**Exhibit 10.2**

** **

** **

**ASSET PURCHASE AND SALE**AGREEMENT

 

 

**BY AND AMONG**

 

 

**SANMINA-SCI CORPORATION**

 

**SANMINA-SCI SYSTEMSSINGAPORE 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       |

 

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| **EXHIBITS**                                   |
|------------------------------------------------|
| ** **                                     |
| Exhibit A –Transition Services Agreement  |
| Exhibit B – Employee Secondment Agreement |
| Exhibit C – Facility Transfer Agreement   |
| Exhibit D – Supply Agreement              |

 

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**ASSET PURCHASE**AND SALE AGREEMENT

 

THIS ASSET PURCHASE AND SALE AGREEMENT (this “**Agreement**”) is made and entered into as ofDecember 23, 2005, by and among Sanmina-SCI Corporation, a Delaware corporation(“**Parent**”)**,**Sanmina-SCISystems Singapore Pte. Ltd., a company incorporated in Singapore and awholly-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 individuallyas a “**Party**” and collectively asthe “**Parties**.”

**RECITALS**

 

A.            Selleris 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 systemmanufacturing currently conducted by Seller using the Purchased Assets at theFacility, which Business will be transferred to Buyer pursuant to thisAgreement.

 

B.            Seller desires to sellto Buyer, and Buyer desires to purchase from Seller, on the terms and subjectto the conditions set forth herein, the Purchased Assets of Seller describedherein, and Seller desires Buyer to assume the Assumed Liabilities, which Buyerwould agree to assume on the terms and subject to the conditions set forthherein.

 

C.            The Board of Directorsof each of Parent, Buyer and Seller believes it is in the best interests of itsrespective corporation and shareholders that the transactions contemplatedhereby be consummated and, in furtherance thereof, has approved this Agreementand the transactions contemplated hereby.

 

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

NOW, THEREFORE, in consideration of the covenants and representationsset forth herein, and for other good and valuable consideration, the partiesagree as follows:

 

# **ARTICLE IDEFINITIONS**

 

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 theplural and vice versa).  Certain otherterms 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 directlyor indirectly, through one of more intermediaries, controls or is controlled byor is under common control with the Person specified.  For purposes of this definition, control of aPerson means the power, direct or indirect, to direct or cause the direction ofthe management and policies of such Person whether by voting power, Contract orotherwise and, in any event and without limitation of the previous sentence, anyPerson owning ten percent (10%) or more of the voting securities of anotherPerson shall be deemed to control that Person.

###  

### (c)           “**Assets**” of any Person means all assets andproperties 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 goodwillrelated thereto, operated, owned or leased by such Person, including withoutlimitation, accounts and notes receivable, chattel paper, documents,instruments, general intangibles, real estate, equipment, inventory and goods.

###  

### (d)           “**Assumed Liabilities**” has the meaning setforth in Section 2.2(b).

###  

### (e)           “**Books and Records**” of any Person means allfiles, documents, instruments, papers, books and records relating to thebusiness, operations, condition of (financial or other), results of operationsand 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 andprograms, retrieval programs, operating data and plans and environmentalstudies and plans.

###  

### (f)            “**Business Day**” shall mean a day other thanSaturday and Sunday or any day on which banks located in the Republic ofSingapore 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 Inventoriesbased on the unaudited pro forma balance sheet in respect of the Business as ofthe Closing Date, prepared in accordance with generally accepted accountingprinciples as consistently applied by Seller in Seller’s preparation of itsperiodic financial statements in each of the three quarters which precede theClosing Date (other than the omission of notes and normal reoccurringadjustments).

###  

### (h)           “**Closing Date**” means the date which is two(2) business days following the satisfaction or, if permitted pursuant to theterms of Article VII hereof, waiver of the conditions to Closing set forthin Article VII hereof, or at such other place and such other time or dateas the parties hereto shall mutually agree.

###  

### (i)            “**Closing Documents**” means all thosedocuments, deeds and other instruments which are required by the DefinitiveAgreements or by operation of law for the consummation of the purchase and saleof the Purchased Assets pursuant to this Agreement and the Ancillary Agreementsand the other transactions contemplated thereby (the “**Transaction**”).

 

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### (j)            “**Closing Net Asset Value**” shall mean thefollowing:

###  

#### (i)            anamount equivalent to the standard cost of Inventories as of November 4, 2005 onthe books of Seller on the Closing Date and, to the extent Inventories did nothave standard cost on the books of Seller as of November 4, 2005, standard costas of the Closing Date; **plus**

####  

#### (ii)           anamount equivalent to the net book value of Fixed Assets on the books of Selleras of the Closing Date.

####  

### (k)           “**Critical Employees**” shall mean the mean theEmployees identified on Schedule 5.7 hereto.

###  

### (l)            “**Definitive Agreements**” means thisAgreement, the Ancillary Agreements and the other the binding, detailed anddefinitive agreements to be executed between the Parties in respect of theTransaction.

###  

### (m)          “**Employee**” means each employee or consultantof Seller, including without limitation Transferred Employees, who is employedin connection with the Business.

###  

### (n)           “**Employee Secondment Agreement**” shall meanthat certain agreement substantially in the form attached as Exhibit Bhereto pursuant to which certain employees of Seller engaged in the Businesswill be seconded to Buyer.

###  

### (o)           “**EmploymentLiabilities**” shall mean any and all claims, debts,liabilities, commitments and obligations, whether fixed, contingent orabsolute, matured or unmatured, liquidated or unliquidated, accrued or unnaccrued,known or unknown, whenever or however arising, including all costs and expensesrelating thereto arising under law, rule, regulation, permit, action orproceeding before any governmental authority, order or consent decree or anyaward of any arbitrator of any kind relating to any benefit plan, employmentagreement or otherwise relating to an Employee and his or her employment withSeller.

###  

### (p)           “**Escrow Agreement**” shall mean the escrowagreement 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 escrowagent (the “**Escrow Agent**”).

###  

### (q)           “**Excluded Liabilities**” has the meaning setforth in Section 2.2(c).

###  

### (r)            “**Execution Date**” means the date of thesigning and execution of the Definitive Agreements.

###  

### (s)           “**Expensed Items**” means supplies and similarconsumable material on hand at the Facility that are related to and of a naturecustomarily used in the Business (other than such supplies and materialsassociated with any Excluded Assets).

###  

### (t)            “**Facility**” means the facility used in theoperation of the Business and located at the location set forth on Exhibit A,including all leasehold and facility improvements thereto and fixtures.

 

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### (u)           “**Facility Transfer Agreement**” means theagreement substantially in the form attached as Exhibit C heretopursuant 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 andsupplies 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 ExcludedAssets and the Facility, including the Facility, leasehold improvements andfixtures or any buildings or other structures, information technology systems(other than Purchased IT Systems) or custom equipment, including but notlimited to custom, Business-specific test fixtures, that can only be used inthe Business and is not readily adaptable to alternative uses and includingequipment utilized by the ASIC and desktop software group engineering teams ofSeller that are located at the Facility.

###  

### (w)          “**Governmental Body**” means any:

###  

#### (i)            nation,province, state, county, city, town, village, district, or other jurisdictionof any nature;

####  

#### (ii)           federal,provincial, state, local, municipal, foreign, or other government;

####  

#### (iii)          governmentalor quasi-governmental authority of any nature (including any governmentalagency, branch, department, official, or entity and any court or othertribunal);

####  

#### (iv)          multi-nationalorganization or body; or

####  

#### (v)           bodyexercising, 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 SingaporeGoods and Services Tax (“**GST**”) that maybe chargeable in respect of the sale of the Purchased Assets under thisAgreement.

###  

### (y)           “**Indebtedness**” of any Person means allmonetary 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 thantrade payables or accruals incurred in the ordinary course of business),(iv) under capital leases or (v) in the nature of guarantees of theobligations described in clauses (i) through (iv) above of any otherPerson.

###  

### (z)            “**Intellectual Property**” means any or all ofthe following and all worldwide common law and statutory rights in, arising outof, or associated therewith: (i) United States and foreign patents andutility models and applications therefor and all reissues, divisions,reexaminations, renewals, extensions, provisionals, continuations andcontinuations-in-part thereof (“**Patents**”);(ii) inventions (whether patentable or not), improvements, trade secrets,proprietary information, know-how, and any rights in technology, inventiondisclosures,

 

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### technical data andcustomer lists, and all documentation relating to any of the foregoing;(iii) copyrights, copyright registrations and applications therefor, andall other rights corresponding thereto throughout the world; (iv) domainnames, uniform resource locators (“**URLs**”),other names and locators associated with the Internet, and applications orregistrations 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 applicationstherefor throughout the world (“**Trademarks**”);(vii) all rights in databases and data collections; (viii) all moraland economic rights of authors and inventors, however denominated; and(ix) any similar or equivalent rights to any of the foregoing (asapplicable).

###  

### (aa)         “**Inventories**” means all good productionready 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 customerpurchase orders or customer forecasts, which Seller believes will be used inproducts to be delivered to Seller within the six (6) month period followingthe Closing Date.  For purposes ofSection 6.2 hereof, the term “Inventories” shall also include material,components and other supplies acquired by Seller pursuant to purchase orders orother Assigned Contracts assumed by Sellers hereunder as of the ClosingDate.  Inventories shall not includefinished goods.

###  

### (bb)         “**Law**”means any law, statute, rule, regulation, ordinance, extension order, or otherpronouncement having the effect of law of the United States, any foreigncountry or any U.S., Singapore or foreign state, county, city or otherpolitical 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, adverseclaims of ownership or use, restrictions on transfer, defect of title or otherencumbrance of any sort, other than (a) mechanic’s, materialmen’s, andsimilar liens with respect to any amounts not yet due and payable, and (b) customary liens for Taxes not yet due and payable.

###  

### (ee)         “**Material AdverseEffect**” means with respect to (i) Parent or Buyer, any materialadverse change in the business, operations, assets (including intangibleassets), liabilities (contingent or otherwise), results of operations orfinancial 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 changein the business, operations, assets (including intangible assets), liabilities(contingent or otherwise), results of operations or financial performance orcondition (financial or otherwise) of such Party which is material to theBusiness taken as a whole; *provided, however*,that in determining whether a Material Adverse Effect has occurred, any effectto the extent attributable to the following shall not be considered:  (a) changes in laws, rules or regulationsof general applicability or interpretations thereof by governmental entities,and (b) any effects resulting from the announcement of this Agreement inaccordance with this Agreement.

 

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### (ff)           “**Multiemployer Plan**” shall mean any “PensionPlan” which is a “multiemployer plan,” as defined in Section 3(37) ofERISA.

###  

### (gg)         “**Order**” means any writ, judgment, decree,injunction, administrative order, directive or similar order or directive ofany Governmental Body (in each such case whether preliminary or final).

###  

### (hh)         “**Permit**” shall mean the licenses, permits,authorizations, registrations, certificates, variances, approvals, consents andfranchises and similar rights obtained from governments and any GovernmentalBody, 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, jointventure, estate, trust, association, organization, labor union, GovernmentalBody or other entity.

###  

### (jj)           “**Preliminary Fixed Asset and Inventories Statement**”means the statement of Preliminary Net Asset Value of Fixed Assets andInventories based upon Seller’s good faith estimate of the unaudited pro formabalance sheet in respect of the Business as of the Closing Date prepared inaccordance with generally accepted accounting principles as consistentlyapplied by Seller in Seller’s preparation of its periodic financial statements ineach of the three quarters which precede the Closing Date (other than theomission of notes and normal reoccurring adjustments).

###  

### (kk)         “**Preliminary Net Asset Value**” shall mean thefollowing:

###  

#### (i)            anamount equivalent to the standard cost of Inventories as of November 4, 2005 onthe books of Seller on the Closing Date and, to the extent Inventories did nothave standard cost on the books of Seller as of November 4, 2005, standard costas of the Closing Date; **plus**

####  

#### (ii)           anamount equivalent to the net book value of Fixed Assets on the books of Selleras 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 purchaseorders listed on Schedule 1.1(mm) which are not Inventory orExpensed Items.  Schedule 1.1(mm)shall include purchase orders for material, components and other supplieswhich, based on firm, non-cancelable customer purchase orders or customer forecasts,Seller reasonably believes will be used in products to be delivered to Sellerwithin the six (6) month period following the Closing Date after taking intoaccount 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 otherrepresentatives.

###  

### (pp)         “**Seller’s Retained Environmental Liabilities**” means anyliability, obligation, judgment, penalty, fine, cost or expense, (includingreasonable attorneys’ fees and environmental consultant costs) of any kind ornature, or the duty to indemnify, defend or reimburse any Person (an “**Environmental Liability**”) with respect to: (i) thepresence 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 ExpensesItems), or known by Seller to be migrating to any Business Facility as of theClosing Date (“**Pre-Existing Contamination**”);(ii) the migration at any time prior to or after the Closing Date of Pre-ExistingContamination to any other real property, or the soil, groundwater, surfacewater, air or building materials thereof; (iii) the exposure of any Personto Pre-Existing Contamination or to Hazardous Materials in the course of or asa consequence of any activities of the operationof the printed circuit board assembly manufacturing and storage systemmanufacturing business conducted by Seller in Singapore prior to the Closing,without regard to whether any health effect of the exposure has been manifestedas of the Closing Date; (iv) the violation of any Environmental Laws bythe Seller or its agents, employees, predecessors in interest, contractors,invitees or licensees prior to the Closing Date or in connection with theoperation of the Business prior to the Closing Date; (v) any actions orproceedings brought or threatened by any third party with respect to any of theforegoing that they existed as of the Closing Date and (vi)  Section1.1(pp)(iv) to the extent it continues during the six (6) month periodfollowing the Closing Date; provided, however, that to the extent Buyer becomesaware of any of the foregoing during the six (6) month period following theClosing Date and such liability arises from Buyer’s continued operation of theBusiness, Buyer shall promptly notify and confer with Seller and shall takereasonable steps to mitigate and if appropriate remediate such noncomplianceprovided that Seller shall reimburse Buyer for reasonable costs incurredtherefore.  For the avoidance of doubt, such remediation costs shall be included inSeller’s Retained Environmental Liabilities.  The foregoing notwithstanding, anEnvironmental Liability shall not be considered a Seller’s RetainedEnvironmental 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 theapplicable Person directly or indirectly through one or more intermediaries.

