<PAGE>
 
                                                                   EXHIBIT 10.53


                      DATED THIS 24TH DAY OF JANUARY 1996
                      -----------------------------------


                            MICROPOLIS CORPORATION



                                      and



                             ST CHATSWORTH PTE LTD



                       ********************************


                           ASSET PURCHASE AGREEMENT


                       ********************************





                                 BIH LI & LEE
                            Advocates & Solicitors
                               79 Robinson Road
                              #24-01 CPF Building
                               Singapore 068897
<PAGE>
 
                                C O N T E N T S
                                ---------------

<TABLE> 
<CAPTION> 
SECTION   HEADING                                                           PAGE
-------   -------                                                           ----
<C>       <S>                                                               <C> 
1.        AGREEMENT TO BUY AND SELL ASSETS                                   1

          1.1    Purchase of Assets by ST                                    1
          1.2    Option over Purchased Companies                             5
          1.3    Option over US Real Property                                6
          1.4    Excluded Assets                                             6
          1.5    Assumption of Certain Obligations by ST                     6
          1.6    Excluded Liabilities                                        7
          1.7    Discharge of Excluded Liabilities                           9

2.        CLOSING AND PAYMENT OF THE PURCHASE PRICE                          9

          2.1    Closing                                                     9
          2.2    Purchase Price                                              9
          2.3    Payment of Initial Payment                                  10
          2.4    Payment of Second Payment                                   11
          2.5    Payment of Final Payment                                    11
          2.6    Allocation of Purchase Price                                11
          2.7    Transfer of Acquired Assets                                 12
          2.8    Transfer by Delivery                                        12
          2.9    Operative Agreements                                        12
          2.10   Closing in relation to Sale of Shares 
                  in Micropolis Thailand                                     13
          2.11   Closing in relation to Sale of Shares 
                  in the Purchased Companies                                 14
          2.12   Prorations                                                  15

3.        DETERMINATION OF NET WORTH 
           AND CLOSING DATE BALANCE SHEET                                    15

          3.1    Determination of Preliminary Closing 
                  Date Balance Sheet                                         15
          3.2    Supply of Information and Documents                         15
          3.3    Confirmation of Disk Drive Final Net Worth                  16
          3.4    Definition of Closing Date Balance Sheet                    17
          3.5    Application of Accounting Principles                        17

4.        REPRESENTATIONS AND WARRANTIES OF MCUS                             17

          4.1    Information and Corporate Capacity                          18
                 (A)    Information                                          18
                 (B)    Organisation and Qualification 
                         of MC                                               18
</TABLE> 
<PAGE>
 
                                C O N T E N T S
                                ---------------

<TABLE> 
<CAPTION> 
SECTION   HEADING                                                           PAGE
-------   -------                                                           ----
<C>       <S>                                                               <C> 
                 (C)    Authority of MCUS                                    18
                 (D)    Assets                                               19
 
          4.2    Real Property                                               20
                 (A)    Environmental Matters                                20
                 (B)    Violation of Applicable Laws                         22
                 (C)    Title                                                23
                 (D)    Planning                                             24
                 (E)    State and Condition of the Real Property             25
                 (F)    Leasehold Properties                                 25

          4.3    General Environmental Matters                               26
          4.4    Conduct of the Business                                     27
          4.5    Permits and Licences                                        27
          4.6    Financial Statements and Undisclosed Liabilities            27
          4.7    Compliance with Laws                                        28
          4.8    Patents and Patent Applications                             28
          4.9    Insolvency                                                  29
          4.10   Affiliate Transactions                                      30
          4.11   Litigation                                                  30
          4.12   Absence of Changes                                          31
          4.13   Employee Benefit Plans                                      32
          4.14   Governmental and Other Approvals                            33
          4.15   Brokerage                                                   33
          4.16   Labour Relations                                            33

          4.17   Warranties in Respect of Micropolis Thailand                33
                 (A)    Debts to, contracts with, 
                         connected persons                                   34
                 (B)    Accounts receivable                                  34
                 (C)    Insurance                                            35
                 (D)    Title to assets                                      35
                 (E)    Books and records                                    35
                 (F)    Options on capital                                   36
                 (G)    Subsidiaries and associated companies                36
                 (H)    Statutory and other requirements, 
                         consents and licenses                               36
                 (I)    The Audited Accounts                                 37
                 (J)    Taxation                                             38
                 (K)    Contributions                                        39
                 (L)    Tax returns                                          39
</TABLE> 
<PAGE>
 
                                C O N T E N T S
                                ---------------

<TABLE> 
<CAPTION> 
SECTION   HEADING                                                           PAGE
-------   -------                                                           ----
<C>       <S>                                                               <C> 
          4.18   Warranties in Respect of Purchased Companies                40
          4.19   Trade Payables                                              40
          4.20   Disclosure                                                  41

5.        REPRESENTATIONS AND WARRANTIES OF ST                               41

          5.1    Organisation and Qualification of ST                        41
          5.2    Authority                                                   41

6.        COVENANTS OF MCUS PRIOR TO CLOSING                                 42

          6.1    Restrictions                                                42
          6.2    Matters Pending Closing                                     43
          6.3    Notice of Breach                                            45
          6.4    Access                                                      45
          6.5    Authorisation from Others                                   45
          6.6    HSR Filings                                                 46
          6.7    Consummation of Agreement                                   46
          6.8    Relationships with Customers and Suppliers                  47
          6.9    Defective Disk Drives                                       47
          6.10   Stock Verification                                          47
          6.11   Inventory for System Business                               47
          6.12   Balance Sheet For Disk Drive Business                       47
          6.13   Financial Statement of Disk Drive Business                  47
          6.14   List of Acquired Assets                                     48
          6.15   Accounts of Purchased Companies                             48
          6.16   Inventory for Evaluation                                    48
          6.17   Purchase of Issued Share Capital                            48

7.        COVENANTS OF ST CHATSWORTH                                         48

          7.1    Regulatory and Other Approvals                              48
          7.2    HSR Filings                                                 49
          7.3    Maintenance of Goodwill                                     49
 
8.        CONDITIONS PRECEDENT TO THE OBLIGATIONS 
           OF ST CHATSWORTH TO CLOSE                                         50
 
          8.1    Representations and Warranties                              50
          8.2    Performance of Covenants                                    50
          8.3    Orders and Laws                                             50
          8.4    Regulatory Consents and Approvals                           51
</TABLE> 
<PAGE>
 
                                C O N T E N T S
                                ---------------

<TABLE> 
<CAPTION> 
SECTION   HEADING                                                           PAGE
-------   -------                                                           ----
<C>       <S>                                                               <C> 
          8.5    Delivery of Certificates and Documents to 
                  ST Chatsworth                                              51
          8.6    Exon-Florio Amendment                                       51
          8.7    Pledge                                                      51
          8.8    Damage or Destruction                                       52
          8.9    Title Insurance                                             52
          8.10   Completion of Due Diligence                                 52
          8.11   Approval of Board of Directors                              52

9.        CONDITIONS PRECEDENT TO OBLIGATIONS OF MCUS TO 
           CLOSE                                                             53

          9.1    Approval of Board of Directors                              53
          9.2    Approval of MCUS Stockholders                               53
          9.3    Delivery of Certificates and Documents to 
                  MCUS                                                       53
          9.4    Exon-Florio Amendment                                       53
          9.5    Orders and Laws                                             53
          9.6    Regulatory Consents and Approvals                           54
 
10.       CERTAIN RIGHTS AND OBLIGATIONS SUBSEQUENT TO 
           CLOSING                                                           54
 
          10.1   Survival of Representations, Warranties, 
                  Agreements, Covenants and Obligations                      54
          10.2   Further Assurances                                          54
          10.3   Publicity and Disclosures                                   54
          10.4   Further Co-operation of the Parties                         55
          10.5   Consents of Third Parties                                   55
          10.6   Mail Received after Closing                                 55
          10.7   Employment of Business Employees by ST                      56
          10.8   Accounts Receivable                                         57
          10.9   Transfer Tax Liabilities                                    57
          10.10  Provisions in Relation to the name 
                  "Micropolis"                                               58
          10.11  Warranty Servicing                                          58
          10.12  Inventory Sent for Evaluation                               59
          10.13  AMK Leasehold                                               59
</TABLE> 
<PAGE>
 
                                C O N T E N T S
                                ---------------

<TABLE> 
<CAPTION> 
SECTION   HEADING                                                           PAGE
-------   -------                                                           ----
<C>       <S>                                                               <C>
11.       INDEMNIFICATION                                                    59
 
          11.1   General Indemnification by MCUS                             59
          11.2   Environmental Indemnification by MCUS                       60
          11.3   Notice and Defence of Claim                                 61
          11.4   No Tax Effect: Insurance                                    62
 
12.       TERMINATION OF AGREEMENT                                           63
 
          12.1   Termination                                                 63
          12.2   Effects of Termination                                      63
          12.3   Right to Proceed                                            63
 
13.       MCUS's NON-COMPETITION COVENANTS                                   64
 
          13.1   Non-Competition of MCUS                                     64
          13.2   Injunctive Relief                                           65
          13.3   Enforcement                                                 65

14.       NON-DISCLOSURE COVENANTS                                           65
 
          14.1   Non-Disclosure of Information by MCUS                       65
          14.2   Definition of Confidential Information                      65
          14.3   Injunctive Relief                                           66
 
15.       MISCELLANEOUS                                                      66
 
          15.1   Expenses                                                    66
          15.2   Notices                                                     66
          15.3   Waiver                                                      67
          15.4   Bulk Sales Act                                              67
          15.5   Section Headings                                            68
          15.6   Exhibits and Schedules                                      68
          15.7   Severability                                                68
          15.8   Entire Understanding                                        68
          15.9   Binding Effect                                              68
          15.10  Governing Law                                               68
          15.11  Choice of Forum and Consent to Jurisdiction                 69
          15.12  Assignability                                               69
          15.13  Counterparts: Delivery by Facsimile                         69
          15.14  Certain Definitions                                         69
          15.15  No Rights to Third Parties                                  72
          15.16  Pronouns and Plurals                                        72
</TABLE> 
<PAGE>
 
                                C O N T E N T S
                                ---------------

<TABLE> 
<CAPTION> 
SECTION   HEADING                                                           PAGE
-------   -------                                                           ----
<S>       <C>                                                               <C> 
          Schedule 1                                                         73

          Schedule 2                                                         74

          Schedule 3                                                         75

          Schedule 4                                                         76

          Schedule 5                                                         77

          Schedule 6                                                         82

          Schedule 7                                                         83

          Schedule 8                                                         84
</TABLE>
<PAGE>
 
                           ASSET PURCHASE AGREEMENT
                           ------------------------


     THIS ASSET PURCHASE AGREEMENT (the "Agreement") entered into this 24th day 
                                         ---------                         
of January 1996, by and between:- 

(1)    MICROPOLIS CORPORATION, of 21211 Nordhoff St., Chatsworth, CA 91311,
       United States of America (hereinafter called "MCUS"); and
                                                     ----   
(2)    ST CHATSWORTH PTE LTD of 83 Science Park Drive, #01-01/02 The Curie,
       Singapore Science Park, Singapore 118258 (hereinafter called 
       "ST Chatsworth").
        -------------   

       WITNESSETH:-

       WHEREAS, ST Chatsworth desires to purchase or cause one or more of its
affiliated corporations to purchase the business and certain assets of the disk
drive business of MCUS including the business and the assets used in the
development, manufacturing, sales marketing and distribution of disk drives as
carried on by MCUS and its affiliates (each such affiliate is hereinafter
referred to as a "MC Affiliate") (MCUS and each such MC Affiliate are sometimes
                  ------------                                                 
hereinafter referred to individually and collectively as "MC") excluding the
                                                          --                
business and assets associated with the systems business (the "Disk Drive
                                                               ----------
Business");
--------   

       WHEREAS, ST Chatsworth intends to assign all or a portion of its rights
and obligations under this Agreement to one or more of its affiliates (each such
affiliate to which any such rights and obligations are assigned is hereinafter
referred to as a "ST Affiliate") (ST Chatsworth and each such ST Affiliate are
                  ------------                                  
sometimes hereinafter referred to individually and collectively as "ST"); and
                                                                    --       

       WHEREAS, MC desires to sell and cause the MC Affiliates to sell to ST the
business and certain assets of the Disk Drive Business.

       NOW, THEREFORE, in consideration of the representations and warranties,
covenants and agreements hereinafter made, the parties hereto do hereby agree as
hereinafter set forth, and each of ST Chatsworth and MCUS hereby agrees to cause
the ST Affiliates and the MC Affiliates respectively to perform their respective
obligations pursuant to this Agreement.

1.     AGREEMENT TO BUY AND SELL ASSETS
       --------------------------------

1.1    Purchase of Assets by ST
       ------------------------                                              

       At the Closing (as defined in Section 2.1), on the terms and subject to
       the conditions set forth in this Agreement, MCUS shall and shall procure
       the MC Affiliates to sell, convey, transfer, assign and deliver to ST,
       and ST shall purchase and acquire from MC, free and clear of all Liens
       (as defined in

                                      C-1
<PAGE>
 
                                       2

       Section 15.14) all of MC's right, title and interest in and to the
       following assets, properties and business of the Disk Drive Business as
       the same may exist on the Closing Date (as defined in Section 2.1),
       whether or not in the possession or control of MC:-

       (a)  (in the event ST Chatsworth exercises the option pursuant to Section
            1.3) the real property and all buildings and improvements located
            thereon owned by MCUS and located in Chatsworth, California, United
            States of America and more fully described in Schedule 1 of the
                                                          -----------------
            Disclosure Schedule annexed hereto (the "Disclosure Schedule") 
            -------------------                      -------------------   
            (which real property, together with all buildings, structures and
            improvements thereon and all rights, easements and appurtenances
            pertaining thereto are referred to as the "US Real Property");
                                                       ----------------
     
       (b)  (in the event ST Chatsworth exercises the option pursuant to Section
            1.3) the leasehold interest and all buildings and improvements
            located thereon leased by MCUS from Northpark Industrial and more
            fully described in Schedule 2 of the Disclosure Schedule together
                               ------------------------------------- 
            with all buildings, structures and improvements thereon and all
            rights, easements and appurtenances pertaining thereto and together
            with any options to purchase the underlying property and leasehold
            improvements thereon, and all other rights, subleases, licences,
            permits, deposits and profits appurtenant to or related to the lease
            (the "US Leasehold");
                  ------------   

       (c)  an irrevocable licence to use, to the exclusion of Micropolis
            Singapore (as defined in Section 15.14), the leasehold interest and
            all buildings and improvements located thereon leased by Micropolis
            Singapore from Technology Parks Private Limited and more fully
            described in Schedule 3 of the Disclosure Schedule subject to
                         -------------------------------------
            Section 10.13 for the remaining of the leasehold interest (the "AMK
                                                                            ---
            Leasehold");
            ---------   

       (d)  the leasehold interest and all buildings and Improvements located
            thereon leased by Micropolis Singapore from Jurong Town Corporation
            and more fully described in Schedule 4 of the Disclosure Schedule
                                        -------------------------------------   
            (the "SN Leasehold"), 
                  ------------

            (the SN Leasehold together with all buildings, structures and
            improvements thereon and all rights, easements and appurtenances
            pertaining thereto and together with any options to purchase the
            underlying property and leasehold improvements thereon, and all
            other rights, subleases, licences, permits, deposits and profits
            appurtenant to or related to the lease and the AMK leasehold are
            referred to as the "Singapore Leasehold");
                                -------------------   

       (e)  the total issued share capital of Micropolis Thailand (as defined in
            Section 15.14);

                                      C-2

<PAGE>
 
                                       3

       (f)  (at the election of ST Chatsworth pursuant to Section 1.2) the total
            issued share capital of each or any of the Purchased Companies (as
            defined in Section 15.14);

       (g)  the machinery, plant and equipment, office furniture, fixtures,
            vehicles and trailers and other tangible personal property (other
            than inventory) held for use in the conduct of the Disk Drive
            Business at the locations at which the Disk Drive Business is
            conducted or at customers' premises on consignment of MC used or
            useful in the Disk Drive Business (the "Machinery and Equipment")
                                                    -----------------------  
            including, without limitation, the foregoing purchased subject to
            any conditional sales or title retention agreement in favour of any
            other person other than items disposed of between the date hereof
            and the Closing Date in the ordinary course of business consistent
            with past practice and on an arm's length basis;

       (h)  the corporate assets of MCUS located in Chatsworth, California,
            United States of America, used in the conduct of the Disk Drive
            Business including the MIS computer software and other related
            equipment (the "Corporate Assets");
                            -----------------   

       (i)  subject to Section 6.11, the finished goods inventory related to the
            Disk Drive Business of MC, the raw materials, supplies, work-in-
            progress on hand at MC's facilities at which the Disk Drive Business
            is conducted which are used solely in the Disk Drive Business (the
            "Inventory");
             ---------

       (j)  the sundry assets and all notes and other evidence of such
            indebtedness occurring in the conduct of or related to the Disk
            Drive Business (collectively the "Sundry Assets");
                                              -------------   

       (k)  all, but not less than all of the customer lists and related data,
            lists of suppliers, sales reports, cost sheets, bills of material,
            inventions, technical information, engineering data, production
            data, manufacturing process and process control data, blueprints and
            specifications, drawings, formulae, laboratory notebooks, all data
            regarding product development, processes, trade secrets, know-how
            and the Confidential Information (as defined in Section 14.2), and
            all files, financial and business information and records of MC
            relating to the Disk Drive Business, all of which shall be in
            machine readable form to the extent available; provided, that if any
            of the foregoing do not relate exclusively to the Disk Drive
            Business, MC shall deliver to ST extracts of the foregoing which
            relate to the Disk Drive Business provided that (except in relation
            to Micropolis Thailand and each or any of the Purchased Companies
            where ST Chatsworth has elected to purchase the issued share
            capital) MC shall be entitled to retain the original copies of
            financial and business information and records which are required
            for the filing of tax returns;

                                      C-3

<PAGE>
 
                                       4

       (l)  all, but not less than all, patents, trademarks, trade names,
            service marks, brand names, business and product names, logos,
            copyrights and applications for any of the foregoing of MC, relating
            to or used in the conduct of the Disk Drive Business and including
            MC's rights, title and interest including goodwill to the word and
            name "Micropolis";

       (m)  subject to Section 10.5 all right, title and interest of MC in and
            to:-

            (i)    the leases for real property (collectively the "Real Property
                                                                   -------------
                   Leases") together with any options to purchase the underlying
                   ------                                   
                   property and leasehold improvements thereon, and in each case
                   all other rights, subleases, licences, permits, deposits and
                   profits appurtenant to or related to such leases and
                   subleases of MC listed in Schedule 5 of the Disclosure
                                             ----------------------------
                   Schedule;
                   -------- 

            (ii)   the leases or subleases of tangible personal property
                   described in Schedule 6 of the Disclosure Schedule as to
                                ------------------------------------- 
                   which MC is the lessor or sublessor and the leases of
                   tangible personal property described in Schedule 6 of the
                                                           -----------------
                   Disclosure Schedule as to which MC is the lessee or 
                   ------------------- 
                   sublessee, together with any options to purchase the
                   underlying property;

            (iii)  all purchase orders given by MC in the ordinary course of
                   business consistent with past practice for the purchase of
                   products, materials, supplies, parts and other items related
                   to the Disk Drive Business;

            (iv)   all purchase orders related to the Disk Drive Business
                   submitted to MC by customers of MC in the ordinary course of
                   business and consistent with past practice with respect to
                   which MC has not received full payment thereon on or prior to
                   the Closing Date; and

            (v)    all contracts to which MC is a party and which are utilized
                   in the conduct of the Disk Drive Business, including without
                   limitation contracts relating to suppliers, sales
                   representatives, distributors, purchase orders, marketing
                   arrangements and manufacturing arrangements listed in
                   Schedule 7 of the Disclosure Schedule,
                   -------------------------------------
          
            (all of such leases, contracts, purchase orders and sales
            commitments specified in this Section 1.1(m) are hereinafter
            referred to as the "Assumed Contracts");
                                -----------------   

       (n)  all government licences and permits of MC necessary to the conduct
            of the Disk Drive Business which are transferable to the extent
            permitted under applicable law;

                                      C-4

<PAGE>
 
                                       5

       (o)  all prepaid expenses and other assets of MC related to the Disk
            Drive Business;

       (p)  any security deposits deposited by or on behalf of MC as lessee or
            sublessee under the Real Property Leases and the SN Leasehold;

       (q)  the goodwill of MC related to the Disk Drive Business;

       (r)  subject to Section 10.5, all manufacturers', vendors' and suppliers'
            warranties in respect of any asset of the Acquired Assets (as
            hereinafter defined);

       (s)  subject to Section 10.5, all rights, contractual or otherwise, in
            favour of MC regarding Confidential Information related to the Disk
            Drive Business;

       (t)  all books and records used or held for use in the conduct of the
            Disk Drive Business or otherwise relating to the Acquired Assets
            (except in relation to Micropolis Thailand and the Purchased
            Companies where ST has elected to purchase the issued share capital)
            other than the minute books, stock transfer books and corporate seal
            of MC; and

       (u)  all other assets and properties of MC used or held for use in
            connection with the Disk Drive Business except as otherwise provided
            in Section 1.4.

       Provided that in the case where the assets described above are owned by,
       belonging to or to be sold by the Purchased Companies, such assets shall
       only be included in the sale and purchase if ST Chatsworth makes the
       election pursuant to Section 1.2 to purchase these assets.

       All of the assets of MC described above to be acquired by ST are
       hereinafter collectively referred to as the "Acquired Assets."
                                                    ---------------  

1.2    Option Over Purchased Companies
       -------------------------------                             

       MC irrevocably grant to ST Chatsworth or a ST Affiliate nominated by ST
       Chatsworth an option to be exercised in its absolute discretion in
       relation to each of the Purchased Companies to either:-

       (i)  purchase the assets set out in Section 1.1 owned by, belonging to or
            to be sold by that Purchased Company; or

       (ii) purchase the total issued share capital of that Purchased Company.

       The option shall be exercised no later than the date falling 30 days
       prior to the Closing Date, by ST Chatsworth giving written notice to MCUS
       of the exercise of the option under this Section 1.2.

                                      C-5

<PAGE>
 
                                       6

1.3    Option Over US Real Property
       ----------------------------                                

       MCUS irrevocably grants to ST Chatsworth or a ST Affiliate nominated by
       ST Chatsworth an option to purchase the US Real Property and/or the US
       Leasehold.

       The option may be exercised no later than the date falling 30 days prior
       to the Closing Date by ST Chatsworth giving written notice to MCUS of the
       exercise of the option.

1.4    Excluded Assets
       ---------------                                                 

       Notwithstanding anything in Section 1.1 to the contrary, the following
       shall be specifically excluded from the Acquired Assets:-

       (a)  cash, commercial paper, certificates of deposit and other bank
            deposits, treasury bills and other cash equivalents;

       (b)  life insurance policies of officers and other employees of MC and
            all other insurance policies relating to the operation of the Disk
            Drive Business;

       (c)  all refunds or credits, if any, of Taxes (as defined in Section
            15.14) due to or from MC which cannot be assigned by law;

       (d)  any rights (including indemnification) and claims and recoveries
            under litigation of MC against third parties arising out of or
            relating to events prior to the Closing Date;

       (e)  the rights of MC in, to and under all contracts of any nature, the
            obligations of MC under which expressly are not assumed by ST
            pursuant to Section 1.6;

       (f)  the assets and properties of Tulip Memory System Inc; and

       (g)  except as provided in Section 1.1(j) in relation to the Sundry
            Assets, the accounts receivable related to the Disk Drive Business
            of MC.

