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                                                                   EXHIBIT 10.26

                          PURCHASE AND SALE AGREEMENT
                          ---------------------------


  THIS AGREEMENT is made and entered into this 22nd day of March, 2000 (the
"Effective Date") by and between ZiLOG, Inc., a Delaware corporation
("ZiLOG"); Dasaradha R. Gude, an individual ("Gude"); the shareholders listed
on Exhibit "A" attached hereto under the heading "Remaining Shareholders"
(collectively, the "Remaining Shareholders" and individually, a "Remaining
Shareholder"); Virtual IP Group, Inc., a California corporation ("VIP");
Qualcore Group, Inc., a Delaware corporation ("Qualcore"); and Qualcore Logic
Private Limited, a Hyderabad corporation ("Qualcore India"), and is made with
reference to the following facts and objectives:

                                R E C I T A L S
                                - - - - - - - -

  A.  Gude and the Remaining Shareholders, collectively, own Seven Million One
Hundred Ninety-one Thousand (7,191,000) shares of common stock in Qualcore,
which constitutes fifty-one percent (51%) of the issued and outstanding shares
of Qualcore.

  B.  Qualcore is the parent corporation and sole shareholder of VIP and
Qualcore India.

  C.  DII Group, Inc., a Delaware corporation ("DII") originally acquired and
currently owns Six Million Nine Hundred Nine Thousand (6,909,000) shares of
stock in Qualcore, which constitutes the remaining forty-nine percent (49%) of
the issued and outstanding shares of stock in Qualcore.

  D.  In addition to the foregoing, Qualcore desires to authorize and grant
options to certain employees of Qualcore and/or its subsidiaries under a stock
option plan or other arrangement to be developed whereby such employees will
have the option to acquire an additional Nine Hundred Thousand shares (900,000)
of common stock in Qualcore.

  E.  DII has recently agreed to merge with Flextronics International, Ltd.
("Flextronics") whereby Flextronics will be the surviving corporation in such
merger.

  F.  Gude desires to sell certain amounts of stock he owns in Qualcore to ZiLOG
in order to raise some of the funds necessary to acquire all of the shares in
Qualcore owned by DII and/or Flextronics and some or all shares owned by certain
other shareholders of Qualcore which, following the same, will result in ZiLOG
owning twenty percent (20%) of Qualcore, taking into account both the issued and
outstanding stock in Qualcore and the options anticipated to be granted to
employees to acquire stock in Qualcore, and Gude and some or all of the
Remaining Shareholders owning all remaining issued and outstanding equity
interests in Qualcore.

  G.  ZiLOG desires to obtain an option to acquire all of the issued and
outstanding shares of stock in Qualcore and all options to acquire stock in
Qualcore which may be granted to employees of Qualcore and/or its subsidiaries.

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  NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this agreement, the parties agree
as follows:

1.  Acquisition of Stock:  ZiLOG agrees to purchase from Gude, and Gude agrees
    --------------------
    to sell to ZiLOG, Three Million (3,000,000) shares of common stock in
    Qualcore (the "Initial Stock Acquisition"), which, as of the Effective Date,
    represents twenty percent (20%) of the total issued and outstanding shares
    of stock in Qualcore plus the options to acquire stock in Qualcore which are
    anticipated to be granted to employees of Qualcore and/or its subsidiaries.
    The closing date for the Initial Stock Acquisition shall occur on the First
    Closing Date (as defined in Paragraph 14, below). The purchase price for the
    Initial Stock Acquisition shall be Four Million Four Hundred Twenty-four
    Thousand Dollars ($4,424,000), which shall be payable in cash on the First
    Closing Date. ZiLOG, Gude, the Remaining Shareholders and Qualcore shall,
    concurrently herewith, enter into an investor rights agreement which shall
    be effective as of the First Closing Date (the "Investor Rights Agreement")
    in the form attached hereto as Exhibit "D".

2.  Grant of Option to Acquire Shares: Gude and each of the Remaining
    ---------------------------------
    Shareholders hereby grant ZiLOG the option to acquire all of the shares of
    stock and all other claims, rights and causes of action each of them now own
    or hereafter acquire in Qualcore and any and all rights, claims and causes
    of action any of them may have against Qualcore and/or any of its
    subsidiaries, whether or not such rights, claims or causes of action are
    known (collectively, the "Option Shares"). This option shall be exercised,
    if at all, by delivery of written notice of exercise (the "Exercise Notice")
    by ZiLOG to Qualcore, Gude and each of the Remaining Shareholders who
    continue to hold Option Shares, no later than the earlier of June 30, 2001,
    or thirty (30) days following the date of ZiLOG's IPO. Notwithstanding the
    foregoing, however, in the event ZiLOG's IPO occurs prior to June 30, 2001,
    then ZiLOG must exercise the option set forth herein within thirty (30) days
    following such IPO.

3.  Option Consideration:  The consideration for the option to acquire the
    --------------------
    Option Shares granted pursuant to Paragraph 2, above, shall be Three Million
    Five Hundred Seventy-six Thousand Dollars ($3,576,000), of which One Million
    Seventy-six Thousand Dollars ($1,076,000) shall be payable in cash at the
    First Closing, and the remaining Two Million Five Hundred Thousand Dollars
    ($2,500,000) shall be payable in cash at the Second Closing (as defined in
    Paragraph 14, below). The payment of this option consideration shall be made
    to Gude, who shall be responsible for distributing such cash to any
    Remaining Shareholders in accordance with Gude's agreement or understanding
    with such Remaining Shareholders. The Remaining Shareholders acknowledge and
    agree that the payment of the option consideration to Gude hereunder shall
    constitute full performance of ZiLOG's obligation to deliver such option
    consideration. Each Remaining Shareholder acknowledges that they have a
    previous agreement or understanding with Gude concerning the disposition of
    this option consideration, and, upon ZiLOG paying the option consideration
    to Gude, each Remaining Shareholder agrees to hold ZiLOG harmless from and
    against any and all claims, liabilities, causes of action or damages any of
    them may have or incur as a result of ZiLOG paying such option consideration
    to Gude. In addition to the foregoing, the option consideration

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    includes the Initial Stock Acquisition referenced in Paragraph 1, above, and
    other valuable consideration, the receipt of which is hereby acknowledged by
    Gude and the Remaining Shareholders. Gude and the Remaining Shareholders
    acknowledge that the provision of funds by ZiLOG to allow Gude and/or the
    Remaining Shareholders to acquire the shares of stock from DII and/or
    Flextronics will confer additional valuable benefit to each of them, and
    they acknowledge that the granting of the options to acquire the Option
    Shares is a material and substantial consideration for ZiLOG agreeing to the
    Initial Stock Acquisition hereunder. In the event the option to acquire the
    shares is exercised, then the option consideration shall be applied towards
    the Purchase Price (as defined in Paragraph 5, below). In the event the
    option is not exercised, then the option consideration shall be considered
    nonrefundable.

