (12) MONTHS (SUCH DATE UPON WHICH THEY EXPIRE BEING
REFERRED TO HEREIN AS THE “SURVIVAL DATE”) AND SHALL THEREAFTER EXPIRE;
PROVIDED, HOWEVER, THAT NOTWITHSTANDING THE FOREGOING (I) THE REPRESENTATIONS
AND WARRANTIES OF SELLER CONTAINED IN SECTION 3.16 (ENVIRONMENT, HEALTH AND
SAFETY) SHALL SURVIVE THE CLOSING DATE FOR A PERIOD OF TWENTY-FOUR (24) MONTHS. 
BUYER’S OR PARENT’S (OR ANY BUYER INDEMNITEE’S) RIGHT TO MAKE A CLAIM FOR
INDEMNIFICATION UNDER SECTION 9.1, AND SELLER’S (OR ANY SELLER INDEMNITEE’S)
RIGHT TO MAKE A CLAIM FOR INDEMNIFICATION UNDER SECTION 9.2, SHALL EXPIRE WITH
RESPECT TO SUCH CLAIMS WHICH ARE NOT MADE ON OR PRIOR TO THE DATE, IF ANY, ON
WHICH THE SURVIVAL PERIOD FOR SUCH REPRESENTATION OR WARRANTY EXPIRES.  ANY
CLAIMS UNDER ARTICLE IX MUST BE ASSERTED IN WRITING WITH REASONABLE
PARTICULARITY BY THE PARTY MAKING SUCH CLAIM, INCLUDING INDEMNIFYING THE BASIS
OF THE CLAIM AND ESTIMATE OF THE POTENTIAL DAMAGES COVERED THEREBY.

 

ARTICLE IX

INDEMNIFICATION

 

9.1           INDEMNIFICATION BY SELLER.  SUBJECT TO THIS SECTION 9, SELLER
AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS PARENT AND BUYER AND THEIR
RESPECTIVE SUCCESSORS, ASSIGNS AND AFFILIATES (INDIVIDUALLY, A “BUYER
INDEMNITEE”, AND COLLECTIVELY, THE “BUYER INDEMNITEES”) FROM AND AGAINST AND IN
RESPECT OF ANY AND ALL LOSSES, DAMAGES, DEFICIENCIES, LIABILITIES, ASSESSMENTS,
JUDGMENTS, COSTS AND EXPENSES, INCLUDING ATTORNEYS’ FEES (BOTH THOSE INCURRED IN
CONNECTION WITH THE DEFENSE OR PROSECUTION OF THE INDEMNIFIABLE CLAIM AND THOSE
INCURRED IN CONNECTION WITH THE ENFORCEMENT OF THIS PROVISION), NET OF INSURANCE
PROCEEDS RECEIVED BY THE BUYER INDEMNITTEE WITH RESPECT THERETO (COLLECTIVELY,
“DAMAGES”) SUFFERED OR INCURRED BY ANY BUYER INDEMNITEE WHICH IS CAUSED BY,
RESULTING FROM OR ARISING OUT OF:

 

(A)           ANY BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT OF SELLER
CONTAINED IN THIS AGREEMENT OR IN ANY ANCILLARY AGREEMENT, OR OTHER AGREEMENT,
CERTIFICATE, INSTRUMENT OR OTHER DOCUMENT ENTERED INTO OR DELIVERED BY SELLER AT
THE CLOSING IN CONNECTION HEREWITH (IT BEING

 

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UNDERSTOOD AND AGREED THAT SOLELY FOR PURPOSES OF DETERMINING THE AMOUNT OF
DAMAGES FOR PURPOSES OF THE INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS
ARTICLE IX, ALL QUALIFICATIONS AS TO “MATERIALITY,” AND ALL “MATERIAL ADVERSE
EFFECT” QUALIFICATIONS, CONTAINED IN SUCH REPRESENTATIONS AND WARRANTIES SHALL
BE DISREGARDED AND HAVE NO FORCE OR EFFECT);

 

(B)           ANY EXCLUDED LIABILITIES;

 

(C)           TAXES OF SELLER TO THE EXTENT PROVIDED IN SECTION 2.6;

 

(D)           LIABILITIES OF SELLER, WHETHER ARISING BEFORE OR AFTER THE CLOSING
DATE, ARISING FROM OR RELATING TO THE OWNERSHIP OR ACTIONS OR INACTIONS OF
SELLER OR THE CONDUCT OF THE BUSINESS PRIOR TO THE CLOSING; AND

 

(E)           ANY AND ALL DAMAGES SUFFERED OR INCURRED BY BUYER INDEMNITEE BY
REASON OF OR IN CONNECTION WITH ANY CLAIM OR CAUSE OF ACTION OF ANY THIRD PARTY
TO THE EXTENT ARISING OUT OF THE OPERATION OF THE BUSINESS PRIOR TO THE CLOSING.

 

To the extent that Seller’s undertakings set forth in this Section 9.1 may be
unenforceable, Seller shall contribute the maximum amount that it is permitted
to contribute under applicable Law to the payment and satisfaction of all
Damages incurred by Buyer Indemnitee.