1.5    Assumption of Certain Obligations by ST
       ---------------------------------------                     

       In addition to the contractual obligations of ST under this Agreement on
       and as of the Closing Date, ST shall assume and pay, perform or discharge
       when due the following obligations (collectively, the "Assumed
                                                              -------
       Liabilities"):-
       -----------

       (a)  the liabilities as of the (Closing Date under the Assumed Contracts
            except for any liability under any of the Assumed Contracts arising
            out of MC's failure to perform its obligations thereunder to the
            extent such performance is due on or prior to the Closing Date;

                                      C-6

<PAGE>
 
                                       7

       (b)  the liabilities as of the Closing Date of Micropolis Limited (as
            defined in Section 15.14) under the contract in relation to the
            design, construction and completion of a proposed 4/part 5-storey
            factory building on Plot A14269 Mukim 18, Singapore, dated 20 June
            1994 between Micropolis Limited, CDC-Construction & Development Pte
            Ltd and Design Team Pte Ltd;

       (c)  the liabilities as of the Closing Date of Micropolis Limited under
            the contract in relation to the design, supply, installation and
            commissioning into operation of a cleanroom dated 12 September 1995
            between Takasago Thermal Engineering Co. Ltd and Micropolis Limited;

       (d)  the liabilities as of the Closing Date of Micropolis Limited under
            the Loan Agreement dated 8 September 1995 between Micropolis Limited
            and ST Capital Limited;

       (e)  the liabilities as of the Closing Date of Micropolis Limited to
            Garytech Engineering & Trading pursuant to the letter dated 13
            November 1995;

       (f)  trade payables occurring in the conduct of or related to the Disk
            Drive Business not paid prior to the Closing Date (collectively the
            "Trade Payables");
             --------------   

       (g)  the warranty claims reserve amounting to US$8,000,000; and

       (h)  any benefits relating to the employment of the Transferred Employees
            (as defined in Section 10.7) which are imposed or required by
            statutory provisions of the relevant country where the Transferred
            Employees are employed but only to the extent reflected dollar for
            dollar on the Closing Date Balance Sheet (as defined in Section
            3.4).

1.6    Excluded Liabilities
       --------------------                                                 

       With the exception of the Assumed Liabilities, ST assumes no liabilities
       or other obligations, commercial or otherwise, of MC, known or unknown,
       fixed or contingent, choate or inchoate, liquidated or unliquidated,
       secured or unsecured or otherwise (the "Excluded Liabilities"). Without
                                               --------------------    
       in any way limiting the generality of the foregoing, ST shall not assume
       any obligation or liability to any person with respect to the following:-

       (a)  any liability of MC for Taxes other than Transfer Tax Liabilities
            (as set out in Section 10.9);

       (b)  except as provided in Section 10.11, any liability for defects,
            returns or allowances, losses, personal injury, property damage or
            other damages of any kind whatsoever, whether suffered or incurred
            by a customer of MC or a customer of ST or any other person, arising
            out

                                      C-7

<PAGE>
 
                                       8

            of products manufactured or sold by MC or services performed by MC
            on or prior to the Closing Date, whether the occurrence giving rise
            to such liability occurs before or after the Closing Date, whether
            the claim is asserted before or after the Closing Date;

       (c)  except as provided in Section 1.5(h), any responsibility, liability
            or obligation (whether contractual, statutory or otherwise) with
            respect to salary, wages, sick pay, vacation pay, severance pay,
            redundancy pay, savings plans, deferred compensation, MC's pension,
            profit-sharing, retirement and other fringe benefit plans, or other
            obligations (whether contractual, governmentally mandated or
            otherwise) for the benefit of any employees of MC (including the
            Transferred Employees) including accounts payable and accrued
            payroll and pension benefits accrued (vested or unvested), or
            arising out of their employment through the Closing Date and/or
            their termination of employment by MC upon the consummation of the
            transactions contemplated hereby;

       (d)  any liability with respect to the environmental condition of the
            Real Property (as defined in Section 4.2(A)(a)) or the clean-up
            thereof including, without limitation, the clean-up of any Hazardous
            Materials (as defined in Section 4.2(A)(d)) either on the Real
            Property or originating on the Real Property;

       (e)  any liability resulting from the failure of MC to comply with the
            requirements of all applicable building, fire, zoning and
            Environmental Laws (as defined in Section 4.2(A)(c)), laws relating
            to occupational health and safety, anti-trust laws, and other laws
            (foreign or domestic) applicable to MC or the conduct of their
            business as previously or currently in effect;

       (f)  any liability under any Assumed Contract to the extent such
            liability arises out of MC's failure to perform its obligations
            thereunder on or prior to the Closing Date;

       (g)  any liability of MC arising out of indebtedness for borrowed money;

       (h)  any obligation or liability under MC's employee health and dental
            plans arising out of or relating to, medical or dental services
            provided or rendered to employees on or before the Closing Date;

       (i)  any obligation of MC due and payable under non-competition covenants
            or consulting agreements or the like;

       (j)  any liability arising from or related to tort claims or any
            penalties or fines, whether criminal or civil, assessed against MC;
            and

                                      C-8

<PAGE>
 
                                       9

       (k)  the liability to reinstate the premises in relation to the AMK
            Leasehold.

1.7    Discharge of Excluded Liabilities
       ---------------------------------                                   

       MCUS shall and shall procure the MC Affiliates to discharge in a timely
       manner or shall make adequate provision for all of the Excluded
       Liabilities, provided that MC shall have the ability to contest, in good
       faith, any such claim of liability asserted in respect thereof by any
       person other than ST and ST Affiliates.

2.     CLOSING AND PAYMENT OF THE PURCHASE PRICE
       -----------------------------------------

2.1    Closing
       -------                                                           

       The closing of the transactions contemplated hereby (the "Closing") shall
                                                                 -------   
       be held at the offices of Messrs Bih Li & Lee, Singapore counsel to ST
       Chatsworth at 4.00 p.m. on 29 March 1996 or at such other time, date or
       place as MCUS and ST Chatsworth shall mutually agree (the "Closing
                                                                  -------
       Date").
       ----

2.2    Purchase Price
       --------------                                                       

       The aggregate consideration to be paid by ST to MCUS for the Acquired
       Assets and the non-competition covenant set forth in Section 13 (the
       "Purchase Price") shall be the amount equal to the Disk Drive Final Net
        --------------                                                        
       Worth.  For the purpose hereof, the term "Disk Drive Final Net Worth" 
                                                 --------------------------   
       shall be the result of the following amounts:-

       (a)  the purchase price of the goodwill of MC related to the Disk Drive
            Business and the name "Micropolis" which shall be US$7,000,000;

       (b)  the purchase price of the following which shall be the net book
            value as of the Closing Date as reflected in the Closing Date
            Balance Sheet:-

            (i)    the Inventory and the Machinery and Equipment;

            (ii)   the SN Leasehold;

            (iii)  the Real Property Leases;

            (iv)   if applicable, the US Real Property; and

            (v)    the Sundry Assets;

                                      C-9

<PAGE>
 
                                      10

       (c)  the purchase price of the total issued share capital of Micropolis
            Thailand which shall be the net book value as of the Closing Date
            but excluding goodwill, if any, as reflected in the Closing Date
            Balance Sheet except that the land (excluding the building and the
            improvements) of Micropolis Thailand located at 733/1-8 Phaholyothin
            Road, Lumlookkar Pathumthani (the "Thai Land") shall be deemed to
                                               ---------        
            have a value of US$2,000,000;

       (d)  if applicable, the purchase price of the total issued share capital
            of each of the Purchased Companies which shall be the net book value
            as of the Closing Date but excluding goodwill, if any, as reflected
            in the Closing Date Balance Sheet; and

       (e)  the purchase price of the Corporate Assets which shall be the fair
            market value, to be determined by an appraiser of international
            repute to be agreed between ST Chatsworth and MCUS;

       minus
       -----

       (a)  the amount of the net book value of the Assumed Liabilities other
            than the warranty claims reserve as of the Closing Date as reflected
            in the Closing Date Balance Sheet; and

       (b)  the warranty claims reserve of US$8,000,000,

       Provided that under no circumstances shall the Purchase Price exceed the
       mount equal to the Disk Drive Final Net Worth determined as of 29
       December 1995 in accordance with the Financial Statements (as defined in
       Section 4.6) plus 10 per cent and if the Purchase Price exceeds the said
       amount, it shall be reduced by an amount equal to the difference.

       For the avoidance of doubt, no other payment will be made by ST for any
       other Acquired Assets.

       ST Chatsworth shall pay the Purchase Price in the manner hereinafter set
       forth by telegraphic transfer of immediately available funds to such
       account or accounts as may be specified by MCUS for such purpose.

2.3    Payment of Initial Payment
       --------------------------                                     

       At the Closing, on the conveyance, transfer, assignment and delivery of
       the Acquired Assets, ST shall pay to MCUS for and on behalf of MC the
       initial payment (the "Initial Payment") which shall be an amount equal to
                             ---------------              
       the result of the following amounts:-

       (a)  90 per cent of the net book value of the Acquired Assets other than
            the Inventory; and

                                     C-10

<PAGE>
 
                                      11

       (b)  50 per cent of the net book value of the Inventory,

       minus
       -----

       (a)  the amount of the net book value of the Assumed Liabilities other
            than the warranty claims reserve as of the Closing Date; and

       (b)  the warranty claims reserve of US$8,000,000.

       For the purpose of calculating the Initial Payment only, the net book
       value as aforesaid shall be as reflected in the Preliminary Closing Date
       Balance Sheet as defined in Section 3.1).

2.4    Payment of Second Payment
       ------------------------- 

       (a)  In the event no ST Disapproval Notice (as defined in Section 3.3(a))
            is given by ST Chatsworth within the 21-day period set forth in
            Section 3.3(a), within 3 days of the determination of the Closing
            Date Balance Sheet, ST Chatsworth shall pay to MCUS for and on
            behalf of MC, the balance of the Purchase Price, after subtracting
            five (5) per cent from the said balance.

       (b)  In the event ST Chatsworth gives the ST Disapproval Notice to MCUS
            within the 21-day period set forth in Section 3.3(a), within 3 days
            of the delivery of the ST Disapproval Notice by ST Chatsworth to
            MCUS, ST Chatsworth shall pay to MCUS for and on behalf of MC, the
            balance of the Purchase Price in relation to the items not in
            dispute, after subtracting five (5) per cent from the said balance.
            The balance of the Purchase Price in relation to the disputed items,
            after subtracting five (5) per cent from the said balance shall be
            paid within 3 days of the resolution of the dispute in accordance
            with Section 3.3(a) or (b) as the case may be.

2.5    Payment of Final Payment
       ------------------------                                           

       On or prior to the date falling 6 months from the Closing Date, ST shall
       pay to MCUS for and on behalf of MC, the remaining five (5) per cent of
       the Purchase Price, after deducting and netting-off any sums owing by MC
       or for which MC are liable to ST under this Agreement whether as a result
       of any claims for breach of warranty or otherwise.

2.6    Allocation of Purchase Price
       ----------------------------                                         

       ST Chatsworth and MCUS shall negotiate in good faith prior to the Closing
       Date and determine the allocation of the consideration paid by ST
       Chatsworth for the Acquired Assets. ST and MC shall report the purchase
       and sale of the Acquired Assets in accordance with the allocation for all
       national, federal, state, provincial and local tax and other purposes.

                                     C-11

<PAGE>
 
                                      12

2.7    Transfer of Acquired Assets
       ---------------------------                                      

       At the Closing, MCUS shall or shall procure the appropriate MC Affiliate
       to deliver to ST Chatsworth or the appropriate ST Affiliate duly executed
       deeds, bills of sale, endorsements, assignments and other instruments of
       transfer and assignment of the Acquired Assets sufficient to vest in such
       party the interests in the Acquired Assets being conveyed in accordance
       with the terms of this Agreement in form and substance reasonably
       satisfactory to ST.

       In the event that local laws, custom and practice require that the
       transactions contemplated by this Agreement be the subject of an
       instrument or other agreement under applicable local law ("Local
                                                                  -----
       Agreement"), such Local Agreement shall be in form and substance 
       ---------    
       reasonably satisfactory to ST Chatsworth and MCUS, provided that such
       Local Agreement will give full force and effect to the provisions of this
       Agreement, and in the event of conflict, the terms of this Agreement
       shall prevail. (The deeds, bills of sale, endorsements, assignments,
       instruments and agreements and Local Agreements referred to in this
       Section 2.7 are hereinafter referred to collectively as the "Ancillary
                                                                    ---------
       Documents").
       ---------

2.8    Transfer by Delivery
       --------------------                                             

       At the Closing or such other date and time thereafter as may reasonably
       be determined by ST, MCUS shall or shall procure the appropriate MC
       Affiliate to deliver to ST Chatsworth or the appropriate ST Affiliate:-

       (a)  such of the Acquired Assets which are capable of transfer by
            delivery; and

       (b)  possession of the Real Property.

2.9    Operative Agreements
       --------------------                                                 

       At the Closing, each of ST Chatsworth and MCUS shall enter into or shall
       procure the relevant ST Affiliate or MC Affiliate as the case may be to
       enter into the following agreements:-

       (a)  computer services agreement in relation to the use by MCUS (or such
            other person as ST Chatsworth and MCUS may agree) of the MIS
            computer system;

       (b)  patent cross-licensing agreement whereby MCUS shall license to ST
            Chatsworth (or such other person as ST Chatsworth and MCUS may
            agree) the use of all its patents in relation to the system
            application business and ST Chatsworth shall license MCUS (or such
            other person as ST Chatsworth and MCUS may agree) the use of all the
            patents in relation to the Disk Drive Business to be sold and
            transferred herein; and

                                     C-12

<PAGE>
 
                                      13

       (c)  a distributorship agreement whereby MCUS shall appoint ST Chatsworth
            (or such other person as ST Chatsworth and MCUS may agree) to
            distribute its products in relation to the system business in
            Europe, for a period of 2 years.

2.10   Closing in Relation to Sale of Shares in Micropolis Thailand
       ------------------------------------------------------------ 

       (a)  At the Closing, MCUS shall deliver to ST Chatsworth:-

            (i)    duly executed transfers in favour of ST Chatsworth or as it
                   may direct accompanied by the relative share certificates in
                   respect of the shares in Micropolis Thailand to be sold by
                   MCUS to ST Chatsworth;

            (ii)   the written resignations of all directors from their
                   directorships in Micropolis Thailand to take effect as ST
                   Chatsworth may determine with acknowledgements signed by each
                   of them in the form required by ST Chatsworth to the effect
                   that he has no claim against Micropolis Thailand for
                   compensation for loss of office or otherwise howsoever;

            (iii)  a certified copy of board resolutions of Micropolis Thailand
                   in the form required by ST Chatsworth:-

                   (aa)  approving the registration of the said share transfers;

                   (bb)  appointing such persons as ST Chatsworth may nominate
                         as directors of Micropolis Thailand; and

                   (cc)  revoking all existing authorities to bankers in respect
                         of the operation of its bank accounts and giving
                         authority in favour of such persons as ST Chatsworth
                         may nominate to operate such accounts and appointing
                         such persons as ST Chatsworth may nominate as the
                         signatories of all the bank accounts of Micropolis
                         Thailand; and

            (iv)   MCUS shall deliver to ST Chatsworth a list of all Micropolis
                   Thailand's bank accounts and banking facilities.

       (b)  At the Closing, ST Chatsworth shall procure the discharge of all
            guarantees given by MCUS to secure the liabilities of Micropolis
            Thailand.

                                     C-13

<PAGE>
 
                                      14

2.11   Closing in Relation to Sale of Shares in the Purchased Companies
       ----------------------------------------------------------------     

       In the event ST Chatsworth elects to purchase the total issued share
       capital of each or any of the Purchased Companies pursuant to the option
       in Section 1.2, at the Closing:-

       (a)  MCUS shall deliver to ST Chatsworth:-

            (i)    duly executed transfers in favour of ST Chatsworth or as it
                   may direct accompanied by the relative share certificates or
                   other analogous documents in respect of the shares in the
                   Purchased Companies to be sold by MCUS to ST Chatsworth;

            (ii)   the written resignations of all directors from their
                   directorships in the relevant Purchased Companies to take
                   effect as ST Chatsworth may determine with acknowledgements
                   signed by each of them in the form required by ST Chatsworth
                   to the effect that he has no claim against the relevant
                   company for compensation for loss of office or otherwise
                   howsoever;

            (iii)  a certified copy of board resolutions of the Purchased
                   Companies in the form required by ST Chatsworth:-

                   (aa)  approving the registration of the said share transfers;

                   (bb)  appointing such persons as ST Chatsworth may nominate
                         as directors of the relevant company; and

                   (cc)  revoking all existing authorities to bankers in respect
                         of the operation of its bank accounts and giving
                         authority in favour of such persons as ST Chatsworth
                         may nominate to operate such accounts and appointing
                         such persons as ST Chatsworth may nominate as the
                         signatories of all the bank accounts of the relevant
                         company; and

            (iv)   MCUS shall deliver to ST Chatsworth a list of the Purchased
                   Companies' bank accounts and banking facilities.

       (b)  At the Closing, ST Chatsworth shall procure the discharge of all
            guarantees issued by MCUS to secure the liabilities of the relevant
            Purchased Companies.

                                     C-14

<PAGE>
 
                                      15

2.12   Prorations
       ----------                                                           

       The following prorations relating to the Acquired Assets and the
       ownership and operation of the Disk Drive Business will be made as of the
       Closing Date, with MC liable to the extent such items relate to any time
       period prior to the Closing Date and ST liable to the extent such items
       relate to periods beginning with and subsequent to the Closing Date:-

       (a)  real estate taxes on or with respect to the Acquired Assets;

       (b)  rents, additional rents, taxes and other items payable by MC under
            the Real Property Leases and the AMK Leasehold so long as ST
            Chatsworth occupies and continues to occupy the AMK Leasehold;

       (c)  the amount of rents, taxes and charges for sewer, water, telephone,
            electricity and other utilities relating to the Real Property and
            the Real Property Leases; and

       (d)  all other items (excluding personal property taxes and other taxes)
            normally adjusted in connection with similar transactions.

       Except as otherwise agreed by the parties, the net amount or all such
       prorations will be settled and paid on the Closing Date. If the Closing
       shall occur before a real estate tax rate is fixed, the apportionment of
       taxes shall be based upon the tax rate for the preceding year applied to
       the latest assessed valuation.

3.     DETERMINATION OF NET WORTH AND CLOSING DATE BALANCE SHEET
       ---------------------------------------------------------

3.1    Determination of Preliminary Closing Date Balance Sheet
       -------------------------------------------------------             

       MCUS shall prepare a combined balance sheet of the Disk Drive Business
       (the "Preliminary Closing Date Balance Sheet") as of the Closing Date 
             --------------------------------------
       and shall deliver the Preliminary Closing Date Balance Sheet to ST
       Chatsworth or ST's Accountants as promptly as possible and in any event
       no later than the date falling 21 days after the Closing Date. The
       Preliminary Closing Date Balance Sheet shall be prepared in accordance
       with the generally accepted accounting principles applicable in the
       United States of America and applied on a consistent basis (collectively,
       the "Accounting Principles"). ST and ST's Accountants shall have the 
            ---------------------                                       
       obligation to participate in the physical inventory.
       
3.2    Supply of Information and Documents
       ----------------------------------- 

       (a)  MCUS agrees to provide ST and ST's Accountants the opportunity to
            review the Preliminary Closing Date Balance Sheet delivered by MCUS
            and the underlying work papers with a view to confirming the Disk
            Drive Final Net Worth.

                                     C-15

<PAGE>
 
                                      16

       (b)  As promptly as possible and in any event no later than 28 days after
            the Closing Date, MCUS shall give or shall procure for ST's
            Accountants all such information and documentation relating to the
            Disk Drive Business as ST's Accountants shall require to enable them
            to confirm the Disk Drive Final Net Worth.

3.3    Confirmation of Disk Drive Final Net Worth
       ------------------------------------------ 

       (a)  If ST Chatsworth notifies MCUS in writing of its disagreement with
            the Preliminary Closing Date Balance Sheet within 21 days after
            receipt thereof, specifying the nature of each disagreement and the
            basis therefor (the "ST Disapproval Notice"), then ST Chatsworth 
                                 ---------------------                 
            and MCUS shall attempt to resolve their differences with respect
            thereto within fourteen (14) days after MCUS's receipt of the ST
            Disapproval Notice, in which case, the Preliminary Closing Date
            Balance Sheet, as amended to the extent necessary to reflect
            resolution of all such disagreements, shall be the Closing Date
            Balance Sheet (as hereinafter defined) and shall be conclusive and
            binding on ST and MC.

       (b)  Any disputes not resolved by ST Chatsworth and MCUS within such 14
            day period regarding the Preliminary Closing Date Balance Sheet
            shall be submitted by the parties promptly after the expiration of
            the applicable 14-day period to an internationally recognized
            accounting firm mutually acceptable to both parties, which firm
            shall not have had a material relationship with either ST Chatsworth
            or MCUS or any of their respective affiliates within the two years
            preceding the selection (the "Independent CPA"). Within thirty (30)
                                          ---------------    
            days after its acceptance of its appointment as Independent CPA, the
            Independent CPA shall determine, based solely on presentations by ST
            Chatsworth and MCUS, and not by independent review, those items in
            dispute and shall render a written report as to the resolution of
            each dispute and the resulting calculation of the Closing Date
            Balance Sheet and the Disk Drive Final Net Worth. Materiality shall
            not be a basis for rejection of a disputed item in the calculation
            of the Disk Drive Final Net Worth. In resolving any disputed item,
            the Independent CPA may not assign a value to such item greater than
            the greatest value for such item claimed by either party or less
            than the smallest value for such item claimed by either party. The
            Independent CPA shall have exclusive jurisdiction over (and resort
            to the Independent CPA as provided in this Section 3.3) shall be the
            sole recourse and remedy of the parties against one another or any
            other person with respect to) any disputes (without prejudice to the
            parties' rights to claim a breach of any representation or warranty
            or to indemnification under Section 11 hereof) arising out of or
            relating to the Preliminary Closing Date Balance Sheet and the
            Closing Date Balance Sheet; and the Independent CPA's determination
            (without prejudice to the parties' rights to claim a breach of any
            representation or warranty or to indemnification under Section 11
            hereof) shall be conclusive and

                                     C-16

<PAGE>
 
                                      17

            binding on the parties and shall be enforceable in a court of law.
            In the event ST Chatsworth does not deliver the ST Disapproval
            Notice within 21 days from ST Chatsworth's receipt of the
            Preliminary Closing Date Balance Sheet, ST Chatsworth shall be
            deemed to have accepted MCUS's determination and the Preliminary
            Closing Date Balance Sheet shall be deemed to be the Closing Date
            Balance Sheet and shall be conclusive and binding (without prejudice
            to the parties' rights to claim a breach of any representation or
            warranty or to indemnification under Section 11 hereof) on ST
            Chatsworth and MCUS.