4.  Use of Cash Received:  Gude and the Remaining Shareholders all agree that
    --------------------
    the cash received by Gude and/or the Remaining Shareholders on account of
    the Initial Stock Acquisition and on account of the option consideration
    shall be used solely for the following purposes:

    a.  Gude has entered or shall enter an agreement with DII and/or Flextronics
        to acquire all of the shares of stock and any and all other rights held
        by DII and/or Flextronics in Qualcore (other than contractual rights DII
        may have with respect to the provision of services or of intellectual
        property by VIP to DII) which, as of the Effective Date, equals Six
        Million Nine Hundred Nine Thousand (6,909,000) shares of common stock in
        Qualcore, and represents forty-nine percent (49%) of the currently
        issued and outstanding equity interests in Qualcore. Such agreement
        shall provide that Gude and/or the Remaining Shareholders shall acquire
        such stock for a total amount equal to Nine Million Six Hundred Seventy-
        two Thousand Six Hundred Dollars ($9,672,600), plus forty-six and 06/100
        percent (46.06%) of the cash on hand in Qualcore, VIP and Qualcore India
        as of the closing of that transaction, which is estimated to be a total
        purchase price equal to Ten Million Two Hundred Twenty-five Thousand
        Three Hundred Twenty Dollars ($10,225,320), consisting of an amount
        equal to Five Million Five Hundred Thousand Dollars ($5,500,000) in
        cash, with the balance estimated at Four Million Seven Hundred Twenty-
        five Thousand Three Hundred Twenty Dollars ($4,725,320) being
        represented by a purchase money promissory note from Gude, as maker, to
        DII and/or Flextronics, as holder. A copy of the agreement under which
        Gude will acquire the stock in Qualcore from DII and/or Flextronics is
        attached hereto as Exhibit "C" (the "DII Agreement"). The funding for
        the cash portion of this acquisition shall be funded from the cash
        received by Gude on account of the Initial Stock Acquisition, from the
        cash received by Gude on account of the option consideration payable on
        the First Closing Date, and from any other independent sources Gude may
        require.

    b.  The balance of the cash shall be distributed as determined by Gude and
        the Remaining Shareholders.

5.  Exercise of Option; Purchase Price:  In the event the option to purchase the
    ----------------------------------
    Option Shares is exercised as provided herein, then the purchase price shall
    be an amount equal

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    to Seventeen Million Six Hundred Ninety-six Thousand Dollars ($17,696,000)
    (the "Purchase Price") . The option consideration paid by ZiLOG shall be
    applied against and reduce the amount of the Purchase Price which is
    required to be paid by ZiLOG on the Final Closing Date, resulting in a total
    net payment if the option hereunder is exercised of Fourteen Million One
    Hundred Twenty Thousand Dollars ($14,120,000) payable on the Final Closing
    Date (the "Net Final Payment"). The Net Final Payment shall be allocated
    pro-rata among Gude and the Remaining Shareholders in proportion to the
    number of shares each of them hold in Qualcore.

6.  Payment of Purchase Price:  Upon ZiLOG exercising its option to acquire the
    -------------------------
    Option Shares, payment of the Purchase Price shall be paid as follows:

    a.  Payment of the Purchase Price shall be paid as follows: (i) Three
        Million Five Hundred Seventy-six Thousand Dollars ($3,576,000), in the
        form of the option consideration paid by ZiLOG on the First Closing Date
        and the Second Closing Date, shall be applied against and reduce the
        amount of the Purchase Price; (ii) part of the remaining Purchase Price
        payable on the Final Closing Date shall be paid in cash in an amount not
        to exceed Eight Million One Hundred Thousand Dollars ($8,100,000); and
        (iii) the balance of the Purchase Price payable on the Final Closing
        Date shall be paid through the issuance of common stock in ZiLOG (the
        "ZiLOG Stock"). The number of shares of ZiLOG Stock to be issued shall
        be determined by dividing the remainder dollar amount to be paid in
        ZiLOG Stock by an amount computed as follows (the "Conversion Price"):

        i.   The asking price of ZiLOG Stock as of 4:00 p.m. in New York City on
             the first day of ZiLOG's initial public offering ("IPO"), and the
             asking price as of 4:00 p.m. in New York City on each of the next
             four (4) trading days, shall be determined.

        ii.  Each of the five (5) closing prices determined pursuant to
             subparagraph (i), above, shall be added together.

        iii. The sum computed pursuant to subparagraph (ii), above, shall be
             divided by five (5), which shall be the Conversion Price for
             purposes of this Agreement.

        The parties agree that the Conversion Price, as calculated above, shall,
        for purposes of this Agreement, be deemed the fair market value of each
        share of ZiLOG Stock to be issued to Gude and the Remaining Shareholders
        at the Final Closing Date.

    b.  Exhibit "B" sets forth the Net Final Payment amounts to be received by
        Gude and the Remaining Shareholders in exchange for their shares of
        Qualcore. This schedule presumes that Nine Hundred Thousand (900,000)
        options to acquire stock in Qualcore will be granted to the employees of
        Qualcore and/or its subsidiaries, and a pro-rata portion of the Net
        Final Payment is allocated to "Employee Option Holders" on the basis of
        this presumption. In the event some

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        or al of the options are not, in fact, granted prior to the Final
        Closing Date, than any amounts which are allocable to those options
        which are not granted shall be reallocated proportionately to Gude, the
        Remaining Shareholders and to those employees who were, in fact, granted
        such options. A portion of the Net Final Payment will be made in cash,
        and a portion of the Net Final Payment shall be made in ZiLOG Stock. The
        amount of cash and the value of shares of ZiLOG Stock to be issued to
        Gude, each Remaining Shareholder and each the employees, collectively,
        who are anticipated to be granted Nine Hundred Thousand (900,000)
        options to acquire stock in Qualcore are dollar value denoted on Exhibit
        "B". The number of shares of ZiLOG Stock shall be the value denoted as
        being received in ZiLOG Stock divided by the Conversion Price. No change
        may be made to Exhibit "B" following the execution of this Agreement
        without the prior written consent of ZiLOG, which consent may be given
        or withheld in ZiLOG's sole and absolute discretion.

    c.  Notwithstanding the foregoing, ZiLOG may, in its sole discretion,
        substitute cash in favor of ZiLOG Stock for any part of the
        consideration payable to Gude and/or the Remaining Shareholders
        hereunder. If ZiLOG has not had its IPO on the Final Closing Date, and
        it has exercised its option to acquire the Qualcore shares pursuant
        hereto, it shall pay the entire consideration to Gude and/or the
        Remaining Shareholders in cash or in ZiLOG Stock at a Conversion Price
        to be determined by agreement between the parties hereto; provided,
        however, that if Gude or any Remaining Shareholder does not desire to
        receive ZiLOG Stock, such person shall be entitled to receive cash in
        lieu thereof, and, provided further, that the Conversion Price shall be
        determined by agreement between ZiLOG and a majority in interest of
        those persons electing to receive ZiLOG Stock, which Conversion Price,
        once agreed, shall be binding on ZiLOG and all persons electing to
        receive ZiLOG Stock. In the event ZiLOG exercises its right to pay cash
        in lieu of ZiLOG Stock, it shall notify Gude and the Remaining
        Shareholders of its desire to substitute cash for a portion of the
        Purchase Price hereunder prior to the Final Closing Date. Any payment of
        cash pursuant to an election by ZiLOG to pay cash rather than ZiLOG
        Stock shall be paid out of the general funds of ZiLOG as and when the
        same become due.

7.  Pledge of Optioned Shares:  Gude and the Remaining Shareholders agree to
    -------------------------
    pledge all of the Option Shares in which ZiLOG has an option to purchase
    pursuant to the terms of the pledge agreement attached hereto as Exhibit "E"
    (the "Option Pledge Agreement") for purposes of perfecting ZiLOG's option
    hereunder. In the event employee stock options are granted to employees of
    Qualcore and/or its subsidiaries following the date of this Agreement, such
    grants shall specifically provide that the options and/or shares received
    thereunder constitute Option Shares under this Agreement, and any such
    employees shall execute an agreement or agreements specifically agreeing to
    be treated as a Remaining Shareholder hereunder, with all rights,
    restrictions and obligations of a Remaining Shareholder hereunder including,
    without limitation, the obligation to execute all agreements required to be
    executed by all Remaining Shareholders hereunder, and shall be required to
    assign such option and/or pledge any shares received to ZiLOG as security
    for the option granted hereunder.