###  

### (rr)           “**Supply Agreement**” means that certain SupplyAgreement attached hereto as Exhibit D entered into by Buyer andSeller as of the date hereof relating to the provision of manufacturingservices by Buyer.

###  

### (ss)         “**Transferred Employee**” means any Employee orother individual currently providing services to Seller who becomes an employeeof Buyer as a result of the Secondment Agreement.

###  

### (tt)           “**Transition Services Agreement**” means thatcertain Transition Services Agreement substantially in the form attached heretoas Exhibit A to be entered into by Buyer and

 

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### Seller in substantiallythe same form at the Closing with respect to the provision of certaintransition 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 theterms and subject to the conditions set forth herein, at the Closing (asdefined in Section 2.3(a) hereof), Buyer shall purchase from Seller, andSeller shall irrevocably sell, convey, transfer, assign and deliver to Buyer,the Purchased Assets (as defined in Section 2.1(b) hereof), free and clearof all Liens (other than Permitted Liens). All payment amounts expressed in this Agreement are in U.S. dollars.

###  

### (b)           Definition of Purchased Assets.  For allpurposes of and under this Agreement, the term “**Purchased Assets**” shall mean, refer to and include all ofSeller’s right, title and interest in and to all of the following tangible andintangible assets, properties and rights to the extent owned, used or held foruse by Seller as of the Closing (but specifically excluding the Excluded Assets(as defined in Section 2.1(c) hereof)):

###  

#### (i)            the FixedAssets, the Inventories, Purchased IT Systems, the Expensed Items and the othertangible personal property used in connection with the Business, and listed on Schedule 2.1(b)(i)hereto (the “**Tangible Personal Property**”);

####  

#### (ii)           allrights of Seller in, to or under (A) the leases or subleases of TangiblePersonal Property listed on Schedule 2.1(b)(ii)(A) as to whichSeller is the lessor or sublessor, and (B) the leases of Tangible PersonalProperty listed on Schedule 2.1(b)(ii)(B) as to which Seller is thelessee or sublessee, together with any options to purchase the underlyingproperty (the leases and subleases described in subclauses (A) and (B)hereof, the “**Personal Property Leases**”);

####  

#### (iii)          all Books and Records of Seller solelyrelating to the Purchased Assets and necessary for the conduct of the Businessat the Closing, other than Books and Records of Seller concerning trade secretsor other confidential information of Seller, privileged information, internalfinancial statements and related information or records; and files and recordsof Employees or related human resource matters prior to the Closing (the “**Seller Records**”);

####  

#### (iv)          all rightsunder any contracts, indentures, mortgages, instruments, Liens, guaranties orother agreements of Seller set forth on Schedule 2.1(b)(iv)and the Purchase Orders, other than the Excluded Agreements (the “**Assigned Contracts**”);

####  

#### (v)           allPermits (including applications therefor) used in the conduct of the Businessset forth in Schedule 2.1(b)(v) (the “**Assumed Permits**”);

 

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#### (vi)          allprepaid expenses listed in Schedule 2.1(b)(vi), and all prepaid expensesmade following the date hereof and prior to the Closing that relate exclusivelyto the Business (the “**Prepaid Expenses**”);and

####  

#### (vii)         allsecurity deposits deposited by or on behalf of Seller as lessee or sublesseeunder 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 andwarranties set forth in Article III of this Agreement.

 

### (c)           Definition of Excluded Assets. Notwithstanding anything to the contrary set forth in thisSection 2.1 or elsewhere in this Agreement, the term “**Purchased Assets**” shall not mean, refer toor include the following (collectively, the “**ExcludedAssets**”) to the extent owned, used or held for use by Seller as ofthe Closing:

###  

#### (i)            Cash, cashequivalents, investments in cash,securities or otherwise and all Seller bank accounts;

####  

#### (ii)           all refundsof Taxes with respect to Taxes paid oraccrued 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, andrights of recoupment of any kind or nature (including any such item relating toTaxes) to the extent attributable to the Excluded Agreements, Excluded Assetsor the Excluded Liabilities;

####  

#### (iv)          all rights ofSeller under this Agreement andAncillary Agreement, or any other agreement, certificate, instrument or otherdocument executed and delivered by Seller or Buyer in connection with theTransaction or any side agreement between Seller and Buyer entered into on orafter the date hereof;

####  

#### (v)           all Booksand Records of Seller which relate to the Taxes, Excluded Agreements orExcluded Assets; *provided, however*,Seller agrees that it shall provide Buyer with copies of, or reasonable accessto, such Books and Records to the extent that any such Books and Records(i) relate to any of the Business, the Purchased Assets or AssumedLiabilities; and (ii) do not reflect confidential information orprivileged materials;

####  

#### (vi)          allaccounts receivable and all notes, bonds and other evidences of Indebtedness,and all security agreements related thereto, including any rights with respectto any third party collection procedures or any other Actions or Proceedingswhich have been commenced in connection therewith;

####  

#### (vii)         allIntellectual Property of Seller, including the trade name Adaptec andderivatives thereof and logos associated therewith and all related trademarksand service marks, and software licenses.

 

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#### (viii)        allassets other than Purchased Assets, including but not limited to land,buildings, leasehold improvements, information technology systems, hardware andsoftware (and other related intellectual property) and custom equipmentincluding specifically custom test fixtures specific to the Business andincluding equipment and assets utilized by the ASIC and desktop software groupengineering teams of Seller.

####  

#### (ix)           allcapital stock, options and other securities of Seller, and all corporateminutes and stock books of account of Seller, blank stock certificates,qualifications to conduct business as a foreign corporation, arrangements withregistered agents relating to foreign qualifications, taxpayer and otheridentification numbers, seals and other documents relating to the organization,maintenance and existence of Seller as a corporation;

####  

#### (x)            allagreements and contracts to which Seller is a party or is bound or to which itsassets are subject that are not Assigned Contracts; and

####  

#### (xi)           allassets or rights that relate to the Employee Plans of Seller, all Books andRecords relating to the Employees of Seller as of the Closing.

####  

2.2           Assumption of Liabilities.

 

### (a)           Assumption.  Upon the terms and subject to theconditions set forth herein, at the Closing, Buyer shall assume from Seller,and Seller shall irrevocably convey, transfer and assign to Buyer, all of theAssumed Liabilities (as defined in Section 2.2(b) hereof).  Buyer shall not assume any liabilities ofSeller pursuant hereto, other than the Assumed Liabilities.

###  

### (b)           Definition of Assumed Liabilities.  For allpurposes of and under this Agreement, the term “**Assumed Liabilities**” shall mean, refer to and include thefollowing Liabilities of Seller (but specifically excluding the ExcludedLiabilities (as defined in Section 2.2(c) hereof)):

###  

#### (i)            allLiabilities under Assumed Permitsarising after the Closing Date; and

####  

#### (ii)           allLiabilities related to the PurchasedAssets or the operation of the Business to the extent arising from or relatedto any facts or circumstances occurring after the Closing Date;

####  

#### (iii)          all Liabilities relating to Employees that are hired by Buyer or Parent for actions thatoccur after the date of hire.

####  

### (c)           Definition of Excluded Liabilities. Notwithstanding anything to the contrary set forth in thisSection 2.2 or elsewhere in this Agreement, the term “**Assumed Liabilities**” shall not mean, referto or include the following (collectively, “**ExcludedLiabilities**”):

###  

#### (i)            allLiabilities relating to agreements notassumed by Buyer (the “**Excluded Agreements**”);

 

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#### (ii)           any and allLiabilities or obligations of Sellerarising from the breach by Seller of any term, covenant or provisions of any ofthe Assigned Contracts prior to the Closing;

####  

#### (iii)          subject toSection 2.6, all Liabilities for Taxes of Seller or Taxes attributable to theownership or operation of the Purchased Assets for any taxable period (orportion of any period) ending on or prior to the Closing Date and, including,without limitation, all liabilities for Taxes attributable to the Transaction;

####  

#### (iv)          allLiabilities relating to options,warrants and other rights to purchase or otherwise acquire shares of capitalstock of Seller or any Affiliate of Seller;

####  

#### (v)           allLiabilities to shareholders of Seller orany Affiliate of Seller in their capacity as such;

####  

#### (vi)          allLiabilities of Seller under theDefinitive Agreements or any other certificate, instrument or other agreemententered into by the Parties in connection with the Transaction;

####  

#### (vii)         except as setforth in Section 2.2(b), all Employment Liabilities and all Liabilitiesarising under or with respect to any Pension Plan;

####  

#### (viii)        Seller’sRetained Environmental Liabilities;

####  

#### (ix)           allLiabilities for legal, accounting, audit and investment banking fees, brokeragecommissions, and any other expenses incurred by the Seller in connection withthe Transaction;

####  

#### (x)            allLiabilities for or related to Indebtedness of Seller, on its own behalf or onbehalf of other Persons, to banks, financial institutions or other Persons withrespect to borrowed money, and including any accrued interest payable inrespect thereof;

####  

#### (xi)           allLiabilities that are attributable to any of the Excluded Assets;

####  

#### (xii)          allLiabilities of Seller with respect to accounts payable;

####  

#### (xiii)         allLiabilities of Seller for injury to or death of persons (including, withoutlimitation, workers’ compensation claims) or damages to or destruction ofproperties or assets, arising from the sale or distribution of productsdistributed, or business services provided, by Seller on or before the ClosingDate, whether or not any such liability arises before or after the ClosingDate, including, without limitation, liability for consequential and punitivedamages in connection with the foregoing; and

####  

#### (xiv)        all Liabilities other than Assumed Liabilities.

 

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2.3           Closing.

 

### (a)           Theconsummation of the purchase and sale of the Purchased Assets (the “**Closing**”) shall take place at such place asBuyer and Seller mutually agree, at 10:00 A.M. local time, on the Closing Dateunless otherwise mutually agreed by Buyer and Seller.  The Closing shall be deemed to be effectiveas of 12:01 A.M., local time, at the place where the Purchased Assets arelocated on the applicable Closing Date (the “**ClosingTime**”).

###  

### (b)           Assoon as practicable following the date hereof and at all times until theClosing of the purchase by Buyer of all of the Purchased Assets listed ordescribed in Section 2.1(b), Buyer and Seller shall cooperate in goodfaith to (i) formulate and effect a plan and closing schedule for thetransfer of the Purchased Assets and the Business to Buyer pursuant to thisAgreement, and (ii) identify the Purchased Assets to be purchased by Buyerpursuant to this Agreement at the Closing, and (iii) identify the AssumedLiabilities to be assumed by Buyer pursuant to this Agreement at the Closing.

###  

### (c)           Atleast five (5) Business Days prior to the Closing Date, Seller shall furnish toBuyer the Preliminary Fixed Asset and Inventories Statement indicating thePreliminary Net Asset Value as of such date. Buyer shall have been given full access to the relevant records andworking papers used by Seller to prepare the Preliminary Fixed Asset andInventories Statement.  The PreliminaryFixed Asset and Inventories Statement shall be reasonably acceptable to Buyer; *provided, however*, that the Preliminary Fixed Asset andInventories Statement shall be deemed to be reasonably acceptable to Buyer ifprepared in accordance with the terms of this Agreement.

###  

### (d)           Atthe Closing, on the terms and subject to theconditions set forth in this Agreement, as full payment for the transfer of thePurchased Assets by Seller to Buyer, Parent and/or Buyer shall pay toSeller the Purchase Price (as defined below) and the GST Tax Amount by wiretransfer of immediately available funds in United States dollars to such accountor accounts as Seller may direct by written notice delivered to Buyer by Sellerat least two (2) Business Days prior to the applicable Closing Date, subject toSection 2.3(f) below with respect to the Escrow.

###  

### (e)           Atthe Closing, and simultaneously with the payment of the Purchase Price and theGST 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 andto the Purchased Assets (free and clear of all Liens, other than PermittedLiens) by delivery of (A) a General Assignment and Bill of Sale in formand substance reasonably acceptable to Buyer and Seller (the “**General Assignment**”), duly executed bySeller; (B) the Facility Transfer Agreement duly executed by Seller; andsuch other instruments of conveyance, assignment and transfer as Buyer shallreasonably request, in form and substance reasonably acceptable to Buyer andSeller, as shall be effective to vest in Buyer good and valid title to theapplicable Purchased Assets as contemplated by this Agreement (the GeneralAssignment and the other instruments being collectively referred to herein asthe “**Assignment Instruments**”); and(ii) Buyer shall assume from Seller the due payment, performance anddischarge of the Assumed Liabilities by delivery of (A) an AssumptionAgreement in form and substance reasonably acceptable to Seller and Buyer (the “**Assumption Agreement**”), duly executed byBuyer and (B) such other instruments of

 

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### assumption as Sellershall reasonably request, in form and substance reasonably acceptable to Sellerand Buyer, as shall be effective to cause Buyer to assume the AssumedLiabilities as and to the extent provided in Section 2.2(b) (theAssumption Agreement and such other instruments referred to inclause (ii)(B) being collectively referred to herein as the “**Assumption Instruments**”).  At the Closing, there shall also be deliveredto Seller and Buyer the certificates and other contracts, documents and instrumentsrequired to be delivered pursuant to Article VII hereof.