       (c)  MCUS and ST Chatsworth shall bear the fees and expenses of their
            respective accountants and other representatives. The fees and
            expenses of the Independent CPA shall be borne equally by MCUS and
            ST Chatsworth.

3.4    Definition of Closing Date Balance Sheet
       ----------------------------------------                           

       As used herein, the term "Closing Date Balance Sheet" shall mean:-
                                 --------------------------

       (a)  the Preliminary Closing Date Balance Sheet if no ST Disapproval
            Notice is given by ST Chatsworth within the 21-day period set forth
            in Section 3.3(a); or

       (b)  if the ST Disapproval Notice is given in accordance with Section
            3.3(a) and all of the disputed items are resolved by mutual
            agreement of the parties, the Preliminary Closing Date Balance
            Sheet, as amended, if necessary, to reflect such resolution of all
            disputes; or

       (c)  if any or all of the disputed items are submitted to the Independent
            CPA for resolution, the Preliminary Closing Date Balance Sheet, as
            amended, if necessary, to reflect any resolution of any disputes by
            mutual agreement of the parties and the resolution of all other
            disputes by the Independent CPA.

3.5    Application of Accounting Principles
       ------------------------------------                                 

       ST's Accountants in confirming the Disk Drive Final Net Worth shall apply
       the Accounting Principles.

4.     REPRESENTATIONS AND WARRANTIES OF MCUS
       --------------------------------------

       MCUS makes the following representations and warranties to each of ST
       Chatsworth and the ST Affiliates (with the intent that the provisions of
       this Section 4 shall continue to have full force and effect
       notwithstanding Closing):-

                                     C-17

<PAGE>
 
                                      18

4.1    Information and Corporate Capacity
       ---------------------------------- 

       (A)  Information
            -----------                                                     

            All information in writing which has been given by or on behalf of
            MC or their agents to ST or their agents before and during the
            negotiations leading to this Agreement was, when given, and remains
            to the best of the knowledge of MC true, complete and accurate in
            all respects and not misleading and that after making all proper
            enquiries MC is not aware of any fact or matter, not in the public
            domain, in relation to the Disk Drive Business which would render
            any such information untrue, incomplete, inaccurate or misleading or
            might reasonably affect the willingness of ST to purchase the Disk
            Drive Business or the price at or the terms upon which the purchase
            is made.

       (B)  Organisation and Qualification of MC
            ------------------------------------                          

            Each of MCUS and the MC Affiliates is duly organised, validly
            existing and in good standing under the laws of the jurisdiction of
            its incorporation (except in the case where under the laws of a
            jurisdiction in which the concept of good standing is inapplicable,
            as to which no representation or warranty regarding good standing is
            made). Except for the approval by the shareholders of MCUS of the
            transactions contemplated hereby, which approval shall be obtained
            before the Closing, each of MCUS and the MC Affiliates has full
            corporate power and authority to enter into and perform the
            transactions contemplated by this Agreement.

       (C)  Authority of MCUS
            ----------------- 

            (i)    This Agreement and each of the Ancillary Documents delivered
                   or to be delivered by MCUS when executed and delivered in
                   accordance with their respective terms will constitute the
                   valid and binding obligations of each of MCUS and the MC
                   Affiliates and shall be enforceable against it in accordance
                   with their respective terms.

            (ii)   The execution, delivery and performance of this Agreement and
                   each of the Ancillary Documents delivered or to be delivered
                   by MCUS have been, or when delivered will be, duly authorised
                   by all necessary corporate action of MCUS.

            (iii)  The execution, delivery and performance by MCUS of this
                   Agreement or any Ancillary Documents does not and will not
                   with the passage of time or the giving of notice or both:-

                                     C-18

<PAGE>
 
                                      19

                   (aa)  result in a breach of or constitute a default by MC or
                         result in any right of termination or other effect
                         adverse to MC under any agreement, lease or instrument
                         pertaining to the Disk Drive Business to which MC is a
                         party or by which any Acquired Asset is bound or
                         affected or under any other agreement binding on MC the
                         effect of which breach or default would hinder, delay,
                         interfere with or prohibit the transactions
                         contemplated by this Agreement;

                   (bb)  result in a violation of any law, rule or regulation
                         now in effect to which MC is subject, or any order,
                         writ, judgement, injunction, decree, determination or
                         award, now in effect which is applicable to MC; and

                   (cc)  violate any provisions of the memorandum and articles
                         of association or equivalent, or bylaws of MC, as
                         amended.

       (D)  Assets
            ------ 

            (i)    To the best of the knowledge of MCUS after making due and
                   careful inquiries, the Machinery and Equipment conforms to
                   all applicable laws, ordinances and regulations.

            (ii)   Except as listed in Schedule 8 of the Disclosure Schedule,
                                       ------------------------------------- 
                   MC have good and marketable title to the Acquired Assets,
                   free and clear of all claims, liens, pledges, charges,
                   mortgages, security interests, encumbrances, equities or
                   other imperfections of title.

            (iii)  To the best of the knowledge of MCUS after making due and
                   careful inquiries, the inventories of MC are of a quality and
                   quantity saleable or usable in the ordinary course of MC's
                   business.

            (iv)   All of the Acquired Assets are located on the premises owned
                   or leased by MC or on consignment to its customers.

            (v)    To the best of the knowledge of MCUS after making due and
                   careful inquiries, the Acquired Assets comprise all assets
                   now used in the Disk Drive Business and which are necessary
                   for the continuation of the Disk Drive Business as now
                   carried on.

            (vi)   The Machinery and Equipment:-

                   (aa)  are in a proper state of repair and condition and
                         satisfactory working order;

                                     C-19
<PAGE>
 
                                      20

                   (bb)  have been regularly and properly maintained; and

                   (cc)  are adequate for and not surplus to the requirements of
                         the Disk Drive Business.

            (vii)  The Sundry Assets:-

                   (aa)  arose from bona fide transactions in the ordinary
                         course of business and are payable on ordinary trade
                         terms;

                   (bb)  are legal, valid and binding obligations of the
                         respective debtors enforceable in accordance with their
                         terms;

                   (cc)  are not subject to any valid set-off or counterclaim;

                   (dd)  are collectible in the ordinary course of business
                         consistent with past practice in the aggregate recorded
                         amounts thereof, net of any applicable reserve
                         reflected in the balance sheet included in the annual
                         financial statements; and

                   (ee)  are not the subject of any actions or proceedings
                         brought by or on behalf of MC.

4.2    Real Property
       ------------- 

       (A)  Environmental Matters
            --------------------- 

            (i)    The Real Property and the operations thereon and the uses
                   made thereof, are in compliance with all, and are not in
                   violation of any Environmental Laws (as hereinafter defined).

            (ii)   There has been no generation, use, treatment, handling,
                   storage or disposal of Hazardous Materials on or from the
                   Real Property by any person (including, without limitation,
                   MC and the past and present officers, employees and agents of
                   MC and all past and present owners, operators and lessees of
                   the Real Property) at any time except in full compliance with
                   all Environmental Laws.

            (iii)  The Real Property has not been used at any time by any person
                   in such a manner as to cause a violation of any Environmental
                   Law or to potentially give rise to any liability or
                   obligation for the remediation or restoration of the Real
                   Property or for the treatment, storage, removal, disposal,
                   release, arrangement for removal or disposal or
                   transportation of any Hazardous Materials.

                                     C-20

<PAGE>
 
                                      21

            (iv)   None of MCUS or the MC Affiliates has received any notice of,
                   and no circumstances exist that could form the basis of, an
                   Environmental Action (as hereinafter defined) arising out of
                   or relating to the Real Property or the generation, use,
                   treatment, handling, storage or disposal of Hazardous
                   Materials thereon, or the release or transportation of
                   Hazardous Materials thereto or therefrom.

            (v)    Each of MCUS and the MC Affiliates has obtained all permits,
                   approvals, licences and other authorisations required under
                   Environmental Laws, such licenses and permits being in full
                   force and effect and is complying in all respects therewith.

            (vi)   No employees of MC or its predecessors or any past owner,
                   operator or lessee of the Real Property have been exposed to
                   Hazardous Materials.

            (vii)  Each of MCUS and the MC Affiliates has delivered to ST true,
                   complete and correct copies or results of any and all
                   reports, studies or tests in the possession of or initiated
                   by it pertaining to the existence of Hazardous Materials and
                   other environmental concerns on any part of the Real Property
                   or concerning compliance with or liability under
                   Environmental Laws in the operation of the business of MC or
                   as conducted by any prior owner, operator or lessee of the
                   Real Property.

            As used in this Section 4.2 and elsewhere in this Agreement:-

            (a)    The term "Real Property" shall mean the US Real Property (in 
                             -------------                                 
                   the event ST Chatsworth exercises the option pursuant to
                   Section 1.3), the US Leasehold (in the event ST Chatsworth
                   exercises the option pursuant to Section 1.3), the Singapore
                   Leasehold and the Thai Land and the Real Property Leases;

            (b)    "Environmental Action" means any administrative, regulatory 
                    --------------------                           
                   or judicial action, suit, demand, demand letter, claim,
                   notice of non-compliance or violation, investigation,
                   proceeding, consent order or consent agreement relating in
                   any way to any Environmental Law, including, without
                   limitation:-

                   (aa)  any claim by any Governmental or Regulatory Authority
                         (as defined in Section 15.14) for enforcement, clean-
                         up, removal, response, remedial or other actions or
                         damages pursuant to any Environmental Law; and

                                     C-21

<PAGE>
 
                                      22

                   (bb)  any claim by any third party seeking damages,
                         contribution, indemnification, cost recovery,
                         compensation or injunctive relief resulting from
                         Hazardous Materials or arising from alleged injury or
                         threat of injury to the environment;

            (c)    "Environmental Laws" and "Environmental Law" mean any
                    ------------------       -----------------          
                   applicable national, federal, provincial, state or local law
                   of any country or any political subdivision thereof, rule,
                   regulation, order, writ, judgement, injunction, decree,
                   determination or award of any jurisdiction relating to the
                   environment or Hazardous Materials; and

            (d)    "Hazardous Materials" means:-
                    -------------------

                   (aa)  petroleum or petroleum products, natural or synthetic
                         gas and asbestos in any form;

                   (bb)  any substances defined as or included in the definition
                         of "hazardous substances," "hazardous wastes,"
                         "hazardous materials," "extremely hazardous wastes,"
                         "restricted hazardous wastes," "toxic substances,"
                         "toxic pollutants," "contaminants" or "pollutants" or
                         words of any similar import under any Environmental
                         Law; and

                   (cc)  any other substance exposure to which is regulated
                         under any Environmental Law.

       (B)  Violation of Applicable Laws
            ---------------------------- 

            (i)    No notice of violation of any applicable federal, national,
                   provincial, state or local statute, ordinance, order,
                   requirement, law, rule, regulation (including, without
                   limitation, any Environmental Law), or of any covenant,
                   condition, restriction or easement affecting the Real
                   Property with respect to the use or occupancy of the Real
                   Property has been given to MC by any person having
                   jurisdiction over the Real Property or by any other person
                   entitled to enforce the same, or by any private citizen or
                   citizen action group and, to the best knowledge of each of
                   MCUS and the MC Affiliates, no such notice has been given to
                   any other person.

            (ii)   To the best of the knowledge of each of MCUS and the MC
                   Affiliates, there is not:-

                                     C-22

<PAGE>
 
                                      23

                   (aa)  any intended or proposed federal, national, provincial,
                         state, or local statute, ordinance, order, requirement,
                         law, rule or regulation (including, but not limited to,
                         zoning changes) which may prevent or hinder ST's
                         continued use of the Real Property as heretofore used
                         in the conduct of the Disk Drive Business; or

                   (bb)  any suit, action, claim or legal, administrative,
                         arbitration or other proceeding or governmental
                         investigation (other than Environmental Actions)
                         pending or threatened in writing against or affecting
                         either the Real Property or the use thereof or that
                         would prevent or hinder ST's continued use thereof in
                         the Disk Drive Business.

       (C)  Title
            -----                                     

            In relation to each Real Property:-

            (i)    MCUS or the MC Affiliates as indicated as the owner or lessee
                   of the Real Property in Schedule 5 is the beneficial owner or
                   lessee of and is beneficially entitled to the whole of the
                   proceeds of sale of and has a good and marketable title to
                   the whole of the Real Property.

            (ii)   MCUS has in its possession or unconditionally held to its
                   order all the original documents of title and other documents
                   and papers relating to the Real Property.

            (iii)  There are no mortgages, charges or debentures (whether legal
                   or equitable and whether fixed or floating), rent charges,
                   liabilities to maintain roadways, liens (whether for costs or
                   to any unpaid vendor or otherwise), annuities or other
                   unusual outgoings or trusts (whether for securing money or
                   otherwise) affecting the Real Property or the proceeds of
                   sale thereof.

            (iv)   Except for the lots-tie restriction in relation to the US
                   Real Property and the US Leasehold, the Real Property is not
                   subject to any lease, sub-lease, tenancy, concession,
                   occupancy agreement or similar right, adverse estate, right,
                   interest, covenant, restriction, stipulation, easement,
                   option, right of pre-emption, wayleave, profit a prendre,
                   licence or other right or informal arrangement in favour of
                   any third party (whether in the nature of a public or private
                   right or obligation) nor is there any agreement or commitment
                   to give or create any of the foregoing and where the Real
                   Property is subject to any such arrangement no breach has
                   occurred of any of the terms 

                                     C-23

<PAGE>
 
                                      24

                   thereof and all rights of light, air and support are enjoyed
                   fully is of right.

            (v)    The Real Property enjoys access and egress over roads which
                   prior to the date of this Agreement have been adopted by the
                   appropriate highway authority and are maintainable at the
                   public expense. The Real Property drains into a public sewer
                   and is serviced by water, electricity and gas utilities. The
                   pipes, sewers, wires, cables, conduits and other conducting
                   media serving the Real Property connect directly to the mains
                   without passing through land in the occupation and ownership
                   of a third party or if they do, the facilities, easements or
                   rights necessary for the enjoyment and present use of the
                   Real Property are enjoyed on terms which do not entitle any
                   person to terminate or curtail the same.

       (D)  Planning
            --------                                     

            In relation to each Real Property:-

            (i)    No development at the Real Property or use of the Real
                   Property has been undertaken in breach of any planning,
                   building or construction legislation or any regulations, by-
                   laws, orders, consents or permissions made or given
                   thereunder.

            (ii)   The planning consents and permissions affecting the Real
                   Property are either unconditional or are subject only to
                   conditions which are neither unusual, personal nor temporary
                   and which have been satisfied or fully observed and performed
                   up to the date of this Agreement.

            (iii)  There is no resolution, proposal, scheme or order, whether
                   formally adopted or not, for the compulsory acquisition of
                   the whole or any part of the Real Property or any access or
                   egress, or for the alteration, construction or improvement of
                   any road, sub-way, underpass, footbridge, elevated road, dual
                   carriageway or flyover upon or adjoining the Real Property or
                   any access or egress.

            (iv)   There is no outstanding statutory or informal notice relating
                   to the Real Property or any business carried on thereat or
                   the use thereof.

            (v)    To MC's knowledge, there are no encroachments onto the Real
                   Property by any improvements on any adjoining property which
                   would materially and adversely impair the utility of the Real
                   Property for the uses for which it is currently used in the
                   Disk Drive Business.

                                     C-24

<PAGE>
 
                                      25

            (vi)   To MC's knowledge, there are no material encroachments onto
                   any adjoining property by any improvements on the Real
                   Property.

       (E)  State and Condition of the Real Property
            ----------------------------------------                      

            In relation to each Real Property:-

            (i)    The buildings and other structures on the Real Property are
                   in good and substantial repair and fit for the purposes for
                   which they are presently used.

            (ii)   None of the following has in the past affected the Real
                   Property:-

                   (aa)  structural or other defects in the Real Property or the
                         building of which the Real Property is part or in any
                         drains, pipes, wires or services;

                   (bb)  flooding;

                   (cc)  subsidence; and

                   (dd)  rising damp, wet or dry rot or any infestation.

       (F)  Leasehold Properties
            --------------------                                       

            Where the interest of MC in any Real Property is a leasehold
            interest:-

            (i)    Any consent necessary for the grant of the lease under which
                   MC holds its interest in the Real Property (the "Lease") was
                                                                    -----   
                   duly obtained and a copy of the consent is with the documents
                   of title and the receipt for the payment of rent which fell
                   due immediately prior to the date of this Agreement
                   unqualified.

            (ii)   There is no material subsisting breach, nor any material non-
                   observance of any covenant, condition or agreement contained
                   in the Lease on the part of either the relevant landlord or
                   MC and no landlord has refused to accept rent or made any
                   complaint or objection.

            (iii)  There are no restrictions in the Lease which prevent the Real
                   Property being used now or in the future for the present or
                   proposed use.

                                     C-25

<PAGE>
 
                                      26

            (iv)   No alterations have been made to the Real Property at the
                   expense of MC without all necessary consents and approvals
                   and all such alterations to the Real Property are to be
                   disregarded on rent reviews and do not have to be reinstated
                   at the expiry of the term.

            (v)    All steps in rent reviews have been duly taken and no rent
                   reviews are or should be currently under negotiation or the
                   subject of a reference to an expert or arbitrator or the
                   courts.

            (vi)   The Lease does not contain any unusual or objectionable
                   covenants or agreements having regard to the use to which the
                   Real Property is currently put.

4.3    General Environmental Matters
       ----------------------------- 

       (a)  MC have obtained all licences which are required under applicable
            Environmental Laws in connection with the conduct of the Disk Drive
            Business or the Acquired Assets. Each of such licences is in full
            force and effect. MC have conducted the Disk Drive Business in
            compliance in all material respects with the terms and conditions of
            such licences and with any applicable Environmental Law.

       (b)  No order has been issued, no Environmental Claim (as defined in
            Section 15.14) has been filed, no penalty has been assessed and no
            investigation or review is pending or, to the knowledge of MC,
            threatened by any Governmental or Regulatory Authority with respect
            to any alleged failure by MC to have any licence required under
            applicable Environmental Laws in connection with the conduct of the
            Disk Drive Business or with respect to any generation, treatment,
            storage, recycling, transportation, discharge, disposal or release
            of any Hazardous Material in connection with the Disk Drive Business
            and to the knowledge of MC there are no facts or circumstances in
            existence which could reasonably be expected to form the basis for
            any such order, Environmental Claim, penalty or investigation.

       (c)  MC has not transported or arranged for the transportation of any
            Hazardous Material in connection with the operation of the Disk
            Drive Business to any location that is:-

            (i)    listed on the NPL (as defined in Section 15.14) under CERCLA
                   (as defined in Section 15.14);

            (ii)   listed for possible inclusion on the NPL by the Environmental
                   Protection Agency in CERCLIS (as defined in Section 15.14) or
                   on any similar state or local list; or

                                     C-26

<PAGE>
 
                                      27

            (iii)  the subject of enforcement actions by federal, state or local
                   Governmental or Regulatory Authority that may lead to
                   Environmental Claims against MC or the Disk Drive Business.

       (d)  No Hazardous Material generated in connection with the operation of
            the Disk Drive Business has been recycled, treated, stored, disposed
            of or released by MC at any location.

4.4    Conduct of the Business
       -----------------------                                             

       No supplier, distributor or customer of MC has notified MC that it
       intends to discontinue its relationship with MC other than any supplier,
       distributor or customer, the loss of which would not have a Material
       Adverse Effect (as defined in Section 4.12).

4.5    Permits and Licences
       -------------------- 

       (a)  MC have obtained all governmental authorisations, licences, permits
            and orders necessary for the conduct of the Disk Drive Business as
            presently conducted. MC is not required to have any form of security
            clearance from any governmental agency in order to conduct the Disk
            Drive Business in the manner it is presently conducted.

       (b)  The execution, delivery and performance by MC of this Agreement and
            the Ancillary Documents to which it is a party, and the consummation
            of the transactions contemplated hereby and thereby, will not:-

            (i)    result in or give to any person any right of termination,
                   cancellation, acceleration or modification in or with respect
                   to,

            (ii)   result in or give to any person any additional rights or
                   entitlement to increased, additional, accelerated or
                   guaranteed payments under, or

            (iii)  result in the creation or imposition of any Lien upon MC or
                   any of the Acquired Assets and under,

            any business licence.

4.6    Financial Statements and Undisclosed Liabilities
       ------------------------------------------------ 

       (a)  MCUS will deliver to ST Chatsworth the audited accounts of MC on a
            consolidated basis for the twelve months ended 29 December 1995
            together with all notes thereto. The foregoing accounts are referred
            to herein as the "Financial Statements".
                              --------------------  

                                     C-27

<PAGE>
 
                                      28

       (b)  The Financial Statements:-
            
            (i)    will present fairly the results of operations of MC as of 29
                   December 1995 in accordance with the Accounting Principles
                   applied on a consistent basis; and

            (ii)   are based on the books and records of MC.

4.7    Compliance with Laws  
       --------------------                                                  

       Each of MCUS and the MC Affiliates has been and is, and its business and
       operations have been and are being conducted, in compliance with all
       requirements of all applicable statutes, laws, ordinances, regulations,
       rules, codes or decrees, whether foreign or domestic, federal, national,
       provincial, state or local, which are currently in effect and apply to
       the Disk Drive Business or the Acquired Assets including, without
       limitation, those relating to fair labour practices and standards, equal
       employment practices, occupational safety and health, export/import
       licences or controls, foreign exchange controls, restraint of trade and
       unfair competition, immigration, and federal procurement. MC has not
       received any written notice from any person with respect to an alleged,
       actual or potential violation and/or failure to comply with any of the
       foregoing.

4.8    Patents and Patent Applications
       ------------------------------- 

       (a)  All patents and patent applications owned by or licensed to or used
            by each of MCUS and the MC Affiliates in connection with the Disk
            Drive Business have been duly filed in or issued by the United
            States Patent and Trademark Office or the corresponding offices of
            other countries or other jurisdictions and have been properly
            maintained in accordance with all applicable provisions of law and
            administrative regulations in the United States and each such
            country or other jurisdictions. To the best of the knowledge of
            MCUS, after making due and careful inquiries, each of MCUS and the
            MC Affiliates' use of the said patent does not require the consent
            of any third party. Also the same are freely transferable and are
            owned exclusively by MC free and clear of any attachments, liens,
            royalties, encumbrances, adverse claims, licences or any other
            ownership or other interest of any person whatsoever, including,
            without limitation, any ownership or other interest of any other
            affiliate of MC. To the best of the knowledge of MCUS, after making
            due and careful inquiries, no person has a licence to use any of
            such patents or any claim which may arise from the existence of such
            patent application and no outstanding order, decree, judgement or
            stipulation, and no proceeding charging MC or its affiliates with
            infringement of any adversely held patent with respect to the Disk
            Drive Business, has been served upon MC or its affiliates at any
            time during the 1-year period prior to and ending upon the Closing
            Date or, except as disclosed by MCUS's patent counsel in its

                                     C-28

<PAGE>
 
                                      29

            attorney representation letter to ST Chatsworth or its
            representatives and to the best of MC's knowledge, is threatened to
            be filed; and to the best of the knowledge of MCUS, after making due
            and careful inquiries, the continuing conduct of the Disk Drive
            Business by ST, as heretofore conducted by MC, will not result in
            the infringement of any patents or patent application or other
            rights owned by or owed to any third party. To the best knowledge of
            MC after a review of the current files of MC and their affiliates,
            no person or entity is infringing upon the patents referred to
            herein.