 

9.2           INDEMNIFICATION BY BUYER AND PARENT.  SUBJECT TO THIS ARTICLE IX,
THE BUYER AND PARENT EACH JOINT AND SEVERALLY AGREES TO DEFEND, INDEMNIFY AND
HOLD HARMLESS THE SELLER AND ITS RESPECTIVE SUCCESSORS, ASSIGNS AND AFFILIATES
(INDIVIDUALLY, A “SELLER INDEMNITEE”, AND COLLECTIVELY, THE “SELLER
INDEMNITEES”) FROM AND AGAINST AND IN RESPECT OF ANY AND ALL DAMAGES SUFFERED OR
INCURRED BY ANY SELLER INDEMNITEE WHICH IS CAUSED BY, RESULTING FROM OR ARISING
OUT OF:

 

(A)           ANY BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT OF BUYER
CONTAINED IN THIS AGREEMENT, OR IN ANY ANCILLARY AGREEMENT, OR OTHER AGREEMENT,
CERTIFICATE, INSTRUMENT OR OTHER DOCUMENT ENTERED INTO OR DELIVERED BY ANY BUYER
AT THE CLOSING IN CONNECTION HEREWITH (IT BEING UNDERSTOOD AND AGREED THAT
SOLELY FOR PURPOSES OF DETERMINING THE AMOUNT OF DAMAGES FOR PURPOSES OF THE
INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS ARTICLE IX, ALL QUALIFICATIONS AS
TO “MATERIALITY,” AND ALL “MATERIAL ADVERSE EFFECT” QUALIFICATIONS, CONTAINED IN
SUCH REPRESENTATIONS AND WARRANTIES SHALL BE DISREGARDED AND HAVE NO FORCE OR
EFFECT); AND

 

(B)           ANY ASSUMED LIABILITIES OR ASSIGNED CONTRACTS ARISING OUT OF
CIRCUMSTANCES EXISTING AFTER THE CLOSING DATE;

 

(C)           TAXES OF BUYER TO THE EXTENT PROVIDED IN SECTION 2.6.

 

(D)           LIABILITIES OF BUYER OR PARENT ARISING FROM OR RELATING TO THE
OWNERSHIP OR ACTIONS OR INACTIONS OF BUYER AND PARENT OR THE CONDUCT OF THE
BUSINESS ON OR AFTER THE CLOSING; AND

 

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(E)           ANY AND ALL DAMAGES SUFFERED OR INCURRED BY SELLER INDEMNITEE BY
REASON OF OR IN CONNECTION WITH ANY CLAIM OR CAUSE OF ACTION OF ANY THIRD PARTY
PRIOR TO THE EXTENT ARISING OUT OF THE OPERATION OF THE BUSINESS ON OR AFTER THE
CLOSING.

 

To the extent that Buyers or Parent’s undertakings set forth in this Section 9.2
may be unenforceable, Buyer and/or Parent shall contribute the maximum amount
that it is permitted to contribute under applicable Law to the payment and
satisfaction of all Damages incurred by Seller Indemnities.

 

9.3           NOTICE AND OPPORTUNITY TO DEFEND.  IF ANY ACTION, PROCEEDING,
CLAIM, LIABILITY, DEMAND OR ASSESSMENT SHALL BE ASSERTED AGAINST ANY BUYER
INDEMNITEE OR ANY SELLER INDEMNITEE (THE “INDEMNITEE”) IN RESPECT OF WHICH SUCH
INDEMNITEE PROPOSES TO DEMAND INDEMNIFICATION, SUCH INDEMNITEE SHALL NOTIFY THE
PARTY OBLIGATED TO PROVIDE INDEMNIFICATION PURSUANT TO SECTION 9.1 OR
SECTION 9.2 (THE “INDEMNIFYING PARTY”) THEREOF WITHIN A REASONABLY PROMPT PERIOD
OF TIME AFTER ASSERTION THEREOF; PROVIDED, HOWEVER, THAT THE FAILURE TO SO
NOTIFY THE INDEMNIFYING PARTY SHALL ONLY AFFECT THE INDEMNITEE’S RIGHT TO
INDEMNIFICATION HEREUNDER TO THE EXTENT THAT THE INDEMNIFYING PARTY’S INTERESTS
ARE ACTUALLY AND MATERIALLY PREJUDICED THEREBY.  SUBJECT TO RIGHTS OF OR DUTIES
TO ANY INSURER OR OTHER THIRD PERSON HAVING LIABILITY THEREFOR, THE INDEMNIFYING
PARTY SHALL HAVE THE RIGHT, WITHIN TEN (10) DAYS AFTER RECEIPT OF SUCH NOTICE,
TO ASSUME THE CONTROL OF THE DEFENSE, COMPROMISE OR SETTLEMENT OF ANY SUCH
ACTION, SUIT, PROCEEDING, CLAIM, LIABILITY, DEMAND OR ASSESSMENT, AND TO RETAIN
COUNSEL IN CONNECTION THEREWITH; PROVIDED, HOWEVER, THAT IF THE INDEMNIFYING
PARTY SHALL EXERCISE ITS RIGHT TO ASSUME SUCH CONTROL:

 

(A)           THE INDEMNITEE MAY, IN ITS SOLE DISCRETION AND AT ITS OWN EXPENSE,
EMPLOY SEPARATE COUNSEL TO REPRESENT IT IN ANY SUCH MATTER, AND IN SUCH EVENT
COUNSEL SELECTED BY THE INDEMNIFYING PARTY SHALL BE REQUIRED TO COOPERATE WITH
SUCH COUNSEL OF THE INDEMNITEE IN SUCH DEFENSE, COMPROMISE OR SETTLEMENT FOR THE
PURPOSE OF INFORMING AND SHARING INFORMATION WITH SUCH INDEMNITEE;

 

(B)           FOR ANY SUBJECT MATTER, THE INDEMNITEE WILL, AT ITS OWN EXPENSE,
MAKE AVAILABLE TO THE INDEMNIFYING PARTY THOSE EMPLOYEES OF THE INDEMNITEE OR
ANY AFFILIATE OF THE INDEMNITEE WHOSE ASSISTANCE, TESTIMONY OR PRESENCE IS
NECESSARY TO ASSIST THE INDEMNIFYING PARTY IN EVALUATING AND IN DEFENDING ANY
SUCH ACTION, SUIT, PROCEEDING, CLAIM, LIABILITY, DEMAND OR ASSESSMENT; PROVIDED,
HOWEVER, THAT ANY SUCH ACCESS SHALL BE CONDUCTED IN SUCH A MANNER AS NOT TO
INTERFERE UNREASONABLY WITH THE BUSINESS ACTIVITIES OF THE INDEMNITEE AND ITS
AFFILIATES;