###  

### (f)            Escrow.  At the Closing, ten percent (10%) of thePurchase Price being paid under Section 2.3(d) above shall be paid to theEscrow Agent to be held and administered by the Escrow Agent in escrow assecurity for the indemnification obligations of Seller for Damages underArticle 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 Buyerunder Section 2.4(f)(i) shall be paid into Escrow and held pursuant to theEscrow Agreement, or (ii) downward, then ten percent (10%) of suchDecrease Amount will be paid by the Escrow Agent to Buyer.  In addition, to the extent that Buyer and/orParent exercises its Put Right under Sections 6.2 or 6.3 of the PurchaseAgreement, and the Seller purchases certain Unused Inventories or Inventoriesfrom the Buyer and/or Parent, all or a portion of the purchase price of suchUnused Inventories or Inventories shall be paid by the release of an amountequal to such purchase price of such inventories (calculated in accordance withSections 6.2 and 6.3) from the Escrow Account to the Buyer and/or Parent (the “**Inventory Escrow Amount**”); provided, however, that theInventory Escrow Amount shall not exceed ten (10%) percent of the portion ofthe Purchase Price paid for the Inventories as determined in Section1.1(j)(i).  Any amounts then held in Escrowand not previously paid in respect of any claims for indemnification underArticle IX or, released in connection with Seller’s purchase of Inventoryunder Sections 6.2 or 6.3, or subject to any pending claims underArticle IX, shall be released to Seller not more than five (5) days afterthe twelve month anniversary of the Closing (the “**EscrowRelease Date**”).  Any amountsearned in respect of the Escrow shall be considered a part of the Escrow andheld pursuant to the Escrow Agreement.

###  

2.4           Post-ClosingPurchase Price Adjustments.

 

### (a)           Preparationof Closing Net Asset Value Statement. As soon as reasonably practicable after the Closing Date (within thirtyfive (35) days if commercially reasonable but, in any event, not later thanforty-five (45) days after the Closing Date), Seller shall prepare and deliverto Buyer at Seller’s expense an unaudited Closing Fixed Asset and InventoriesStatement indicating the Closing Net Asset Value as of the Closing Date (the “**Closing Net Asset Value Statement**”).  The date Seller delivers the Closing NetAsset Value Statement shall be referred to as the “**Notice Date**”.  Buyer shall reasonably cooperate with Seller’sfinance organization in order to enable the preparation of the Closing FixedAsset and Inventories Statement.

###  

### (b)           Verification.  As soon as reasonably practicable after theNotice Date (but not later than thirty (30) days after the Notice Date), Buyershall verify (i) that the Fixed Assets and the Inventories stated in thePreliminary Fixed Asset and Inventories Statement and the statement of thePreliminary Net Asset Value accurately reflect the Fixed Assets and Inventoriesdelivered to Buyer as part of the Purchased Assets at the Closing and(ii) that the Closing Net

 

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### Asset Value is accuratelyreflected on the Closing Fixed Asset and Inventories Statement (the “**Verification**”).  Seller shall reasonably cooperate with Buyerin order to enable Buyer to perform the Verification.

###  

### (c)           Reviewof Preliminary Closing.  Buyer shallbe given full access, during regular business hours, to the relevant recordsand working papers used by Seller to prepare the Closing Fixed Asset andInventories Statement and the Closing Net Asset Value Statement and to reviewthe results of the Verification in relation to the Closing Fixed Asset andInventories Statement and the Closing Net Asset Value Statement.  If Buyer believes that any changes arerequired to be made to the Closing Fixed Asset and Inventories Statement andthe Closing Net Asset Value (including but not limited to changes based ondifferences between the Closing Fixed Asset and Inventories Statement theresults of the Verification) (a “**MaterialUncertainty**”), Buyer shall, within the later of seventy-five (75)days following the Closing Date or thirty (30) days following the receipt by itof the Closing Fixed Asset and Inventories Statement and the Closing Net AssetValue Statement (the “**Dispute Period**”),give written notice to Seller (a “**DisputeNotice**”) of any such proposed change or Material Uncertainty,describing the change or Material Uncertainty and the basis for the change orMaterial Uncertainty in reasonable detail. The Closing Fixed Asset and Inventories Statement and the Closing NetAsset Value Statement shall be binding and conclusive upon, and deemed acceptedby, Buyer unless Buyer shall have timely delivered a Dispute Notice to Sellerduring the Dispute Period.

###  

### (d)           Disputes.  Disputes between Buyer and Seller relating tothe Closing Fixed Asset and Inventories Statement and the Closing Net AssetValue Statement that cannot be resolved by them through negotiation withinthirty (30) days after receipt by Seller of a Dispute Notice shall be referredto an independent accounting firm reasonably agreed upon by the Parties for arbitration(the “**Independent Accountant**”)with respect to the Dispute Notice.  TheIndependent Accountant will be instructed to select, in its discretion, theindividuals within its organization who will have primary responsibility forthis matter and to reach a determination within forty-five (45) days from thedate of referral.  The IndependentAccountant determination hereunder shall be limited to determining the ClosingNet Asset Value.  The IndependentAccountant will not have the authority alter or vary this Agreement.  The decision of the Independent Accountantwill be final and binding upon the Parties. The engagement of the Independent Accountant shall be paid one-half bySeller and one-half by Buyer.  TheClosing Fixed Asset and Inventories Statement and the Closing Net Asset ValueStatement as adjusted by the Independent Accountant in accordance with thisSection 2.4(d), shall be final and binding on the parties.  It is understood and agreed that the decisionof the Independent Accountant shall not be subject to judicial review by anycourt or tribunal under any circumstances whatsoever and the Parties herebyexpressly waive any right to appeal or otherwise seek judicial review of anydecision of the Independent Accountant under this Section 2.4(d).

###  

### (e)           FinalClosing Fixed Asset and Inventories Statement.  The Closing Fixed Asset and InventoriesStatement and the Closing Net Asset Value Statement shall become final withrespect to all or any portion thereof, and binding upon Buyer and Seller uponthe earlier of (i) the failure by Buyer to timely object to all or anyportion thereof during the Dispute Period, (ii) an agreement between Buyerand Seller with respect thereto, or (iii) the decision by the IndependentAccountant with respect to any disputed matters pursuant toSection 2.4(d).  The

 

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### Closing Fixed Asset andInventories Statement and the Closing Net Asset Value Statement as finallydetermined 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)            Adjustmentto the Closing Net Asset Value.  ThePreliminary Net Asset Value Amount paid at the Closing shall be subject toadjustment pursuant to the following provisions of this Section 2.4(f):

###  

#### (i)            Ifthe Final Closing Net Asset Value as reflected in the Final Closing Fixed Assetand Inventories Statement is less than the Preliminary Net Asset Value asreflected in the applicable Preliminary Fixed Asset and Inventories Statement,then the Final Closing Net Asset Value shall be decreased on a dollar-for-dollarbasis by an amount (the “**Decrease Amount**”)equal to the amount by which the Final Closing Net Asset Value as reflected inthe Final Closing Fixed Asset and Inventories Statement is less than thePreliminary Net Asset Value as reflected in the Preliminary Fixed Asset andInventories Statement, and the Decrease Amount shall be payable ninety percent(90%) from Seller to Buyer and ten percent (10%) released from the Escrow bythe Escrow Agent to Buyer in immediately available funds pursuant toSection 2.4(g).  In the event of aDecrease Amount, there shall be a corresponding adjustment to the GST TaxAmount.

####  

#### (ii)           Ifthe Final Closing Net Asset Value as reflected in the Final Closing Fixed Assetand Inventories Statement is greater than the Preliminary Net Asset Value asreflected in the Preliminary Fixed Asset and Inventories Statement, then theFinal Closing Net Asset Value shall be increased on a dollar-for-dollar basisby an amount (the “**Increase Amount**”)equal to the amount by which the Final Closing Net Asset Value as reflected inthe Final Closing Fixed Asset and Inventories Statement is greater than thePreliminary Net Asset Value as reflected in the Preliminary Fixed Asset andInventories Statement, and ninety percent (90%) of the Increase Amount shall bepayable by Buyer to Seller in immediately available funds pursuant toSection 2.4(g), and ten percent (10%) of the Increase Amount shall bepayable by Buyer to the Escrow Agent to be held in Escrow pursuant to theEscrow Agreement.  In the event of anIncrease Amount, there shall be a corresponding adjustment to the GST TaxAmount.

####  

### (g)           Paymentsof Adjustment Amount.  As soon as practicable(but not more than ten (10) Business Days) after all or any portion of aClosing Net Asset Value shall become final and binding pursuant toSection 2.4(e) hereof, Buyer or Seller, as the case may be, shall make thepayment contemplated by Section 2.4(f) in respect of all or such portionof such Closing Net Asset Value that has become final and binding (it being theintention of the parties that the payment of all undisputed amounts set forthin the Final Closing Fixed Asset and Inventories Statement that become finaland binding pursuant to Section 2.4(e) shall not be contingent upon theresolution of any disputed amounts set forth in such Final Closing Fixed Assetand Inventories Statement ).

###  

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

 

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### (a)           Governmentalproperty or similar taxes or levys on or with respect to the Purchased Assets;

###  

### (b)           rents,additional rents, operating expense pass throughs, Taxes and other itemspayable by Seller under any personal property leases; and

###  

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

 

2.6           Taxes. Buyer and Seller shall bear equally any sales, use, value-added, grossreceipts, excise, registration, stamp duty or other similar taxes orgovernmental fees arising out of the transfer of the Purchased Assets to Buyerpursuant hereto (“**Transfer Taxes**”);*provided* Buyer shall pay GST that may bechargeable in respect of the sale of the Purchased Assets under this Agreementsubject to Seller issuing and delivering to Buyer a tax invoice relating tosuch GST and provided that GST is chargeable or payable with respect to thesale of the Purchased Assets under this Agreement and such sale is notconsidered by the relevant tax authorities in Singapore to be a sale of abusiness as a going concern.  To theextent permitted by applicable law, Parent, Buyer and Seller shall cooperate inminimizing Transfer Taxes.

 

### (a)           StraddlePeriod Taxes.  In the case of anyreal or personal property taxes or any similar ad valorem taxes attributable tothe Purchased Assets for which Taxes are reported on a Tax Return covering aperiod commencing before the Closing and ending thereafter (a “**Straddle Period Tax**”), any such Straddle Period Taxes shallbe prorated between Buyer and Seller on a per diem basis.  The party required by law to file a TaxReturn with respect to Straddle Period Taxes shall do so within the time periodprescribed by law.

###  

### (b)           TaxReturns.  To the extent relevant tothe Business or the Purchased Assets, each party shall (i) provide theother with such assistance as may reasonably be required in connection with thepreparation of any Tax Return and the conduct of any audit or other examinationby any governmental authority or in connection with judicial or administrativeproceedings relating to any liability for Taxes and (ii) retain andprovide the other with all records or other information that may be relevant tothe 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 orAssumed Liability to be sold, conveyed, assigned, transferred, delivered orassumed to or by Buyer pursuant hereto, or any claim, right or benefit arisingthereunder or resulting therefrom, is not capable of being sold, conveyed,assigned, transferred or delivered without the approval, consent or waiver ofthe issuer thereof or the other party thereto, or any third person (including aGovernmental Body), or if such sale, conveyance, assignment, transfer ordelivery or attempted sale, conveyance, assignment, transfer or delivery wouldconstitute a breach or termination right thereof or a violation of any law,decree, order, regulation or other governmental edict, except as expresslyotherwise 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 suchapproval, consent or waiver shall not be obtained, or if an attemptedassignment of any such Purchased Asset or the assumption of any AssumedLiability by Buyer would be ineffective so that Buyer would not in

 

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fact receive all such Purchased Assets orassume all such Assumed Liabilities pursuant hereto, Seller, Buyer and Parentshall cooperate in a mutually agreeable arrangement and use reasonable diligentefforts to provide Buyer with the benefits and assume the obligations of suchPurchased Assets and Assumed Liabilities in accordance with this Agreement,including subcontracting, sub-licensing, or sub-leasing to Buyer, or underwhich Seller, at Buyer’s expense, would enforce for the benefit of Buyer, withBuyer assuming all of Seller’s obligations thereunder, any and all rights ofSeller against a third party thereto; *provided* thatin 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 Buyeror Parent solely in connection with its obligations under this Section 2.6.  Buyer and Parent agree to reasonablycooperate with Seller and supply relevant information to such party or partiesor such third-party in order to assist Seller in its obligations under thisSection 2.6.

 

2.8           Taking of Necessary Action; Further Action.  From time to time after the Closing Date, atthe request of any Party hereto and at the expense of such Party, the Partieshereto shall execute and deliver such other instruments of sale, transfer,conveyance, assignment and confirmation and take such action as Parent or Buyermay 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 tothis Agreement, to put Buyer in actual possession and operating control of suchPurchased Assets as contemplated by this Agreement and to assist Buyer inexercising all rights with respect thereto.

 

2.9           Allocation ofPurchase Price Consideration.  The sum of the Purchase Price and theAssumed Liabilities (except to the extent that such Assumed Liabilities are notrequired to be capitalized for income tax purposes) shall be allocated amongthe 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 ClosingDate and shall be reasonably acceptable to the Seller.  Any subsequent adjustments to the sum of thePurchase Price and Assumed Liabilities (except to the extent that such AssumedLiabilities are not required to be capitalized for income tax purposes) shallbe reflected by Buyer in the allocation hereunder in a manner consistent withSection 1060 of the Code and the regulations thereunder.  For all Tax purposes, Purchaser and Selleragree to report the transactions contemplated in this Agreement in a mannerconsistent with the terms of this Agreement, including the allocation under Schedule2.9, and that none of them will take any position inconsistent therewith inany Tax Return, in any refund claim, in any related litigation, or other relateddispute.

 

# **ARTICLE III**REPRESENTATIONS AND WARRANTIES OF SELLER

# ** **

Subject to such exceptions as arespecifically disclosed in the disclosure letter supplied by Seller to Parentand Buyer (the “**Seller Disclosure Letter**”),Seller hereby represents and warrants to Parent and Buyer that the statementscontained in this Article III are true and correct as of the date of thisAgreement and will be true and correct as of the Closing (as though made at theClosing ); *provided*, that**therepresentations and warranties made as of a specified date will be true andcorrect as of such date.