       (b)  To the best of the knowledge of MCUS, after making due and careful
            inquiries, each of MCUS and the MC Affiliates owns and has the right
            to use, free and clear of any claims or rights of any third party,
            including without limitation, any affiliate of MC, all trademarks,
            trade names, service marks, brand names, business and product names,
            logos, trade secrets, customer lists, secret processes, technology,
            know-how and any other Confidential Information required for or used
            in the manufacture, sale, distribution or marketing of all products
            either being or proposed to be manufactured, sold, distributed or
            marketed by MC and included in the Disk Drive Business, including,
            without limitation, any products licensed by MC from others in
            connection with the Disk Drive Business.

       (c)  MC is not in any way making any unlawful or wrongful use of any
            trade secrets, customer lists, manufacturing processes, secret
            processes, technology, know-how or any other confidential
            information of any third party, including, without limitation, any
            former employer of any present or past employee of MC. The
            manufacturing processes, secret processes, know-how and any other
            intellectual property and confidential information resulting from
            the development activities engaged in by any employees of MC with
            respect to the Disk Drive Business is the property of MC.

       (d)  Neither MC nor any Transferred Employees of MC is a party to any 
            non-competition agreement or similar agreement with any third party
            pertaining to the Disk Drive Business.

       (e)  MC has not provided to any entities in which MC has a beneficial
            equity or ownership interest but which are not affiliates
            ("Investees") any material know-how or technology with respect to 
              ---------      
            the Disk Drive Business and to the knowledge of MC, no Investees
            have any material know-how or technology with respect to the Disk
            Drive Business.

4.9    Insolvency
       ---------- 

       (a)  No order has been made or petition presented or resolution passed
            for the winding up of MC or for the appointment of a provisional
            liquidator to MC or for an administration order to be made in
            respect

                                     C-29

<PAGE>
 
                                      30

            of MC and no meeting has been convened for the purposes of winding
            up MC.

       (b)  No receiver or receiver and manager has been appointed by any person
            and no steps have been taken for the appointment of a receiver or a
            receiver and manager over the whole or any part of the business or
            assets of MC.

       (c)  There is no unfulfilled or unsatisfied judgement or court order
            outstanding against MC.

       (d)  No judicial management order has been made and no petition for such
            an order has been presented in respect of MC.

       (e)  No distress, charging order, garnishee order, execution or other
            process has been levied against MC or the Acquired Assets and no
            action has been taken to repossess any of the Acquired Assets.

       (f)  MC has not made or proposes to make any arrangement or composition
            with its creditors or any class of its creditors.

4.10   Affiliate Transactions
       ---------------------- 

       (a)  No officer, director, affiliate or associate of MC or any associate
            of any such officer, director or affiliate provides or causes to be
            provided any assets, services or facilities used or held for use in
            connection with the Disk Drive Business.

       (b)  The Disk Drive Business does not provide or cause to be provided any
            assets, services or facilities to any such officer, director,
            affiliate or associate.

4.11   Litigation
       ---------- 

       (a)  There are no actions or proceedings pending or, to the knowledge of
            MC, threatened against, relating to or affecting MC with respect to
            the Disk Drive Business or any of the Acquired Assets which:-

            (i)    could reasonably be expected to result in the issuance of an
                   order restraining, enjoining or otherwise prohibiting or
                   making illegal the consummation of any of the transactions
                   contemplated by this Agreement or any of the Ancillary
                   Documents or otherwise result in a material diminution of the
                   benefits contemplated by this Agreement or any of the
                   Ancillary Documents to ST; or

                                     C-30

<PAGE>
 
                                      31

            (ii)   if determined adversely to MC, could reasonably be expected
                   to result in any injunction or other equitable relief that
                   would interfere in any material respect with the Disk Drive
                   Business.

       (b)  There are no facts or circumstances known to MC that could
            reasonably be expected to give rise to any action or proceeding that
            would be required to be disclosed pursuant to Section 4.11(a).

       (c)  There are no orders outstanding against MC with respect to the Disk
            Drive Business.

4.12   Absence of Changes
       ------------------                                                    

       Since 29 December 1995, MC has conducted the Disk Drive Business only in
       the ordinary course, and MC has not (in connection with or pertaining to
       the Disk Drive Business), as of the date hereof and as of the date of the
       Closing, either directly or indirectly:-

       (a)  suffered any change in the financial condition, assets, liabilities
            of the Disk Drive Business, whether or not arising in the ordinary
            course of business, which change by itself or in conjunction with
            any or all other such changes has a Material Adverse Effect (the
            term "Material Adverse Effect" shall mean a material adverse effect 
                  -----------------------  
            on the business or financial condition of the Disk Drive Business,
            excluding any general economic, market or industry changes);

       (b)  incurred any obligation or liability (absolute, accrued, contingent
            or otherwise) with respect to the Disk Drive Business other than
            liabilities in the ordinary course of business consistent with past
            practice;

       (c)  permitted any Acquired Assets to become subject to any Lien,
            mortgage, pledge or encumbrance other than in the ordinary course of
            business;

       (d)  (i)    purchased, sold, assigned, transferred, abandoned or
                   otherwise disposed of any asset of the Disk Drive Business
                   other than in the ordinary and normal course of its business
                   consistent with past practice; or

            (ii)   cancelled any debts or claims of the Disk Drive Business,
                   other than in the ordinary and normal course of business
                   consistent with past practice;

       (e)  entered into any transaction or agreement other than in the ordinary
            and normal course of the Disk Drive Business consistent with past
            practice;

                                     C-31

<PAGE>
 
                                      32

       (f)  entered into any compromise or settlement of any litigation or
            governmental investigation relating to the Disk Drive Business or
            the Acquired Assets;

       (g)  suffered any damage, destruction or loss to the Acquired Assets,
            whether or not covered by insurance, which has a Material Adverse
            Effect;

       (h)  made or suffered any amendment, modification or termination of any
            of the Assumed Contracts which has a Material Adverse Effect;

       (i)  received notice or acquired knowledge of any labour trouble,
            difficulty, dispute or organizing effort involving employees of the
            Disk Drive Business;

       (j)  entered into any lease or sub-lease, pledge or hypothecation of any
            Acquired Asset; or

       (k)  (except where it has given written notice thereof to ST) suffered
            any loss of employees, customers or suppliers that has a Material
            Adverse Effect on the Disk Drive Business or been advised by any
            customer or supplier that such customer or supplier intends to
            discontinue its relationship with MC with respect to the Disk Drive
            Business.

4.13   Employee Benefit Plans
       ----------------------                                             

       In relation to all employee benefit plans, agreements, policies,
       arrangements and understandings (whether or not written) relating to
       employee benefits provided to the Business Employees (as defined in
       Section 10.7), including, without limitation, all plans, agreements,
       arrangements, policies or understandings relating to sick pay, vacation
       pay or severance pay, deferred compensation, pensions, profit sharing,
       retirement income or other benefits, stock purchase and stock option
       plans, bonuses, severance arrangements, health benefits, disability
       benefits, insurance benefits and all other employee benefits or fringe
       benefits (individually referred to as "a Plan" and collectively referred
                                              ------  
       to as the "Plans").
                  -----   

       (a)  True, correct and complete copies of each such Plan (or in the case
            of any unwritten Plan, a description thereof) have been furnished to
            ST.

       (b)  Each Plan has been administered and operated in accordance with its
            terms and applicable law.

       (c)  Full payment has been made of all amounts which MC was required,
            under the terms of any of the Plans, to have paid as contributions
            to such Plans on or prior to the date hereof. There are no accrued
            liabilities under any Plans, programmes or practices maintained on
            behalf of the employees of MC which are not provided for on their

                                     C-32

<PAGE>
 
                                      33

            books or financial statements or which have not been fully provided
            for by contributions to such Plans, programmes, or practices.

       (d)  Other than for claims in the ordinary course for benefits under the
            Plans, there are no actions, suits, claims or proceedings, pending
            or, to the best of MC's knowledge, threatened, nor, to the best of
            MC's knowledge does there exist any basis therefor, which would
            result in any liability with respect to any Plan of MC.

       (e)  MC does not maintain any employee welfare benefit plans which
            provide post-retirement benefits to employees.

4.14   Governmental and Other Approvals
       --------------------------------                                  

       MC is not required to obtain or make any application for any approval,
       licence or permit from or take other action or effect any filing with,
       any foreign or domestic, federal, national, provincial, state, municipal
       or other governmental body, commission, board, department or agency or
       third party in order to execute this Agreement and/or consummate the
       transactions contemplated hereby in accordance with applicable laws and
       regulations.

4.15   Brokerage
       ---------                                                             

       MCUS agree to indemnify and hold ST harmless in connection with any
       claims for commissions or other compensation made by any broker or finder
       claiming to have been employed by or on behalf of MC in connection with
       the transactions contemplated herein.

4.16   Labour Relations
       ----------------                                                 

       None of the Business Employees is covered by a collective bargaining
       agreement between a collective bargaining unit, trade union, works
       council, or other employees' association and MC.

4.17   Warranties in Respect of Micropolis Thailand
       -------------------------------------------- 

       (a)  MCUS hereby makes the representations and warranties contained in
            Sections 4.1 to 4.16 in respect of Micropolis Thailand insofar as
            the same would be applicable as if the assets, business, undertaking
            and liabilities of such company were being acquired by ST.

       (b)  In respect of Micropolis Thailand, MCUS hereby warrants and
            represents to ST that:-

                                     C-33

<PAGE>
 
                                      34

            (A)    Debts to, contracts with, connected persons
                   ------------------------------------------- 

                   (i)   There are:-

                         (aa)  no loans made by Micropolis Thailand to its
                               shareholder and/or any director of Micropolis
                               Thailand;

                         (bb)  no debts owing to Micropolis Thailand by its
                               shareholder and/or any director of Micropolis
                               Thailand;

                         (cc)  except in relation to inter-company balances, no
                               debts owing by Micropolis Thailand other than
                               debts which have arisen in the ordinary course of
                               business; and

                         (dd)  no securities for any such loans or debts as
                               aforesaid.

                   (ii)  There are no existing contracts or engagements to which
                         Micropolis Thailand is a party and in which any
                         director of Micropolis Thailand is interested.

            (B)    Accounts receivable
                   -------------------

                   (i)   None of the accounts receivable which are included in
                         the audited accounts (the "Audited Accounts") of
                                                    ----------------   
                         Micropolis Thailand for the year ended 29 December 1995
                         (the "Balance Sheet Date") or which have subsequently 
                               ------------------     
                         arisen have been outstanding for more than three (3)
                         months from their due dates for payment and all such
                         debts have realized or will realize in the normal
                         course of collection their full value as included in
                         the Audited Accounts or in the books of Micropolis
                         Thailand after taking into account the provisions for
                         bad and doubtful debts in the Audited Accounts.

                   (ii)  No part of the amounts included in the Audited Accounts
                         or in the books of Micropolis Thailand as due from
                         debtors has been released on terms that any debtors
                         pays less than the net book value after any provisions
                         made in the Audited Accounts as at the Balance Sheet
                         Date or has been written off or has proved to any
                         extent to be irrecoverable or is now regarded as being
                         irrecoverable.

                                     C-34

<PAGE>
 
                                      35

            (C)    Insurance
                   ---------                                              

                   All the assets of Micropolis Thailand which are of an
                   insurable nature have at all material times been and are as
                   at the date hereof insured in amounts reasonably regarded as
                   adequate against fire and other risks normally insured
                   against by companies carrying on similar businesses or owning
                   property of a similar nature and Micropolis Thailand has at
                   all material times been, and is at the date hereof,
                   adequately covered against accident, third party errors and
                   omissions and other risks normally covered by insurance by
                   such companies. The particulars of the insurance of
                   Micropolis Thailand which have been supplied to ST are true
                   and correct. In respect of all such insurances:-

                   (i)   all premiums have been duly paid; and

                   (ii)  all the policies are in force and are not voidable on
                         account of any act, omission or non-disclosure on the
                         part of the insured party.

            (D)    Title to assets
                   ---------------                                            

                   All assets of Micropolis Thailand and all debts due to it
                   which are included in the Audited Accounts or have otherwise
                   been represented as being the property of or due to
                   Micropolis Thailand or at the Balance Sheet Date used or held
                   for the purposes of its business were at the Balance Sheet
                   Date the absolute property of Micropolis Thailand and (save
                   for those subsequently disposed of or realized in the
                   ordinary course of trading) all such assets and all assets
                   and debts which have subsequently been acquired or arisen are
                   as at the date hereof the absolute property of Micropolis
                   Thailand free from all and any encumbrance of whatever nature
                   and there are no circumstances under which by operation of
                   law or otherwise Micropolis Thailand's title, right or
                   interest in and to such assets may be adversely affected in
                   any way whatsoever.

            (E)    Books and records
                   -----------------                                            

                   The records, statutory books and books of account of
                   Micropolis Thailand are duly entered up and maintained in
                   accordance with all legal requirements applicable thereto and
                   contain true, full and accurate records of all matters
                   required to be dealt with therein and all such books and all
                   records and documents (including documents of title) which
                   are its property are in its possession or under its control
                   and all accounts, documents and returns required to be
                   delivered to or made to

                                     C-35

<PAGE>
 
                                      36

                   the relevant authority in Thailand have been duly and
                   correctly delivered or made.

            (F)    Options on capital
                   ------------------ 

                   (i)   MCUS is entitled to sell and transfer to ST the full
                         legal and beneficial ownership of the total issued
                         share capital of Micropolis Thailand on the terms of
                         this Agreement without the consent of any third party.

                   (ii)  No person has the right (whether exercisable now or in
                         the future and whether contingent or not) to call for
                         the allotment, issue, sale or transfer of any share or
                         loan capital of Micropolis Thailand under any option or
                         other agreement (including conversion rights and rights
                         of pre-emption) and there are no claims, charges,
                         liens, equities or encumbrances on the share capital of
                         Micropolis Thailand.

            (G)    Subsidiaries and associated companies
                   ------------------------------------- 

                   (i)   Micropolis Thailand has no subsidiaries or associated
                         companies (that is to say a company in which Micropolis
                         Thailand has not less than 20 per cent of its issued
                         share capital and in whose commercial and financial
                         policy decisions Micropolis Thailand participates) and
                         is not a partner in any partnership.

                   (ii)  Micropolis Thailand does not carry on any business
                         outside Thailand.

                   (iii) Micropolis Thailand has not, other than in the ordinary
                         course of business, made any material investment in, or
                         material advance of cash to, guarantee of indebtedness
                         of, or other extension of credit to any company.

            (H)    Statutory and other requirements, consents and licenses
                   ------------------------------------------------------- 

                   (i)   All statutory and other requirements applicable to the
                         carrying on of the business of Micropolis Thailand as
                         now carried on, and all conditions applicable to any
                         licences and consents involved in the carrying on of
                         such business, have been complied with and MCUS is not
                         aware (after making due and careful enquiries) of any
                         breach thereof or of any intended or contemplated
                         refusal or revocation of any such licence or consent.

                                     C-36

<PAGE>
 
                                      37

                   (ii)  No notice has been issued and received and, to the
                         knowledge of MCUS, no investigation or review is
                         pending or threatened by any governmental or self-
                         regulatory entity:-

                         (aa)  with respect to any alleged violation by
                               Micropolis Thailand or, to the best knowledge of
                               MCUS, any officer, director or employee of
                               Micropolis Thailand, of any law, ordinance, rule,
                               regulation, order, policy or guideline of any
                               governmental or self-regulatory entity, the
                               sanction for which violation could be reasonably
                               expected to have a Material Adverse Effect on the
                               business, assets or prospects or the financial
                               condition or the results of operations of
                               Micropolis Thailand; or

                         (bb)  with respect to any alleged failure to have all
                               permits, certificates, licences, registrations,
                               approvals and other authorisations required in
                               connection with the operation of the business of
                               Micropolis Thailand, the absence of which may
                               have a Material Adverse Effect on the business,
                               assets or prospects or the financial condition or
                               the results of operations of Micropolis Thailand.

                   (iii) The Promotion Certificate of the Board of Investment
                         No. 1555 issued to Micropolis Thailand is valid and has
                         not been revoked and Micropolis Thailand is not in
                         breach of the Promotion Certificate and has complied
                         with all the terms and conditions of the Promotion
                         Certificate.

            (I)    The Audited Accounts
                   -------------------- 

                   (i)   The Audited Accounts have been prepared in accordance
                         with all applicable laws and on a consistent basis in
                         accordance with accounting principles, standards and
                         practices generally accepted at the date hereof in
                         Thailand so as to give a true and fair view of the
                         state of affairs of Micropolis Thailand at the Balance
                         Sheet Date and of the profits or losses for the period
                         concerned and as at that date make:-

                         (aa)  full provision for all actual liabilities;

                                     C-37

<PAGE>
 
                                      38

                         (bb)  proper provision (or note in accordance with good
                               accountancy practice) for all contingent and
                               disputed liabilities;

                         (cc)  provision reasonably regarded as adequate for all
                               bad and doubtful debts; and

                         (dd)  due provision for depreciation and amortisation
                               and any obsolescence of assets.

                   (ii)  Full provision or reserve has been made in the Audited
                         Accounts for all taxation liable to be assessed on
                         Micropolis Thailand or for which it is or may become
                         accountable in respect of:-

                         (aa)  profits, gains or income (as computed for
                               taxation purposes) arising or accruing or deemed
                               to arise or accrue on or before the Balance Sheet
                               Date;

                         (bb)  any transactions effected or deemed to be
                               effected on or before the Balance Sheet Date or
                               provided for in the Audited Accounts; and

                         (cc)  distributions made or deemed to be made on or
                               before the Balance Sheet Date or provided for in
                               the Audited Accounts.

                   (iii) Proper provision or reserve for deferred taxation in
                         accordance with accounting principles and standards
                         generally accepted at the date hereof in Thailand has
                         been made in the Audited Accounts.

                   (iv)  The profits of Micropolis Thailand as shown by the
                         Audited Accounts have not been affected to a material
                         extent by inconsistencies of accounting practices, by
                         the inclusion of non-recurring items of income or
                         expenditure, by transactions entered into otherwise
                         than on normal commercial terms or by any other factors
                         rendering such profits exceptionally high or low.

            (J)    Taxation
                   --------   

                   There is no liability for Taxes in respect of which a claim
                   could be made against Micropolis Thailand (other than as
                   specifically provided for in the Audited Accounts and other
                   than taxes on income arising from transactions entered into
                   in the ordinary course of business after the Balance Sheet
                   Date)

                                     C-38

<PAGE>
 
                                      39

                   and there are no circumstances likely to give rise to such a
                   Liability.

            (K)    Contributions
                   ------------- 

                   (i)   All deductions and payments required to be made by
                         Micropolis Thailand in respect of contributions
                         (including employer's contributions) to any relevant
                         competent authority have been so made.

                   (ii)  Proper records have been maintained in respect of all
                         such deductions and payments and all regulations
                         applicable thereto have been complied with.

            (L)    Tax returns
                   ----------- 

                   (i)   Micropolis Thailand has duly made all returns and given
                         or delivered all notices, accounts and information
                         which on or before the date hereof ought to have been
                         made, given or delivered for the purposes of taxation
                         and all such returns, notices, accounts and information
                         (and all other information supplied to the inland
                         revenue or the customs and excise or other fiscal
                         authority concerned for any such purpose) have been
                         correct and made on a proper basis and none of such
                         returns, notices, accounts or information is disputed
                         in any material respect by the fiscal authority
                         concerned and there is not in existence any fact which
                         might be the occasion of any such dispute or of any
                         claim for taxation in respect of any financial period
                         down to and including the Balance Sheet Date not
                         provided for in the Audited Accounts.

                   (ii)  Without limiting the generality of Section
                         4.17(b)(L)(i), except as disclosed in the audited
                         accounts for the period ending 29 December 1995, the
                         tax returns of Micropolis Thailand have at all times
                         been correct and on a proper basis and no taxes, levies
                         or duties, including but not limited to goods and
                         services tax, value added tax, sales tax and property
                         tax, if any, are the subject of any arrears or other
                         dispute with the fiscal authorities in Thailand or
                         elsewhere and there is no liability to taxation in
                         respect of which a claim could be made against
                         Micropolis Thailand and there are no circumstances
                         likely to give rise to such a claim.

                                     C-39
<PAGE>
 
                                      40

                   (iii) All documents the enforcement of which Micropolis
                         Thailand may be interested in and which are subject to
                         ad valorem stamp duty have been duly stamped and no
                         document belonging to Micropolis Thailand which is
                         subject to ad valorem stamp duty is or will be
                         unstamped or insufficiently stamped; nor has any relief
                         from such duty been improperly obtained, nor has any
                         event occurred as a result of which any such duty from
                         which relief has been obtained will become payable.

                   (iv)  Micropolis Thailand has not received any tax
                         concession, relief or other special tax treatment,
                         whether in relation to its assets or the business
                         carried on by it or otherwise which, if revoked or
                         otherwise removed, will or may give rise to any
                         additional liability to taxation and, to the extent
                         that Micropolis Thailand has received any such tax
                         concession, relief or other special tax treatment,
                         there are not in existence any facts or circumstances
                         which will or may lead to the revocation or removal of
                         the same.

4.18   Warranties in Respect of Purchased Companies
       --------------------------------------------                  

       In the event ST Chatsworth elects to purchase the total issued share
       capital of each or any of the Purchased Companies pursuant to the option
       in Section 1.2:-

       (a)  MCUS hereby makes the representations and warranties contained in
            Sections 4.1 to 4.16 in respect of the Purchased Company whose share
            capital is to be purchased insofar as the same would be applicable
            as if the assets, business, undertaking and liabilities of such
            companies were being acquired by ST; and

       (b)  in respect of the Purchased Company whose share capital is to be
            purchased, MCUS warrants and represents to ST in the terms of
            Section 4.17(b) mutatis mutandis and all references therein to
            Micropolis Thailand shall be construed as references to the
            Purchased Company whose share capital is to be purchased and all
            references therein to Thailand shall be construed as references to
            the country of incorporation of the Purchased Company whose share
            capital is to be purchased.

4.19   Trade Payables
       --------------                      

       The Trade Payables:-

       (a)  arose from bona fide transactions in the ordinary course of business
            and are payable on ordinary trade terms;

                                     C-40

<PAGE>
 
                                      41

       (b)  are legal, valid and binding obligations of MC enforceable in
            accordance with their terms;

       (c)  are not subject to any valid set-off or counterclaim; and

       (d)  will be paid on normal credit terms.

4.20   Disclosure
       ----------                                                          

       No representation or warranty in this Section 4 and the Disclosure
       Schedule, and no statement contained therein contains or will contain any
       untrue statement of a material fact or omits or will omit to state a
       material fact or any fact necessary to make the statements contained
       herein or therein not misleading in any material respect.

5.     REPRESENTATIONS AND WARRANTIES OF ST
       ------------------------------------

       ST Chatsworth hereby makes the following representations and warranties
       to MCUS:-

5.1    Organisation and Qualification of ST
       ------------------------------------                               

       ST Chatsworth is duly organised and validly existing under the laws of
       Singapore. ST Chatsworth has full corporate power and authority to enter
       into and perform the transactions contemplated by this Agreement.