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8.  Stockholder Agreement:  Gude and the Remaining Shareholders agree to
    ---------------------
    execute a stockholder agreement in the form attached hereto as Exhibit "F"
    (the "Stockholder Agreement") pursuant to which ZiLOG and/or its nominee
    shall be given the right to vote any shares in Qualcore outstanding in a
    manner which will give ZiLOG's nominees at least one director on the Board
    of Directors of Qualcore. In addition, Gude and the Remaining Shareholders
    agree that the Certificate of Incorporation and the Bylaws of Qualcore will
    be amended, as provided in Exhibit "G" and "H", respectively, to provide
    that certain major decisions made prior to June 30, 2001, set forth in such
    Certificate and Bylaws require the agreement of ZiLOG's designated director
    in Qualcore and/or require the approval of eighty-five percent (85%) of the
    issued and outstanding shares of stock in Qualcore in order for such
    decisions to be effective. These provisions shall expire by their terms on
    June 30, 2001. Notwithstanding the foregoing and any provision in the
    Restated Certificate of Incorporation, ZiLOG agrees that it will vote its
    shares and direct its designated director to vote in favor of any stock plan
    or issuance for the benefit of the employees of Qualcore and/or its
    subsidiaries in an amount not to exceed Nine Hundred Thousand (900,000)
    shares of stock, as long as the plan requires that any person receiving
    grants of stock or grants of stock options to, as a condition to receiving
    such grant, execute such agreement or agreements specifically agreeing to be
    treated as a Remaining Shareholder hereunder, with all rights, restrictions
    and obligations of a Remaining Shareholder hereunder including, without
    limitation, the obligation to execute all agreements required to be executed
    by all Remaining Shareholders hereunder, and shall be required to assign
    such option and/or pledge any shares received to ZiLOG as security for the
    option granted hereunder, and such other agreements such that ZiLOG will
    have the same rights against such employees as it has against any and all
    other Remaining Shareholders.

9.  Representations and Covenants of Qualcore, VIP, Qualcore India, Gude and the
    ----------------------------------------------------------------------------
    Remaining Shareholders: Qualcore, VIP, Qualcore India, Gude and the
    ----------------------
    Remaining Shareholders hereby make the following covenants, agreements,
    representations and warranties:

    a.  Qualcore, VIP and Qualcore India have good and marketable title to all
        of its assets free and clear of any and all claims, liabilities, liens
        and encumbrances of any kind or character.

    b.  The Option Shares, together with the Initial Stock Acquisition,
        represents all of the issued and outstanding stock of Qualcore; there
        are no other equity interests which are outstanding in Qualcore; and
        there are no other options, warrants or rights of any kind or character
        to acquire any equity interest in Qualcore, VIP or Qualcore India.

    c.  Neither Qualcore, VIP nor Qualcore India shall issue any additional
        shares of stock, preferred or common, or any other equity interests in
        either of them, or issue any options, warrants or other rights to
        acquire any of the foregoing, or incur any debts or liabilities other
        than those incurred in the normal course of business, without the prior
        written consent of ZiLOG at any time prior to the Final Closing Date.

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    d.  Gude and the Remaining Shareholders shall, upon the exercise of the
        option by ZiLOG, deliver to ZiLOG on the Final Closing Date any
        instruments of assignment as may be necessary or appropriate to transfer
        title in all of the Option Shares to ZiLOG.

    e.  There has been no transfer of any significant asset of Qualcore, VIP or
        Qualcore India over the past twelve (12) months, and there shall be no
        such transfer prior to the Final Closing Date, except as may have
        occurred or occurs in the ordinary course of such entity's business.

    f.  Qualcore, VIP and Qualcore India have performed and shall continue to
        perform all obligations they are required to perform under any and all
        agreements which they may have at any time with any third parties; and
        neither Qualcore, VIP or Qualcore India is or will be in default under
        the terms and conditions of any agreements it may, at any time, have
        with any third parties.

    g.  Qualcore is a corporation duly organized, validly existing, and in good
        standing under the laws of Delaware, and has all necessary corporate
        powers to own its properties and to operate its business as now owned
        and operated by it. Neither the ownership of its properties nor the
        nature of its business requires Qualcore to be qualified to do business
        in any jurisdiction other than Delaware.

    h.  VIP is a corporation duly organized, validly existing, and in good
        standing under the laws of California, and has all necessary corporate
        powers to own its properties and to operate its business as now owned
        and operated by it. Neither the ownership of its properties nor the
        nature of its business requires VIP to be qualified to do business in
        any jurisdiction other than California.

    i.  Qualcore India is a corporation duly organized, validly existing, and in
        good standing under the laws of Hyderabad, India, and has all necessary
        corporate powers to own its properties and to operate its business as
        now owned and operated by it. Neither the ownership of its properties
        nor the nature of its business requires Qualcore India to be qualified
        to do business in any jurisdiction other than in Hyderabad, India.

    j.  Qualcore, VIP and Qualcore India each owns or possesses sufficient legal
        rights to all patents, patent applications, trademarks, service marks,
        trade names, copyrights, trade secrets, information and other
        proprietary rights and processes necessary for its business as now
        conducted and as proposed to be conducted (collectively, the
        "Intellectual Property"), without any infringement of the rights of
        others. Except as set forth in a separate written document delivered by
        Qualcore to ZiLOG, there are no outstanding options, licenses or
        agreements of any kind relating to the foregoing, nor is the Company
        bound by or a party to any options, licenses or agreements of any kind
        with respect to the patents, trademarks, service marks, trade names,
        copyrights, trade secrets, licenses, information and other proprietary
        rights and processes of any other person or

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        entity other than such licenses or agreements arising from the purchase
        of "off the shelf" or standard products. Neither Qualcore, VIP nor
        Qualcore India has received any communications alleging that any of them
        have violated or, by conducting its business as proposed, would violate
        any of the patents, trademarks, service marks, trade names, copyrights,
        trade secrets or other proprietary or intellectual property rights of
        any other person or entity. Neither Qualcore, VIP nor Qualcore India is
        aware that any of its employees is obligated under any contract
        (including licenses, covenants or commitments of any nature) or other
        agreement, or subject to any judgment, decree or order of any court or
        administrative agency, that would interfere with their duties to their
        employer or that would conflict with their employer's business as
        proposed to be conducted. Neither the execution nor delivery of this
        Agreement, nor the carrying on of the business of its employer by the
        employees of Qualcore, VIP or Qualcore India, nor the conduct of
        Qualcore's, VIP's or Qualcore India's business as proposed, will
        conflict with or result in a breach of the terms, conditions or
        provisions of, or constitute a default under, any contract, covenant or
        instrument under which any employee is now obligated. It is not
        currently, nor will it be in the future, necessary to utilize any
        inventions, trade secrets or proprietary information of any employees of
        Qualcore, VIP or Qualcore India made prior to their employment by
        Qualcore, VIP and/or Qualcore India, except for inventions, trade
        secrets or proprietary information that have been assigned to the
        respective employer.

    k.  Qualcore is the sole owner of all equity interests outstanding in VIP
        and in Qualcore India, free and clear of any and all liabilities,
        claims, liens or encumbrances of any kind, and no person or entity has
        any options, warrants or any other rights to acquire any equity interest
        in either VIP or Qualcore India.

    l.  Qualcore, VIP and Qualcore India has supplied copies of all agreements
        which any of them have entered into over the past four (4) years (the
        "Contracts"), and such Contracts are full and complete copies of all
        such agreements.

    m.  Attached hereto as Exhibit "I" are copies of all of the financial
        statements, tax returns and other financial reports or tax filings from
        Qualcore, VIP and Qualcore India for the past three (3) years (the
        "Financial Statements"). All Financial Statements supplied hereunder are
        true and correct, fully and accurately report all financial transactions
        of the respective entity to which it relates; are prepared in accordance
        with generally accepted accounting principals except as may be
        specifically noted thereon; and such Financial Statements do not fail to
        state any material fact which would cause such Financial Statements not
        to be misleading as presented.

    n.  All technology, know-how and other intellectual property owned by, used
        by or delivered or made available to third parties by Qualcore, VIP or
        Qualcore India were developed by or for Qualcore, VIP or Qualcore India;
        do not make use of or incorporate in any way any intellectual property
        rights belonging to any third party; and do not infringe on the patent
        rights, copyrights, trade secret rights or other intellectual property
        rights of any third party.