 

(C)           THE INDEMNIFYING PARTY SHALL NOT COMPROMISE OR SETTLE ANY SUCH
ACTION, SUIT, PROCEEDING, CLAIM, LIABILITY OR ASSESSMENT WITHOUT THE CONSENT OF
THE INDEMNITEE, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED;

 

(D)           IN THE EVENT THAT ANY ACTION, SUIT, PROCEEDING, CLAIM, LIABILITY
OR ASSESSMENT (OR THE COMPROMISE OR SETTLEMENT THEREOF) INVOLVES A CLAIM FOR
(I) INJUNCTIVE RELIEF THAT AFFECTS OR COULD REASONABLY BE EXPECTED TO AFFECT THE
BUSINESS IN MATERIAL ANY RESPECT, OR (II) A CLAIM FOR DAMAGES (OR A CLAIM THAT
COULD REASONABLY BE EXPECTED TO RESULT IN DAMAGES) IN EXCESS OF LIMITATIONS SET
FORTH IN SECTION 9.5(C) AND SECTION 9.5(G), PARENT SHALL HAVE THE RIGHT TO
CONTROL THE DEFENSE AND SETTLEMENT THEREOF, AT THE SOLE COST AND EXPENSE OF THE
INDEMNIFIED PARTY (SUBJECT TO THE LIMITATIONS SET FORTH IN ARTICLE IX AND
SUBJECT TO THE INDEMNIFIED PARTY’S RIGHT TO MAKE A CLAIM

 

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FOR DAMAGES IN RESPECT OF SUCH COST AND EXPENSE IF APPROPRIATE); PROVIDED,
HOWEVER, THAT PARENT SHALL NOT COMPROMISE OR SETTLE ANY SUCH ACTION, SUIT,
PROCEEDING, CLAIM, LIABILITY OR ASSESSMENT WITHOUT THE CONSENT OF THE
INDEMNIFYING PARTY, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.

 

9.4           REMEDIES.  EXCEPT FOR THE RIGHT TO SEEK TO SPECIFICALLY ENFORCE
THE COVENANTS HEREUNDER, AND EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT
(INCLUDING, WITHOUT LIMITATION, THE IMMEDIATELY SUCCEEDING SENTENCE), FOLLOWING
THE CLOSING DATE, IN THE ABSENCE OF FRAUD OR INTENTIONAL MISREPRESENTATION (A
“FRAUD CLAIM”), THE SOLE AND EXCLUSIVE REMEDY OF BOTH BUYER AND SELLER WITH
RESPECT TO ANY BREACH OF ANY REPRESENTATION OR WARRANTY CONTAINED IN THIS
AGREEMENT, OR ANY ANCILLARY AGREEMENT OR IN ANY AGREEMENT, CERTIFICATE,
INSTRUMENT OR OTHER DOCUMENT ENTERED INTO IN CONNECTION HEREWITH AT THE CLOSING
OR ANY COVENANT OR AGREEMENT IN THIS AGREEMENT, SHALL BE RESTRICTED TO THE
INDEMNIFICATION RIGHTS SET FORTH IN THIS ARTICLE IX.  NOTHING CONTAINED IN THIS
ARTICLE IX OR ELSEWHERE IN THIS AGREEMENT SHALL LIMIT THE LIABILITY OF EITHER
PARTY UNDER THIS AGREEMENT IF THIS AGREEMENT IS TERMINATED PURSUANT TO
SECTION 10.1 OR OTHERWISE, OR IF THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT
BE CONSUMMATED FOR ANY REASON.  THE FOREGOING NOTWITHSTANDING, EXCEPT FOR A
FRAUD CLAIM, A PARTY SHALL HAVE NO FURTHER OBLIGATIONS UNDER THIS ARTICLE IX
WITH RESPECT TO DAMAGES ARISING FROM A BREACH OF A REPRESENTATION OR WARRANTY
CONTAINED IN ARTICLE III OR ARTICLE IV IN THE EVENT THE OTHER PARTY WAIVES IN
WRITING SUCH PARTY’S SATISFACTION OF THE CLOSING CONDITION UNDER SECTION 7.1(A)
OR SECTION 7.2(A), AS THE CASE MAY BE, DUE TO SUCH BREACH AND CLOSES THE
TRANSACTION.

 

9.5           CERTAIN LIMITATIONS.  THE LIABILITY OF THE SELLER, PARENT OR THE
BUYER, AS APPLICABLE, FOR CLAIMS UNDER THIS AGREEMENT SHALL BE LIMITED BY THE
FOLLOWING:

 

(A)           AT ANY TIME AFTER THE APPLICABLE SURVIVAL DATE FOR A
REPRESENTATION AND WARRANTY, (I) THE SELLER SHALL HAVE NO FURTHER OBLIGATIONS
UNDER THIS ARTICLE IX FOR BREACHES OF SUCH REPRESENTATIONS AND WARRANTIES OF THE
SELLER, EXCEPT FOR DAMAGES WITH RESPECT TO WHICH THE BUYER INDEMNITEE HAS TIMELY
GIVEN THE SELLER WRITTEN NOTICE PRIOR TO SUCH DATE IN ACCORDANCE WITH
SECTIONS 8.1 AND 9.3 AND (II) THE BUYER SHALL HAVE NO FURTHER OBLIGATIONS UNDER
THIS ARTICLE IX FOR BREACHES OF SUCH REPRESENTATIONS AND WARRANTIES OF THE
BUYER, EXCEPT FOR DAMAGES WITH RESPECT TO WHICH THE SELLER INDEMNITEE HAS GIVEN
THE BUYER WRITTEN NOTICE PRIOR TO SUCH DATE IN ACCORDANCE WITH SECTIONS 8.1 AND
9.3.