5.2    Authority
       ---------                                                     

       This Agreement and each of the Ancillary Documents delivered or to be
       delivered by ST Chatsworth or a ST Affiliate will constitute the valid
       and binding obligation of ST Chatsworth or such ST Affiliate, as
       appropriate, when executed and delivered in accordance with its terms,
       and shall be enforceable against ST Chatsworth or such ST Affiliate in
       accordance with their respective terms, except to the extent such
       enforceability:-

       (a)  may be limited by bankruptcy, insolvency, reorganisation, moratorium
            or similar laws affecting the enforcement of creditors' rights
            generally;

       (b)  is subject to equitable principles generally.

       The execution, delivery and performance of this Agreement and of the
       Ancillary Documents delivered or to be delivered by ST Chatsworth or such
       ST Affiliate have been, or when delivered will be, duly authorised by all
       necessary corporate action of ST Chatsworth or such ST Affiliate. The
       execution, delivery and performance by ST Chatsworth or such ST
       Affiliate, as the case may be, of this Agreement or any Ancillary
       Documents does not and will not with the passage of time or the giving of
       notice or both:-

                                     C-41
<PAGE>
 
                                      42

       (a)  violate any provisions of the memorandum and articles of association
            or equivalent, or bylaws of ST Chatsworth or the ST Affiliate; or

       (b)  require any approval, consent or waiver of, or filing with, any
            entity, private or governmental except such approvals which are
            required under Section 8.4.

6.     COVENANTS OF MCUS PRIOR TO CLOSING
       ----------------------------------

       MCUS covenants and agrees as follows throughout the period from the date
       hereof through and including the Closing:-

6.1    Restrictions
       ------------                                                  

       Except as may be otherwise contemplated by this Agreement or except as ST
       Chatsworth may otherwise consent to in writing, MCUS shall cause the Disk
       Drive Business in all material respects to be conducted in the ordinary
       course of business and in substantially the same manner in which such
       business and operations have been previously conducted prior to the date
       hereof and shall:-

       (a)  deliver or make, duly and correctly all accounts, documents and
            returns required by applicable law to be made to such authorities as
            is appropriate;

       (b)  conduct its business and affairs in all material respects in
            accordance with its memorandum and articles of association or
            equivalent and all applicable laws and regulations of any country in
            which it operates;

       (c)  keep ST Chatsworth informed and consult with ST Chatsworth on all
            material proposals and matters affecting or potentially affecting
            the Disk Drive Business;

       (d)  hold meetings from time to time with the representatives of ST
            Chatsworth at such times as may be requested by ST Chatsworth on
            reasonable notice in order that ST Chatsworth may be informed as to
            the progress of the Disk Drive Business;

       (e)  use all efforts to:-

            (i)    preserve intact the present business organisation and
                   reputation of the Disk Drive Business;

            (ii)   keep available (subject to dismissals and retirements in the
                   ordinary course of business consistent with past practice)
                   the services of the employees;

            (iii)  maintain the Acquired Assets in good working order and
                   condition, ordinary wear and tear excepted;

                                     C-42
<PAGE>
 
                                      43

            (iv)   maintain the goodwill of customers, suppliers, lenders and
                   other persons to whom MC sell goods or provide services or
                   with whom MC otherwise have significant business
                   relationships in connection with the Disk Drive Business; and

            (v)    continue all current sales, marketing and promotional
                   activities relating to the Disk Drive Business; and

       (f)  except to the extent required by applicable law:-

            (i)    cause the Disk Drive Business books and records to be
                   maintained in the usual, regular and ordinary manner, and

            (ii)   not permit any material change in any pricing, investment,
                   accounting, financial reporting, inventory, credit, allowance
                   or tax practice or policy of MC that would adversely affect
                   the Disk Drive Business, the Acquired Assets and the Assumed
                   Liabilities.

6.2    Matters Pending Closing
       -----------------------                                             

       Without limiting the generality of Section 6.1 with respect to the Disk
       Drive Business throughout the period from the date hereof through and
       including the Closing, MCUS shall not (except with the prior written
       consent of ST Chatsworth) cause or permit MC to:-

       (a)  suffer or permit any event or condition within MC's control which
            will have a Material Adverse Effect on the Disk Drive Business or
            the Acquired Assets;

       (b)  effect any dissolution, winding up, liquidation or termination of
            MC;

       (c)  effect any merger or consolidation of MC unless MC is the survivor
            thereof;

       (d)  institute, settle or dismiss any litigation, claim or other
            proceeding with respect to the Disk Drive Business or the Acquired
            Assets before any court or governmental agency;

       (e)  make any change in the memorandum and articles of association or
            equivalent, or bylaws of MC which would hinder, delay or prohibit
            the transactions contemplated by this Agreement;

       (f)  dispose of or agree to dispose of any interest in the Disk Drive
            Business or grant any option or right of pre-emption over, or
            mortgage, charge or otherwise encumber the assets of the Disk Drive
            Business including the Acquired Assets;

                                     C-43
<PAGE>
 
                                      44

       (g)  take any action which is inconsistent with the provisions of this
            Agreement or the consummation of the transactions contemplated
            hereunder;

       (h)  enter into any transaction, agreement, contract, commitment or
            arrangement:-

            (i)    which involves or is likely to involve negotiations or
                   resources on the Disk Drive Business of an unusual or
                   exceptional nature; or

            (ii)   which is not in the ordinary course of business and on arm's
                   length terms;

       (i)  amending, modifying, terminating (partially or completely), granting
            any waiver under or giving any consent with respect to any contract
            in relation to the Disk Drive Business;

       (j)  violating, breaching or defaulting under in any material respect, or
            taking or failing to take any action that (with or without notice or
            lapse of time or both) would constitute a material violation or
            breach of, or default under any term or provision of any contract in
            relation to the Disk Drive Business;

       (k)  fail to take any action required to maintain any of its insurances
            in force or knowingly do anything to make any policy of insurance
            void or voidable;

       (l)  make or agree to make any change in the nature or organisation of
            the Disk Drive Business;

       (m)  make any material change to the accounting procedures or principles
            by reference to which its accounts are drawn up otherwise than as
            required by any accounting standards authorities;

       (n)  borrow any money or agree to (other than by bank overdraft or
            similar facility in the ordinary course of business and within
            limits subsisting as at the date of this Agreement);

       (o)  incurring, purchasing, cancelling, prepaying or otherwise providing
            for a complete or partial discharge in advance of a scheduled
            payment date with respect to, or waiving any right of MC under, any
            liability of or owing to MC in connection with the Disk Drive
            Business, other than in the ordinary course of business consistent
            with past practice;

       (p)  make or agree to make any capital commitment, including for this
            purpose, the acquisition of any capital asset under a finance lease;

                                     C-44

<PAGE>
 
                                      45

       (q)  create, grant or issue, agree to create, grant or issue, any
            mortgages, charges (other than liens arising by operation of law),
            debentures or other securities or give or agree to give any
            guarantees or indemnities; and

       (r)  engaging in any transaction with respect to the Disk Drive Business
            with any officer, director, affiliate or associate of MC, or any
            associate of any such officer, director or affiliate or in relation
            to the system business, either outside the ordinary course of
            business consistent with past practice or other than on an arm's
            length basis.

6.3    Notice of Breach
       ----------------                                                   

       To the extent MCUS obtains knowledge that any of the representations or
       warranties contained in Section 4 would be incorrect in any respect were
       those representations or warranties made immediately after such knowledge
       was obtained, MCUS shall notify ST Chatsworth in writing promptly of such
       fact and MCUS shall or shall procure the MC Affiliates to exercise their
       best efforts to remedy the same.

6.4    Access
       ------                                                              

       MCUS shall or shall procure the MC Affiliates to provide ST and ST's
       solicitors, auditors, environmental consultants and appraisers, officers,
       directors, employees, agents, financial advisors, consultants and other
       representatives, with such information as ST may from time to time
       reasonably request with respect to the Disk Drive Business and the
       transactions contemplated by this Agreement, and shall provide ST and
       such representatives reasonable access during regular business hours and
       upon reasonable notice to the properties, books and records of the Disk
       Drive Business as ST may from time to time reasonably request.

6.5    Authorisation from Others
       -------------------------                                   

       MCUS will or will procure the MC Affiliates to:-

       (a)  take all commercially reasonable steps necessary or desirable, and
            proceed diligently and in good faith and use all commercially
            reasonable efforts, as promptly as practicable to obtain all
            consents, approvals or actions of, to make all filings with and to
            give all notices to Governmental or Regulatory Authority or any
            other person required of MC to consummate the transactions
            contemplated hereby and by the Ancillary Documents;

       (b)  provide such other information and communications to such
            Governmental or Regulatory Authority or other persons as ST or such
            Governmental or Regulatory Authority or other persons may reasonably
            request in connection therewith; and

                                     C-45

<PAGE>
 
                                      46

       (c)  co-operate with ST as promptly as practicable in obtaining all
            consents, approvals or actions of, making all filings with and
            giving all notices to Governmental or Regulatory Authority or other
            persons required of ST to consummate the transactions contemplated
            hereby and by the Ancillary Documents and in connection with the
            voluntary notice to CFIUS (as defined in Section 15.14). MCUS will
            provide prompt notification to ST when any such consent, approval,
            action, filing or notice referred to in Section 6.5(a) is obtained,
            taken, made or given, as applicable, and will advise ST of any
            communications (and, unless precluded by law, provide copies of any
            such communications that are in writing) with any Governmental or
            Regulatory Authority or other person regarding any of the
            transactions contemplated by this Agreement or any of the Ancillary
            Documents.

6.6    HSR Filings
       -----------                                                           

       In addition to and not in limitation of MCUS's covenants contained in
       Section 6.5, MCUS will:-

       (a)  take promptly all actions necessary to make the filings required or
            MC under the HSR Act (as defined in Section 15.14);

       (b)  comply at the earliest practicable date with any request for
            additional information received by MC from the Federal Trade
            Commission or the Antitrust Division of the Department of Justice
            pursuant to the HSR Act; and

       (c)  co-operate with ST in connection with ST's filing under the HSR Act
            and in connection with resolving any investigation or other inquiry
            concerning the transactions contemplated by this Agreement commenced
            by either the Federal Trade Commission or the Antitrust Division of
            the Department of Justice or state attorneys general and CFIUS under
            the Exon-Florio Amendment (as defined in Section 15.14) of the
            transactions contemplated by this Agreement and by the Ancillary
            Documents and, in connection therewith, provide CFIUS with such
            information concerning the transactions contemplated by this
            Agreement and the Ancillary Documents as is reasonably necessary or
            desirable.

6.7    Consummation of Agreement
       -------------------------                                         

       MCUS and ST Chatsworth shall use their reasonable efforts and due
       diligence to satisfy all conditions to the Closing to the end that the
       transactions contemplated by this Agreement shall be fully carried out.

                                     C-46

<PAGE>
 
                                      47

6.8    Relationships with Customers and Suppliers
       ------------------------------------------                       

       MCUS shall and shall procure the MC Affiliates to use their best efforts
       to keep available until the Closing its key employees and shall not make
       any material variation to the terms and conditions of employment of such
       employees and to maintain its relationship with material customers,
       distributors and suppliers and other persons having material business
       dealings with it such that the Disk Drive Business will not be impaired.

6.9    Defective Disk Drives
       ---------------------                                              

       MCUS shall notify ST Chatsworth on a weekly basis of the number of disk
       drives that are returned by customers for after-sales service or to meet
       warranty claims or the subject of complaint by customers and a reasonably
       detailed description of the reason for the return of the disk drives.

6.10   Stock Verification
       ------------------                                                

       MCUS shall conduct a joint stock verification exercise with ST Chatsworth
       of the Machinery and Equipment and Inventory as of the Closing Date.
       Provided that the stock verification exercise shall not in any way
       relieve or discharge MCUS from any liability for breach of warranty or
       otherwise which would have arisen under this Agreement.

6.11   Inventory for System Business
       -----------------------------                                        

       MCUS shall ensure that at the Closing the finished goods inventory sold
       or transferred to or otherwise in the possession or control of its system
       business shall not exceed the value of US$4,000,000.

6.12   Balance Sheet For Disk Drive Business
       -------------------------------------                                

       MCUS shall at Closing provide ST Chatsworth with a list of the Acquired
       Assets owned by, belonging to or to be sold by it and the relevant MC
       Affiliate and the country of location of the relevant Acquired Assets.

6.13   Financial Statement of Disk Drive Business
       ------------------------------------------                        

       MCUS shall at Closing deliver to ST Chatsworth the audited accounts of
       MCUS on a consolidated basis for the twelve months ended 29 December 1995
       together with all notes thereto and a division of the audited accounts
       between the Disk Drive Business and the system business and an analysis
       supporting such division.

                                     C-47

<PAGE>
 
                                      48

6.14   List of Acquired Assets
       -----------------------                                           

       On or before 1 February 1996, MCUS shall deliver to ST Chatsworth a
       detailed list of all the Acquired Assets together with copies of the
       relevant contract, agreement or document in relation thereto as ST
       Chatsworth may require to identify the Acquired Assets.

6.15   Accounts of Purchased Companies
       -------------------------------                                      

       MCUS shall on or before 29 February 1996 deliver to ST Chatsworth the
       audited accounts of Micropolis Thailand and each of the Purchased
       Companies for the year ending 29 December 1995.

6.16   Inventory for Evaluation
       ------------------------                                              

       MCUS shall obtain the written consent of ST Chatsworth prior to sending
       any inventory to any customer for evaluation.

6.17   Purchase of Issued Share Capital
       --------------------------------                                     

       In relation to Micropolis Thailand and each of the Purchased Companies
       which ST Chatsworth has elected to purchase the issued share capital,
       MCUS shall not and shall ensure that without the prior written consent of
       ST Chatsworth:-

       (a)  no dividend or other distribution will be declared, made or paid to
            its members;

       (b)  no material change will be made in the basis of the emoluments or
            other terms of employment of its directors or any of its employees;
            and

       (c)  it has not terminated the lease in relation to any of the premises
            where the business of the relevant companies are carried on.

7.     COVENANTS OF ST CHATSWORTH
       --------------------------

7.1    Regulatory and Other Approvals
       ------------------------------                      

       ST Chatsworth will:-

       (a)  take all commercially reasonable steps necessary or desirable, and
            proceed diligently and in good faith and use all commercially
            reasonable efforts, as promptly as practicable to obtain all
            consents, approvals or actions of, to make all filings with and to
            give all notices to Governmental or Regulatory Authority or any
            other person required of ST Chatsworth to consummate the
            transactions contemplated hereby and by the Ancillary Documents;

                                     C-48

<PAGE>
 
                                      49

       (b)  provide such other information and communications to such
            Governmental or Regulatory Authority or other persons as MCUS or
            such Governmental or Regulatory Authority or other persons may
            reasonably request in connection therewith; and

       (c)  co-operate with MCUS as promptly as practicable in obtaining a
            consents, approvals or actions of, making all filings with and
            giving all notices to Governmental or Regulatory Authority or other
            persons required of MCUS to consummate the transactions contemplated
            hereby and by the Ancillary Documents. ST Chatsworth will provide
            prompt notification to MCUS when any such consent, approval, action,
            filing or notice referred to in Section 7.1(a) is obtained, taken,
            made or given, as applicable, and will advise MCUS of any
            communications (and, unless precluded by law, provide copies of any
            such communications that are in writing) with any Governmental or
            Regulatory Authority or other person regarding any of the
            transactions contemplated by this Agreement or any of the Ancillary
            Documents.

7.2    HSR Filings
       -----------                                                      

       In addition to and without limiting ST Chatsworth's covenants contained
       in Section 7.1, ST Chatsworth will:-

       (a)  take promptly all actions necessary to make the filings required of
            ST Chatsworth under the HSR Act;

       (b)  comply at the earliest practicable date with any request for
            additional information received by ST Chatsworth from the Federal
            Trade Commission or the Antitrust Division of the Department of
            Justice pursuant to the HSR Act; and

       (c)  co-operate with MCUS in connection with MCUS's filing under the HSR
            Act and in connection with resolving any investigation or other
            regulatory inquiry concerning the transactions contemplated by this
            Agreement commenced by either the Federal Trade Commission or the
            Antitrust Division of the Department of Justice or state attorneys
            general and CFIUS under the Exon-Florio Amendment of the
            transactions contemplated by this Agreement and by the Ancillary
            Documents and, in connection therewith, provide CFIUS with such
            information concerning the transactions contemplated by this
            Agreement and the Ancillary Documents as is reasonably necessary or
            desirable.

7.3    Maintenance of Goodwill
       -----------------------                                          

       ST Chatsworth shall use such reasonable efforts to assist MCUS to
       maintain the goodwill of the Disk Drive Business, including making visits
       to the suppliers and customers.

                                     C-49

<PAGE>
 
                                      50

8.     CONDITIONS PRECEDENT TO THE OBLIGATIONS OF ST CHATSWORTH TO CLOSE
       -----------------------------------------------------------------

       The obligation of ST Chatsworth to acquire the Acquired Assets and assume
       the Assumed Liabilities as contemplated hereby shall be subject to the
       fulfilment, on or prior to the Closing Date, unless otherwise waived, in
       whole or in part, in writing by ST Chatsworth, of the following
       conditions:-

8.1    Representations and Warranties
       ------------------------------                                      

       The representations and warranties of MCUS set forth in Section 4 hereof
       shall be true and correct in all respects when made and shall be true and
       correct in all respects on the Closing Date as if made on and as of such
       date, except to the extent that such representations and warranties were
       made as of a specified date as to such representations and warranties the
       same shall continue on the Closing Date to have been true as of the
       specified date.

8.2    Performance of Covenants
       ------------------------                                            

       MCUS shall have performed in all material respects all of its obligations
       contained in this Agreement to be performed on or prior to the Closing
       Date, and ST Chatsworth shall have received a certificate to such effect,
       executed by MCUS and dated as of the Closing Date, in form satisfactory
       to ST Chatsworth. Notwithstanding the provisions of Sections 8.1 and 8.2
       hereof, ST Chatsworth shall be entitled to enforce, without regard to
       materiality, the representations, warranties, agreements, covenants and
       obligations which are made by MCUS herein and which are not, by their
       terms, qualified as to materiality.

8.3    Orders and Laws
       ---------------                                                       

       There shall not be in effect on the Closing Date any order or law
       restraining, enjoining or otherwise prohibiting or making illegal the
       consummation of any of the transactions contemplated by this Agreement or
       any of the Ancillary Documents or which could reasonably be expected to
       otherwise result in a material diminution of the benefits of the
       transactions contemplated by this Agreement or any of the Ancillary
       Documents to ST and there shall not be pending or threatened on the
       Closing Date any action or proceeding or any other action in, before or
       by any Governmental or Regulatory Authority which could reasonably be
       expected to result in the issuance of any such order or the enactment,
       promulgation or deemed applicability to ST or the transactions
       contemplated by this Agreement or any of the Ancillary Documents of any
       such law.

                                     C-50

<PAGE>
 
                                      51

8.4    Regulatory Consents and Approvals
       ---------------------------------                              

       All consents, approvals and actions of, filings with and notices to any
       Governmental or Regulatory Authority necessary to permit ST and MCUS to
       perform their obligations under this Agreement and the Ancillary
       Documents and to consummate the transactions contemplated hereby and
       thereby:-

       (a)  shall have been duly obtained, made or given;

       (b)  shall be in form and substance reasonably satisfactory to ST
            Chatsworth;

       (c)  shall not be subject to the satisfaction of any condition that has
            not been satisfied or waived; and

       (d)  shall be in full force and effect, and all terminations or
            expirations of waiting periods imposed by any Governmental or
            Regulatory Authority necessary for the consummation of the
            transactions contemplated by this Agreement and the Ancillary
            Documents, including under the HSR Act, shall have occurred,

       including without limitation, the approval of MCUS's stockholders of the
       transactions contemplated hereby, and ST shall have been furnished with
       copies of all applicable resolutions certified by the Secretary or
       Assistant Secretary or other appropriate officer of MCUS.

8.5    Delivery of Certificates and Documents to ST Chatsworth
       -------------------------------------------------------             

       MCUS shall have delivered, or caused to be delivered to ST Chatsworth the
       certificates as to the legal existence and corporate good standing of
       each of MCUS and the MC Affiliates and copies of their respective
       memorandum and articles of association, or equivalent, as amended, issued
       or certified by the Secretary or Assistant Secretary or other appropriate
       officer of MCUS (except for any jurisdiction in which the concept of good
       standing is inapplicable).

8.6    Exon-Florio Amendment
       ---------------------                                            

       ST Chatsworth shall have received written notice from CFIUS of its
       determination pursuant to the Exon-Florio Amendment not to undertake an
       investigation of the transactions contemplated by this Agreement and the
       Ancillary Documents.

8.7    Pledge
       ------                                                             

       That the pledge in favour of the CIT Group/Business Credit Inc, over all
       the assets of MC and all other Liens shall be discharged to the extent
       that the Acquired Assets shall cease to be subject to such pledge on or
       prior to Closing.

                                     C-51
<PAGE>
 
                                      52

8.8    Damage or Destruction
       ---------------------                                          

       MC shall not have suffered prior to the Closing Date any loss on account
       of fire, flood, accident or any other calamity or casualty to an extent
       that would materially interfere with the conduct of the Disk Drive
       Business or materially impair the value of the Disk Drive Business as a
       going concern, regardless of whether any such loss or losses have been
       insured against.

8.9    Title Insurance
       ---------------                                                     

       In the event ST Chatsworth exercises the option to purchase the US Real
       Property, ST Chatsworth shall have received a policy of title insurance
       on forms of and issued by one or more title companies reasonably
       satisfactory to ST Chatsworth insuring the title of MCUS to the US Real
       Property, subject only to such exceptions as are reasonably satisfactory
       to ST Chatsworth, and MCUS shall have paid to such title companies all
       expenses and premiums of such title companies in connection with the
       issuance of such policies.

8.10   Completion of Due Diligence
       ---------------------------                                    

       The completion of a due diligence investigation on each of MCUS and the
       MC Affiliates (including, without limitation):-

       (a)  an audit of the financial condition of Micropolis Thailand and each
            of the Purchased Companies whose issued share capital is to be
            purchased by ST Chatsworth; and

       (b)  a legal and financial analysis of each of MCUS and the MC Affiliates
            and the Acquired Assets and the Assumed Liabilities on or before
            Closing,

       and the result of such due diligence exercise being satisfactory to ST
       Chatsworth.

       Provided that if ST Chatsworth shall not have informed MCUS to the
       contrary on or before 29 February 1996, it shall be deemed to be
       satisfied with the said due diligence.

8.11   Approval of Board of Directors
       ------------------------------                               

       The approval by the board of directors of ST Chatsworth of the purchase
       or the Disk Drive Business by ST Chatsworth and the entry into this
       Agreement by ST Chatsworth.

                                     C-52
<PAGE>
 
                                      53

9.     CONDITIONS PRECEDENT TO OBLIGATIONS OF MCUS TO CLOSE
       ----------------------------------------------------

       The obligation of MCUS to sell or procure the MC Affiliates to sell the
       Acquired Assets as contemplated hereby shall be subject to the
       fulfilment, on or prior to the Closing Date, unless otherwise waived in
       writing by MCUS of the following conditions:-

9.1    Approval of Board of Directors
       ------------------------------                               

       The approval of the board of directors of MCUS of the sale of the Disk
       Drive Business by MCUS and the entry into this Agreement by MCUS.