                                      -8-
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    o.  Qualcore, VIP and Qualcore India are the sole and exclusive owners of
        all technology, know-how and other intellectual property used by any of
        them in their respective businesses; and no transfer of any of the
        foregoing has been made by any of them within the past twelve (12)
        months.

    p.  Attached hereto as Exhibit "J" is a listing of all employees of
        Qualcore, VIP and Qualcore India which devote substantially all of their
        time to the business affairs of their respective employer. All of such
        employees have been paid all compensation due to them as a result of
        their employment with their respective employer except for any accrued
        vacation duly reflected on the Financial Statements of such employees'
        employer including, without limitation, wages, benefits, bonuses and
        profit-sharing, and all requirements of law concerning benefit plans
        including, without limitation, the requirements imposed by any United
        States or state laws including, without limitation, the Employee
        Retirement and Income Security Act ("ERISA") and all requirements
        imposed by any Indian or Hyderabad laws, have been complied with. There
        are no collective bargaining agreements in force or effect concerning
        such employees, there are no threatened labor disputes by such
        employees, and there are no unfunded vested benefits under any
        retirement plan maintained by any of these entities.

    q.  Qualcore, VIP and Qualcore India shall continue to maintain in full
        force and effect through the Final Closing Date all existing insurance
        policies currently being maintained by such entities including, without
        limitation, any insurance policies covering any assets owned by any of
        them, any comprehensive general liability policies, and any worker's
        compensation insurance. Each of them shall, at all times prior to the
        Final Closing Date, pay all premiums which become due prior to the
        latest date on which failure to pay such premiums would result in
        cancellation of such policies.

    r.  The consummation of the transactions contemplated by this agreement will
        not result in or constitute any of the following: (1) a breach of any
        term or provision of this Agreement; (2) a default or an event that,
        with notice or lapse of time or both, would be a default, breach or
        violation of the articles of incorporation or bylaws of Qualcore, VIP or
        Qualcore India, or any lease, license, promissory note, conditional
        sales contract, commitment, employee plan, indenture, mortgage, deed of
        trust or other agreement, instrument or arrangement to which Qualcore,
        VIP, Qualcore India, Gude or the Remaining Shareholders is a party or by
        which any of them, or the property of any of them, is bound, or which
        may result in the creation or imposition of any lien, charge or
        encumbrance on any of the properties of any of them.

    s.  Qualcore, VIP, Qualcore India, Gude and the Remaining Shareholders each
        has the right, power, legal capacity, and authority to enter into and
        perform its obligations under this agreement, and no approvals or
        consents of any persons are necessary in connection with it. The
        execution and delivery of this agreement by Qualcore, VIP, Qualcore
        India, Gude and the Remaining Shareholders has been

                                      -9-
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        duly authorized by all necessary corporate action on the part of the
        respective party.

    t.  Qualcore, VIP and Qualcore India shall each use its best efforts to
        preserve its business organizations intact, to keep available to each of
        them its present officers and employees, and to preserve its present
        relationships with suppliers, customers, clients and others having
        business relationships with them.

    u.  All tax returns of any kind or character which are required to be filed
        by Qualcore, VIP and Qualcore India have been accurately prepared and
        filed, as required by law, and all taxes of any kind or character
        including, without limitation, all federal, state and local employment
        taxes, sales taxes, excise taxes, and income taxes, together with any
        taxes required to be withheld from employees and/or customers and
        required to be remitted to the relevant taxing authorities, have been
        withheld and paid as required. Qualcore, VIP and Qualcore India further
        agree that they will accurately prepare and file all tax returns of any
        kind or character required to be filed following the date hereof, and
        will pay all taxes of any kind or character required to be paid by any
        of them following the date hereof.

    v.  None of the representations and warranties made by Qualcore, VIP,
        Qualcore India, Gude or the Remaining Shareholders contains or will
        contain any untrue statement of a material fact, or omits to state a
        material fact necessary to make the statements made, in light of the
        circumstances under which they were made, not misleading.

    w.  The authorized number of shares of common stock of Qualcore are Twenty
        Million (20,000,000) shares; the authorized number of common stock of
        VIP are Fifteen Million (15,000,000) shares, and the authorized number
        of common stock of Qualcore India are Six Million (6,000,000) shares,
        and no other authorized equity exists in any of these entities. The
        total number of shares issued by Qualcore are Fourteen Million One
        Hundred Thousand (14,100,000) shares of common stock, plus it is
        anticipated that employees of Qualcore and/or its subsidiaries will be
        granted employee stock options and/or employee stock grants giving such
        employees, collectively, the option to acquire and/or grant of no more
        than Nine Hundred Thousand (900,000) shares of common stock in Qualcore
        to be proposed by the officers of Qualcore for approval by the board of
        directors and, if required in the opinion of counsel for Qualcore,
        shareholders of Qualcore; the total number of shares issued by VIP are
        Nine Million One Hundred Twenty-three Thousand (9,123,000) shares of
        common stock; and the total number of shares issued by Qualcore India
        are One Million Three Hundred Seventy-five Thousand Six Hundred
        (1,375,600) shares of common stock, and no other equity shares are
        issued in any of the foregoing entities. It is anticipated that, within
        the next several months, Qualcore India will issue an additional Two
        Million One Hundred Seventy-five Thousand (2,175,000) shares of its
        common stock to Qualcore to facilitate capitalization of Qualcore India.
        All issued and outstanding shares of stock in each of these entities (i)
        have been duly authorized and validly issued to Gude and/or the
        Remaining Shareholders as listed on Exhibit "A" attached hereto;

                                     -10-
<PAGE>

        (ii) are fully paid and nonassessable, and (iii) were issued in
        compliance with all applicable state and federal laws concerning the
        issuance of securities. Attached hereto as Exhibits K, L and M,
        respectively, are full and complete copies of the Articles of
        Incorporation and other organizational documents of Qualcore, VIP and
        Qualcore India; and attached hereto as Exhibits N, O and P,
        respectively, are full and complete copies of the bylaws of Qualcore,
        VIP and Qualcore India. The rights, preferences, privileges and
        restrictions of the shares are as stated in the articles of
        incorporation and/or bylaws of the respective entity issuing the same.
        There are no outstanding options, warrants, rights (including conversion
        or preemptive rights and rights of first refusal), proxy or shareholder
        agreements, or agreements of any kind for the purchase or acquisition
        from any of the entities listed above, or from Gude or the Remaining
        Shareholders, of any of any of the foregoing entities' securities. When
        the Option Shares are transferred to ZiLOG in accordance with the
        provisions of this Agreement, the Option Shares will be validly issued,
        fully paid and nonassessable, and will be free of any liens or
        encumbrances; provided, however, that the Option Shares may be subject
        to restrictions on transfer under state and/or federal securities laws
        or as otherwise required by such laws at the time a transfer is
        proposed.