 

(B)           NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, EXCEPT WITH
RESPECT TO FRAUD CLAIMS, ANY CLAIM BY A BUYER INDEMNITEE AGAINST SELLER PURSUANT
TO SECTION 9.1(A) SHALL BE PAYABLE BY SELLER ONLY IN THE EVENT THAT THE
ACCUMULATED AMOUNT OF DAMAGES IN RESPECT OF SELLER’S OBLIGATIONS TO INDEMNIFY
THE BUYER INDEMNITEES UNDER THIS AGREEMENT SHALL EXCEED $100,000 IN THE
AGGREGATE (THE “SELLER INDEMNIFICATION THRESHOLD”); PROVIDED, HOWEVER, THAT AT
SUCH TIME AS THE AGGREGATE AMOUNT OF DAMAGES IN RESPECT OF THE INDEMNITY
OBLIGATIONS OF SELLER SHALL EXCEED THE SELLER INDEMNIFICATION THRESHOLD, SELLER
SHALL THEREAFTER BE LIABLE FOR ALL DAMAGES SUFFERED OR INCURRED BY THE BUYER
INDEMNITEES IN EXCESS OF SUCH INITIAL $100,000 OF DAMAGES.

 

(C)           NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, EXCEPT WITH
RESPECT TO FRAUD CLAIMS (FOR WHICH THERE SHALL BE NO LIMITATION), IN NO EVENT
SHALL THE MAXIMUM AGGREGATE LIABILITY OF SELLER IN RESPECT OF ANY CLAIMS BY THE
BUYER INDEMNITEES AGAINST SELLER PURSUANT TO

 

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SECTION 9.1(A) FOR DAMAGES SUFFERED OR INCURRED BY ANY BUYER INDEMNITEES EXCEED
10% OF THE VALUE OF THE PURCHASE PRICE (AS ADJUSTED PURSUANT TO SECTION 2.4),
EXCEPT THAT WITH RESPECT TO DAMAGES SUFFERED OR INCURRED BY ANY BUYER INDEMNITEE
DUE TO A BREACH OF SECTION 3.16 THE MAXIMUM AGGREGATE LIABILITY OF SELLER SHALL
BE 20% OF THE VALUE OF THE PURCHASE PRICE (AS ADJUSTED PURSUANT TO SECTION 2.4).

 

(D)           NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THE LIMITATIONS
CONTAINED IN THIS SECTION 9.5 SHALL NOT APPLY TO CLAIMS FOR INDEMNIFICATION BY
BUYER INDEMNITEES AGAINST SELLER IN PURSUANT TO SECTIONS 9.1(B), 9.1(C), 9.1(D),
AND 9.1(E); PROVIDED, HOWEVER, THAT EXCEPT FOR FRAUD CLAIMS, BUYER’S OR PARENT’S
(OR ANY BUYER INDEMNITEE’S) RIGHT TO MAKE A CLAIM FOR INDEMNIFICATION UNDER
SECTIONS 9.1(B), 9.1(C), 9.1(D), AND 9.1(E) SHALL EXPIRE WITH RESPECT TO SUCH
CLAIMS WHICH ARE NOT MADE ON OR PRIOR TO THE DATE FIVE YEARS FOLLOWING THE
CLOSING DATE.

 

9.6           ENVIRONMENTAL COVENANTS.  THE OBLIGATIONS AND RIGHTS OF THE BUYER
INDEMNITEES AND SELLER INDEMNITEES WITH RESPECT TO INDEMNIFICATION FOR
ENVIRONMENTAL LIABILITIES UNDER THIS ARTICLE IX (WHETHER AS AN EXCLUDED
LIABILITY, ASSUMED LIABILITY OR AS A RESULT OF A REPRESENTATION OR WARRANTY MADE
IN THIS AGREEMENT), COLLECTIVELY THE “ENVIRONMENTAL COVENANTS,” ARE IN ADDITION
TO, INDEPENDENT FROM, AND SEVERABLE FROM THE RIGHTS AND OBLIGATIONS OF SAID
PARTIES UNDER ALL OTHER PROVISIONS OF THIS AGREEMENT.  IT IS EXPRESSLY
ACKNOWLEDGED BY ALL PARTIES HERETO THAT NEITHER THE ACTS OR OMISSIONS OF ANY
PARTY HERETO, NOR ANY FAILURE OF ANY CONDITION OR BREACH OF A REPRESENTATION
CONTAINED IN THIS AGREEMENT, ANY ANCILLARY AGREEMENTS, OR ANY OTHER AGREEMENTS
ENTERED INTO IN CONNECTION THEREWITH, SHALL IMPAIR THE RIGHTS OF SELLER
INDEMNITEES OR BUYER INDEMNITEES TO ENFORCE THE ENVIRONMENTAL COVENANTS FOR
THEIR BENEFIT, IT BEING UNDERSTOOD THAT THE ENVIRONMENTAL COVENANTS ARE BEING
GIVEN IN CONSIDERATION OF THE CLOSING OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.  THE ENVIRONMENTAL COVENANTS SHALL SURVIVE THE SALE, TRANSFER,
ASSIGNMENT, OR HYPOTHECATION OF ANY OWNERSHIP INTEREST IN A PARTY BENEFITED
HEREBY OR OBLIGATED HEREUNDER AND THE SALE, TRANSFER, ASSIGNMENT, OR
HYPOTHECATION OF THE BUSINESS ACTIVITIES OF THE FACILITY OR PURCHASED ASSETS OR
THE REAL PROPERTY AT WHICH THE FACILITY IS LOCATED, OR ANY PORTION THEREOF OR
INTEREST THEREIN, BY ANY PARENT, BUYER OR SELLER TO ANY PERSON.