9.2    Approval of MCUS Stockholders
       -----------------------------                                      

       The stockholders of MCUS shall have approved the transactions
       contemplated hereby.

9.3    Delivery of Certificates and Documents to MCUS
       ----------------------------------------------                      

       ST Chatsworth shall have delivered, caused to be delivered, to MCUS the
       certificates as to the legal existence and corporate good standing of ST
       Chatsworth and the ST Affiliate and copies of their respective memorandum
       and articles of association or equivalent, as amended, issued or
       certified by the Secretary or Assistant Secretary or other appropriate
       officer of ST Chatsworth or the ST Affiliate as appropriate (except for
       any of such entities organised under the laws of a jurisdiction in which
       the concept of good standing is inapplicable).

9.4    Exon-Florio Amendment
       ---------------------                                            

       ST Chatsworth shall have received written notice from CFIUS of its
       determination pursuant to the Exon-Florio Amendment not to undertake an
       investigation of the transactions contemplated by this Agreement and the
       Ancillary Documents.

9.5    Orders and Laws
       ---------------                                                       

       There shall not be in effect on the Closing Date any order or law that
       became effective after the date of this Agreement restraining, enjoining
       or otherwise prohibiting or making illegal the consummation of any of the
       transactions contemplated by this Agreement or any of the Ancillary
       Documents or which could reasonably be expected to otherwise result in a
       material diminution of the benefits of the transactions contemplated by
       this Agreement or any of the Ancillary Documents to MCUS and there shall
       not be pending or threatened on the Closing Date any action or proceeding
       or any other action in, before or by any Governmental or Regulatory
       Authority which could reasonably be expected to result in the issuance of
       any such order or the enactment, promulgation or deemed applicability to
       MCUS or the transactions

                                     C-53
<PAGE>
 
                                      54

       contemplated by this Agreement or any of the Ancillary Documents of any
       such law.

9.6    Regulatory Consents and Approvals
       ---------------------------------                              

       All consents, approvals and actions of, filings with and notices to any
       Governmental or Regulatory Authority necessary to permit MC and ST to
       perform their obligations under this Agreement and the Ancillary
       Documents and to consummate the transactions contemplated hereby and
       thereby:-

       (a)  shall have been duly obtained, made or given;

       (b)  shall not be subject to the satisfaction of any condition that has
            not been satisfied or waived; and

       (c)  shall be in full force and effect, and all terminations or
            expirations of waiting periods imposed by any Governmental or
            Regulatory Authority necessary for the consummation of the
            transactions contemplated by this Agreement and the Ancillary
            Documents, including under the HSR Act, shall have occurred.

10.    CERTAIN RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING
       ----------------------------------------------------

10.1   Survival of Representations, Warranties, Agreements, Covenants and
       ------------------------------------------------------------------
       Obligations
       -----------                                                             

       All representations, warranties, agreements, covenants and obligations
       herein or in any exhibit, schedule, certificate or financial statement
       delivered by any party to another party incident to the transactions
       contemplated in this Agreement or in any Ancillary Document shall be
       deemed to have been relied upon by the other party, shall survive the
       execution and delivery of this Agreement, any investigation made by any
       party hereto, and the sale and purchase of the Acquired Assets and
       payment therefor.

10.2   Further Assurances
       ------------------                                                  

       From time to time after the Closing and without further consideration,
       the parties will execute and deliver, or arrange for the execution and
       delivery of, such other instruments of conveyance and transfer and take
       such other action or arrange for such other actions as the other parties
       may reasonably request in order to evidence the consummation of the
       transactions contemplated hereby and to further effectuate the
       transactions contemplated by this Agreement.

10.3   Publicity and Disclosures
       -------------------------                                             

       No press release or any public disclosure, either written or oral, of the
       transactions contemplated by this Agreement shall be made without the
       prior knowledge and written consent of MCUS and ST Chatsworth, provided
       that

                                     C-54
<PAGE>
 
                                      55

       either MCUS or ST Chatsworth may make such disclosures as are required by
       law or the rules and regulations of any stock exchange on which their
       shares are quoted after notice to, and, to the extent practicable,
       consultation with, the other.

10.4   Further Co-operation of the Parties
       ----------------------------------- 

       (a)  MCUS and ST Chatsworth agree to use their reasonable efforts and
            cooperate in good faith to secure the transfer to ST or the re-
            issuance or issuance in the name of ST of all consents, licences and
            permits required under applicable law or regulation, federal, state
            and local or necessary to the ownership of the Acquired Assets or
            the operation of the Disk Drive Business.

       (b)  After Closing, ST Chatsworth shall at the request of MCUS provide
            MCUS access to the records and books sold and transferred herein to
            ST Chatsworth for the purpose of enabling MCUS to prepare and file
            its tax returns and to comply with other regulatory requirement.

10.5   Consents of Third Parties
       -------------------------                                     

       To the extent that any transfer or assignment of any Acquired Assets or
       Assumed Contract to be transferred and assigned to ST as provided herein
       shall require the consent of the other party thereto, or of any other
       person or governmental or other authority, and such consent is not
       obtained, then as between MC and such other party, person or authority
       this Agreement shall not constitute an agreement to assign the same
       unless and until such consent shall have been obtained. MCUS agrees that,
       at the request of ST, they will use their best efforts, before and after
       Closing, to obtain and deliver the consent of the other parties and the
       approvals of other persons or authorities, to the extent necessary, to
       the assignment of all such contracts, leases, licences, commitments or
       rights to ST. Until such consent or approval is obtained, MCUS, at their
       expense, shall or shall procure the MC Affiliates to either act as ST's
       agent in order to obtain for it the benefits thereunder or will co-
       operate with ST in any reasonable arrangement designed to provide for ST
       all benefits under such contracts, leases, licenses, commitments or
       rights and, to the extent ST obtains the benefit of any such Acquired
       Assets or Assumed Contract, ST shall perform its obligations with respect
       thereto.

10.6   Mail Received after Closing
       --------------------------- 

       (a)  In the event that ST receives after the Closing any mail or other
            communications addressed to MC, ST may open such mail or other
            communications and deal with the contents thereof in its discretion
            to the extent that such mail or other communications and the
            contents thereof relate to any of the Acquired Assets or to any of
            the Assumed Liabilities, including the right to endorse without
            recourse the name of MC on any cheque received by ST with respect to
            the Acquired

                                     C-55
<PAGE>
 
                                      56

            Assets, and to deal with the proceeds in accordance with the terms
            of this Agreement. ST agrees to deliver or cause to be delivered to
            MC all other mail and the contents thereof which does not relate to
            the Acquired Assets or the Assumed Liabilities, including any
            amounts received by ST on or after the Closing Date not in respect
            of Acquired Assets or Assumed Liabilities. If any cheque or other
            evidence of indebtedness endorsed by ST represents a payment not on
            account of an Acquired Asset or Assumed Liability, ST shall pay MC
            on the date ST receives payment the amount of such payment.

       (b)  In the event that MC receive after the Closing Date any mail or
            other communications addressed to MC which relates to any of the
            Acquired Assets or the Assumed Liabilities, MCUS shall or shall
            procure the MC Affiliates to promptly deliver or cause to be
            delivered all such mail or other written communication and the
            contents thereof to ST. MCUS agrees to co-operate with ST and to
            make arrangements reasonably necessary in order to properly deal
            with cheques addressed to MC but which belong to ST pursuant to this
            Agreement, and to properly direct the proceeds thereof to ST.

10.7   Employment of Business Employees by ST
       -------------------------------------- 

       (a)  ST Chatsworth or the ST Affiliate may at any time hereafter, offer
            employment to such of the current employees of MC employed in the
            Disk Drive Business as ST in its absolute discretion deems fit (such
            employees to whom ST shall offer employment shall hereinafter be
            referred to as the "Business Employees").  ST's or the ST 
                                ------------------     
            Affiliate's offer of employment to the Business Employees shall be
            on such terms as ST or the ST Affiliate in its absolute discretion
            deems fit. Provided that ST shall offer employment to Mr Ray Vapian
            and Mr Terry Atkins, such offer of employment shall be on such terms
            as ST in its absolute discretion deems fit and shall commence 120
            days after the Closing Date or such earlier date as the parties may
            agree. Such Business Employees who accept such offers of employment
            are hereinafter referred to as "Transferred Employees." To the
                                            ---------------------   
            extent assignable, MCUS shall and shall procure the MC Affiliates to
            assign to ST Chatsworth all confidentiality and non-compete
            covenants related to the Disk Drive Business of all Transferred
            Employees.

       (b)  For injuries arising out of employment by MC prior to the Closing
            Date, MC shall be liable for any damages, costs, losses, expenses or
            liabilities including, without limitation, any workers' compensation
            (including benefits, medical and rehabilitation expenses and any
            other expenses or obligations) payable under tort, occupational
            health and safety laws or otherwise in respect of MC's Business
            Employees. ST shall be liable for any such damages, costs, losses,
            expenses or liabilities payable for injuries arising out of the
            employment of the Transferred Employees by ST on or after the
            Closing Date.

                                     C-56
<PAGE>
 
                                      57

       (c)  ST shall have no liabilities or obligations under or with respect to
            MC's Plans (as defined in Section 4.13).

       (d)  ST shall have no liabilities or obligations with respect to MC's
            employees other than Transferred Employees as set out in Section
            1.5(h), and MC shall be solely responsible for such other employees
            for all purposes, including, without limitation, any health benefit
            continuation, severance, redundancy or other entitlements under any
            applicable law.

10.8   Accounts Receivable
       ------------------- 

       (a)  In relation to the accounts receivable related to the Disk Drive
            Business of MC except the Sundry Assets, ST shall render such
            reasonable assistance to MC in the collection of the accounts
            receivable, however, ST shall not be required to initiate legal
            proceedings or to engage a collection agent for this purpose or to
            terminate its business relationship with the debtor.

       (b)  ST shall at the written request of MC supported by reasonable
            grounds, stop or suspend the sale of disk drives to any customer
            which has unreasonably failed to discharge its debt giving rise to
            the aforesaid accounts receivable of MC.

       (c)  In the event within a period of 90 days after the Closing Date, any
            pricing policy adopted by ST Chatsworth has an adverse effect on the
            price protection policy of MCUS towards customers, resulting in a
            reduction of the aforesaid accounts receivable, ST Chatsworth will
            indemnify MCUS for the reduction in the aforesaid accounts
            receivable during the 90-day period.

10.9   Transfer Tax Liabilities
       ------------------------ 

       (a)  ST Chatsworth shall be responsible for all documentary, stamp,
            sales, use, notarisation, excise, transfer or other taxes or fees
            payable in respect of the sale and transfer of the Acquired Assets
            and Assumed Liabilities including any value added tax, but excluding
            any income taxes payable by MC in relation to or arising from the
            sale of the Acquired Assets and the Assumed Liabilities (the
            "Transfer Tax Liabilities" or "Transfer Taxes").
             ------------------------      --------------   

       (b)  ST Chatsworth and MCUS shall use reasonable efforts to minimise the
            Transfer Tax or to recover any Transfer Taxes paid and shall
            cooperate with each other in such efforts and in the filing of any
            exemption, application, returns or reports relating to the Transfer
            Taxes. MCUS shall deliver on a timely basis to ST Chatsworth any
            documents which may be used by ST Chatsworth under applicable state
            or local law to support the position that the sale of any Acquired

                                     C-57
<PAGE>
 
                                      58

            Assets pursuant hereto is not subject to a Transfer Tax (including
            resale certificates and similar documents relating to the sale of
            inventory for resale of property incorporated into inventory for
            resale), and shall promptly deliver to ST Chatsworth any other
            documents reasonably requested by ST Chatsworth with respect to the
            applicability of any Transfer Tax.

10.10  Provisions in Relation to the Name "Micropolis"
       ----------------------------------------------- 

       (a)  MC undertakes that at no time after the Closing Date shall it or the
            MC Affiliates or related company use as or as part of its corporate
            name or as, or as part of, any trade mark, service mark or logo
            (whether any of the foregoing is registered or unregistered) or as
            or as part of any trading or business name, the name "Micropolis" or
            any name which is the same as, similar to or a colourable imitation
            of, the name "Micropolis".

       (b)  Within 3 months, in the case of premises, sales literature and
            stationery and 6 months in the case of products, following the
            Closing Date, MCUS shall and shall procure the MC Affiliates or
            other related company to remove the "Micropolis" name or mark from
            its premises, products, sales literature and stationery and by the
            last day of the relevant period and so far as practicable during the
            relevant period shall delete from existing stocks of sales
            literature and stationery, references to the "Micropolis" name or
            mark by taking reasonable steps to delete the same with an ink
            marker so that no trace can be seen of the "Micropolis" name or
            mark.

       (c)  Promptly after the Closing, MCUS shall and shall procure the MC
            Affiliates or other related company whose corporate name or title is
            or includes the name "Micropolis" to change the corporate name or
            title to remove the name "Micropolis" therefrom.

       (d)  After the Closing Date, MCUS undertakes to provide ST with such
            assistance as may be required to enable ST or such party nominated
            by ST Chatsworth to register the name "Micropolis" with the relevant
            registry of companies and businesses or other similar or analogous
            body as ST may determine.

10.11  Warranty Servicing
       ------------------                                            

       After the Closing Date, ST shall take all reasonable steps to perform, in
       accordance with its normal business standards, the obligations of MC to
       provide after-sales service or to meet warranty claims of customers in
       relation to inventory sold in the normal course of the Disk Drive
       Business by MC prior to the Closing Date, insofar as the same are
       required by MC's conditions of sale.

                                     C-58
<PAGE>
 
                                      59

10.12  Inventory Sent for Evaluation
       -----------------------------                               

       In relation to the inventory delivered to customers of MC prior to the
       date hereof for evaluation, on the return of such inventory by the
       customers, ST shall return the inventory to MCUS.

10.13  AMK Leasehold
       -------------                                              

       At the request of ST Chatsworth, Micropolis Singapore shall use its best
       endeavours to obtain from the lessor such extension of the lease of the
       AMK Leasehold as ST Chatsworth may require and upon such extension the
       irrevocable licence granted to ST Chatsworth to use the leasehold
       interest in relation to the AMK Leasehold to the exclusion of Micropolis
       Singapore shall be extended accordingly.

11.    INDEMNIFICATION
       --------------- 

11.1   General Indemnification by MCUS
       ------------------------------- 

       (a)  MCUS agrees to indemnify and hold each of ST Chatsworth and the ST
            Affiliates and their respective officers, directors, affiliates,
            employees and agents (individually a "ST Indemnified Party" and
                                                  --------------------
            collectively the "ST Indemnified Parties"), harmless from and 
                              ----------------------    
            against any damages, liabilities, losses and expenses and any claims
            by third persons (including, without limitation, reasonable
            solicitors' fees, amounts paid in settlement of any claim or suit,
            fines, penalties or interest, of any kind or nature whatsoever
            including loss of profits and/or consequential damages) ("Loss" or
                                                                      ----      
            "Losses"), which may be sustained or suffered by an ST Indemnified 
             ------   
            Party arising out of or by reason of:-

            (i)    a breach of any representation or warranty of MCUS made in
                   this Agreement, the Disclosure Schedule or any Ancillary
                   Document;

            (ii)   any failure to perform any agreement or covenant of MCUS in
                   this Agreement or in any Ancillary Document to be performed
                   or complied with; and

            (iii)  any liability of MCUS that is not an Assumed Liability.

       (b)  Provided that no claim shall be made in respect of the aforesaid
            indemnity by the ST Indemnified Parties unless notice shall have
            been given by ST Chatsworth to MCUS within 12 months following
            Closing in the case where the claim relates to the Acquired Assets
            and the Assumed Liabilities (except Micropolis Thailand and the
            Purchased Companies where ST Chatsworth has elected to purchase the
            issued share capital thereof) and 24 months following Closing in the
            case

                                     C-59
<PAGE>
 
                                      60

            where the claim relates to Micropolis Thailand and the Purchased
            Companies where ST Chatsworth has elected to purchase the issued
            share capital thereof.

       (c)  The maximum aggregate liability of MCUS for all claims in respect of
            the aforesaid indemnity shall not exceed the Purchase Price.

       (d)  No claim shall be made in respect of the aforesaid indemnity unless
            the aggregate amount of all such claims exceeds US$100,000.

11.2   Environmental Indemnification by MCUS
       -------------------------------------                               

       MCUS agrees to indemnify and hold each of the ST Indemnified Parties
       harmless from and against any Losses including any claim by third persons
       (including, without limitation, any foreign, provincial, state or local
       agency having jurisdiction over environmental matters or Environmental
       Laws) (including, without limitation, reasonable solicitors' fees,
       amounts paid in settlement of any claim or suit and costs of clean-up,
       restoration, remediation or removal required under Environmental Laws)
       which may be sustained or suffered by any of the ST Indemnified Parties
       arising out of or by reason of:-

       (a)  any environmental matters disclosed in the Disclosure Schedule;

       (b)  any of the following occurring prior to the Closing Date;

            (i)    generation, use, treatment, handling, storage or disposal, or
                   arrangement for the treatment, handling, storage or disposal,
                   of Hazardous Materials on, or release of Hazardous Materials
                   to or from, the Real Property permitted, taken or made by any
                   person whomsoever, whether or not in compliance with
                   Environmental Laws then in force;

            (ii)   the removal of Hazardous Materials from the Real Property
                   and/or the ultimate disposition of such Hazardous Materials,
                   by any person whomsoever, whether or not in compliance with
                   Environmental Laws then in force;

            (iii)  the use of the Real Property by any person whomsoever in such
                   a manner as to cause a violation of any Environmental Laws or
                   to potentially give rise to any liability or obligation for
                   the remediation or restoration of the Real Property or any
                   other affected property, or for the treatment, storage,
                   removal, disposal, release or arrangement for removal or
                   disposal or transportation of any Hazardous Materials;

            (iv)   any violation of Environmental Laws in relation to the Real
                   Property;

                                     C-60
<PAGE>
 
                                      61

            (v)    the failure by any person to obtain, maintain current, and
                   comply with the terms and conditions of, all permits,
                   approvals, licenses and other authorisations and renewals
                   thereof, required by the Environmental Laws for the use and
                   operation of the Real Property; and

            (vi)   the exposure of employees of any owner, operator or lessees
                   of the Real Property to Hazardous Materials on or in relation
                   to the Real Property.

       The obligations of MCUS under this Section 11.2 shall survive
       indefinitely.

11.3   Notice and Defence of Claim
       --------------------------- 

       (a)  In the event that any party shall incur or suffer any Losses in
            respect of which indemnification may be sought by such party
            pursuant to the provisions of this Section 11, the party seeking to
            be indemnified hereunder (the "Indemnified Party") shall assert a
                                           -----------------   
            claim for indemnification by written notice (a "Notice") to the
                                                            ------   
            party from whom indemnification is sought (the "Indemnifying Party")
                                                            ------------------
            stating the nature and basis of such claim. In the case of Losses
            arising by reason of any third party claim, the Notice shall be
            given within sixty (60) days of the filing or other written
            assertion of any such claim against the Indemnified Party, but the
            failure of the Indemnified Party to give the Notice within such time
            period shall not relieve the Indemnifying Party of any liability
            that the Indemnifying Party may have to the Indemnified Party except
            to the extent that the Indemnifying Party is actually prejudiced
            thereby.

       (b)  The Indemnified Party shall provide to the Indemnifying Party on
            request all information and documentation reasonably necessary to
            support and verify any Losses which the Indemnified Party believes
            give rise to a claim for indemnification hereunder and shall give
            the Indemnifying Party reasonable access to all premises (including
            the Real Property), books, records and personnel in the possession
            or under the control of the Indemnified Party which would have
            bearing on such claim.

       (c)  In the case of any claims for which indemnification is sought, the
            Indemnified Party shall have the option:-

            (i)    to conduct and control or cause the Indemnifying Party to
                   conduct and control any proceedings or negotiations in
                   connection therewith; and

                                     C-61
<PAGE>
 
                                      62

            (ii)   to perform and control or direct or cause the Indemnifying
                   Party to perform and control or direct the performance of
                   activities required, including remedial activities, under
                   Environmental Laws.

            The parties agree to cooperate fully with one another in connection
            with the matters set out in this Section 11.3(c).

       (d)  Notwithstanding anything in this Agreement to the contrary, MCUS
            shall be responsible for any liability or obligation as a result of
            ST's failure to comply with applicable law in connection with the
            ownership or operation of the Disk Drive Business by ST after the
            Closing if the Disk Drive Business is owned or operated after the
            Closing in the manner owned or operated prior to Closing except that
            MCUS shall be responsible for such on-going failure to comply until
            the earlier of:-

            (i)    the first anniversary of the Closing Date; or

            (ii)   the date upon which ST obtains actual knowledge that such
                   manner of operation is in violation of applicable law.

11.4   No Tax Effect; Insurance
       ------------------------ 

       (a)  Indemnification for Losses payable pursuant to the indemnification
            provisions in this Section 11 shall be on a dollar for dollar basis
            and shall be determined without regard to deductibility for tax
            purposes or other tax benefits to the Indemnified Party or any other
            person or entity resulting therefrom.

       (b)  The Indemnifying Party shall make any indemnification payments
            determined to be payable to the Indemnified Party hereunder promptly
            after such determination is made, without delay, and without regard
            to any expectation that the Indemnified Party will recover insurance
            proceeds as a direct result of the matter giving rise to the claim
            for which indemnification payments are to be made. The Indemnified
            Party shall have no obligation whatsoever to seek to recover or make
            a claim for insurance proceeds as a result of any matter giving rise
            to an indemnification claim of the Indemnified Party against the
            Indemnifying Party. Notwithstanding the foregoing, if the
            Indemnified Party receives any insurance proceeds as a direct result
            of the matter giving rise to any indemnification claim of the
            Indemnified Party prior to the date upon which the Indemnifying
            Party is given notice of the claim, the Indemnifying Party's
            indemnification obligation with respect to such claim shall be
            reduced by the amount of any such insurance proceeds actually
            received by the Indemnified Party. If the Indemnified Party receives
            any insurance proceeds as a direct result of the matter giving rise
            to any indemnification claim of the Indemnified Party against the
            Indemnifying Party after the

                                     C-62
<PAGE>
 
                                      63

            Indemnifying Party has paid such indemnification claim to the
            Indemnified Party, then the Indemnified Party shall promptly turn
            over my such insurance proceeds received to the Indemnifying Party
            to the extent of the payments made by the Indemnifying Party to the
            Indemnified Party on the claim.

12.    TERMINATION OF AGREEMENT
       ------------------------

12.1   Termination
       -----------                                                        

       At any time prior to the Closing Date, this Agreement may be terminated:-

       (a)  by the written agreement of ST Chatsworth and MCUS;

       (b)  by MCUS if there has been a material misrepresentation, breach of
            warranty or breach of covenant by ST Chatsworth in its
            representation, warranties and covenants set forth herein and such
            breach results in a failure to satisfy a condition to MCUS's
            obligation to consummate the transactions provided herein;

       (c)  by ST Chatsworth if there has been a material misrepresentation,
            breach of warranty or breach of covenant by MCUS in their
            representations, warranties and covenants set forth herein and such
            breach results in a failure to satisfy a condition to ST
            Chatsworth's obligation to consummate the transactions provided
            herein;

       (d)  by MCUS if the conditions stated in Section 9 have not been
            satisfied on or prior to the Closing Date; or

       (e)  by ST Chatsworth if the conditions stated in Section 8 have not been
            satisfied on or prior to the Closing Date.