    x.  To the knowledge of Qualcore, VIP, Qualcore India, Gude and the
        Remaining Shareholders, there is no action, suit, proceeding or
        investigation pending or to the knowledge of Qualcore, VIP, Qualcore
        India, Gude or the Remaining Shareholders, currently threatened against
        Qualcore, VIP, Qualcore India, for any claim whatsoever; or pending
        against Gude or the Remaining Shareholders which involve the Option
        Shares; or that questions the validity of this Agreement or the right of
        the parties to enter into any of such the agreements contemplated
        hereby; or to consummate the transactions contemplated hereby; or which
        might result, either individually or in the aggregate, in any material
        adverse change in the assets, condition, affairs or prospects of
        Qualcore, VIP or Qualcore India, financially or otherwise, or any change
        in the current equity ownership of Qualcore, VIP or Qualcore India; nor
        are any of the foregoing aware that there is any basis for any such
        claims. The foregoing includes, without limitation, actions pending or
        threatened (or any basis therefor) involving the prior employment of any
        employees or officers of Qualcore, VIP or Qualcore India, their use in
        connection with their respective employer's business of any information
        or techniques allegedly proprietary to any of their former employers, or
        their obligations under any agreements with prior employers. None of the
        parties hereto is a party or subject to the provisions of any order,
        writ, injunction, judgment or decree of any court or government agency
        or instrumentality. To the best knowledge of Qualcore, VIP, Qualcore
        India, Gude and the Remaining Shareholders, there is no action, suit,
        proceeding or investigation by or against Qualcore, VIP or Qualcore
        India currently pending, which any of them intends to initiate, or which
        any of them contemplate initiating.

    y.  Neither Qualcore, VIP or Qualcore India is, to the best knowledge of
        Qualcore, VIP, Qualcore India, Gude and the Remaining Shareholders, in
        violation of any applicable statute, rule, regulation, order or
        restriction of any domestic or foreign

                                     -11-
<PAGE>

        government or any instrumentality or agency thereof in respect of the
        conduct of its business or the ownership of its properties. No
        governmental orders, permissions, consents, approvals or authorizations
        are required to be obtained and no registrations or declarations are
        required to be filed in connection with the execution and delivery of
        this Agreement and the transfer of the Option Shares, except such as has
        been duly and validly obtained or filed, or with respect to any filings
        that must be made after the Final Closing Date, as will be filed in a
        timely manner. Qualcore, VIP and Qualcore India have all franchises,
        permits, licenses and any similar authority necessary for the conduct of
        their respective businesses as now being conducted by them, and believes
        it can obtain, without undue burden or expense, any similar authority
        for the conduct of its business as planned to be conducted.

    z.  Neither Qualcore, VIP nor Qualcore India is in violation of any
        applicable statute, law or regulation relating to the environment or
        occupational health and safety, and no material expenditures are or will
        be required in order to comply with any such existing statute, law or
        regulation.

   aa.  This Agreement, the Exhibits hereto, and all other documents delivered
        to ZiLOG or its attorneys or agents in connection herewith or with the
        transactions contemplated hereby are complete and, except as
        specifically stated thereon, have not been amended, rescinded or
        modified in any manner; and do not contain any untrue statement of a
        material fact nor omit to state a material fact necessary in order to
        make the statements contained herein or therein not misleading.

   bb.  There are no liabilities of any kind or character, whether contingent or
        liquid, known or unknown, which exist and which are not fully disclosed
        on the Financial Statements.

   cc.  All representations and warranties of Qualcore, VIP, Qualcore India,
        Gude and the Remaining Shareholders set forth herein shall also be true
        and correct on the date hereof, on the First Closing Date, on the Second
        Closing Date and on the Final Closing Date as if made on each such date.

   dd.  Qualcore, VIP, Qualcore India, Gude and each of the Remaining
        Shareholders shall, jointly and severally, indemnify and hold ZiLOG
        harmless from and against any and all claims, liabilities, causes of
        action, damages, taxes, penalties, interest, costs and expenses
        (including, without limitation, attorneys' fees) which may be incurred
        or sustained by ZiLOG as the result of any inaccuracy or breach of any
        of the representations, warranties, agreements or covenants contained
        herein. The obligations of Gude and the Remaining Shareholders under
        this subparagraph shall survive the First Closing Date, the Second
        Closing Date and the Final Closing Date, and shall survive the transfer
        of the Option Shares to ZiLOG. The liability of Gude and the Remaining
        Shareholders hereunder shall be primary to the liability of Qualcore,
        VIP and Qualcore India, and Gude and the Remaining Shareholders hereby
        waive any and all rights any of them may have to claim contribution or
        reimbursement of any amounts required to be paid by any of them

                                     -12-
<PAGE>

        hereunder from Qualcore, VIP or Qualcore India under any contract,
        document, agreement, or any theory of law or equity. Notwithstanding the
        foregoing, however, the maximum individual liability of Gude and of each
        of the Remaining Shareholders to ZiLOG on account of this subparagraph
        (dd) shall not exceed the total of the following: (i) the Purchase Price
        allocated to each of them for the purchase of their respective shares
        hereunder; plus (ii) the value of any restricted stock (valued at the
        date of vesting), or cash paid in lieu thereof, which is paid or becomes
        payable to Gude and/or the Remaining Shareholders under and pursuant to
        an employment agreement executed between Gude and/or the Remaining
        Shareholders and Qualcore, VIP, Qualcore India or ZiLOG.

10.  Representations and Warranties of ZiLOG:  ZiLOG hereby represents and
     ---------------------------------------
     warrants that it is a corporation duly organized, validly existing, and in
     good standing under the laws of Delaware, and has all necessary corporate
     powers to own its properties and to operate its business as now owned and
     operated by it; that it has the right, power, legal capacity, and authority
     to enter into and perform its obligations under this agreement, and no
     approvals or consents of any persons other than ZiLOG and its board of
     directors are necessary in connection with it. ZiLOG further represents and
     warrants that it will maintain sufficient common stock reserves to
     accomplish the issuance of the shares required to be issued by it pursuant
     hereto. The execution and delivery of this agreement by ZiLOG has been duly
     authorized by all necessary corporate action on the part of ZiLOG.

11.  ZiLOG's Contingencies:  The closing of the Initial Stock Acquisition, and
     ---------------------
     all of ZiLOG's other obligations under and pursuant to this Agreement
     including, without limitation, any obligations arising on the First Closing
     Date, the Second Closing Date, the Final Closing Date, or following the
     lapse of the option granted hereunder, are contingent upon all of the
     following contingencies being satisfied or waived in writing by ZiLOG
     within the time periods set forth below:

     a.  ZiLOG shall have the opportunity to inspect, test, verify and otherwise
         validate all assets held by Qualcore, VIP and Qualcore India to such
         extent as ZiLOG, in its sole and absolute discretion, determines is
         necessary or appropriate including, without limitation, interviewing
         the employees, customers, clients, suppliers, landlords and others
         having business relationships with Qualcore, VIP and Qualcore India.
         Qualcore, VIP and Qualcore India agree to cooperate with ZiLOG in
         conducting its examinations hereunder, and shall make available
         personnel who are qualified to respond to questions which may be raised
         by ZiLOG and/or its employees or consultants. The determination of
         whether or not this contingency is satisfied shall be made by ZiLOG in
         its sole and absolute discretion. In the event ZiLOG does not give
         written notice to Qualcore, Gude and the Remaining Shareholders of the
         failure of this contingency by March 13, 2000, then this contingency
         shall conclusively be considered satisfied or waived by ZiLOG.