 

9.7           ESCROW.  WITH RESPECT TO ANY CLAIMS FOR INDEMNIFICATION, BUYER
SHALL FIRST PROCEED AGAINST THE ESCROW WITH RESPECT TO CLAIMS BUYER HAS FOR
INDEMNIFICATION PURSUANT TO THIS SECTION 9.  IN THE EVENT THE ESCROW IS NOT
SUFFICIENT TO SATISFY ANY VALID INDEMNIFICATION CLAIM OF BUYER, OR IN THE EVENT
SUCH CLAIM IS MADE IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 9 AFTER THE
ESCROW HAS TERMINATED AND RECOURSE TO SUCH CLAIM PROPERLY BE MADE BEYOND THE
ESCROW, THEN SELLER SHALL REMAIN OBLIGATED TO SATISFY SUCH INDEMNIFICATION CLAIM
OF BUYER IN FULL (SUBJECT TO THE OTHER LIMITATIONS IN THIS ARTICLE IX).

 

41

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ARTICLE X

TERMINATION

 

10.1         TERMINATION OF THE AGREEMENT.  THE PARTIES MAY TERMINATE THIS
AGREEMENT AS PROVIDED BELOW:

 

(A)           PARENT AND SELLER MAY TERMINATE THIS AGREEMENT AS TO ALL PARTIES
BY MUTUAL WRITTEN CONSENT AT ANY TIME PRIOR TO THE CLOSING;

 

(B)           PARENT OR SELLER MAY TERMINATE THIS AGREEMENT BY WRITTEN NOTICE IF
THE CLOSING HAS NOT OCCURRED BY JANUARY 31, 2006; PROVIDED, HOWEVER, THAT THE
RIGHT TO TERMINATE THIS AGREEMENT UNDER THIS SECTION 10.1(B)(I) SHALL NOT BE
AVAILABLE TO ANY PARTY WHOSE ACTION OR FAILURE TO ACT HAS BEEN A PRINCIPAL CAUSE
OF OR RESULTED IN THE FAILURE OF THE CLOSING TO OCCUR ON OR BEFORE SUCH DATE AND
SUCH ACTION OR FAILURE TO ACT CONSTITUTES A BREACH OF THIS AGREEMENT;

 

(C)           PARENT OR SELLER MAY TERMINATE THIS AGREEMENT BY WRITTEN NOTICE
IF: (I) THERE SHALL BE A FINAL NONAPPEALABLE ORDER OF A COURT OF COMPETENT
JURISDICTION IN EFFECT PREVENTING CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR (III) THERE SHALL BE ANY STATUTE, RULE, REGULATION OR ORDER
ENACTED, PROMULGATED OR ISSUED OR DEEMED APPLICABLE TO THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT BY ANY GOVERNMENTAL BODY THAT WOULD MAKE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ILLEGAL;

 

(D)           PARENT OR SELLER IF (I) THERE SHALL BE A FINAL NONAPPEALABLE ORDER
OF A COURT COMPETENT JURISDICTION IN EFFECT PREVENTING CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR (II) THERE SHALL BE ANY STATUTE,
RULE, REGULATION OR ORDER ENACTED, PROMULGATED OR ISSUED OR DEEMED APPLICABLE TO
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT BY ANY GOVERNMENTAL BODY THAT
WOULD MAKE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
ILLEGAL.

 

(E)           PARENT MAY TERMINATE THIS AGREEMENT BY WRITTEN NOTICE IF THERE
SHALL BE ANY ACTION TAKEN, OR ANY STATUTE, RULE, REGULATION OR ORDER ENACTED,
PROMULGATED OR ISSUED OR DEEMED APPLICABLE TO THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT BY ANY GOVERNMENTAL BODY, WHICH WOULD (I) PROHIBIT PARENT’S OR
BUYER’S OWNERSHIP OR OPERATION OF ALL OR A MATERIAL PORTION OF THE BUSINESS OR
THE PURCHASED ASSETS OR (II) COMPEL PARENT OR BUYER TO DISPOSE OF OR HOLD
SEPARATE ALL OR A MATERIAL PORTION OF THE BUSINESS OR ASSETS OF PARENT OR SELLER
AS A RESULT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT;

 

(F)            PARENT MAY TERMINATE THIS AGREEMENT BY WRITTEN NOTICE IF IT IS
NOT IN MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THERE HAS
BEEN A MATERIAL BREACH OF ANY REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT
CONTAINED IN THIS AGREEMENT ON THE PART OF SELLER AND SUCH BREACH HAS NOT BEEN
CURED WITHIN THIRTY (30) CALENDAR DAYS AFTER WRITTEN NOTICE TO SELLER; PROVIDED,
HOWEVER, THAT, NO CURE PERIOD SHALL BE REQUIRED FOR A BREACH WHICH BY ITS NATURE
CANNOT BE CURED;

 

(G)           SELLER MAY TERMINATE THIS AGREEMENT BY WRITTEN NOTICE IF IT IS NOT
IN MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THERE HAS BEEN A
MATERIAL BREACH OF ANY REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT CONTAINED
IN THIS AGREEMENT ON THE PART OF

 

42

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PARENT OR BUYER AND SUCH BREACH HAS NOT BEEN CURED WITHIN THIRTY (30) CALENDAR
DAYS AFTER WRITTEN NOTICE TO PARENT; PROVIDED, HOWEVER, THAT NO CURE PERIOD
SHALL BE REQUIRED FOR A BREACH WHICH BY ITS NATURE CANNOT BE CURED; AND

 

(H)           PARENT MAY TERMINATE THIS AGREEMENT BY WRITTEN NOTICE IF AN EVENT
HAVING A MATERIAL ADVERSE EFFECT OR THAT MAY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT ON THE BUSINESS OR ON THE PURCHASED ASSETS SHALL HAVE OCCURRED
AFTER THE DATE OF THIS AGREEMENT.