 

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

 

3.2           Authorization.  The execution and delivery of this Agreement and theAncillary Agreements by Seller, the performance by Seller of its obligationshereunder and thereunder and the consummation by Seller of the transactionscontemplated hereby and thereby have been duly authorized by all requisiteaction on the part of Seller and its subsidiaries and no other corporateproceedings on the part of Seller are necessary to authorize this Agreement orthe Ancillary Agreements, or to consummate the transactions contemplated herebyand thereby.  This Agreement and the Ancillary Agreements to which Seller is a party havebeen duly and validly executed and constitute the valid and legally bindingobligations of Seller, enforceable against Seller in accordance with theirrespective terms and conditions, except as such enforceability may be limitedby principles of public policy and subject to the laws of general applicationrelating to bankruptcy, insolvency and the relief of debtors and rules of lawgoverning specific performance, injunctive relief or other equitableremedies.  Except as set forth inSection 3.2 of the Seller Disclosure Letter, Seller does not own and hasnever owned any subsidiaries.

 

3.3           No Conflicts.  Neither the execution and the delivery of this Agreement and theAncillary 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, governmentalagency, or court to which Seller is subject, (B) violate or conflict withany provision of the charter documents, bylaws or organizational documents ofthe Seller, or (C) conflict with, result in a breach of, constitute adefault under, result in the acceleration of, create in any party the right toaccelerate, terminate, modify, or cancel, or require any notice or consentunder, any Assigned Contract or any Assumed Permit (or result in the impositionof any Lien upon any of the Purchased Assets).

 

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

 

3.5           Legal Compliance.  The Business as being conducted by Seller has been and at theClosing will be in material compliance with all applicable Laws (includingwithout 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 GovernmentalBody alleging any failure to so comply in any material respect.  Seller has all material Permits that arenecessary to operate the Business and hold the Purchased Assets as of theClosing.

 

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, localand foreign taxes, assessments and other governmental charges, duties,impositions and liabilities, including taxes based upon or measured by grossreceipts, 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 andother import and export duties together with all interest, penalties andadditions imposed with respect to such amounts; (ii) any liability for thepayment of any amounts of the type described in clause (i) as a result ofbeing or ceasing to be a member of an affiliated, consolidated, combined orunitary group for any period (including, without limitation, any liabilityunder Treas. Reg. Section 1.1502-6 or any comparable provision of foreign,state or local law); and (iii) any liability for the payment of anyamounts of the type described in clause (i) or (ii) as a result of anyexpress or implied obligation to indemnify any other person or as a result ofany obligations under any agreements or arrangements with any other person withrespect to such amounts and including any liability for taxes of a predecessoror transferor entity.

 

Except to the extent not relevant to thePurchased 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 tofile.  All such Tax Returns are correctand complete in all material respects and have been completed in accordancewith applicable law.  All Taxes owed bySeller (whether or not shown on any Tax Return) were paid in full when due.

###  

### (b)           Seller has timely withheld or paid with respect toits employees or other third parties and timely paid over any withheld amountsto the appropriate Taxing authority all Singaporean and U.S. federal and stateincome Taxes, Federal Insurance Contribution Act, Federal Unemployment Tax Actand other taxes required to be withheld or paid.

###  

### (c)           Seller has made available to Parent copies of all TaxReturns relating to the Business or the Purchased Assets for all periods sincethe Seller’s incorporation.

###  

### (d)           Sellerhas paid all Taxes for which Seller is liable to pay in respect of thePurchased Assets.

###  

3.7           Title of Properties; Absence of Liens andEncumbrances; Condition of Equipment.

 

### (a)           All current leases related to the Business are infull force and effect, are valid and effective in accordance with theirrespective terms, and there is not, under any of such leases, any existingdefault 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 ofSeller, on the part of any other party thereto.

###  

### (b)           Seller has good and valid title to, or, in the caseof leased properties and assets valid leasehold interests in, all of thePurchased Assets, free and clear of any Liens, except (i) as reflected inthe Seller Disclosure Letter, and (ii) such imperfections of title andencumbrances, if any, which do not detract from the value or interfere with thepresent use of, in any material respect, assets subject thereto (the “**Permitted Liens**”).  Seller is a party to and enjoys the right tothe benefits of all Assigned Contracts.

###  

### (c)           Allof the Fixed Assets are in good operating condition and repair (normal wear andtear excepted) and are suitable for the purposes for which they are currentlyused.

###  

### (d)           Sellerhas the complete power and right to sell, assign, transfer, convey and deliverthe Purchased Assets to Buyer pursuant to this Agreement.  Following the consummation of the Transactionand the execution of the instruments of transfer contemplated by this Agreementand the Ancillary Agreements, Buyer will own, with good and valid title to, orotherwise acquire the interests of Seller and its subsidiaries in, thePurchased Assets, free and clear of any Liens, other than the Permitted Liens.

###  

3.8           Intellectual Property.  Other thanIntellectual Property Rights included in the Purchased Assets and AssumedLiabilities and Intellectual Property Rights related to the Excluded Assets, notransfer of Intellectual Property Rights from Seller to Buyer or Parent isrequired for Buyer and/or Parent to conduct the Business as currently conductedby Seller.  The manufacturing processesof the Business as currently conducted by the Seller at the Closing and continuedby Buyer or Parent pursuant to the Supply Agreement do not infringe ormisappropriate any Intellectual Property of any third party.  For the avoidance of doubt, the foregoingsentence shall take prevail in the event of a conflict between such sentenceand the Supply Agreement.

 

3.9           Contracts.  Section 3.9 of Seller Disclosure Letterlists all written or oral contracts, agreements, commitments and otherarrangements (including any amendment thereto) outstanding as of the datehereof to which Seller is a party and that relates to the Business, other thanbids submitted to customers, purchase orders and sales orders in the ordinarycourse of business (collectively, the “**BusinessContracts**”).  Seller has delivered to Parent a correct and completecopy of each Business Contract, and any written modification, amendment oradditional terms (and a written summary setting forth the terms and conditionsof any oral modification, amendment or additional terms) to the BusinessContracts.  With respect to each BusinessContract: (A) the Business Contract, with respect to Seller and, to Seller’sknowledge, all other parties thereto, is legal, valid, binding, enforceable,and in full force and effect in all respects; (B) neither Seller nor, toSeller’s knowledge, any other party is in breach or default, and no event hasoccurred, which with notice or lapse of time would constitute a breach ordefault, or permit termination, modification, or acceleration, under theBusiness Contract; and (C) Seller has not received notice that any partyhas repudiated any provision of the Business Contract.  Except as set forth on Section 3.4 ofthe Seller Disclosure Letter, Seller has obtained or will obtain prior to theClosing Date, all necessary consents, waivers and approvals of parties to anyAssigned Contract as are required thereunder in connection with thetransactions contemplated by this

 

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Agreement or to remain in effect withoutmodification after the Closing. Following the Closing, Buyer will be permitted to exercise all of Seller’srights under such Assigned Contracts to the same extent in all materialrespects 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 ofSeller and related to the Business, the Purchased Assets or the AssignedContracts.

 

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

 

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

 

3.13         Employees.Schedule 3.13 contains a complete and accurate list of allcurrent Employees as of the date hereof, showing for each such Employee thefollowing: 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 plansto terminate employment with Seller or within the twelve (12) months from thedate of the Closing.  The Seller is not aparty to any special collective bargaining agreement and no special collectivebargaining agreement is being negotiated with respect to the Business.  There are no collective relations in anyFacility.  The Employees are notorganized, and there is no Employees’ committee or collective representation ofany kind.  There is no material unfairlabor practice, charge or complaint pending against the Seller with respect tothe Business, nor is there any material labor strike, work stoppage, grievanceor other labor dispute pending or, to the knowledge of the Seller, threatenedin writing or orally against the Seller with respect to the Business.  The Seller: (i) is in compliance in allmaterial respects with all applicable Laws respecting employment and wage andhours, and with all terms and conditions of employment, agreements with thirdparties, codes of conduct, visas, work permits, in each case, with respect toEmployees; (ii) have withheld, paid and reported all amounts required byLaw or by agreement to be withheld, reported and paid with respect to wages,salaries and other payments to Employees; (iii) are not liable for anyarrears 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 orother fund governed by or maintained by or on behalf of any Governmental Body,with respect to unemployment compensation benefits, social security or otherbenefits or obligations for Employees (other than routine payments to be madein the normal course of business and consistent with past practice).  There are no pending, or to the knowledge ofSeller, threatened against the Seller under any employment policy or disabilitypolicy.

 

3.15         Environment, Health and Safety.  For purposes of this Agreement, the followingterms 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 Bodyto be radioactive, toxic, hazardous or otherwise a danger to health,reproduction or the environment or the disposal, treatment, transfer, storageor manufacture of which is regulated in any manner by a Governmental Body.

####  

#### (ii)           “**Business Facility**” is any propertyincluding the land, the improvements thereon, the groundwater thereunder andthe surface water thereon, that is or at any time has been owned, operated,occupied, controlled or leased by the Seller in connection with the operationof the printed circuit board assembly manufacturing and storage systemmanufacturing business conducted by Seller in Singapore.

####  

#### (iii)          “**Environmental Laws**” are all applicablelaws, rules, regulations, orders, treaties, statutes, and codes promulgated byany Governmental Body which prohibit, regulate or control any HazardousMaterial or any Hazardous Material Activity, including, without limitation, theFactories Act (Cap 104) of Singapore, the Fire Safety Act (Cap 109A) ofSingapore, the Environmental Pollution Control Act (Cap 94A) of Singapore, theEnvironmental Public Health Act (Cap 95) of Singapore, and any other laws andregulations in Singapore pertaining to occupational health and safety, orpollution control, the regulations promulgated to any of the foregoing, and allamendments and modifications of any of the foregoing.

####  

#### (iv)          “**Hazardous Materials Activity**” is thetransportation, 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 aHazardous Material.

####  

#### (v)           “**Environmental Permit**” is any approval,permit, license, clearance or consent required to be obtained from any privateperson or any Governmental Body with respect to a Hazardous Materials Activitywhich is or was conducted by the Seller.

####  

### (b)           Condition of Property:  As of theClosing, except in compliance with Environmental Laws and in a manner thatcould not reasonably be expected to subject the Seller to liability, toknowledge of Seller, no Hazardous Materials, underground storage tanks,asbestos which is friable of Polychlorinated Biphenyls (PCBs), are present onany Business Facility or were present on any other Business Facility at thetime it ceased to be owned, operated, occupied, controlled or leased by theSeller.  To the knowledge of the Seller,there are no

 

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### undergroundstorage tanks, asbestos which is friable or likely to become friable or PCBspresent on any Business Facility.

 

### (c)           Hazardous Materials Activities:  The Sellerhas conducted all Hazardous Material Activities relating to the Business incompliance in all material respects with all applicable EnvironmentalLaws.  The Hazardous Materials Activitiesof the Seller prior to the Closing have not resulted in the exposure of anyperson to a Hazardous Material in a manner which has caused or could reasonablybe expected to cause an adverse health effect to any such person.

###  

### (d)           Permits:  Seller holds all Environmental Permits necessaryfor the conduct of the Seller’s Business as currently being conducted bySeller.

###  

### (e)           Environmental Litigation:  No action,proceeding, revocation proceeding, amendment procedure, writ, injunction orclaim is pending, or to the best of the Seller’s knowledge, threatened,concerning or relating to any Environmental Permit or any Hazardous MaterialsActivity of the Seller relating to its Business, or any Business Facility.

###  

### (f)            Reports and Records:  The Seller has delivered to Buyeror made available for inspection by Buyer and its agents, representatives andemployees all records in the Seller’s possession concerning the HazardousMaterials Activities of the Seller relating to its Business and allenvironmental audits and environmental assessments of any Business Facilityconducted at the request of, or otherwise in the possession of the Seller.  The Seller has complied with allenvironmental disclosure obligations imposed by applicable law with respect tothis transaction.

###  

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

 

3.17         CompleteCopies of Materials.  Seller has delivered or made available true andcomplete copies of each document (or summaries of same) that has been requestedby Parent, Buyer or their counsel.

 

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

 

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

 

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responsive to normal competitive conditions and consistent with Seller’spast sales practices, (iii) increases to reflect any increase in the costthereof to Seller and (iv) increases and reductions made with the writtenconsent of Parent.  All of theInventories are located at the Facility.

 

3.20         Facilityand Tangible Personal Property.  Subject to the lease relating to theFacility, the Facility is owned by the Seller free and clear of any Liensexcept for Permitted Liens.  The Selleris in peaceful and undisturbed possession of the Facility.  There are no structural, electrical,mechanical, plumbing, roof, paving or other defects in any improvements locatedon 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 theaggregate, US$300,000 to rectify.  Thereare no outstanding written or, to the Seller’s knowledge, oral contracts madeby Seller for any alterations or improvements on or to the Property which havenot been fully paid.  The Seller hascaused the Purchased Assets to be maintained in accordance with good businesspractice, and all the Purchased Assets are in good operating condition andrepair and (normal wear and tear excepted) are suitable for the purposes forwhich they are used and intended. 

 

3.21         Sufficiencyof Purchased Assets.  Other than the Excluded Assets and theEmployees, and subject any assets or services being provided pursuant to theAncillary Agreements, the sale of the Purchased Assets and the Facilitypursuant to this Agreement and the Ancillary Agreements will effectively conveyto Buyer all of the Assets necessary to operate the Business, as heretoforeconducted by Seller prior to the Closing.

 

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

 

### (a)           Selleris not in material default (or with the giving of notice or lapse of time, orboth, would be in material default) under, or violation in any material respectof, any Business License.

###  

### (b)           ThePermits to be assumed by Buyer in the Transaction are sufficient to enableBuyer to conduct the Business as heretofore conducted by the Seller in compliancein all material respects with all applicable Laws.