     b.  ZiLOG shall have the opportunity to review and inspect all Financial
         Statements, and any other Contracts, agreements, leases or other
         documents related to Qualcore, VIP and Qualcore India or to which any
         of them may be a party, and

                                     -13-
<PAGE>

         any underlying documents or supporting documents related thereto, to
         the extent ZiLOG may, in its sole and absolute discretion, determine.
         Qualcore, VIP and Qualcore India agree to cooperate with ZiLOG and
         provide all documents requested by ZiLOG which any of them may have or
         can reasonably acquire. To the extent Qualcore, VIP, Qualcore India,
         Gude and/or the Remaining Shareholders are aware that documents exist
         but they do not have possession or cannot acquire possession, then such
         person or entity shall provide a listing of such documents to ZiLOG
         together with the person or persons who have or may have possession
         thereof. The determination of whether or not this contingency is
         satisfied shall be made by ZiLOG in its sole and absolute discretion.
         In the event ZiLOG does not give written notice to Qualcore, Gude and
         the Remaining Shareholders of the failure of this contingency by March
         13, 2000, then this contingency shall conclusively be considered
         satisfied or waived by ZiLOG.

     c.  ZiLOG shall conduct an all inclusive feasibility study concerning the
         acquisition of the Option Shares including, without limitation, the
         underlying technology, intellectual property, business plans, and
         technological expertise to ascertain whether the Initial Stock
         Acquisition and/or the acquisition of the Option Shares is suited to
         ZiLOG's intended plans and future development. The determination of
         whether or not this contingency is satisfied shall be made by ZiLOG in
         its sole and absolute discretion. If ZiLOG does not give written notice
         to Qualcore, Gude and the Remaining Shareholders of the failure of this
         condition by March 13, 2000, then this contingency shall conclusively
         be considered satisfied or waived by ZiLOG.

     d.  Gude and MLN Acharyulu shall have delivered to ZiLOG an executed
         Covenant Not to Compete in the form attached hereto as Exhibit "Q".

     e.  Gude and each of the Remaining Shareholders who are to receive an
         allocation of Restricted Stock under and pursuant to their employment
         arrangement with Qualcore, VIP and/or Qualcore India shall have
         delivered to ZiLOG executed employment agreements in a form approved by
         ZiLOG. The form of the Employment Agreement to be executed by Gude
         shall be in the form attached hereto as Exhibit "R", and the form of
         agreement to be executed by all remaining employees shall be as agreed,
         but shall be no less restrictive than the terms contained on Exhibit
         "R".

     f.  ZiLOG shall have received an opinion from the attorney for Qualcore
         Group, VIP and Qualcore India in the form attached hereto as Exhibit
         "S".

     g.  All representations and warranties of Qualcore, VIP, Qualcore India,
         Gude and the Remaining Shareholders shall be true, correct and complete
         in all material respects as of the First Closing Date, the Second
         Closing Date and the Final Closing Date except for those which, by
         their nature, shall change over time, and with respect to those which
         change over time, any change (either singularly or in the aggregate)
         does not materially adversely affect either Qualcore, VIP, Qualcore
         India, Gude or the Remaining Shareholders.

                                     -14-
<PAGE>

12.  Gude's and the Remaining Shareholder's Contingencies: The closing of the
     ----------------------------------------------------
     transactions contemplated by this Agreement, and Gude's and the Remaining
     Shareholder's obligations under and pursuant to this Agreement, are
     contingent upon all representations and warranties made by ZiLOG hereunder
     being true, correct and complete in all material respects as of the First
     Closing Date, the Second Closing Date and the Final Closing Date.

13.  Costs of Sale: Gude and the Remaining Shareholders shall be responsible for
     -------------
     any and all taxes, duties or assessments arising out of the Initial Stock
     Acquisition and arising out of the sale of the Option Shares under and
     pursuant to this Agreement. Each party shall be responsible for its own
     attorneys' fees, accounting fees, consulting fees and all other costs
     incurred by such party in connection with this Agreement and the
     implementation hereof.

14.  Closing Dates:  The First Closing Date shall be the date of execution of
     -------------
     this Agreement by all parties hereto (the "First Closing Date"); and the
     Second Closing Date shall be April 15, 2000 (the "Second Closing Date").
     The closing of all remaining transactions contemplated hereby shall occur
     within fifteen (15) business days following the delivery of the Exercise
     Notice, or such other date as may be mutually agreed in writing by all of
     the parties hereto (the "Final Closing Date"), but in no event later than
     July 30, 2001.

15.  Obligations After Closing:  Qualcore, VIP, Qualcore India, Gude, the
     -------------------------
     Remaining Shareholders and ZiLOG shall have the following obligations which
     shall survive the First Closing Date, the Second Closing Date and the Final
     Closing Date:

     a.  Gude and the Remaining Shareholders, jointly and severally, shall
         indemnify, defend and hold ZiLOG harmless from and against any and all
         claims, taxes, demands, losses, costs, expenses, obligations,
         liabilities, damages, recoveries and deficiencies, including interest,
         penalties, and reasonable attorneys' fees that it shall incur or suffer
         and which arise, result from, or relate to: (i) any breach of this
         Agreement by Qualcore, VIP, Qualcore India, Gude or the Remaining
         Shareholders; (ii) any inaccuracy in or breach of any representations,
         warranties, covenants or agreements in this Agreement by Qualcore, VIP,
         Qualcore India, Gude or the Remaining Shareholders; or (iii) the
         business of Qualcore, VIP or Qualcore India which arises or is
         attributable to events occurring prior to the Final Closing Date. The
         liability of Gude and the Remaining Shareholders hereunder shall be
         primary to the liability of Qualcore, VIP and Qualcore India, and Gude
         and the Remaining Shareholders hereby waive any and all rights any of
         them may have to claim contribution or reimbursement of any amounts
         required to be paid by any of them hereunder from Qualcore, VIP or
         Qualcore India under any contract, document, agreement, or any theory
         of law or equity. The obligations of Gude and the Remaining
         Shareholders under this paragraph shall survive the First Closing Date,
         the Second Closing Date and the Final Closing Date and the transfer of
         the Option Shares to ZiLOG hereunder.

     b.  ZiLOG shall indemnify, defend and hold Gude and the Remaining
         Shareholders harmless from and against any and all claims, taxes,
         demands, losses, costs,

                                     -15-
<PAGE>

         expenses, obligations, liabilities, damages, recoveries and
         deficiencies, including interest, penalties, and reasonable attorneys'
         fees that they shall incur or suffer and which arise, result from, or
         relate to: (i) any breach of this Agreement by ZiLOG; or (ii) any
         inaccuracy in or breach of any representations, warranties, covenants
         or agreements in this Agreement by ZiLOG. The obligations of ZiLOG
         under this paragraph shall survive the First Closing Date, the Second
         Closing Date and the Final Closing Date.