 

10.2         EFFECT OF TERMINATION.  IF ANY PARTY TERMINATES THIS AGREEMENT
PURSUANT TO SECTION 10.1 ABOVE, ALL RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL TERMINATE WITHOUT ANY LIABILITY OF ANY PARTY TO ANY OTHER PARTY
(EXCEPT FOR ANY LIABILITY OF ANY PARTY THEN IN BREACH); PROVIDED THAT EACH PARTY
SHALL REMAIN LIABLE FOR ANY BREACHES OF THIS AGREEMENT PRIOR TO ITS TERMINATION
AND PROVIDED, FURTHER, THAT THE PROVISIONS CONTAINED IN SECTION 5.8
(CONFIDENTIALITY) AND ARTICLE XI (MISCELLANEOUS) SHALL SURVIVE TERMINATION.

 

ARTICLE XI

MISCELLANEOUS

 

11.1         PRESS RELEASES AND PUBLIC ANNOUNCEMENTS.  NO PARTY SHALL ISSUE ANY
PRESS RELEASE OR MAKE ANY PUBLIC ANNOUNCEMENT RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT WITHOUT THE PRIOR WRITTEN APPROVAL OF THE OTHER PARTY; PROVIDED,
HOWEVER, THAT (A) EITHER PARTY MAY MAKE ANY PUBLIC DISCLOSURE IT BELIEVES IN
GOOD FAITH IS REQUIRED BY APPLICABLE LAW OR ANY LISTING OR TRADING AGREEMENT
CONCERNING ITS PUBLICLY-TRADED SECURITIES (IN WHICH CASE SUCH PARTY WILL USE ITS
REASONABLE EFFORTS TO ADVISE THE OTHER PARTIES PRIOR TO MAKING THE DISCLOSURE)
AND (B) SELLER MAY CORRESPOND WITH THIRD PARTIES IN WRITINGS IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO PARENT WITH RESPECT TO OBTAINING CONSENTS
FROM SUCH PARTIES PURSUANT TO SECTION 7.1(F).

 

11.2         NO THIRD-PARTY BENEFICIARIES.  EXCEPT AS PROVIDED IN ARTICLE IX
WITH RESPECT TO INDEMNIFICATION, THIS AGREEMENT SHALL NOT CONFER ANY RIGHTS OR
REMEDIES UPON ANY PERSON OTHER THAN THE PARTIES, AND THEIR RESPECTIVE SUCCESSORS
AND PERMITTED ASSIGNS, OTHER THAN AS SPECIFICALLY SET FORTH HEREIN.

 

11.3         ENTIRE AGREEMENT AND MODIFICATION.  THIS AGREEMENT (INCLUDING THE
EXHIBITS HERETO) AND THE ANCILLARY AGREEMENTS CONSTITUTES THE ENTIRE AGREEMENT
AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY
PRIOR UNDERSTANDINGS, AGREEMENTS, WARRANTIES OR REPRESENTATIONS BY OR AMONG THE
PARTIES, WRITTEN OR ORAL, TO THE EXTENT THEY RELATED IN ANY WAY TO THE SUBJECT
MATTER HEREOF..

 

11.4         AMENDMENT.  THIS AGREEMENT MAY BE AMENDED BY THE PARTIES HERETO AT
ANY TIME BY EXECUTION OF AN INSTRUMENT IN WRITING SIGNED ON BEHALF OF EACH OF
THE PARTIES HERETO.

 

11.5         WAIVERS.  THE RIGHTS AND REMEDIES OF THE PARTIES TO THIS AGREEMENT
ARE CUMULATIVE AND NOT ALTERNATIVE.  NEITHER THE FAILURE NOR ANY DELAY BY ANY
PARTY IN EXERCISING ANY RIGHT, POWER OR PRIVILEGE UNDER THIS AGREEMENT OR THE
DOCUMENTS REFERRED TO IN THIS AGREEMENT WILL OPERATE AS A WAIVER OF SUCH RIGHT,
POWER OR PRIVILEGE, AND NO SINGLE OR PARTIAL EXERCISE OF SUCH RIGHT, POWER, OR
PRIVILEGE WILL PRECLUDE ANY OTHER OR FURTHER EXERCISE OF SUCH RIGHT, POWER, OR
PRIVILEGE OR THE

 

43

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EXERCISE OF ANY OTHER RIGHT, POWER, OR PRIVILEGE.  TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, (I) NO CLAIM OR RIGHT ARISING OUT OF THIS AGREEMENT
OR THE DOCUMENTS REFERRED TO IN THIS AGREEMENT CAN BE DISCHARGED BY ONE PARTY,
IN WHOLE OR IN PART, BY A WAIVER OR RENUNCIATION OF THE CLAIM OR RIGHT UNLESS IN
WRITING SIGNED BY THE OTHER PARTY; (II) NO WAIVER THAT MAY BE GIVEN BY A PARTY
WILL BE APPLICABLE EXCEPT IN THE SPECIFIC INSTANCE FOR WHICH IT IS GIVEN; AND
(III) NO NOTICE TO OR DEMAND ON ONE PARTY WILL BE DEEMED TO BE A WAIVER OF ANY
OBLIGATION OF SUCH PARTY OR OF THE RIGHT OF THE PARTY GIVING SUCH NOTICE OR
DEMAND TO TAKE FURTHER ACTION WITHOUT NOTICE OR DEMAND AS PROVIDED IN THIS
AGREEMENT OR THE DOCUMENTS REFERRED TO IN THIS AGREEMENT.

 

11.6         SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL BE BINDING UPON AND
INURE TO THE BENEFIT OF THE PARTIES NAMED HEREIN AND THEIR RESPECTIVE SUCCESSORS
AND PERMITTED ASSIGNS.  NO PARTY MAY ASSIGN EITHER THIS AGREEMENT OR ANY OF ITS
RIGHTS, INTERESTS, OR OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN APPROVAL
OF THE OTHER PARTIES; PROVIDED, HOWEVER, THAT SO LONG AS PARENT REMAINS LIABLE
FOR ALL OBLIGATIONS UNDER THIS AGREEMENT, PARENT MAY (I) ASSIGN ANY OR ALL OF
ITS RIGHTS AND INTERESTS HEREUNDER TO ONE OR MORE OF ITS AFFILIATES AND
(II) DESIGNATE ONE OR MORE OF ITS AFFILIATES TO PERFORM ITS OBLIGATIONS
HEREUNDER.