###  

3.23         ISO Certifications and Non-GovernmentalCertifications.

 

### (a)           TheFacility is currently certified ISO 9002/ ISO 14001.  The manufacturing operations conducted at theFacility are in material compliance with the European Union directivesregarding RoHS.

###  

### (b)           Section 3.24of the Seller’s Disclosure Letter contains a complete and accurate list of allcustomer, supplier and other non-governmental entities that have issuedcertifications or quality assurance criteria regarding the Purchased Assets orFacility.

###  

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

 

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

 

# **ARTICLE IV**REPRESENTATIONS AND WARRANTIES OFPARENT AND BUYER

# ** **

Subject to such exceptions as arespecifically disclosed in the disclosure letter supplied by theParent to Seller (the “**Parent DisclosureLetter**”), each of Parent and Buyer, jointly and severally, herebyrepresents and warrants to Seller that the statements contained in thisArticle IV are true and correct as of the date of this Agreement and willbe true and correct as of the Closing (as though made at the Closing); *provided*, that**therepresentations and warranties made as of a specified date will be true andcorrect 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 toconduct business and are in good standing under the laws of each otherjurisdiction where such qualification is required and in which the failure toso qualify would not (i) in the aggregate have a Material Adverse Effecton Parent or Buyer, taken as a whole, or (ii) adversely affect the abilityof Parent or Buyer to execute and deliver this Agreement and the AncillaryAgreements, 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 theyare parties, and to consummate the Transaction and to perform their obligationshereunder and thereunder.  This Agreementand the Ancillary Agreements to which they are parties constitute the valid andlegally binding obligations of Parent or Buyer, enforceable against Parent orBuyer in accordance with their respective terms and conditions, except as such enforceabilitymay be limited by principles of public policy and subject to the laws ofgeneral application relating to bankruptcy, insolvency and the relief ofdebtors and rules of law governing specific performance, injunctive relief orother equitable remedies.

 

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

 

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any oftheir assets is subject, other than any of the foregoing which would not in theaggregate 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 anddeliver this Agreement and the Ancillary Agreements, or consummate theTransactions.

 

## 4.4           Consents.  No consent,waiver, approval, order, license, permit, certificates, filing or authorizationof, or registration, declaration or filing with, any Governmental Body or anythird party, is required by or with respect to Parent or Buyer in connectionwith the execution and delivery of this Agreement or the consummation of theTransaction, except for (i) such consents, waivers, approvals, orders,authorizations, registrations, declarations and filings as may be requiredunder applicable federal and state securities laws, (ii) any applicablefilings required under the noncompetition laws, and (iv) such consents,waivers, approvals, orders, authorizations, registrations, declarations andfilings in which the failure of which to obtain would not (i) in theaggregate have a Material Adverse Effect on Parent or Buyer, or(ii) adversely affect the ability of Parent or Buyer to execute anddeliver this Agreement and the Ancillary Agreements, or consummate theTransactions.

 

## 4.5           PurchasePrice.  Buyer has and will have sufficient cash onhand to pay the Purchase Price and the GST Tax Amount that may be chargeable inrespect of the sale of the Purchased Assets under this Agreement at the Closing.

 

# **ARTICLE V**PRE-CLOSING COVENANTS

# ** **

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

 

## 5.1           Operationof Business.

###  

### (a)           Selleragrees that, during the Pre-Closing Period, except as contemplated by thisAgreement, any Ancillary Agreement or the Transactions, or as otherwiseconsented to or approved in advance by Parent or Buyer, Seller shall:

###  

#### (i)            use allcommercially reasonable efforts to (i) preserve intact the presentbusiness organization, reputation, contractual and other arrangements of theBusiness then under the control of Seller, (ii) keep available (subject todismissals and retirements in the ordinary course of business consistent withpast 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 orprovides services or with whom Seller otherwise has significant businessrelationships in connection with the Business, and (v) continue allcurrent sales, service, marketing, promotional, product development and otheractivities relating to the Business;

 

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#### (ii)           except tothe extent required by applicable Law and consistent with past practice, (i) cause the Books and Records of the Business to bemaintained 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 theBusiness, the Purchased Assets or increase the Assumed Liabilities;

####  

#### (iii)          use allcommercially reasonable efforts to continue in full force and effect allmaterial insurance policies (or comparable insurance policies) insuring theBusiness and its Assets; and

####  

#### (iv)          comply in allmaterial respects with all Laws and Orders applicable to the Business, andpromptly following receipt thereof deliver to Buyer copies of any writtennotice received from any Governmental Body or other Person alleging anyviolation of any such Law or Order.

####  

### (b)           Selleragrees that, during the Pre-Closing Period, except as contemplated by thisAgreement, the Ancillary Agreements or this Transaction or as otherwiseconsented to or approved in advance by Parent or Buyer, Seller shall not:

###  

#### (i)            Except forany existing benefit plan or program or contract, make any representation orpromise, oral or written, to any Employee concerning any employee benefit plan,except for statements as to the rights or accrued benefits of any Employeeunder the terms of any employee benefit plan or agreements, or otherwiserequired by Law;

####  

#### (ii)           Except forany existing benefit plan or program or contract, make any increase in thesalary, wages or other compensation (cash, equity or otherwise) of any Employeewhose annual salary is or, after giving effect to such change, would be theequivalent individually to in excess of US$50,000 and in the aggregate inexcess of US$100,000;

####  

#### (iii)          adopt, enterinto or become bound by any employee benefit plan, any employment-relatedcontract or any collective bargaining agreement with respect to the Business orany of the Employees, or, amending, modifying or terminating (partially orcompletely) any such employee benefit Plan, employment-related contract orcollective bargaining agreement, except to the extent required by applicableLaw or existing contractual obligation and, in the event compliance with legalrequirements presents options, only to the extent that the option which Sellerreasonably believes to be the least costly is chosen, except in the ordinarycourse of business consistent with past practice;

####  

#### (iv)          terminatethe employment of any Employee, exceptfor cause, provided Seller provides notice to Parent or Buyer prior to any suchtermination, or

####  

#### (v)           enter intoany Contract to do or engage in any of the foregoing items set forth in thisSection 5.1(b).

####  

### (c)           Selleragrees that, during the Pre-Closing Period, except as permitted by thisAgreement, the Ancillary Agreements or this Transaction, or as otherwiseconsented to or approved in advance by Parent or Buyer, Seller shall not:

 

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#### (i)            acquire,lease, license or dispose of or agree to acquire lease, license or dispose ofany assets that would constitute Purchased Assets hereunder, other than in theordinary course of business consistent with past practice, or create or incurany material Lien, other than a Permitted Lien, on any assets that wouldconstitute Purchased Assets hereunder;

####  

#### (ii)           enter into,amend, modify, terminate (partially or completely), grant any waiver under orgive 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 pastpractice;

####  

#### (iii)          violate,breach or default in any material respect under, or take or fail to take anyaction that (with or without notice or lapse of time or both) would constitutea material violation or breach of, or material default under, any term orprovision of any Assigned Contract or any Assumed Permit;

####  

#### (iv)          makeany material changes in the conduct ofthe Business, except as specifically contemplated or permitted by thisAgreement, or any Ancillary Agreement or this Transaction; or

####  

#### (v)           enter intoany Contract to do or engage in any of the foregoing items set forth in thisSection 5.1(c).

####  

## 5.2           Access toInformation.  The Seller shall permit the Buyer andits representatives during the Pre-Closing Period to have reasonable accessduring normal business hours, upon reasonable advance notice, to the Books andRecords, Employees and assets of the Business (including the testing andinvestigation of any Facility as the Buyer deems reasonably necessary prior tothe Closing) then under the control ofSeller for the purposes of, among other things, identifying andverifying the value of the Purchased Assets to be purchased at the Closing; *provided, however*, that such access shall be conducted bythe Buyer and its representatives in such a manner as not to interfere unreasonablywith the businesses or operations of the Seller or the Business.  In order to facilitate the resolution of anyclaims made by or against or incurred by Parent or Buyer after the Closing orfor any other reasonable purpose, for a period of five years following theClosing, Seller shall, and shall cause its subsidiaries to, (i) retain allbooks and records which are not transferred to Buyer pursuant to this Agreementand which relate to the Business for periods prior to the Closing and which shallnot otherwise have been delivered to Buyer and (ii) upon reasonablenotice, afford the officers, employees and authorized agents andrepresentatives of Parent or Buyer, reasonable access (including the right tomake photocopies at Parent of Buyer’s expense), during normal business hours,to such books and records, all subject to Section 5.8 regardingconfidentiality.

 

## 5.3           Notice ofDevelopments.  During the Pre-Closing Period, Seller shallgive prompt notice to Buyer of (i) the occurrence or non-occurrence of anyevent of which Seller has knowledge, the occurrence or non-occurrence of whichis reasonably likely to cause any representation or warranty of Sellercontained in this Agreement to be untrue or inaccurate at or prior to theClosing and (ii) any failure of Seller to comply with or satisfy anycovenant, condition or agreement to be complied with or satisfied by ithereunder; *provided, however*,that

 

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## thedelivery of any notice pursuant to this Section 5.3 shall not limit orotherwise affect any remedies available to the Party receiving such notice.

 

## 5.4           NoSolicitation.  During the Pre-Closing Period, neither Sellernor any subsidiary of Seller shall (nor shall it permit its Representatives to)directly or indirectly take any of the following actions with any Person otherthan Parent, Buyer and their designees: (a) solicit, initiate, consider,encourage or accept any proposals or offers from, or conduct discussions withor engage in negotiations with, any Person relating to any possible AcquisitionProposal with Seller or any of its subsidiaries (whether such subsidiaries arein existence on the date hereof or are hereafter organized), (b) provideinformation with respect to Seller to any Person, other than Parent or Buyer,relating to, or otherwise cooperate with, facilitate or encourage any effort orattempt by any such Person with regard to, any possible Acquisition Proposalwith Seller or any subsidiary of Seller (whether such subsidiaries are in existenceon the date hereof or are hereafter organized), except as required by Law,(c) enter into a contract or agreement (whether oral or written) with anyPerson, other than Parent or Buyer, providing for an Acquisition Proposal withSeller or any subsidiary (whether such subsidiaries are in existence on thedate hereof or are hereafter organized), or (d) make or authorize anystatement, recommendation or solicitation in support of any possibleAcquisition Proposal with Seller or any subsidiary (whether such subsidiary isin existence on the date hereof or are hereafter organized) other than byParent or Buyer.  Seller shall, and shallcause its Representatives to, immediately cease and cause to be terminated anysuch contacts or negotiations with any Person relating to any AcquisitionProposal.  As used in thisSection 5.4, “**Acquisition Proposal**”shall mean a proposal or offer for (i) a merger, consolidation or other business combination involving anacquisition of the Business or the Purchased Assets or (ii) any extraordinary business transaction involving orotherwise relating to the Business or Purchased Assets.

 

## 5.5           ReasonableEfforts.  During the Pre-Closing Period, each of theParties will use their reasonable efforts to take all action and to do all thingsnecessary, proper, or advisable in order to consummate and make effective thetransactions contemplated by this Agreement (including satisfaction, but notwaiver, of the closing conditions set forth in Article VII below).

 

## 5.6           Noticesand Consents.  During the Pre-Closing Period, Seller willgive any notices to third parties and use reasonable commercial efforts toobtain any third party consents that are required in connection with thematters identified in Sections 3.3 and 3.4 of Seller Disclosure Letter orotherwise required in connection with the Transaction so as to preserve allmaterial rights of or benefits to Seller. During the Pre-Closing Period, each of the Parties will give any noticesto, make any filings with, and use its commercially reasonable efforts toobtain any authorizations, consents, and approvals of Governmental Bodies inconnection with the matters identified in Sections 3.3 and 3.4 of SellerDisclosure Letter or as otherwise required in connection with the Transactionscontemplated by this Agreement.

 

## 5.7           EmployeeMatters.  In the event that any ofthe Critical Employees terminate their employment with the Seller prior to theClosing or during that portion of the transition period in which such CriticalEmployees have significant remaining transition related functions, the Buyerand Seller will use reasonable commercial efforts to seek to implement amutually agreed alternative solution for the fulfillment of suchfunctions.  Any costs associated withthese matters, including any compensation incentives paid to Critical Employeesto encourage them to

 

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## remain employed after theClosing through the end of the transition period as provided in the SecondmentAgreement, will be shared equally by Buyer and Seller; as mutually agreed bythem; *provided* that Parent and Buyer will beresponsible only for costs approved by them in advanced; *providedfurther* that Parent and Buyer will be solely responsible for anycompensation for work after the date of transfer of any Transferred Employeehired by either of them.

 

## 5.8           Confidentiality.  All Book and Records of Seller, andother confidential and/or proprietary information of a party to this Agreementare hereinafter referred to as “**Confidential Information**.”  A party who owns and discloses itsConfidential Information is referred to below as a “**DisclosingParty**” and a party who receives or is given access to a DisclosingParty’s Confidential Information is referred to below as a “**Receiving Party**.”  Each party hereto agrees that all ConfidentialInformation of another party that is disclosed to such party in the course ofnegotiating the Transactions contemplated by this Agreement or conducting duediligence in connection herewith will be held in confidence, and will not beused or disclosed by the Receiving Party except for the purposes relating to orpermitted by this Agreement for which such Confidential Information wasdisclosed, and upon termination of this Agreement or the consummation of the Transactionscontemplated hereby, will be promptly destroyed by the Receiving Party orreturned to the Disclosing Party, upon the Disclosing Party’s writtenrequest.  No party’s employees will begiven access to Confidential Information of another party except on a “need toknow” basis and such employees shall be informed of the need to keep suchConfidential Information confidential. It is agreed that Confidential Information will not include informationthat: (i) was known to such Receiving Party before receipt of suchinformation from the Disclosing Party; (ii) is or becomes generally knownto the public through no breach of this Section or any act or omission on thepart of the Receiving Party; (iii) is disclosed by a third party havingthe legal right to disclose such information with no obligation of confidenceto the Disclosing Party, or is required to be disclosed as a result of courtorder or similar process; or (iv) is independently developed by theReceiving Party without use of any of the Disclosing Party’s ConfidentialInformation (as evidenced by a contemporaneous writing).