16.  Failure to Exercise Option:  In the event ZiLOG shall fail to exercise the
     --------------------------
     option to acquire the Option Shares pursuant hereto on or before the
     earlier of: (i) June 30, 2001, or (ii) within thirty (30) days following
     ZiLOG's IPO, then the option to acquire the Option Shares described in
     Paragraph 2, above, shall lapse, and all option consideration paid by ZiLOG
     shall become nonrefundable. Notwithstanding the foregoing, however, upon
     such lapse, ZiLOG shall purchase from Gude, and Gude shall sell to ZiLOG,
     One Million Six Hundred Forty-two Thousand Eighteen (1,642,018) shares of
     common stock in Qualcore for a cash purchase price of Four Million Seven
     Hundred Twenty-five Thousand Three Hundred Twenty Dollars ($4,725,320), the
     closing date of which shall be thirty (30) days following the date the
     option to acquire the shares of stock in Qualcore lapses, or such other
     date as may be mutually agreed in writing, but in no event later than July
     30, 2001. In the event the option lapses, and ZiLOG is obligated to acquire
     the shares set forth herein, then, for purposes of this Agreement, the
     closing date of such acquisition shall be the Final Closing Date.

17.  Acknowledgment of Assignment:  ZiLOG acknowledges that Gude is required to
     ----------------------------
     assign the proceeds payable to him hereunder to DII as additional security
     for his secured promissory note to DII under the terms of his separate
     agreement with DII. Gude shall be permitted to make this assignment to DII,
     and ZiLOG agrees to pay any proceeds payable hereunder to Gude directly to
     DII upon such assignment, which payment shall in all events be in complete
     satisfaction of ZiLOG's obligation to pay the foregoing proceeds to Gude;
     and upon such payment, Gude shall take all necessary action to transfer to
     ZiLOG any Option Shares held by DII as security for its loan. Any payment
     by ZiLOG shall be concurrent with and contingent upon the transfer by DII
     of any Option Shares DII is holding which are being purchased by ZiLOG on
     account of the payment being made hereunder.

18.  Public Announcements:  This Agreement is to be maintained in strict
     --------------------
     confidence, and neither party shall issue any public announcement
     concerning this transaction without the approval of the other until after
     the Final Closing Date. Notwithstanding the foregoing, however, in the
     event a disclosure of this transaction is required under securities or
     other laws of the United States of America or any state thereof, or under
     the laws of India, or any state or province thereof, then the terms of this
     Agreement may be announced to the extent required to comply with any such
     disclosure or other requirements.

19.  Notices:  All notices, requests, demands and other communications under
     -------
     this Agreement shall be in writing and shall be deemed to have been duly
     given on the date of service, if served personally on the party to whom
     notice is to be given, or on the second day after mailing, if mailed to the
     party to whom notice is to be given, by first class mail,

                                     -16-
<PAGE>

    registered or certified, postage prepaid, or by express courier such as
    Federal Express, DHL, United Parcel Service or similar types of carrier, and
    properly addressed as follows:

    ZiLOG                    910 E. Hamilton Ave., Suite 110
                             Campbell, CA  95008
                             Attention:  Richard R. Pickard,
                             Senior Vice President and General Counsel

    Qualcore                 1095 East Duane Ave., Suite 211
                             Sunnyvale, CA  94086
                             Attention:  Dasaradha Gude

    VIP                      1095 East Duane Ave., Suite 211
                             Sunnyvale, CA  94086
                             Attention:  Dasaradha Gude

    Qualcore India           1095 East Duane Ave., Suite 211
                             Sunnyvale, CA  94086
                             Attention:  Dasaradha Gude

    Gude                     1095 East Duane Ave., Suite 211
                             Sunnyvale, CA  94086

    Remaining Shareholders   See Addresses on Exhibit A

    Any party may change its address for purposes of this paragraph by giving
    the other parties written notice of the new address in the manner set forth
    above.

20. Commissions and Fees: Gude and the Remaining Shareholders shall pay any and
    --------------------
    all costs, fees and expenses associated with any brokers, agents, attorneys,
    accountants or other advisors or agents hired by or representing either
    Qualcore, VIP, Qualcore India, Gude or the Remaining Shareholders other than
    the fees and costs payable to current legal counsel and accountants for
    Qualcore, VIP and Qualcore India incurred in the ordinary course of business
    or in connection with the transactions contemplated by this Agreement, which
    shall be paid by Qualcore, VIP and/or Qualcore India; and ZiLOG shall pay
    any and all costs, fees and expenses associated with any brokers, agents,
    attorneys, accountants or other advisors or agents hired by or representing
    ZiLOG. ZiLOG, Gude and the Remaining Shareholders each agree to defend and
    to indemnify and hold each other and Qualcore, VIP and Qualcore India free
    and harmless from and against any and all claims, demands, causes of action
    or judgments respecting payment of any brokers' commissions or other fees of
    any advisors representing the indemnifying party, including attorneys' fees
    and costs arising from a breach of the foregoing obligations. The liability
    of Gude, the Remaining Shareholders and ZiLOG hereunder shall be primary,
    and Gude, the Remaining Shareholders and ZiLOG hereby waive any and all
    rights any of them may have to claim contribution or reimbursement of any
    amounts required to be paid by any of them hereunder from Qualcore, VIP or
    Qualcore India under any contract, document, agreement, or any theory of law
    or equity.

                                     -17-
<PAGE>

21.  Attorneys' Fees:  If any party to this Agreement becomes involved in any
     ---------------
     litigation or other proceeding concerning the enforcement or interpretation
     of this Agreement, the losing party shall be liable for the prevailing
     party's reasonable attorneys' fees and court costs actually incurred in
     such litigation, and in any enforcement or appeal of any judgment rendered
     therein.

22.  Arbitration of Disputes:  Any dispute, claim or controversy arising between
     -----------------------
     ZiLOG, Qualcore, VIP, Qualcore India, Gude or the Remaining Shareholders
     regarding this Agreement or any ancillary agreement executed concurrently
     herewith shall be settled by arbitration in accordance with the rules of
     the American Arbitration Association. Proper service of process for such
     arbitration shall be by U.S. Postal Service or by Federal Express, DHL,
     United Parcel Service or similar types of carriers. The arbitration shall
     be held in Santa Clara County, California before one arbitrator who shall
     follow the substantive law of California in deciding the arbitration. Pre-
     hearing discovery shall be allowed of all evidence and testimony to be
     presented at the hearing. The arbitrators' decision shall be final and
     binding upon the parties. The arbitrators shall render their decision in
     writing, explaining the legal and factual basis for decision as to each of
     the principal controverted issues. An award shall be deemed in excess of
     the powers granted to the arbitrators if it (1) does not contain the legal
     grounds therefor; or (2) if it contains an error of law on the face of the
     award that causes substantial injustice. In any petition to confirm or
     vacate the arbitrator's decision, an error of law appearing on the face of
     the award that causes substantial injustice shall constitute grounds to
     vacate the award. A judgment upon any award may be entered in a court of
     competent jurisdiction.

23.  Joint and Several Liability:  The obligations of Qualcore, VIP, Qualcore
     ---------------------------
     India, Gude and the Remaining Shareholders under this Agreement are joint
     and several, and each shall be fully responsible and liable for any and all
     obligations of any of them hereunder. ZiLOG shall have the right to proceed
     against any of the foregoing; provided, however, that if ZiLOG proceeds
     against Gude and/or the Remaining Shareholders, in full or in part, Gude
     and the Remaining Shareholders hereby waive any and all rights any of them
     may have to claim contribution or reimbursement of any amounts required to
     be paid by any of them hereunder from Qualcore, VIP or Qualcore India under
     any contract, document, agreement, or any theory of law or equity.
     Notwithstanding the foregoing, however, the maximum individual liability of
     Gude and of each of the Remaining Shareholders to ZiLOG on account of this
     paragraph shall not exceed the total of the following: (i) the Purchase
     Price allocated to each of them for the purchase of their respective shares
     hereunder; plus (ii) the value of any restricted stock (valued at the date
     of vesting), or cash paid in lieu thereof, which is paid or becomes payable
     to Gude and/or the Remaining Shareholders under and pursuant to an
     employment agreement executed between Gude and/or the Remaining
     Shareholders and Qualcore, VIP, Qualcore India or ZiLOG.