 

11.7         COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS, EACH
OF WHICH SHALL BE DEEMED AN ORIGINAL BUT ALL OF WHICH TOGETHER WILL CONSTITUTE
ONE AND THE SAME INSTRUMENT.

 

11.8         HEADINGS.  THE SECTION HEADINGS CONTAINED IN THIS AGREEMENT ARE
INSERTED FOR CONVENIENCE ONLY AND SHALL NOT AFFECT IN ANY WAY THE MEANING OR
INTERPRETATION OF THIS AGREEMENT.

 

11.9         NOTICES.  ALL NOTICES AND OTHER COMMUNICATIONS REQUIRED OR
PERMITTED HEREUNDER SHALL BE IN WRITING, SHALL BE EFFECTIVE WHEN GIVEN, AND
SHALL IN ANY EVENT BE DEEMED TO BE GIVEN UPON RECEIPT OR, IF EARLIER, (A) UPON
DELIVERY, IF DELIVERED BY HAND, (B) THREE BUSINESS DAYS AFTER THE BUSINESS DAY
OF DEPOSIT WITH FEDERAL EXPRESS OR SIMILAR OVERNIGHT COURIER, FREIGHT PREPAID OR
(C) ONE BUSINESS DAY AFTER THE BUSINESS DAY OF FACSIMILE TRANSMISSION, IF
DELIVERED BY FACSIMILE TRANSMISSION WITH COPY BY FEDERAL EXPRESS OR SIMILAR
OVERNIGHT COURIER, FREIGHT PREPAID, AND SHALL BE ADDRESSED TO THE INTENDED
RECIPIENT AS SET FORTH BELOW:

 

If to Parent or Buyer:

 

Sanmina-SCI Corporation

2700 North First Street

San Jose, CA 95134

Attention: Robin Walker, Senior Vice President, Corporate Development

Steven Jackman, Vice President and Corporate Counsel

Telephone No.:  (408) 964-3500

Facsimile No.:   (408) 964-3636

 

44

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Copy to:

 

Wilson Sonsini Goodrich & Rosati, Professional Corporation

650 Page Mill Road

Palo Alto, California  94304

Attention:  Christopher D. Mitchell, Esq.
Facsimile No.:  (650) 493-6811

 

If to Seller:

 

Marshall Mohr

Chief Financial Officer

Adaptec, Inc.

691 S. Milpitas Boulevard

Milpitas, CA  95035

Fax:  (408) 957-1682

 

Copy to:

 

Randy Gast

Vice President of Global Operations

Adaptec, Inc.

691 S. Milpitas Boulevard

Milpitas, CA  95035

Fax:  (408) 957-7185

 

Copy to:

 

Fenwick & West LLP

275 Battery Street, Suite 1600

San Francisco, California 94111

Attention: Samuel B. Angus, Esq.

Facsimile No.:  (415) 281-1350

 

Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties ten (10) days’ advance written notice to the other Parties pursuant to
the provisions above.

 

11.10       GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS
SOLELY BY THE SUBSTANTIVE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO
CONFLICTS OF LAWS OR THE CHOICE OF LAW PRINCIPLES OF ANY JURISDICTION INCLUDING
THE STATE OF CALIFORNIA, AND WITHOUT THE NEED OF ANY PARTY TO ESTABLISH THE
REASONABLENESS OF THE RELATIONSHIP BETWEEN THE LAWS OF THE STATE OF CALIFORNIA
AND THE SUBJECT MATTER OF THIS AGREEMENT, AND ALL QUESTIONS CONCERNING THE
VALIDITY AND CONSTRUCTION HEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF CALIFORNIA.  NOTWITHSTANDING THE FOREGOING, THE EMPLOYEE
SECONDMENT AGREEMENT AND THE FACILITY TRANSFER AGREEMENT WILL BE GOVERNED BY THE
LAWS OF THE REPUBLIC OF SINGAPORE.

 

45

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11.11       SEVERABILITY.  ANY TERM OR PROVISION OF THIS AGREEMENT THAT IS
INVALID OR UNENFORCEABLE IN ANY SITUATION IN ANY JURISDICTION SHALL NOT AFFECT
THE VALIDITY OR ENFORCEABILITY OF THE REMAINING TERMS AND PROVISIONS HEREOF OR
THE VALIDITY OR ENFORCEABILITY OF THE OFFENDING TERM OR PROVISION IN ANY OTHER
SITUATION OR IN ANY OTHER JURISDICTION.

 

11.12       EXPENSES.  SUBJECT TO THE PROVISIONS OF THIS AGREEMENT, EACH PARTY
WILL BEAR ITS OWN COSTS AND EXPENSES (INCLUDING LEGAL AND ACCOUNTING FEES AND
EXPENSES) INCURRED IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

11.13       CONSTRUCTION.

 

(A)           THE PARTIES HAVE PARTICIPATED JOINTLY IN THE NEGOTIATION AND
DRAFTING OF THIS AGREEMENT.  IN THE EVENT AN AMBIGUITY OR QUESTION OF INTENT OR
INTERPRETATION ARISES, THIS AGREEMENT SHALL BE CONSTRUED AS IF DRAFTED JOINTLY
BY THE PARTIES AND NO PRESUMPTION OR BURDEN OF PROOF SHALL ARISE FAVORING OR
DISFAVORING ANY PARTY BY VIRTUE OF THE AUTHORSHIP OF ANY OF THE PROVISIONS OF
THIS AGREEMENT.  ANY REFERENCE TO ANY FEDERAL, STATE, LOCAL, OR FOREIGN STATUTE
OR LAW SHALL BE DEEMED ALSO TO REFER TO ALL RULES AND REGULATIONS PROMULGATED
THEREUNDER, UNLESS THE CONTEXT REQUIRES OTHERWISE.  THE WORD “INCLUDING” SHALL
MEAN INCLUDING WITHOUT LIMITATION.