12.2   Effects of Termination
       ----------------------                                           

       If this Agreement shall be terminated as above provided, all obligations
       of the parties hereunder shall terminate without liability of any party
       to the other whether for costs, damages or otherwise; provided however,
       that termination pursuant to Section 12.1(b) or (c) by reason of a
       knowing and wilful breach by ST Chatsworth or MCUS of its representations
       and warranties or covenants shall not relieve the breaching party from
       any liability to the other party hereto.

12.3   Right to Proceed
       ----------------                                             

       Anything in this Agreement to the contrary notwithstanding, if any of the
       conditions specified in Section 8 have not been satisfied at or prior to
       the Closing, ST Chatsworth shall have the right to proceed with the
       transactions contemplated hereby without waiving any of its rights
       hereunder, and if any

                                     C-63
<PAGE>
 
                                      64

       of the conditions specified in Section 9 have not been satisfied at or
       prior to the Closing, MCUS may determine to proceed with the transactions
       contemplated hereby without waiving any of their rights hereunder.

13.    MCUS's NON-COMPETITION COVENANTS
       --------------------------------

13.1   Non-Competition of MCUS
       -----------------------                                            

       MCUS covenants and agrees with each of ST Chatsworth and each of the ST
       Affiliates that it and the MC Affiliates and other affiliates which are
       controlled by or under common control with MCUS and/or the MC Affiliates
       will not without the prior written consent of ST, directly or indirectly,
       anywhere within the world (the "Territory"), during the period
                                       ---------                     
       commencing on the Closing Date and expiring on the fifth (5th)
       anniversary of the Closing Date (the "Restrictive Period"):-
                                             ------------------   

       (a)  form, acquire (except for the ownership of less than five (5%)
            percent of the issued and outstanding capital stock of a publicly
            traded company), finance, assist, support, provide premises,
            facilities, goods or services to, or become associated in any
            capacity or to any extent, directly or indirectly with, an
            enterprise which is substantially similar to, as to types of
            customers or products or otherwise competitive with the Disk Drive
            Business of MC as heretofore conducted (a "Competing Business")
                                                       ------------------  
            provided that the foregoing shall not prohibit MC from engaging in
            transactions with parties which conduct a Competing Business so long
            as such transactions with such parties are not directly or
            indirectly connected with such other parties Competing Business;

       (b)  interfere with or attempt to interfere with or induce or attempt to
            induce any Transferred Employee to leave the employ of ST or any of
            it affiliates, or violate the terms of their contract with any of
            them;

       (c)  cause or attempting to cause:-

            (i)    any client, customer or supplier of the Disk Drive Business
                   to terminate or materially reduce its business with ST, or

            (ii)   any officer, employee or consultant of ST engaged in the Disk
                   Drive Business to resign or sever a relationship with ST; or

       (d)  disclose (unless compelled by judicial or administrative process) or
            using any confidential or secret information relating to the Disk
            Drive Business or any client, customer or supplier of the Disk Drive
            Business.

                                     C-64
<PAGE>
 
                                      65

13.2   Injunctive Relief
       -----------------                                                    

       The parties hereto acknowledge and agree that the breach by MCUS and the
       MC Affiliates of the restrictive covenant contained in Section 13.1 would
       cause irreparable injury to each of ST Chatsworth and/or each of the ST
       Affiliates or any of them and that the remedy at law for any such breach
       would be inadequate, and MCUS agrees and consents that, in addition to
       any other available remedy, temporary and permanent injunctive relief may
       be granted in any proceeding which may be brought by ST or any ST
       Affiliate to enforce such restrictive covenant without necessity of proof
       that any other remedy at law is adequate.

13.3   Enforcement
       -----------                                                      

       ST Chatsworth and MCUS intend that the covenants of Section 13.1 shall be
       deemed to be a series of separate covenants, one for each country or
       province of each and every state, territory or jurisdiction of, each
       country included within the Territory and one for each month of the
       Restrictive Period. If, in any judicial proceeding, a court shall refuse
       to enforce any of such covenants, then such unenforceable covenants shall
       be deemed eliminated from the provisions hereof for the purpose of such
       proceedings to the extent necessary to permit the remaining separate
       covenants to be enforced in such proceeding. If, in any judicial
       proceeding, a court shall refuse to enforce any one or more of such
       separate covenants because the total time thereof is deemed to be
       excessive or unreasonable, then it is the intent of the parties hereto
       that such covenants, which would otherwise be unenforceable due to such
       excessive or unreasonable period of time, be in force for such lesser
       period of time as shall be deemed reasonable and not excessive by such
       court.

14.    NON-DISCLOSURE COVENANTS
       ------------------------

14.1   Non-Disclosure of Information by MCUS
       -------------------------------------                                 

       It is understood that the Disk Drive Business acquired by ST hereunder is
       of a confidential nature. MCUS agrees that it will and will procure that
       the MC Affiliates will never divulge or appropriate to their own use, or
       to the use of any third party, any Confidential Information (as
       hereinafter defined).

14.2   Definition of Confidential Information
       --------------------------------------                             

       As used in this Section 14 and elsewhere in this Agreement, the term
       "Confidential Information" means the following oral or written 
        ------------------------           
       information relating to the business operations and affairs of the Disk
       Drive Business of MC including know-how, technology, inventions, designs,
       methodologies, trade secrets, patents, secret processes and formula,
       information and data relating to the development, research, testing,
       manufacturing, marketing, sale, distribution and use of products, sources
       of supplies, budgets and strategic

                                     C-65
<PAGE>
 
                                      66

       plans, the identity and special need of customers, plants and other
       properties, provided that the term "Confidential Information" shall not
       include:-

       (a)  any such information that can be shown to have been in the public
            domain or generally known or available to customers, suppliers or
            competitors of ST through no breach of the provisions of this
            Section 14 or other non-disclosure covenants;

       (b)  any such information that rightfully comes into the receiving
            party's possession after the Closing Date, without violation of the
            provisions of this Section 14 or other non-disclosure covenants; and

       (c)  any such information that was independently developed after the
            Closing Date by the receiving party without violation of the
            provisions of this Section 14 or other non-disclosure covenants; and

       provided further that MC may retain and use Confidential Information to
       the extent it relates to any business of MC other than the-Disk Drive
       Business.

14.3   Injunctive Relief
       -----------------                                                    

       The parties hereto acknowledge and agree that the breach by MCUS and the
       MC Affiliates and employees of the restrictive covenant contained in
       Section 14.1 would cause irreparable injury to each of ST Chatsworth
       and/or each of the ST Affiliates or any of them and that the remedy at
       law for any such breach would be inadequate, and MCUS agrees and consents
       that, in addition to any other available remedy, temporary and permanent
       injunctive relief may be granted in any proceeding which may be brought
       by ST or any ST Affiliate to enforce such restrictive covenant without
       necessity of proof that any other remedy at law is adequate.

15.    MISCELLANEOUS
       -------------

15.1   Expenses
       --------                                                            

       ST Chatsworth and MCUS shall pay the fees and expenses of their
       respective accountants and legal advisors incurred in connection with the
       transactions contemplated by this Agreement, except as otherwise provided
       in Section 3.

15.2   Notices
       -------                                                             

       Any notice or other communication required or permitted to be given to
       any party hereunder shall be in writing and shall be given to such party
       at such party's address set forth below or such other address as such
       party may hereafter specify by notice in writing to the other party. Any
       such notice or other communication shall be addressed as aforesaid and
       given (and shall be deemed to have been duly given upon receipt) by:-

                                     C-66
<PAGE>
 
                                      67

            (a)    registered air mall;

            (b)    hand delivery;

            (c)    reputable overnight courier; or

            (d)    facsimile transmission.

            To MCUS:               21211 Nordhoff St.
                                   Chatsworth, CA 91311
                                   United States of America
                                   Fax:  1 (818) 709 3302

            To ST Chatsworth:      83 Science Park Drive
                                   #01-01/02 The Curie
                                   Singapore Science Park
                                   Singapore 118258
                                   Fax:  65 775 3233

15.3   Waiver
       ------                                         

       The failure of any party hereto at any time or times hereafter to
       exercise any right, power, privilege or remedy hereunder or to require
       strict performance by the other or another party of any of the
       provisions, terms or conditions contained in this Agreement or in any
       other document, instrument or agreement contemplated hereby or delivered
       in connection herewith shall not waive, affect, or diminish any right,
       power, privilege or remedy of such party at any time or times thereafter
       to demand strict performance thereof; and, no rights of any party hereto
       shall be deemed to have been waived by any act or knowledge of such
       party, or any of its agents, officers or employees, unless such waiver is
       contained in an instrument in writing, signed by such party. No waiver by
       any party hereto of any of its rights on any one occasion shall operate
       as a waiver of any of its other rights or any of its rights on a future
       occasion.

15.4   Bulk Sales Act
       --------------                           

       The parties hereby waive compliance with the bulk sales act or comparable
       statutory provisions of each applicable jurisdiction. MCUS shall
       indemnify ST and its officers, directors, employees and agents in respect
       of, and hold each of them harmless from and against, any and all losses
       suffered, incurred or sustained by any of them or to which any of them
       becomes subject, resulting from, arising out of or relating to the
       failure of MCUS to comply with the terms of any such provisions
       applicable to the transactions contemplated by this Agreement.

                                     C-67
<PAGE>
 
                                      68

15.5   Section Headings
       ----------------                               

       The Section headings in this Agreement are for convenience of reference
       only and shall not be deemed to be a part of this Agreement or to alter
       or affect any provisions, terms or conditions contained herein.

15.6   Exhibits and Schedules
       ----------------------                           

       Any exhibits, schedules, financial statements and other documents
       referenced herein shall be deemed to be attached hereto and made a part
       hereof.

15.7   Severability
       ------------                                    

       Wherever possible, each provision of this Agreement shall be interpreted
       in such a manner as to be effective and valid under applicable law. If
       any portion of this Agreement is declared invalid for any reason in any
       jurisdiction, such declaration shall have no effect upon the remaining
       portions of this Agreement which shall continue in full force and effect
       as if this Agreement has been executed with the invalid portions thereof
       deleted. Furthermore, the entirety of this Agreement shall continue in
       full force and effect in all other jurisdictions.

15.8   Entire Understanding
       --------------------                            

       This Agreement sets forth the entire agreement and understanding between
       the parties with respect to the subject matter hereof and merges any and
       all discussions, negotiations, letters of intent or agreements in
       principle between them. None of the parties shall be bound by any
       conditions, warranties, understandings or representations with respect to
       such subject matter other than as expressly provided herein, or as duly
       set forth on or subsequent to the date hereof in writing and signed by a
       duly authorised officer of the party to be bound thereby.

15.9   Binding Effect
       --------------                                  

       This Agreement shall be binding upon and shall inure to the exclusive
       benefit of the parties hereto and their respective heirs, executors,
       administrators, legal representatives, successors and permitted assigns.
       Except as otherwise expressly provided in this Agreement, this Agreement
       is not intended to, nor shall it, create any rights in any other person.

15.10  Governing Law
       -------------                                 

       This Agreement is and shall be deemed to be a contract entered into and
       made pursuant to the laws of Singapore, and shall in all respects be
       governed, construed, applied and enforced in accordance with the laws of
       Singapore.

                                     C-68
<PAGE>
 
                                      69

15.11  Choice of Forum and Consent to Jurisdiction
       -------------------------------------------       

       Each party hereby irrevocably submits to the exclusive jurisdiction of
       the district or state court of California in any action, suit or
       proceeding arising out of or relating to this Agreement or any of the
       Ancillary Documents or any of the transactions contemplated hereby or
       thereby, provided, however, that such consent to jurisdiction is solely
       for the purpose referred to in this Section 15.11 and shall not be deemed
       to be a general submission to the jurisdiction of said courts or in the
       State of California other than for such purpose. Each party hereby
       irrevocably waives, to the fullest extent permitted by law, any objection
       that it may now or hereafter have to the laying of the venue of any such
       action, suit or proceeding brought in such a court and any claim that any
       such action, suit or proceeding brought in such a court has been brought
       in an inconvenient forum. Nothing herein shall affect the right of any
       party to serve process in any other manner permitted by law.

15.12  Assignability
       -------------                              

       Except as set forth in this Section 15, neither this Agreement nor any
       rights or obligations hereunder are assignable by MCUS or ST Chatsworth.
       Rights of ST Chatsworth under this Agreement are assignable in part or
       wholly to any affiliate of ST Chatsworth and any assignee of ST
       Chatsworth shall succeed to and be possessed of the rights of ST
       Chatsworth hereunder to the extent of the assignment made, provided,
       however, that any such assignment by ST Chatsworth shall not relieve ST
       Chatsworth of its obligations hereunder and any assignee of ST shall also
       assume any of the obligations of ST Chatsworth hereunder. In addition,
       after the Closing, ST Chatsworth may assign all or any part of its rights
       and/or obligations under this Agreement to any person who acquires
       substantially all of the assets of the Disk Drive Business from ST
       Chatsworth.

15.13  Counterparts; Delivery by Facsimile
       -----------------------------------       

       This Agreement may be executed in counterparts and by each party hereto
       on a separate counterpart, all of which when so executed shall be deemed
       to be an original and all of which taken together shall constitute one
       and the same agreement. Delivery of an executed counterpart of a
       signature page to this Agreement by telecopier or facsimile transmission
       shall be effective as delivery of a manually executed counterpart of this
       Agreement.

15.14  Certain Definitions
       -------------------                           

       For the purposes of this Agreement:-

       (a)  an "affiliate" of any specified natural persons shall mean and
                ---------                                                 
            include the members of such person's immediate family;

                                     C-69
<PAGE>
 
                                      70

       (b)  an "affiliate" of any specified other person shall mean and
                ---------                                              
            include any person that directly, or indirectly through one or more
            intermediaries, controls, or is controlled by, or is under common
            control with, such person;

       (c)  a "person" shall mean and include any natural person, firm,
               ------                                                  
            partnership, association, corporation, limited liability company,
            company, unincorporated organisation, trust, public body or
            government or any department or agency thereof; and

       (d)  the following defined terms have the meanings indicated below:-

            "CERCLA" means the Comprehensive Environmental Response, 
             ------  
            Compensation and Liability Act of 1980, as amended, and the rules
            and regulations promulgated thereunder.

            "CERCLIS" means the Comprehensive Environmental Response and 
             -------  
            Liability Information System, as provided for by 40 C.F.R. S300.5.
            

            "CFIUS" means The Committee on Foreign Investments in the United 
             -----  
            States.

            "Environmental Claim" means, with respect to any person, any 
             -------------------  
            written or oral notice, claim, demand or other communication
            (collectively, a "claim") by any other person alleging or asserting
            such person's liability for investigatory costs, cleanup costs,
            Governmental or Regulatory Authority response costs, damages to
            natural resources or other property, personal injuries, fines or
            penalties arising out of, based on or resulting from:-

            (a)    the presence, or release into the environment, of any
                   Hazardous Material at any location, whether or not owned by
                   such person; or

            (b)    circumstances forming the basis of any violation or alleged
                   violation, of any Environmental Law.

            The term "Environmental Claim" shall include, without limitation,
            any claim by any Governmental or Regulatory Authority for
            enforcement, cleanup, removal, response, remedial or other actions
            or damages pursuant to any applicable Environmental Law, and any
            claim by any third party seeking damages, contribution,
            indemnification, cost recovery, compensation or injunctive relief
            resulting from the presence of Hazardous Materials or arising from
            alleged injury or threat of injury to health, safety or the
            environment.

                                     C-70
<PAGE>
 
                                      71

            "Exon-Florio Amendment" means Section 721 of the Defense Production 
             ---------------------  
            Act of 1950, as amended, and any successor thereto and the
            regulations issued pursuant thereto or in consequence thereof.

            "Governmental or Regulatory Authority" means any court, tribunal,
             ------------------------------------                            
            arbitrator, authority, agency, commission, official or other
            instrumentality of the United States, any foreign country or any
            domestic or foreign state, county, city or other political
            subdivision.

            "HSR Act" means Section 7A of the Clayton Act (Title II of the 
             -------  
            Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended)
            and the rules and regulations promulgated thereunder.

            "Liens" means any mortgage, pledge, assessment, security interest, 
             -----  
            lease, lien, adverse claim, levy, charge or other encumbrance of any
            kind, or any conditional sale contract, title retention contract or
            other contract to give any of the foregoing.

            "Micropolis Limited" means the company registered in the Cayman 
             ------------------  
            Islands with its address c/o Roy West Trust Corporation (Cayman)
            Limited, Post Office Box 707, Grand Cayman, British West Indies.

            "Micropolis Thailand" means Micropolis Corporation (Thailand) Ltd 
             -------------------  
            with its address at 733/1-8 Phaholyothin Road, Lumlookkar
            Pathumthani, Thailand.

            "Micropolis Singapore" means the Singapore branch of Micropolis 
             --------------------  
            Limited with its address at Block 5004, Ang Mo Kio Avenue 5 #01-11,
            Singapore 569872.

            "NPL" means the National Priorities List under CERCLA.
             ---                                                  

            "Purchased Companies" means Micropolis GmbH, Micropolis Ltd., 
             -------------------  
            Micropolis S.A.R.L., Micropolis Japan Limited and Micropolis
            Australia Pty. Limited.

            "ST's Accountants" means Messrs Arthur Andersen.
             ----------------                               

            "Taxes" means all forms of taxation, whenever created or imposed 
             -----  
            of any jurisdiction, and whether imposed by a local, municipal,
            governmental, state, federation or other body, and without limiting
            the generality of the foregoing, shall include income, capital-
            based, sales, use, ad valorem, gross receipts, license, value added,
            franchise, transfer, recording, withholding, payroll, employment,
            excise, occupation, premium, utility and property taxes, together
            with any deficiencies, related interest, penalties and additions to
            any such tax, or additional amounts imposed by any taxing authority
            (domestic or foreign).

                                     C-71
<PAGE>
 
                                      72

            "US Dollars" and "US$" mean the lawful currency of the United 
             ----------       ---  
            States of America.

15.15  No Rights to Third Parties
       --------------------------                                         

       Nothing in this Agreement is intended, or shall be construed, to confer
       upon or give any person or entity other than the parties to this
       Agreement any rights or remedies under or by reason of this Agreement.

15.16  Pronouns and Plurals
       --------------------                                              

       All pronouns used herein shall be deemed to refer to the masculine,
       feminine, neuter, singular or plural as the identity of the person or
       persons may require in the context, and the singular form of nouns,
       pronouns and verbs will include the plural, and vice versa, whichever the
       context may require.

                                     C-72

<PAGE>
 
                                      73



                                  Schedule 1
                                  ----------

                                21223 Nordhoff
                                  Chatsworth
                                  California
                           United States of America


                                     C-73

<PAGE>
 
                                      74



                                  Schedule 2
                                  ----------

                                21211 Nordhoff
                                  Chatsworth
                                  California
                           United States of America

                                     C-74
<PAGE>
 
                                      75



                                  Schedule 3
                                  ----------

                     First, Second, Third and Fifth Storey
                        Block 5004, Ang Mo Kio Avenue 5
                                 TechPlace II
                                   Singapore

                             First to Fifth Storey
                        Block 5002, Ang Mo Kio Avenue 5
                                 TechPlace II
                                   Singapore

                                     C-75

<PAGE>
 
                                      76



                                  Schedule 4
                                  ----------

                      Private Lot A14269 forming part of
              Government Survey Lots 7634, 9419, 10979 and 12500,
                     Mukim No. 18, Ang Mo Kio, Singapore.

                                     C-76
<PAGE>
 
                                      77

                                  Schedule 5
                                  ----------
                            MICROPOLIS CORPORATION
                             WORLD-WIDE LOCATIONS

<TABLE>
<CAPTION>
                                                   ADDRESS/                  START DATE   
                                                   LESSOR/                    DATE END                                           
                                                   SQ. FT.                     /TERM         MO. RENT         1995          1996 
                                        --------------------------------------------------------------------------------------------

UNITED STATES                           MUSA                                                             
------------------------------------------------------------------------------------------------------------------------------------

<S>                                     <C>                                   <C>            <C>             <C>           <C>
Type: SALES OFFICE                       
Micropolis Corporation                  4975 PRESTON PARK BLVD., STE 320      12/15/93       $2,300.00       $27,600       $27,600  
South Central District Sales Office     PLANO, TX 75093                        1/31/97    
Plano, TX, USA                                                                                      
# of Employees:  3                      LESSOR: H.D. DELAWARE PROPERTIES, INC.                           
                                        SQ. FT. 2,253                         
Facility Leased                                                                               
Branch of: Micropolis Corporation                                                             
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                       
Micropolis Corporation                  100 CENTURY CENTER CT., #410            5/1/94       $4,212.00       $50,544       $50,544  
Western Regional Sales Office           SAN JOSE, CA 95112                     4/30/98                                       
San Jose, CA, USA                                                                        
# of Employees:  7                      LESSOR: 100 HOMELAND CORP                                       
                                        SQ. FT. 2,568      Lease Signed 3/1/94                      
Facility Leased                                                                               
Branch of: Micropolis Corporation                                                              
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                      19782 MAC ARTHUR BLVD.                  1/1/96       $1,905.00    $22,860.00            $0  
Micropolis Corporation                  SUITE 320                             12/31/96                                      
Southern Calif. District Sales Office   IRVINE, CA 92715                                                       
Irvine, CA, USA                         
# of Employees:  5                      LESSOR: INTEGRITY FUND II/COLTON CAPITAL                         
                                        SQ. FT. 1,732      Month-to-Month                           
Facility Leased                                                                               
Branch of: Micropolis Corporation                                                             
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                      1 STILES ROAD                           2/1/93       $4,350.00       $52,200            $0
Micropolis Corporation                  UNIT 303                              11/30/96                                      
Eastern Regional OEM Sales Office       SALEM, NH                                                        
Salem, NH, USA                                                                                
# of Employees:  8                      LESSOR: GUDEK ENTERPRISES REALTY TRUST                           
                                        SQ. FT. 3,527                                                    
Branch of: Micropolis Corporation                                                                                   
------------------------------------------------------------------------------------------------------------------------------------

<CAPTION> 
                                                   ADDRESS/                  START DATE                                    
                                                   LESSOR/                    END DATE                                      
                                                   SQ. FT.                     /TERM          1997                  1998       1999 

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

UNITED STATES                           MUSA
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                                  <C>             <C>                  <C>          <C>
Type: SALES OFFICE                                       
Micropolis Corporation                  4975 PRESTON PARK BLVD., STE 320      12/15/93       $2,300               $0            $0
South Central District Sales Office     PLANO, TX 75093                        1/31/97
Plano, TX, USA                          
# of Employees:  3                      LESSOR: H.D. DELAWARE PROPERTIES, INC.
                                        SQ. FT. 2,253                         
Facility Leased              
Branch of: Micropolis Corporation                 
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                      
Micropolis Corporation                  100 CENTURY CENTER CT., #410            5/1/94      $50,544          $16,848            $0
Western Regional Sales Office           SAN JOSE, CA 95112                     4/30/98 
San Jose, CA, USA            
# of Employees:  7                      LESSOR:  100 HOMELAND CORP
                                        SQ. FT. 2,568       Lease Signed 3/1/94
Facility Leased              
Branch of: Micropolis Corporation                 
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                      19782 MAC ARTHUR BLVD.                  1/1/96           $0               $0            $0
Micropolis Corporation                  SUITE 320                             12/31/96
Southern Calif. District Sales Office   IRVINE, CA 92715 
Irvine, CA, USA              
# of Employees:  5                      LESSOR: INTEGRITY FUND II/COLTON CAPITAL
                                        SQ. FT. 1,732       Month-to-Month
Facility Leased              
Branch of: Micropolis Corporation                 
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                      1 STILES ROAD                           2/1/93           $0               $0            $0
Micropolis Corporation                  UNIT 303                              11/30/96
Eastern Regional OEM Sales Office       SALEM, NH
Salem, NH, USA               
# of Employees:  8                      LESSOR: GUDEK ENTERPRISES REALTY TRUST
                                        SQ. FT. 3,527
Branch of: Micropolis Corporation
------------------------------------------------------------------------------------------------------------------------------------