 

# **ARTICLE VIOTHER AGREEMENTS AND COVENANTS**

# ** **

## 6.1           AdditionalDocuments and Further Assurances. Each Party hereto, at the reasonable request of another Party hereto, shallexecute and deliver such other instruments and do and perform such other actsand things as may be reasonably necessary or desirable for effecting completelythe consummation of the Transactions contemplated hereby (*provided* that the foregoing will notrequire any Party to make any payment of consideration to any other Person).

 

## 6.2           InventoryPut and Call; Covenant to Purchase Inventory.  For a period of thirty (30) days following the three (3) monthanniversary of the Closing (the “**First****Exercise Period**”), (i) Buyer shall have the option tosell to Seller and Seller shall have to obligation to purchase from Buyer (the“**Put Right**”) all Inventories that Buyerand Seller reasonably agree will reasonably be expected to not have been usedin the manufacture and sale of products of the Business during the 6-monthperiod following the Closing Date (collectively, the “**Estimated**

 

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## **UnusedInventories**”) and (ii) for aperiod of thirty (30) days following the six (6) month anniversary of theClosing (the “**Second****ExercisePeriod**”), Buyer shall have a Put Right with respect to allInventories that have not been used in the manufacture and sale of products ofthe 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 theUnused Inventories shall be deemed to be reduced by the following:

 

### (a)           Theamount 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 andused in substitution for such Unused Inventories during such 6-month period,unless such substituted inventories are used by Buyer or such affiliates at therequest of Seller;

###  

### (b)           Theamount of any Unused Inventories, if any, lost, stolen, destroyed or otherwisedamaged during such 6-month period; and

###  

### (c)           Theamount of any Unused Inventories, if any, to be used by Buyer or its affiliatesafter such 6-month period pursuant to binding, noncancellable purchase ordersreceived or assumed by Buyer or such affiliates during such 6-month period tobe shipped within 30 days after the end of such 6-month period.

###  

### (d)           Forpurposes of the identification of any Unused Inventories, the Inventories shallbe deemed to be used prior to any other inventories of the same kind, orsuitable for the same purposes, as such Unused Inventories acquired by Buyer orits affiliates after the date of this Agreement.

###  

### (e)           Buyermay exercise its Put Right described in Section 6.2(a) solely by thedelivery, within the First Exercise Period or the Second Exercise Period, asthe case may be, to Seller of notice to such effect that (i) sets forth(A) a specific description of any Unused Inventories and (B) theoriginal purchase price less any amount paid by Seller to Buyer with respect tosuch Unused Inventory following the Closing Date (such as a “buy down”) of suchInventories as of the Closing Date (the “**InventoryRepurchase Price**”) and (ii) is accompanied by an officer’scertificate of Buyer that certifies that such Unused Inventories have beenidentified, and the Inventory Repurchase Price thereof has been calculated, inaccordance 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 Sellerdisputes Buyer’s identification of the Unused Inventories or the calculation ofthe Inventory Repurchase Price.  IfSeller fails to timely deliver to Buyer such notice within such 10 business dayperiod, then Seller shall be deemed to have accepted the exercising party’sidentification of the Unused Inventories and calculation of the InventoryRepurchase Price.  If Seller timelydelivers to the Buyer such notice within such 10 business day period, then theparties shall attempt in good faith to reach a resolution of suchdisagreement.  If such disagreement isnot resolved within five (5) days after delivery of Seller’s notice, theIndependent Accountants shall be directed to compute the amount of the UnusedInventories and the Inventory Repurchase Price as promptly as practicable andsuch computation shall be binding upon the Parties hereto.  The expenses of Independent Accountant inconnection with such computation shall be borne equally by Buyer and Seller.

 

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### (f)            Payment.  Seller shall pay to Buyer theamount of the Inventory Repurchase Price as finally determined in this Sectionwithin five (5) business days of any such determination and Buyer shalltransfer title of the Unused Inventory to Seller.  The Unused Inventory shall be insubstantially 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 PermittedLiens).  Except as set forth in theforegoing sentence, Buyer makes no representations or warranties with respectto the Unused Inventories.

###  

## 6.3           Repurchaseof Inventory and Equipment Under Certain Circumstances.

 

### (a)           Inthe event that during the term of the Supply Agreement, (i) Seller sells,transfers or otherwise disposes of its DSG business, its systems business orany other business unit of Seller being supplied by Buyer pursuant to theSupply Agreement to a third party, other than Buyer or Parent, or an Affiliateof either (in each case, an “**Affected Business**”)and (ii) both (1) the acquirer of the Affected Business does not agree tobe bound by and subject to the terms of the Supply Agreement as in effect on thedate of closing of the transaction involving the Affected Business and (2)Adaptec, Inc. (“**Adaptec**”) does not remainprimarily liable for its obligations under the Supply Agreement or Adaptec orthe acquirer of the Affected Business terminates the Supply Agreement inconnection with the sale of the Affected Business, Seller agrees to repurchaseany Fixed Assets or Inventories sold to Buyer hereunder and then held by Buyeron the date of such repurchase that are associated with the Affected Businessnecessary to support Adaptec’s requirements under the Supply Agreementassociated with the Affected Business (and any capital equipment and any rawmaterial or work in process purchased by Parent or Buyer necessary to supportAdaptec’s requirements under the Supply Agreement that are associated with theAffected Business) (the “**Repurchased Assets**”).  In connection with any repurchase of theRepurchased Assets, Buyer shall represent to Sellerthat Buyer is duly and validly organized under the laws of the jurisdiction inwhich it is incorporated, that the repurchase has been duly authorized by allrequisite action on the part of Buyer, that such transfer and purchase does notviolate any applicable law or require the consent or authorization of any thirdparty, that Buyer has good and valid title to the Repurchased Assets, free andclear of any Liens, except Permitted Liens, and that Buyer has thecomplete authority, power and right to sell, assign, transfer, convey anddeliver the Repurchased Assets to Seller pursuant to the repurchase.  The repurchase price for any Inventories soldto Seller pursuant to this Section 6.3(a) shall be (i) if the Seller’sobligation to repurchase the Repurchased Assets under this Section 6.3 istriggered 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 determinedpursuant to Section 6.2 hereof, and (ii) if the Seller’s obligation torepurchase the Repurchased Assets under this Section 6.3 is triggered after theexpiration or exercise of the put right in Section 6.2, then the repurchaseprice shall be the standard cost of such Inventories as shown on the books andrecords of Buyer.  The repurchase pricefor Fixed Assets shall equal the depreciated value of such Fixed Assets thatwould be shown on the books and records of Seller if Seller had continued toown such Fixed Assets on the date of the closing of the divestiture of theAffected Business.  The repurchase pricefor the Fixed Assets and Inventories pursuant to this Section 6.3(a) shallbe determined by Buyer within fifteen (15) days of the occurrence of an eventthat gives Buyer the right to trigger a repurchase pursuant to thisSection.  Thereafter, Seller or Parentmay 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 provisionsof Section 6.2(f) hereof.

###  

### (b)           Inthe event that during the term of the Supply Agreement, (i) Seller isacquired by a third party merger, or other business combination transaction inwhich the shareholders of Adaptec immediately prior to such transaction ownimmediately after such transaction less than 50% of the outstanding votingsecurities of the acquiring or surviving entity (or its ultimate corporateparent) or the sale of substantially all of the assets of the Seller orAdaptec’s, other than an acquisition, merger, business combination or sale toBuyer or Parent, or an Affiliate of either, and (ii) both (1) the acquirerof Adaptec or all or substantially all of the assets of Seller or Adaptec doesnot agree to be bound by and subject to the terms of the Supply Agreement as ineffect on the date of closing of the transaction and (2) Adaptec does notremain primarily liable for its obligations under the Supply Agreement orterminates the Supply Agreement prior to its expiration date in connection withsuch transaction, Seller agrees to repurchase any Fixed Assets or Inventoriessold to Buyer and held by Buyer on the date of such repurchase necessary tosupport Adaptec’s requirements under the Supply Agreement associated with thebusiness or assets being sold (and any capital equipment and any raw materialor work in process purchased by Parent or Buyer necessary to support Adaptec’srequirements under the Supply Agreement associated with the business or assetsbeing sold) (the “**Acquisition Assets**”).  Buyer shall represent to Seller that Buyer is duly and validly organized underthe laws of the jurisdiction in which it is incorporated, that the repurchasehas been duly authorized by all requisite action on the part of Buyer that suchtransfer and purchase does not violate any applicable law or require theconsent or authorization of any third party, that Buyer has good and validtitle to the Acquisition Assets, free and clear of any Liens, except PermittedLiens, and that Buyer has the complete authority, power and right tosell, assign, transfer, convey and deliver the Acquisition Assets to Sellerpursuant to the sale of the Acquisition Assets. The repurchase price for any Inventories sold to Seller or Parentpursuant to this Section 6.3(b) shall be (i) if the Seller’s obligation torepurchase the Repurchased Assets under this Section 6.3 is triggered prior tothe expiration or exercise of the put right in Section 6.2, determined in thesame manner as the Inventory Repurchase Price is determined pursuant toSection 6.2 hereof, and (ii) if the Seller’s obligation to repurchase theRepurchased Assets under this Section 6.3 is triggered after the expiration orexercise of the put right in Section 6.2, then the repurchase price shall bethe standard cost of such Inventories as shown on the books and records ofBuyer.  The repurchase price for FixedAssets shall equal the depreciated value of such Fixed Assets that would beshown on the books and records of Seller if Seller had continued to own suchFixed Assets on the date of the closing of the divestiture of the AcquisitionAssets.  The repurchase price for the Fixed Assets andInventories pursuant to this Section 6.3(b) shall be determined by Buyerwithin fifteen (15) days of the occurrence of an event that gives Buyer theright to trigger a repurchase pursuant to this Section.  Thereafter, Parent may object to suchdetermination using the same framework as set forth in Section 6.2(e)hereof and payment shall be made by Parent pursuant to the provisions ofSection 6.2(f) hereof.  A transactioninvolving the sale of an Affected Business or a sale of Acquisition Assetssubject to the repurchase obligations of Seller pursuant to Sections 6.3(a) or(b), is referred to as a “Disposition Transaction”.

###  

## 6.4           ConsignedInventories.  In the event Seller hasin Buyer’s determination a reasonable amount of inventories related to theBusiness as of the Closing Date in excess of the Inventories, the Parties mayreasonably agree that such inventory (the “**Consigned Inventory**”)

 

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## shall remain at the Facilityfollowing the Closing Date without charge to Seller or Adaptec and Seller andAdaptec shall be given reasonable access to such inventory.  Following each exercise of the Put Right, anyUnused Inventory shall remain at the Facility following such exercise andthereafter be treated as Consigned Inventory without charge to Seller orAdaptec and Seller and Adaptec shall be given reasonable access to suchinventory.  During the period reasonablydetermined by the Buyer (the “**Consignment Period**”),Buyer agrees that, in the event Buyer requires inventories of the same kind andnature as, and in addition to, the Inventories purchased on the Closing Datefor the manufacture of the products of the Business for delivery to Seller,Parent and Buyer shall use the Consigned Inventories to the extent reasonablypossible.  In the event Parent or Buyeruse the Consigned Inventories to manufacture products for Seller, Parent orBuyer 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 Inventoryfrom the Facility upon reasonable prior written notice to Buyer and Parent, andSeller shall remove such Consigned Inventory within a reasonable time followingBuyer’s request to Seller to remove such Consigned Inventory.

 

# **ARTICLE VII**CONDITIONS TO THE CLOSING

# ** **

## 7.1           Conditionsto Parent’s and Buyer’s Obligation to Close.  The obligations of Parent and Buyer hereunder are subject to thefulfillment or satisfaction on, and as of the Closing, of each of the followingconditions (any one or more of which may be waived by Parent, but only in awriting signed by Parent):

 

### (a)           Representationsand Warranties.  The representations and warranties of Sellerset forth in Article III that are qualified as to materiality or MaterialAdverse 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 materialrespects, in each case as of the date of this Agreement, and as of the Closingwith the same force and effect as if made on and as of the Closing (except tothe extent expressly made as of a particular date, in which case as of suchdate).

###  

### (b)           Covenants.  Seller shallhave performed or complied in all material respects with all agreements andcovenants required by this Agreement to be performed or complied with by Selleron or prior to the Closing.

###  

### (c)           NoActions.  No action, suit, or proceeding shall bethreatened or pending before any court or quasi-judicial or administrativeagency of any non-U.S. or any U.S. federal, state or local jurisdiction orbefore any arbitrator wherein an unfavorable injunction, judgment, order,decree, ruling, or charge would, if successful, (A) prevent consummationof any of the Transactions contemplated by this Agreement, or (B) resultin a Material Adverse Effect to Seller of the Purchased Assets.

###  

### (d)           ClosingCertificates.  Seller shall have delivered to Parent anofficer’s certificate to the effect that each of the conditions specified abovein Section 7.1(a) to 7.1(c)(inclusive) is satisfied in all respects.

 

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### (e)           ThirdParty Consents.  All consents (or waivers in lieu thereof) tothe performance by Parent, Buyer and Seller of their respective obligationsunder this Agreement and the Ancillary Agreements or to the consummation of theTransaction, listed on Schedule 7.1(e), (i) shall have beenobtained, (ii) shall be in form and substance satisfactory to Parent, and(iii) shall be in full force and effect.