24.  Confidentiality Obligations:  ZiLOG acknowledges that, in the course of
     ---------------------------
     conducting its due diligence, it has or will receive certain information
     about Qualcore, VIP and/or Qualcore India which is the confidential
     information of Qualcore, VIP and/or Qualcore India. For purposes of this
     Agreement, the term "Confidential Information" means any

                                     -18-
<PAGE>

     financial information, technical information or employment information
     received by ZiLOG from Qualcore, VIP, Qualcore India, Gude and/or the
     Remaining Shareholders (a "Discloser") other than: (i) any information
     which ZiLOG had in its possession through lawful means prior to disclosure
     by Discloser; (ii) any information which is or becomes publicly known
     through no breach of this Agreement by ZiLOG; (iii) any information which
     is furnished to others by Discloser without restriction on disclosure; (iv)
     any information which is hereafter furnished to ZiLOG by a third party
     without restriction on disclosure; or (v) information which is
     independently developed by ZiLOG. For a period of three (3) years following
     the execution date hereof, ZiLOG agrees that it shall not disclose
     Confidential Information to any person, or use any Confidential Information
     except as contemplated by this Agreement. In addition, until June 30, 2001,
     ZiLOG agrees that it will not hire any employees of Qualcore, VIP or
     Qualcore India as an employee of ZiLOG or any entity affiliated with ZiLOG.
     Notwithstanding the foregoing, however, the restrictions hereunder shall
     lapse upon ZiLOG's exercise of the option described herein.

25.  Miscellaneous Provisions:
     ------------------------

     a.  Time of Essence:  Time is of the essence of each provision of this
         ---------------
         Agreement.

     b.  Successors and Assigns: This Agreement shall be binding on and inure to
         ----------------------
         the benefit of the parties and their respective successors and assigns.

     c.  Exhibits: All Exhibits referred to are attached hereto and incorporated
         --------
         herein by this reference.

     d.  Governing Law:  This Agreement shall be construed and interpreted in
         -------------
         accordance with the laws of the State of California.

     e.  Integrated Agreement: Modification: This instrument contains the entire
         --------------------
         agreement of the parties and cannot be amended or modified except by a
         written Agreement, executed by each of the parties hereto.

     f.  Captions: The captions of this Agreement are for convenience purposes
         --------
         only, and shall have no effect on its construction or interpretation.

     g.  Singular and Plural; Gender:  When required by the context of this
         ---------------------------
         Agreement, the singular shall include the plural, and the masculine
         shall include the feminine, and the impersonal pronoun "it" shall refer
         to either of the above, a corporation, partnership, joint venture, or
         other entity, regardless of number or gender.

     h.  Severability:  The unenforceability, invalidity, or illegality of any
         ------------
         provision shall not render the other provisions unenforceable, invalid,
         or illegal.

     i.  Waiver: No consent or waiver, express or implied, by either party to
         ------
         this Contract of any breach or default by the other in the performance
         of any obligation hereunder shall be deemed or construed to be a
         consent to or waiver of any other

                                     -19-
<PAGE>

    breach or default by such party hereunder. Failure on the part of any party
    hereto to complain of any act or failure to act of the other party or to
    declare the other party in default hereunder, irrespective of how long such
    failure continues, shall not constitute a waiver of the rights of such
    party hereunder.

j.  Execution of Documents:  The parties hereto hereby agree to execute and
    ----------------------
    deliver such further instruments, agreements, contracts and documents, as
    may be reasonably required to effectuate the stated and intended purposes of
    this Agreement.

k.  Counterparts:  This Agreement may be executed simultaneously in one (1) or
    ------------
    more counterparts, each of which shall be deemed an original, but all of
    which together shall constitute one and the same instrument.

l.  Neutral Construction:  The parties hereto agree that this Agreement will be
    --------------------
    interpreted neutrally, and that it should not be construed for or against
    any party deemed to be the drafter thereof.

    IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
    the day and year first above written.

Qualcore Group, Inc.                  ZiLOG, Inc.


By:  /s/ Dasaradha R. Gude            By: /s/ W. Norman Win
   ----------------------------          --------------------------
Title:    C.E.O.                      Title:  SVP
      -------------------------             -----------------------


Virtual IP Group, Inc.


By:  /s/ Dasaradha R. Gude
   ----------------------------
Title:    C.E.O.
      -------------------------


Qualcore Logic Private Limited


By:  /s/ Dasaradha R. Gude
   ----------------------------
Title:    C.E.O.
      -------------------------


/s/ Dasaradha R. Gude
------------------------------
Dasaradha R. Gude

                                     -20-
<PAGE>

The Warren & Joyce Kao 1996 Trust


By: /s/ Warran Kao
   ----------------------------
   Warren Kao, Trustee


By: /s/ Joyce Kao
   ----------------------------
   Joyce Kao, Trustee


/s/ Joseph Hong
--------------------------
Joseph Hong


--------------------------
Rao R. Yalamanchili


/s/ Thomas Kailath
--------------------------
Thomas Kailath


/s/ Mark Kao
--------------------------
Mark Kao


/s/ Hung Ling-Chun
--------------------------
Ling-Chun Hung


/s/ Donna Buckmaster-Wilson
---------------------------
Donna Buckmaster-Wilson


Hauer Family Trust


By: /s/ Daniel Hauer
   --------------------------
   Daniel Hauer, Trustee


/s/ Lenin Anne
--------------------------
Lenin Anne


--------------------------
Ming-Kai Tsai

                                     -21-
<PAGE>

/s/ K.C. Shih
--------------------------
K.C. Shih


/s/ Thomas C. Endicott III
--------------------------
Thomas C. Endicott III


/s/ Robert Norman
--------------------------
Robert Norman

                                     -22-
<PAGE>

Qualcore Logic Private Limited

By:
   ---------------------------
Title:
      ------------------------


------------------------------
Dasardha R. Gude

The Warren & Joyce Kao 1996 Trust

By: /s/ Warren Kao,
   ---------------------------
   Warren Kao, Trustee


By: /s/ Joyce Kao, Trustee
   ---------------------------
   Joyce Kao, Trustee


---------------------------
Joseph Hong


---------------------------
Rao R. Yalamanchili


---------------------------
Thomas Kailath


---------------------------
Mark Kao


/s/ Hung Ling-Chun
---------------------------
Ling-Chun Hung


---------------------------
Donna Buckmaster-Wilson

                                     -23-
<PAGE>

                                 EXHIBIT LIST

Exhibit A          Listing of Shareholders

Exhibit B          Allocation of Purchase Price to Shareholders

Exhibit C          DII Agreement

Exhibit D          Investor Rights Agreement

Exhibit E          Option Pledge Agreement

Exhibit F          Stockholder Agreement

Exhibit G          Amended Articles for Qualcore

Exhibit H          Amended Bylaws for Qualcore

Exhibit I          Financial Statements

Exhibit J          Listing of Employees

Exhibit K          Articles of Incorporation of Qualcore Group, Inc.

Exhibit L          Articles of Incorporation of Virtual IP Group, Inc.

Exhibit M          Articles of Incorporation of Qualcore Logic Private Limited

Exhibit N          Bylaws of Qualcore Group, Inc.

Exhibit O          Bylaws of Virtual IP Group, Inc.

Exhibit P          Bylaws of Qualcore Logic Private Limited

Exhibit Q          Covenant Not to Compete

Exhibit R          Gude Employment Agreement

Exhibit S          Attorney Opinion Letter


                                     24