 

(B)           UNLESS THE CONTEXT REQUIRES OTHERWISE, ALL WORDS USED IN THIS
AGREEMENT IN THE SINGULAR NUMBER SHALL EXTEND TO AND INCLUDE THE PLURAL, ALL
WORDS IN THE PLURAL NUMBER SHALL EXTEND TO AND INCLUDE THE SINGULAR, AND ALL
WORDS IN ANY GENDER SHALL EXTEND TO AND INCLUDE ALL GENDERS.

 

11.14       SELLER DISCLOSURE LETTER.

 

(A)           THE DISCLOSURES IN SELLER DISCLOSURE LETTER, AND THOSE IN ANY
SUPPLEMENT THERETO, MUST RELATE ONLY TO THE REPRESENTATIONS AND WARRANTIES IN
THE SECTION OF THE AGREEMENT TO WHICH THEY EXPRESSLY RELATE AND TO ANY OTHER
REPRESENTATION OR WARRANTIES IN THIS AGREEMENT TO THE EXTENT IT IS READILY
APPARENT THAT SUCH DISCLOSURES RELATE TO SUCH OTHER REPRESENTATIONS AND
WARRANTIES.

 

(B)           STATEMENTS CONTAINED WITHIN THE SELLER DISCLOSURE LETTER SHALL BE
DEEMED TO BE REPRESENTATIONS AND WARRANTIES UNDER THIS AGREEMENT.

 

11.15       ATTORNEYS’ FEES.  IF ANY LEGAL PROCEEDING OR OTHER ACTION RELATING
TO THIS AGREEMENT IS BROUGHT OR OTHERWISE INITIATED, THE PREVAILING PARTY SHALL
BE ENTITLED TO RECOVER REASONABLE ATTORNEYS’ FEES, COSTS AND DISBURSEMENTS (IN
ADDITION TO ANY OTHER RELIEF TO WHICH THE PREVAILING PARTY MAY BE ENTITLED).

 

11.16       FURTHER ASSURANCES.  THE PARTIES AGREE (A) TO FURNISH UPON REQUEST
TO EACH OTHER SUCH FURTHER INFORMATION, (B) TO EXECUTE AND DELIVER TO EACH OTHER
SUCH OTHER DOCUMENTS, AND (C) TO DO SUCH OTHER ACTS AND THINGS, ALL AS THE OTHER
PARTY MAY REASONABLY REQUEST FOR THE PURPOSE OF CARRYING OUT THE INTENT OF THIS
AGREEMENT AND THE DOCUMENTS REFERRED TO IN THIS AGREEMENT.

 

11.17       TIME OF ESSENCE.  WITH REGARD TO ALL DATES AND TIME PERIODS SET
FORTH OR REFERRED TO IN THIS AGREEMENT, TIME IS OF THE ESSENCE.

 

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11.18       CONSENT TO JURISDICTION.  SUBJECT TO SECTION 11.2 ABOVE, THE
COMPETENT COURT IN SANTA CLARA, CALIFORNIA (THE “COMPETENT COURT”) (AND NOT ANY
OTHER COURT IN ANY STATE OR COUNTRY) SHALL HAVE EXCLUSIVE JURISDICTION IN
CONNECTION WITH THIS AGREEMENT.  SUBJECT TO SECTION 11.2 ABOVE, EACH PARTY
HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COMPETENT COURT
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
IRREVOCABLY WAIVES ANY OBJECTION SUCH PERSON MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN THE COMPETENT COURT OR
THAT THE COMPETENT COURT IS AN INCONVENIENT FORUM.

 

11.19       SCHEDULES AND EXHIBITS.  THE SCHEDULES AND EXHIBITS DESCRIBED HEREIN
AND ATTACHED HERETO CONSTITUTE AN INSEPARABLE PART OF THIS AGREEMENT AND ARE
INCORPORATED INTO THIS AGREEMENT FOR ALL PURPOSES AS IF FULLY SET FORTH HEREIN. 
ANY DISCLOSURE MADE IN ANY SCHEDULE TO THIS AGREEMENT WHICH MAY BE APPLICABLE TO
ANOTHER SCHEDULE TO THIS AGREEMENT SHALL BE DEEMED TO BE MADE WITH RESPECT TO
SUCH OTHER SCHEDULE ONLY IF A SPECIFIC CROSS REFERENCE IS MADE THERETO OR IF IT
IS READILY APPARENT THAT SUCH DISCLOSURE SHOULD APPLY TO SUCH OTHER SCHEDULE.

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on of the
date first above written.

 

 

Parent:

SANMINA-SCI CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jure Sola

 

 

 

 

Name:

Jure Sola

 

 

 

 

Title:

Chief Executive Officer

 

 

 

 

 

 

 

 

Buyer:

SANMINA-SCI SYSTEMS SINGAPORE PTE. LTD.

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jure Sola

 

 

 

 

Name:

Jure Sola

 

 

 

 

Title:

Chief Executive Officer

 

 

 

 

 

 

 

 

Seller:

ADAPTEC MANUFACTURING (S) PTE. LTD.

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Marshall Mohr

 

 

 

 

Name:

Marshall Mohr

 

 

 

 

Title:

VP&CFO, Adaptec, Inc.

 

 

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Exhibit A

 

Transition Services Agreement

 

(See Tab 4)

 

2

--------------------------------------------------------------------------------

 

Exhibit B

 

Employee Secondment Agreement

 

(See Tab 5)

 

3

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Exhibit C

 

Facility Transfer Agreement

 

(See Tab 6)

 

4

--------------------------------------------------------------------------------

 

Exhibit D

 

Manufacturing Services and Supply Agreement

 

(See Tab 7)

 

5

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