###  

### (f)            Deliveryof Documents.  Seller will havedelivered to Buyer the following documents:

###  

#### (i)            theAssumption Instruments, the TransitionServices Agreement, the Escrow Agreement and the Employee Secondment Agreement;

####  

#### (ii)           alldocuments necessary to effect thetransfer of the Purchased Assets and the Assumed Liabilities as listed in7.1(f)(ii);

####  

#### (iii)          theSeller Books and Records;

####  

#### (iv)          assignmentinstruments with regard to the AssignedContracts and the Assumed Permits, including, to the extent required, consentsto the assignments from all Persons whose consent is required for suchassignment;

####  

#### (v)           consentsfrom all Persons to discharge any Lien(other than Permitted Liens) existing as of the Closing on the PurchasedAssets, the Business or the Facility set forth in Schedule 7.1(f)(v);and

####  

### (g)           MaterialAdverse Effect.  There shall not havebeen a Material Adverse Effect on the Business or the Purchased Assets, takenas a whole, nor shall there have occurred any event or development that couldreasonably be expected to result in the future in a Material Adverse Effect onthe Purchased Assets, taken as a whole.

###  

### (h)           Schedules.  Seller shall have delivered to Buyer Schedule1.1(v), Schedule 1.1(aa) and Schedule 1.1(mm) at leastthree (3) business days prior to the Closing Date.

###  

### (i)            Boardof Directors.  Buyer shall havereceived a certified copy of the resolutions of the board of directors ofSeller executed by an officer of Seller approving this Agreement, the sale andtransfer of the Purchased Assets to Buyer pursuant to this Agreement, and theAncillary Agreements.

###  

### (j)            PreliminaryFixed Asset and Inventories Statement. Seller shall have executed and delivered to Buyer the Preliminary FixedAsset and Inventories Statement and a statement indicating the Preliminary NetAsset Value.

###  

### (k)           Deliveryof Documents.  Seller will havedelivered to Buyer the following documents:

###  

#### (i)            theAncillary Agreements executed by Seller;and

 

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#### (ii)           assumptioninstruments with regard to the Assigned Contracts and the Assumed Licenses.

####  

### (l)            NoActions.  No action, suit, orproceeding shall be threatened or pending before any court or quasi-judicial oradministrative agency of any non-U.S. or any U.S. federal, state or localjurisdiction 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 thisAgreement, or (B) result in a Material Adverse Effect to the Business orthe Purchased Assets.

###  

## 7.2           Conditionsto Seller’s Obligations.  The obligations of Seller hereunder aresubject to the fulfillment or satisfaction on, and as of the Closing, of eachof the following conditions (any one or more of which may be waived by Seller,but only in writing signed by Seller):

 

### (a)           Representationsand Warranties.  The representations and warranties of Parentand Buyer set forth in Article IV that are qualified as to materiality orMaterial Adverse Effect, or in Sections 4.1, 4.2 or 4.3 shall be true andcorrect, and those that are not so qualified shall be true and correct in allmaterial respects, in each case as of the date of this Agreement, and as of theClosing 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 asof such date).

###  

### (b)           Covenants.  Parent andBuyer shall have performed or complied in all material respects with allagreements and covenants required by this Agreement to be performed or compliedwith by them on or prior to the Closing.

###  

### (c)           ClosingCertificate.  Parent shall have delivered to Seller anofficer’s certificate to the effect that each of the conditions specified abovein Section 7.2(a) and 7.2(b) is satisfied in all respects.

###  

### (d)           Boardof Directors.  Seller shall havereceived a certified copy of the resolutions of the board of directors of Buyerapproving this Agreement, the sale and transfer of the Purchased Assets to Buyer,and the Ancillary Agreements.

###  

### (e)           PurchasePrice.  Seller shall have receivedthe Purchase Price and the GST Tax Amount.

###  

### (f)            Deliveryof Documents.  Buyer will havedelivered to Seller the following documents:

###  

#### (i)            theAssumption Instruments, the Transition Service Agreement, the Escrow Agreementand the Employee Secondment Agreement; and

####  

#### (ii)           assumptioninstruments with regard to the Assigned Contracts and the Assumed Licenses.

####  

### (g)           MaterialAdverse Effect.  There shall not havebeen a Material Adverse Effect on Parent or Buyer, taken as a whole, nor shallthere have occurred any event or

 

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### development that couldreasonably be expected to result in the future in a Material Adverse Effect onParent or Buyer, taken as a whole.

###  

### (h)           NoActions.  No action, suit, orproceeding shall be threatened or pending before any court or quasi-judicial oradministrative agency of any non U.S. or any U.S. federal, state or localjurisdiction 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 thisAgreement, or (B) result in a Material Adverse Effect to Parent or Buyer.

###  

# **ARTICLE VIIISURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS**

# ** **

## 8.1           Representations,Warranties and Covenants.  The covenants contained in this Agreementshall survive the applicable Closing Date in accordance with their terms.  The representations and warranties containedin this Agreement and the Ancillary Agreements shall survive the applicableClosing Date for a period of twelve (12) months (such date upon which theyexpire being referred to herein as the “**SurvivalDate**”) and shall thereafter expire; *provided,however*, that notwithstanding the foregoing (i) therepresentations and warranties of Seller contained in Section 3.16(Environment, Health and Safety) shall survive the Closing Date for a period oftwenty-four (24) months.  Buyer’s orParent’s (or any Buyer Indemnitee’s) right to make a claim for indemnificationunder Section 9.1, and Seller’s (or any Seller Indemnitee’s) right to makea claim for indemnification under Section 9.2, shall expire with respectto such claims which are not made on or prior to the date, if any, on which thesurvival period for such representation or warranty expires.  Any claims under Article IX must beasserted in writing with reasonable particularity by the party making suchclaim, including indemnifying the basis of the claim and estimate of thepotential Damages covered thereby.

 

# **ARTICLE IX**INDEMNIFICATION

# ** **

## 9.1           Indemnificationby Seller.  Subject to thisSection 9, Seller agrees to defend, indemnify and hold harmless Parent andBuyer and their respective successors, assigns and Affiliates (individually, a“**Buyer Indemnitee**”, andcollectively, 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 theindemnifiable claim and those incurred in connection with the enforcement ofthis provision), net of insurance proceeds received by the Buyer Indemnitteewith respect thereto (collectively, “**Damages**”)suffered or incurred by any Buyer Indemnitee which is caused by, resulting fromor arising out of:

 

### (a)           any breachof any representation, warranty or covenant of Seller contained in thisAgreement or in any Ancillary Agreement, or other agreement, certificate,instrument or other document entered into or delivered by Seller at the Closingin connection herewith (it being

 

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### understoodand agreed that solely for purposes of determining the amount of Damages forpurposes 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 disregardedand have no force or effect);

###  

### (b)           any Excluded Liabilities;

###  

### (c)           Taxes ofSeller to the extent provided in Section 2.6;

###  

### (d)           Liabilities of Seller, whether arisingbefore or after the Closing Date, arising from or relating to the ownership oractions or inactions of Seller or the conduct of the Business prior to theClosing; and

###  

### (e)           anyand all Damages suffered or incurred by Buyer Indemnitee by reason of or inconnection with any claim or cause of action of any third party to the extentarising out of the operation of the Business prior to the Closing.

###  

To the extent that Seller’s undertakings set forth inthis Section 9.1 may be unenforceable, Seller shall contribute the maximumamount that it is permitted to contribute under applicable Law to the paymentand satisfaction of all Damages incurred by Buyer Indemnitee.

 

## 9.2           Indemnificationby Buyer and Parent.  Subjectto this Article IX, the Buyer and Parent each joint and severally agreesto defend, indemnify and hold harmless the Seller and its respectivesuccessors, assigns and Affiliates (individually, a “**Seller Indemnitee**”, and collectively, the “**Seller Indemnitees**”) from and against andin respect of any and all Damages suffered or incurred by any Seller Indemniteewhich is caused by, resulting from or arising out of:

 

### (a)           any breachof any representation, warranty or covenant of Buyer contained in thisAgreement, or in any Ancillary Agreement, or other agreement, certificate,instrument or other document entered into or delivered by any Buyer at theClosing in connection herewith (it being understood and agreed that solely forpurposes of determining the amount of Damages for purposes of theindemnification obligations set forth in this Article IX, allqualifications as to “materiality,” and all “Material Adverse Effect”qualifications, contained in such representations and warranties shall bedisregarded and have no force or effect); and

###  

### (b)           any AssumedLiabilities or Assigned Contracts arising out of circumstances existing afterthe Closing Date;

###  

### (c)           Taxes ofBuyer to the extent provided in Section 2.6.

###  

### (d)           Liabilitiesof Buyer or Parent arising from or relating to the ownership or actions orinactions of Buyer and Parent or the conduct of the Business on or after theClosing; and

 

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### (e)           anyand all Damages suffered or incurred by Seller Indemnitee by reason of or inconnection with any claim or cause of action of any third party prior to theextent arising out of the operation of the Business on or after the Closing.

###  

To the extent that Buyers or Parent’s undertakings setforth in this Section 9.2 may be unenforceable, Buyer and/or Parent shallcontribute the maximum amount that it is permitted to contribute underapplicable Law to the payment and satisfaction of all Damages incurred bySeller Indemnities.

 

## 9.3           Noticeand Opportunity to Defend.  Ifany action, proceeding, claim, liability, demand or assessment shall beasserted against any Buyer Indemnitee or any Seller Indemnitee (the “**Indemnitee**”) in respect of which suchIndemnitee proposes to demand indemnification, such Indemnitee shall notify theparty obligated to provide indemnification pursuant to Section 9.1 orSection 9.2 (the “**Indemnifying Party**”)thereof within a reasonably prompt period of time after assertion thereof; *provided, however,* that the failure to sonotify the Indemnifying Party shall only affect the Indemnitee’s right toindemnification hereunder to the extent that the Indemnifying Party’s interestsare actually and materially prejudiced thereby. Subject to rights of or duties to any insurer or other third Personhaving liability therefor, the Indemnifying Party shall have the right, withinten (10) days after receipt of such notice, to assume the control of thedefense, 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 theIndemnifying Party shall exercise its right to assume such control:

 

### (a)           theIndemnitee may, in its sole discretion and at its own expense, employ separatecounsel to represent it in any such matter, and in such event counsel selectedby the Indemnifying Party shall be required to cooperate with such counsel ofthe Indemnitee in such defense, compromise or settlement for the purpose ofinforming and sharing information with such Indemnitee;

###  

### (b)           for anysubject matter, the Indemnitee will, at its own expense, make available to theIndemnifying Party those employees of the Indemnitee or any Affiliate of theIndemnitee whose assistance, testimony or presence is necessary to assist theIndemnifying Party in evaluating and in defending any such action, suit,proceeding, claim, liability, demand or assessment; *provided, however*, that any such access shall be conductedin such a manner as not to interfere unreasonably with the business activitiesof the Indemnitee and its Affiliates;

###  

### (c)           theIndemnifying Party shall not compromise or settle any such action, suit,proceeding, claim, liability or assessment without the consent of theIndemnitee, which consent shall not be unreasonably withheld or delayed;

###  

### (d)           in the eventthat any action, suit, proceeding, claim, liability or assessment (or thecompromise or settlement thereof) involves a claim for (i) injunctiverelief that affects or could reasonably be expected to affect the Business inmaterial any respect, or (ii) a claim for damages (or a claim that couldreasonably be expected to result in damages) in excess of limitations set forthin Section 9.5(c) and Section 9.5(g), Parent shall have the right tocontrol the defense and settlement thereof, at the sole cost and expense of theIndemnified Party (subject to the limitations set forth in Article IX and subject to the Indemnified Party’s right tomake a claim

 

39

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### forDamages in respect of such cost and expense if appropriate); *provided, however*, that Parent shall notcompromise or settle any such action, suit, proceeding, claim, liability orassessment without the consent of the Indemnifying Party, which consent shallnot be unreasonably withheld or delayed.

###  

## 9.4           Remedies.  Except for the right to seek to specificallyenforce the covenants hereunder, and except as specifically provided in thisAgreement (including, without limitation, the immediately succeeding sentence),following the Closing Date, in the absence of fraud or intentionalmisrepresentation (a “**Fraud Claim**”),the sole and exclusive remedy of both Buyer and Seller with respect to anybreach of any representation or warranty contained in this Agreement, or anyAncillary Agreement or in any agreement, certificate, instrument or otherdocument entered into in connection herewith at the Closing or any covenant oragreement in this Agreement, shall be restricted to the indemnification rightsset forth in this Article IX. Nothing contained in this Article IX or elsewhere in this Agreementshall limit the liability of either Party under this Agreement if thisAgreement is terminated pursuant to Section 10.1 or otherwise, or if thetransactions contemplated hereby shall not be consummated for any reason.  The foregoing notwithstanding, except for aFraud Claim, a Party shall have no further obligations under this Article IX with respect to Damages arising from a breach of arepresentation or warranty contained in Article III or Article IV in the event the other Party waives in writing such Party’s satisfactionof the closing condition under Section 7.1(a) or Section 7.2(a), asthe case may be, due to such breach and closes the transaction.

 

## 9.5           CertainLimitations.  The liability ofthe Seller, Parent or the Buyer, as applicable, for claims under this Agreementshall be limited by the following:

 

### (a)           At any timeafter the applicable Survival Date for a representation and warranty, (i) the Seller shall have no further obligations underthis Article IX for breaches of such representations and warranties of theSeller, except for Damages with respect to which the Buyer Indemnitee hastimely given the Seller written notice prior to such date in accordance withSections 8.1 and 9.3 and (ii) the Buyer shall have no further obligations under this Article IX forbreaches of such representations and warranties of the Buyer, except forDamages with respect to which the Seller Indemnitee has given the Buyer writtennotice prior to such date in accordance with Sections 8.1 and 9.3.

###  

### (b)           Notwithstandinganything to the contrary herein, except with respect to Fraud Claims, any claimby a Buyer Indemnitee against Seller pursuant to Section 9.1(a) shall bepayable by Seller only in the event that the accumulated amount of Damages inrespect of Seller’s obligations to indemnify the Buyer Indemnitees under thisAgreement shall exceed $100,000 in the aggregate (the “**Seller Indemnification Threshold**”); *provided, however*, that at such time asthe aggregate amount of Damages in respect of the indemnity obligations ofSeller shall exceed the Seller Indemnification Threshold, Seller shallthereafter be liable for all Damages suffered or incurred by the BuyerIndemnitees in excess of such initial $100,000 of Damages.