<CAPTION> 
                                                   ADDRESS/                  START DATE                                    
                                                   LESSOR/                    END DATE                     TOTAL FUTURE
                                                   SQ. FT.                     /TERM         THEREAFTER    COMMITMENTS  
------------------------------------------------------------------------------------------------------------------------------------

UNITED STATES                           MUSA
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                                  <C>             <C>             <C>          
Type: SALES OFFICE                                       
Micropolis Corporation                  4975 PRESTON PARK BLVD., STE 320      12/15/93           $0          $29,900
South Central District Sales Office     PLANO, TX 75093                        1/31/97
Plano, TX, USA                          
# of Employees:  3                      LESSOR: H.D. DELAWARE PROPERTIES, INC.
                                        SQ. FT. 2,253                         
Facility Leased              
Branch of: Micropolis Corporation                 
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                      
Micropolis Corporation                  100 CENTURY CENTER CT., #410            5/1/94           $0         $117,936
Western Regional Sales Office           SAN JOSE, CA 95112                     4/30/98 
San Jose, CA, USA            
# of Employees:  7                      LESSOR:  100 HOMELAND CORP
                                        SQ. FT. 2,568       Lease Signed 3/1/94
Facility Leased              
Branch of: Micropolis Corporation                 
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                      19782 MAC ARTHUR BLVD.                  1/1/96           $0               $0
Micropolis Corporation                  SUITE 320                             12/31/96
Southern Calif. District Sales Office   IRVINE, CA 92715 
Irvine, CA, USA              
# of Employees:  5                      LESSOR: INTEGRITY FUND II/COLTON CAPITAL
                                        SQ. FT. 1,732       Month-to-Month
Facility Leased              
Branch of: Micropolis Corporation                 
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                      1 STILES ROAD                           2/1/93           $0               $0
Micropolis Corporation                  UNIT 303                              11/30/96
Eastern Regional OEM Sales Office       SALEM, NH
Salem, NH, USA               
# of Employees:  8                      LESSOR: GUDEK ENTERPRISES REALTY TRUST
                                        SQ. FT. 3,527
Branch of: Micropolis Corporation
------------------------------------------------------------------------------------------------------------------------------------
</TABLE> 

                                    
* Approximate number of employees based on 12/15/95 Manpower Report 

                                    Page 1

                                     C-77
<PAGE>

                                      78 
                                                          MICROPOLIS     1/17/96
                            MICROPOLIS CORPORATION
                             WORLD-WIDE LOCATIONS

<TABLE> 
<CAPTION> 
                                             ADDRESS/                       START DATE
                                             LESSOR/                         END DATE                                            
                                              SQ FT.                          /TERM       MO. RENT            1995           1996
                                        --------------------------------------------------------------------------------------------

<S>                                     <C>                                 <C>           <C>              <C>             <C> 
Type: SALES OFFICE                      220 E. DEVON                          11/1/95     $1,325.00        $9,135.00       $15,900
North Central District Sales Office     SUITE 215                            10/31/97
Des Plaines, IL, USA                    DES PLAINES, IL
# of Employees:  3           
                                        LESSOR: HIFFMAN, SHAFFER, ANDERSON, INC. 
Branch of: Micropolis Corporation       SQ. FT. 1,116         
                                        --------------------------------------------------------------------------------------------
                                        SUBTOTAL - US PROPERTIES                                          $1,065,819       $94,044
------------------------------------------------------------------------------------------------------------------------------------


<CAPTION> 
                                             ADDRESS/                       START DATE
                                             LESSOR/                         END DATE                                            
                                              SQ FT.                          /TERM           1997             1998            1999
                                        --------------------------------------------------------------------------------------------

<S>                                     <C>                                 <C>             <C>               <C>              <C>  

Type: SALES OFFICE                      220 E. DEVON                          11/1/95            $0                $0           $0 
North Central District Sales Office     SUITE 215                            10/31/97
Des Plaines, IL, USA                    DES PLAINES, IL
# of Employees:  3           
                                        LESSOR: HIFFMAN, SHAFFER, ANDERSON, INC. 
Branch of: Micropolis Corporation       SQ. FT. 1,116         
                                        --------------------------------------------------------------------------------------------
                                        SUBTOTAL - US PROPERTIES                            $52,844           $16,848           $0
------------------------------------------------------------------------------------------------------------------------------------


<CAPTION> 
                                             ADDRESS/                       START DATE     
                                             LESSOR/                         END DATE                       TOTAL FUTURE
                                              SQ FT.                          /TERM          THEREAFTER     COMMITMENTS  
                                        --------------------------------------------------------------------------------------------

<S>                                     <C>                                 <C>              <C>            <C>  
Type: SALES OFFICE                      220 E. DEVON                          11/1/95            $0           $15,900
North Central District Sales Office     SUITE 215                            10/31/97
Des Plaines, IL, USA                    DES PLAINES, IL
# of Employees:  3           
                                        LESSOR: HIFFMAN, SHAFFER, ANDERSON, INC. 
Branch of: Micropolis Corporation       SQ. FT. 1,116         
                                        --------------------------------------------------------------------------------------------
                                        SUBTOTAL - US PROPERTIES                                 $0          $163,736
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

                                    
* Approximate number of employees based on 12/15/95 Manpower Report 

                                    Page 2

                                     C-78
<PAGE>

                                      79
 
                            MICROPOLIS CORPORATION
                              WORLD-WIDE LOCATION

<TABLE> 
<CAPTION> 
                                ADDRESS/                      START DATE
                                LESSOR/                        END DATE                                                       
                                 SQ.FT.                         /TERM                MO.RENT          1995        1996      1997   
                             -------------------------------------------------------------------------------------------------------

EUROPE
ENGLAND
<S>                          <C>                             <C>                <C>                 <C>        <C>       <C>
Type: WAREHOUSE              ACRE ROAD                           10/23/86           (Pounds)5,208    $98,119    $98,119   $98,119
Micropolis Ltd.              READING                              7/7/11          AT 1.57 $/(Pounds)
Berkshire, England           BERKSHIRE                           25 years
# of Employees:  N/A         ENGLAND                       
 
Facility: Leased             LESSOR: GRIMWADE AND MORRELL
wholly owned subsidiary of:  SQ.FT. 8,000
Micropolis Corporation       
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE           4 WORTON DRIVE                      9/21/93            (Pounds)15,583      $0      $85,629  $293,584
Micropolis Ltd.              WORTON GRANGE                       9/17/05          AT 1.57 $/(Pounds)
Berkshire, England           READING                                 
# of Employees:  36          BERKSHIRE                           12 years       Note: 1 or 2 yrs - free
                             ENGLAND
                                                           
Facility: Leased               
wholly owned subsidiary of:  LESSOR: LLOYDS BANK SF NOMINEES LTD
Micropolis Corporation       SQ.FT. 34,000                      
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE           MICROPOLIS SARL                     12/1/87               FF10,000      $20,636       $0        $0
Micropolis S.A.R.L.          2 RUE DE BUISSON AUX FRAISES       11/30/95            AT .1876 $/FF
Massey, France               Z.1. DE LA BLONDE, 91300 MASSEY                    
# of Employees:  3           FRANCE
                                  
Facility: Leased             LESSOR: ACTIPIERRE          
wholly owned subsidiary of:  SQ.FT.                              Cancellable every 3 years with 6 month notice 
Micropolis Corporation                 
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE           MICROPOLIS GmbH                     9/1/93                DM 6,809      $53,061    $55,719  $58,501
Micropolis GmbH              BEHRINGSTRASSE 10                  8/31/98             AT .6494 $/DM
Munchen, Germany             8033 PLANEGG BEI MUNCHEN            
# of Employees:  6           WEST GERMANY

                             LESSOR: HERR FRANZ BAUER
wholly owned subsidiary of:  SQ.FT. 3,600            
Micropolis Corporation       
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE           MICROPOLIS SRL                      6/1/95              IL 1,668,122    $12,395       $0        $0  
Micropolis S.r.l.            VIA STEPHENSON, 43/A                5/31/96             AT IL 1,588/$
Milan, Italy                 20157 MILAN                      
# of Employees:  3           ITALY                          
                             
Facility:  Leased            LESSOR:
wholly owned subsidiary of:  
Micropolis Corporation       
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE           MICROPOLIS A.B.                     7/1/92                SEK 5170       $9,274       $0        $0  
Micropolis A.B.              APRIL VAGEN 3                                         AT 6.69 Krona/$
Jardalla, Sweden             17540 JARFALLA                    Mo. to Mo.   
# of Employees:  1           SWEDEN        

                             LESSOR:   
wholly owned subsidiary of:  SQ.FT. 269 
Micropolis Corporation                  
------------------------------------------------------------------------------------------------------------------------------------
                             TOTAL - EUROPEAN PROPERTIES                                            $193,484   $239,466  $450,203 
                             -------------------------------------------------------------------------------------------------------

 
<CAPTION> 
                                                                                                             TOTAL FUTURE
                                                              1998           1999          THEREAFTER        COMMITMENTS 
                             ------------------------------------------------------------------------------------------------------
EUROPE                                                                                                                   
ENGLAND                                                                                                                  
<S>                                                         <C>            <C>             <C>               <C>         
Type: WAREHOUSE                                              $98,119        $98,119        $1,177,425        $1,569,900  
Micropolis Ltd.                                                                                                          
Berkshire, England                                                                                                       
# of Employees:  N/A                                                                                                     
                                                                                                                         
Facility: Leased                                                                                                         
wholly owned subsidiary of:                                                                                              
Micropolis Corporation                                                                                                   
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                                          $293,584       $293,584        $1,761,502        $2,727,882  
Micropolis Ltd.                                                                                                          
Berkshire, England                                                                                                       
# of Employees:  36                                                                                                      
                                                                                                                         
Facility: Leased                                                                                                         
wholly owned subsidiary of:                                                                                              
Micropolis Corporation                                                                                                   
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                                              $0             $0              $0               $0       
Micropolis S.A.R.L.                                                                                                      
Massey, France                                                                                                           
# of Employees:  3                                                                                                       
                                                                                                                         
Facility: Leased                                                                                                         
wholly owned subsidiary of:                                                                                              
Micropolis Corporation                                                                                                   
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                                           $40,949           $0              $0            $  155,168  
Micropolis GmbH                                                                                                          
Munchen, Germany                                                                                                         
# of Employees:  6                                                                                                       
                                                                                                                         
wholly owned subsidiary of:                                                                                              
Micropolis Corporation                                                                                                   
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                                              $0             $0              $0               $0       
Micropolis S.r.l.                                                                                                        
Milan, Italy                                                                                                             
# of Employees:  3                                                                                                       
                                                                                                                         
Facility:  Leased                                                                                                        
wholly owned subsidiary of:                                                                                              
Micropolis Corporation                                                                                                   
------------------------------------------------------------------------------------------------------------------------------------
Type: SALES OFFICE                                              $0             $0              $0               $0       
Micropolis A.B.                                                                                                          
Jardalla, Sweden                                                                                                         
# of Employees:  1                                                                                                       
                                                                                                                         
wholly owned subsidiary of:                                                                                              
Micropolis Corporation                                                                                                   
------------------------------------------------------------------------------------------------------------------------------------
                             TOTAL - EUROPEAN PROPERTIES    $432,651       $391,702        $2,938,927        $4,452,949
                             -------------------------------------------------------------------------------------------------------

</TABLE> 

*Approximate number of employees based on 12/15/95 Manpower Report 

                                    Page 3

                                     C-79
<PAGE>

                                      80 
<TABLE> 
<CAPTION> 
                                ADDRESS/                         START DATE
                                LESSOR/                           END DATE                                                       
                                 SQ.FT.                            /TERM              MO.RENT       1995      1996        1997   
                             -----------------------------------------------------------------------------------------------------

<S>                          <C>                                 <C>               <C>           <C>         <C>          <C> 
TYPE WAREHOUSE               BLK 302 UBI AVE 1 - 17 UNITS          7/1/94            S$11900           $0          $0        $0
Micropolis Limited           SINGAPORE 1440                       6/30/95          AT .685 $/S$ 
Singapore                                                        Mo. to Mo.              
# of Employees:  N/A         LESSOR: HOUSING & DEVELOPMENT BOARD 
                                    SINGAPORE
Facility: Leased                     
wholly owned subsidiary of:           
Micropolis Corporation                   
-----------------------------------------------------------------------------------------------------------------------------------

                             SUBTOTAL - SINGAPORE                                               $2,785,270  $1,247,714  $616,500 

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


<CAPTION> 
                                                                                                             TOTAL FUTURE
                                                              1998           1989          THEREAFTER        COMMITMENTS 
                             ------------------------------------------------------------------------------------------------------
<S>                                                         <C>            <C>             <C>               <C>         
TYPE WAREHOUSE                                                 $0             $0               $0                 $0     
Micropolis Limited                                                                                                       
Singapore                                                                                                                
# of Employees:  N/A                                                                                                     
                                                                                                                         
Facility: Leased                                                                                                         
wholly owned subsidiary of:                                                                                              
Micropolis Corporation                                                                                                   
-----------------------------------------------------------------------------------------------------------------------------------

                             SUBTOTAL - SINGAPORE           $616,500      $616,500       $15,412,500       $21,294,983
                             ------------------------------------------------------------------------------------------------------

</TABLE> 

*Approximate number of employees based on 12/15/95 Manpower Report 

                                    Page 4

                                     C-80
<PAGE>

                                      81
 
<TABLE> 
<CAPTION> 
                                                      MICROPOLIS CORPORATION
                                                       WORLD-WIDE LOCATIONS
 
                                               ADDRESS/                  START DATE 
                                               LESSOR/                    END DATE                               
                                               SQ. FT.                     /TERM           MO. RENT              1995    
------------------------------------------------------------------------------------------------------------------------------------

                                        SUBTOTAL - SINGAPORE                                                    $52,200  
------------------------------------------------------------------------------------------------------------------------------------

<S>                                     <C>                              <C>             <C>                    <C> 
TAIWAN

Type: SALES OFFICE                      MICROPOLIS CORP.                   9/1/94         NT$ 114,434           $33,534  
Asia/Pacific Sales Headquarters         (TAIWAN BRANCH)                   8/31/96        AT 27.30$/NT$
Micropolis Corporation                  ROOM 1111, 11F, NO. 333
Taipei, Taiwan                          KEELUNG ROAD, SEC. 1
# of Employees:  2                      TAIPEI, TAIWAN, ROC 

Facility: Leased             
wholly owned subsidiary of:  
Micropolis Corporation
------------------------------------------------------------------------------------------------------------------------------------
AUSTRALIA
                                                                                            A.$6,692            $53,536 
Type: SALES OFFICE                      LEVEL 21, 201 MILLER STREET                       AT 1.35S/A.$      
Micropolis Corporation                  NORTH SYDNEY, NSW 2060 AUSTRALIA                  
North Sydney, Australia      
# of Employees:  2           
                             
Facility: Leased
wholly owned subsidiary of:
Micropolis Corporation
------------------------------------------------------------------------------------------------------------------------------------
JAPAN
Type: SALES OFFICE                      MADRE MATSUDA BLDG. 3F-312                          Y707,797            $82,462
Micropolis Corporation                  4-13 KIO-CHO, CHIYODA-KU                           AT 103.00Y/$ 
Tokyo, Japan                            TOKYO, JAPAN 102                  
# of Employees:  2           
                             
Facility: Leased             
wholly owned subsidiary of:
Micropolis Corporation
------------------------------------------------------------------------------------------------------------------------------------
                                        TOTAL - ASIAN PROPERTIES                                             $3,007,001  
------------------------------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------------------------------------------------------------------
                                        TOTAL - ALL PROPERTIES                                               $4,266,305  
------------------------------------------------------------------------------------------------------------------------------------


<CAPTION> 
                                               ADDRESS/                  START DATE 
                                               LESSOR/                    END DATE                                            
                                               SQ. FT.                     /TERM           1996           1997           1998 
------------------------------------------------------------------------------------------------------------------------------------

                                        SUBTOTAL - SINGAPORE                                $0             $0             $0  
------------------------------------------------------------------------------------------------------------------------------------

<S>                                     <C>                              <C>           <C>                <C>            <C>  
TAIWAN                                                                                   

Type: SALES OFFICE                      MICROPOLIS CORP.                   9/1/94      $33,534             $0             $0  
Asia/Pacific Sales Headquarters         (TAIWAN BRANCH)                   8/31/96        
Micropolis Corporation                  ROOM 1111, 11F, NO. 333                          
Taipei, Taiwan                          KEELUNG ROAD, SEC. 1                             
# of Employees:  2                      TAIPEI, TAIWAN, ROC                              
                                                                                         
Facility: Leased                                                                         
wholly owned subsidiary of:                                                              
Micropolis Corporation                                                                   
------------------------------------------------------------------------------------------------------------------------------------
AUSTRALIA                                                                                
                                                                                      
Type: SALES OFFICE                      LEVEL 21, 201 MILLER STREET                            
Micropolis Corporation                  NORTH SYDNEY, NSW 2060 AUSTRALIA                 
North Sydney, Australia                                                                  
# of Employees:  2                                                                       
                                                                                         
Facility: Leased                                                                         
wholly owned subsidiary of:                                                              
Micropolis Corporation                                                                   
------------------------------------------------------------------------------------------------------------------------------------
JAPAN                                                                                    
Type: SALES OFFICE                      MADRE MATSUDA BLDG. 3F-312                    
Micropolis Corporation                  4-13 KIO-CHO, CHIYODA-KU                      
Tokyo, Japan                            TOKYO, JAPAN 102                                 
# of Employees:  2                                                                       
                                                                                         
Facility: Leased                                                                         
wholly owned subsidiary of:                                                              
Micropolis Corporation                                                                   
------------------------------------------------------------------------------------------------------------------------------------
                                        TOTAL - ASIAN PROPERTIES                    $1,281,247       $616,500       $616,500   
------------------------------------------------------------------------------------------------------------------------------------

                                                                                         
------------------------------------------------------------------------------------------------------------------------------------
                                        TOTAL - ALL PROPERTIES                      $1,614,757     $1,119,547     $1,065,999  
------------------------------------------------------------------------------------------------------------------------------------


<CAPTION> 
                                               ADDRESS/                  START DATE 
                                               LESSOR/                    END DATE                                   TOTAL FUTURE
                                               SQ. FT.                     /TERM           1999        THEREAFTER    COMMITMENTS
------------------------------------------------------------------------------------------------------------------------------------

                                        SUBTOTAL - SINGAPORE                                $0             $0             $0 
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                              <C>               <C>         <C>           <C>    
TAIWAN                                                                                   

Type: SALES OFFICE                      MICROPOLIS CORP.                   9/1/94           $0             $0        $33,534
Asia/Pacific Sales Headquarters         (TAIWAN BRANCH)                   8/31/96        
Micropolis Corporation                  ROOM 1111, 11F, NO. 333                          
Taipei, Taiwan                          KEELUNG ROAD, SEC. 1                             
# of Employees:  2                      TAIPEI, TAIWAN, ROC                              
                                                                                         
Facility: Leased                                                                         
wholly owned subsidiary of:                                                              
Micropolis Corporation                                                                   
------------------------------------------------------------------------------------------------------------------------------------
AUSTRALIA                                                                                
                                                                                      
Type: SALES OFFICE                      LEVEL 21, 201 MILLER STREET                            
Micropolis Corporation                  NORTH SYDNEY, NSW 2060 AUSTRALIA                 
North Sydney, Australia                                                                  
# of Employees:  2                                                                       
                                                                                         
Facility: Leased                                                                         
wholly owned subsidiary of:                                                              
Micropolis Corporation                                                                   
------------------------------------------------------------------------------------------------------------------------------------
JAPAN                                                                                    
Type: SALES OFFICE                      MADRE MATSUDA BLDG. 3F-312                    
Micropolis Corporation                  4-13 KIO-CHO, CHIYODA-KU                      
Tokyo, Japan                            TOKYO, JAPAN 102                                 
# of Employees:  2                                                                       
                                                                                         
Facility: Leased                                                                         
wholly owned subsidiary of:                                                              
Micropolis Corporation                                                                   
------------------------------------------------------------------------------------------------------------------------------------
                                        TOTAL - ASIAN PROPERTIES                      $616,500    $15,412,500    $21,328,517
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
                                        TOTAL - ALL PROPERTIES                      $1,008,202    $18,351,427    $25,945,202
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>


* Approximate number of employees based on 12/15/95 Manpower Report

                                    Page 5

                                     C-81
<PAGE>
 
                                      82

                                  Schedule 6
                                  ----------


1.     Leased data transmission lines from AT&T with a monthly payment of
       US$26,500.

2.     Computer rental equipment leases from Hewlett-Packard, with a total
       amount to be financed of US$116,820 and monthly payments of US$3,893.61.

3.     One car leasing agreement, with a remaining amount to be financed of
       approximately US$90,000.

4.     Leases of photocopy machines, at a monthly rate of approximately $4,500.

                                     C-82
<PAGE>
 
                                      83

                                  Schedule 7
                                  ----------


1.     Distribution Agreements

2.     OEM Contracts for the sale of disk drives

3.     Spring Board Agreement

4.     Sales Agreement/Representative Agreements

5.     Advertising Contracts and Contracts/Commitments for Trade shows with a
       total commitment of not more than US$1,000,000

6.     Computer software, licence and maintenance agreements related to the
       purchase of the Chatsworth Corporate Assets.

                                     C-83
<PAGE>
 
                                      84

                                  Schedule 8
                                  ----------


1.     Deed of Assignment of Building Agreement dated 27 September 1995 between
       Micropolis Limited and ST Capital Limited.

2.     Deed of Assignment of Building Contract dated 27 September 1995 between
       Micropolis Limited and ST Capital Limited.

3.     Mortgage in Escrow between Micropolis Limited and ST Capital Limited.

4.     Deed of Assignment of Building Agreement between Micropolis Limited and
       Singapore Technologies Construction Pte Ltd.

5.     Mortgage in Escrow between Micropolis Limited and Singapore Technologies
       Construction Pte Ltd.

6.     Pledge Agreement dated 18 March 1992 between Micropolis Corporation,
       Micropolis Limited and The CIT Group/Business Credit, Inc.

                                     C-84
<PAGE>
 
                                      85

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



Seller
------


Signed by J. LARRY SMART  )
for and on behalf of      )
MICROPOLIS CORPORATION    )
in the presence of:-      )



Buyer
-----


Signed by CHEN YUK FU     )
for and on behalf of      )
ST CHATSWORTH PTE LTD     )
in the presence of:-      )

                                     C-85