###  

### (c)           Notwithstandinganything to the contrary herein, except with respect to Fraud Claims (for whichthere shall be no limitation), in no event shall the maximum aggregateliability of Seller in respect of any claims by the Buyer Indemnitees againstSeller pursuant to

 

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### Section 9.1(a)for Damages suffered or incurred by any Buyer Indemnitees exceed 10% of thevalue of the Purchase Price (as adjusted pursuant to Section 2.4), except that with respect to Damages suffered orincurred by any Buyer Indemnitee due to a breach of Section 3.16 the maximum aggregate liability of Seller shallbe 20% of the value of the Purchase Price (as adjusted pursuant to Section 2.4).

###  

### (d)           Notwithstandinganything to the contrary herein, the limitations contained in thisSection 9.5 shall not apply to claims for indemnification by BuyerIndemnitees 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 BuyerIndemnitee’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 thedate five years following the Closing Date.

###  

## 9.6           EnvironmentalCovenants.  The obligations andrights of the Buyer Indemnitees and Seller Indemnitees with respect toindemnification for Environmental Liabilities under this Article IX(whether as an Excluded Liability, Assumed Liability or as a result of arepresentation or warranty made in this Agreement), collectively the “**Environmental Covenants**,” are in additionto, independent from, and severable from the rights and obligations of saidparties under all other provisions of this Agreement.  It is expressly acknowledged by all partieshereto that neither the acts or omissions of any party hereto, nor any failureof any condition or breach of a representation contained in this Agreement, anyAncillary Agreements, or any other agreements entered into in connectiontherewith, shall impair the rights of Seller Indemnitees or Buyer Indemniteesto enforce the Environmental Covenants for their benefit, it being understoodthat the Environmental Covenants are being given in consideration of theclosing of the transactions contemplated by this Agreement.  The Environmental Covenants shall survive thesale, transfer, assignment, or hypothecation of any ownership interest in aparty benefited hereby or obligated hereunder and the sale, transfer,assignment, or hypothecation of the business activities of the Facility orPurchased Assets or the real property at which the Facility is located, or anyportion thereof or interest therein, by any Parent, Buyer or Seller to anyPerson.

 

## 9.7           Escrow.  With respect to any claims forindemnification, Buyer shall first proceed against the Escrow with respect toclaims Buyer has for indemnification pursuant to this Section 9.  In theevent the Escrow is not sufficient to satisfy any valid indemnification claimof Buyer, or in the event such claim is made in accordance with the provisionsof this Section 9 after the Escrowhas terminated and recourse to such claim properly be made beyond the escrow,then Seller shall remain obligated to satisfy such indemnification claim ofBuyer in full (subject to the other limitations in this Article IX).

 

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# **ARTICLE X**TERMINATION

# ** **

## 10.1         Terminationof the Agreement.  The Parties may terminate this Agreement asprovided below:

 

### (a)           Parent andSeller may terminate this Agreement as to all Parties by mutual written consentat any time prior to the Closing;

###  

### (b)           Parent orSeller may terminate this Agreement by written notice if the Closing has notoccurred by January 31, 2006; *provided,however*, that the right to terminate this Agreement under thisSection 10.1(b)(i) shall not be available to any Party whose action orfailure to act has been a principal cause of or resulted in the failure of theClosing to occur on or before such date and such action or failure to actconstitutes a breach of this Agreement;

###  

### (c)           Parent orSeller may terminate this Agreement by written notice if: (i) there shallbe a final nonappealable order of a court of competent jurisdiction in effectpreventing 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 bythis Agreement by any Governmental Body that would make consummation of thetransactions contemplated by this Agreement illegal;

###  

### (d)           Parentor Seller if (i) there shall be a final nonappealable order of a courtcompetent jurisdiction in effect preventing consummation of the transactionscontemplated by this Agreement or (ii) there shall be any statute, rule,regulation or order enacted, promulgated or issued or deemed applicable to thetransactions contemplated by this Agreement by any Governmental Body that wouldmake consummation of the transactions contemplated by this Agreement illegal.

###  

### (e)           Parent mayterminate this Agreement by written notice if there shall be any action taken,or any statute, rule, regulation or order enacted, promulgated or issued ordeemed applicable to the transactions contemplated by this Agreement by anyGovernmental Body, which would (i) prohibit Parent’s or Buyer’s ownershipor operation of all or a material portion of the Business or the PurchasedAssets or (ii) compel Parent or Buyer to dispose of or hold separate allor a material portion of the business or assets of Parent or Seller as a resultof the transactions contemplated by this Agreement;

###  

### (f)            Parent mayterminate this Agreement by written notice if it is not in material breach ofits obligations under this Agreement and there has been a material breach ofany representation, warranty, covenant or agreement contained in this Agreementon 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 whichby its nature cannot be cured;

###  

### (g)           Seller mayterminate this Agreement by written notice if it is not in material breach ofits obligations under this Agreement and there has been a material breach ofany representation, warranty, covenant or agreement contained in this Agreementon the part of

 

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### Parentor Buyer and such breach has not been cured within thirty (30) calendar daysafter written notice to Parent; *provided,however*, that no cure period shall be required for a breach which byits nature cannot be cured; and

###  

### (h)           Parent mayterminate this Agreement by written notice if an event having a MaterialAdverse Effect or that may be expected to have a Material Adverse Effect on theBusiness or on the Purchased Assets shall have occurred after the date of thisAgreement.

###  

## 10.2         Effect ofTermination.  If any Party terminates this Agreementpursuant to Section 10.1 above, all rights and obligations of the Partieshereunder 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 toits termination and *provided, further*, that**theprovisions contained in Section 5.8 (confidentiality) and Article XI(miscellaneous) shall survive termination.

 

# **ARTICLE XI**MISCELLANEOUS

# ** **

## 11.1         PressReleases and Public Announcements.  No Party shall issue any press release or makeany public announcement relating to the subject matter of this Agreementwithout the prior written approval of the other Party; *provided, however*, that (a) eitherParty may make any public disclosure it believes in good faith is required byapplicable law or any listing or trading agreement concerning its publicly-tradedsecurities (in which case such Party will use its reasonable efforts to advisethe other Parties prior to making the disclosure) and (b) Seller maycorrespond with third parties in writings in form and substance reasonablysatisfactory to Parent with respect to obtaining consents from such partiespursuant to Section 7.1(f).

 

## 11.2         No Third-PartyBeneficiaries.  Except as provided in Article IX withrespect to indemnification, this Agreement shall not confer any rights orremedies upon any Person other than the Parties, and their respectivesuccessors and permitted assigns, other than as specifically set forth herein.

 

## 11.3         EntireAgreement and Modification.  This Agreement (including the exhibits hereto)and the Ancillary Agreements constitutes the entire agreement among the Partieswith respect to the subject matter hereof and supersedes any priorunderstandings, agreements, warranties or representations by or among theParties, written or oral, to the extent they related in any way to the subjectmatter hereof..

 

## 11.4         Amendment.  ThisAgreement may be amended by the Parties hereto at any time by execution of aninstrument in writing signed on behalf of each of the Parties hereto.

 

## 11.5         Waivers.  The rightsand remedies of the Parties to this Agreement are cumulative and notalternative.  Neither the failure nor anydelay by any Party in exercising any right, power or privilege under thisAgreement or the documents referred to in this Agreement will operate as awaiver of such right, power or privilege, and no single or partial exercise ofsuch right, power, or privilege will preclude any other or further exercise ofsuch right, power, or privilege or the

 

43

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## exerciseof any other right, power, or privilege. To the maximum extent permitted by applicable law, (i) no claim orright arising out of this Agreement or the documents referred to in thisAgreement can be discharged by one Party, in whole or in part, by a waiver orrenunciation 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 inthe specific instance for which it is given; and (iii) no notice to ordemand on one Party will be deemed to be a waiver of any obligation of suchParty or of the right of the Party giving such notice or demand to take furtheraction without notice or demand as provided in this Agreement or the documentsreferred to in this Agreement.

 

## 11.6         Successorsand Assigns.  This Agreement shall be binding upon and inureto the benefit of the Parties named herein and their respective successors andpermitted assigns.  No Party may assigneither this Agreement or any of its rights, interests, or obligations hereunderwithout the prior written approval of the other Parties; *provided, however*, that so long as Parentremains liable for all obligations under this Agreement, Parent may(i) assign any or all of its rights and interests hereunder to one or moreof its Affiliates and (ii) designate one or more of its Affiliates toperform its obligations hereunder.

 

## 11.7         Counterparts.  ThisAgreement may be executed in counterparts, each of which shall be deemed anoriginal but all of which together will constitute one and the same instrument.

 

## 11.8         Headings.  The sectionheadings contained in this Agreement are inserted for convenience only andshall not affect in any way the meaning or interpretation of this Agreement.

 

## 11.9         Notices.  All noticesand other communications required or permitted hereunder shall be in writing,shall be effective when given, and shall in any event be deemed to be givenupon receipt or, if earlier, (a) upon delivery, if delivered by hand,(b) three Business Days after the Business Day of deposit with FederalExpress or similar overnight courier, freight prepaid or (c) one BusinessDay after the Business Day of facsimile transmission, if delivered by facsimiletransmission with copy by Federal Express or similar overnight courier, freightprepaid, and shall be addressed to the intended recipient as set forth below:

 

If toParent or Buyer:

 

Sanmina-SCI Corporation

2700 North First Street

San Jose, CA 95134

Attention: RobinWalker, Senior Vice President, Corporate Development

Steven Jackman, Vice President and Corporate Counsel

Telephone No.:  (408) 964-3500

Facsimile No.:   (408) 964-3636

 

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Copy to:

 

WilsonSonsini Goodrich & Rosati, Professional Corporation

650Page Mill Road

PaloAlto, 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 GlobalOperations

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

 

AnyParty may change the address to which notices, requests, demands, claims, andother communications hereunder are to be delivered by giving the other Partiesten (10) days’ advance written notice to the other Parties pursuant to theprovisions above.

 

## 11.10       Governing Law.  ThisAgreement shall be governed in all respects solely by the substantive laws ofthe State of California, without regard to conflicts of laws or the choice oflaw principles of any jurisdiction including the State of California, andwithout the need of any Party to establish the reasonableness of therelationship between the laws of the State of California and the subject matterof this Agreement, and all questions concerning the validity and constructionhereof shall be determined in accordance with the laws of the State ofCalifornia.  Notwithstanding theforegoing, the Employee Secondment Agreement and the Facility TransferAgreement will be governed by the laws of the Republic of Singapore.

 

45

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## 11.11       Severability.  Any term orprovision of this Agreement that is invalid or unenforceable in any situationin any jurisdiction shall not affect the validity or enforceability of theremaining terms and provisions hereof or the validity or enforceability of theoffending term or provision in any other situation or in any otherjurisdiction.

 

## 11.12       Expenses.  Subject tothe provisions of this Agreement, each Party will bear its own costs andexpenses (including legal and accounting fees and expenses) incurred inconnection with this Agreement and the transactions contemplated hereby.

 

## 11.13       Construction.

 

### (a)           The Partieshave participated jointly in the negotiation and drafting of thisAgreement.  In the event an ambiguity orquestion of intent or interpretation arises, this Agreement shall be construedas if drafted jointly by the Parties and no presumption or burden of proof shallarise favoring or disfavoring any Party by virtue of the authorship of any ofthe provisions of this Agreement.  Anyreference to any federal, state, local, or foreign statute or law shall bedeemed also to refer to all rules and regulations promulgated thereunder,unless the context requires otherwise. The word “including” shall mean including without limitation.

###  

### (b)           Unlessthe context requires otherwise, all words used in this Agreement in thesingular number shall extend to and include the plural, all words in the pluralnumber shall extend to and include the singular, and all words in any gendershall extend to and include all genders.

###  

## 11.14       SellerDisclosure Letter.

 

### (a)           Thedisclosures in Seller Disclosure Letter, and those in any supplement thereto,must relate only to the representations and warranties in the section of theAgreement to which they expressly relate and to any other representation orwarranties in this Agreement to the extent it is readily apparent that suchdisclosures relate to such other representations and warranties.

###  

### (b)           Statementscontained within the Seller Disclosure Letter shall be deemed to berepresentations and warranties under this Agreement.

###  

## 11.15       Attorneys’Fees.  If any legal proceeding or other actionrelating to this Agreement is brought or otherwise initiated, the prevailingParty shall be entitled to recover reasonable attorneys’ fees, costs anddisbursements (in addition to any other relief to which the prevailing Partymay be entitled).

 

## 11.16       Further Assurances.  The Partiesagree (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 mayreasonably request for the purpose of carrying out the intent of this Agreementand the documents referred to in this Agreement.

 

## 11.17       Time ofEssence.  With regard to all dates and time periods setforth 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, thecompetent court in Santa Clara, California (the “**Competent Court**”) (and not any other court in any state orcountry) shall have exclusive jurisdiction in connection with thisAgreement.  Subject to Section 11.2above, each Party hereby irrevocably submits to the exclusive jurisdiction ofthe Competent Court in any action or proceeding arising out of or relating tothis Agreement and irrevocably waives any objection such person may now orhereafter have as to the venue of any such suit, action or proceeding broughtin the Competent Court or that the Competent Court is an inconvenient forum.

 

## 11.19       Schedulesand Exhibits.  The Schedules andExhibits described herein and attached hereto constitute an inseparable part ofthis Agreement and are incorporated into this Agreement for all purposes as iffully set forth herein.  Any disclosuremade in any Schedule to this Agreement which may be applicable to anotherSchedule to this Agreement shall be deemed to be made with respect to suchother Schedule only if a specific cross reference is made thereto or if it isreadily apparent that such disclosure should apply to such other Schedule.

 

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IN WITNESS WHEREOF, the Partieshereto 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

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**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

----