instruction:
In this task, you're given a passage that represents a legal contract or clause between multiple parties. Your job is to write questions that ask the basic details corresponding to the legal contracts or clauses. Avoid questions that can be answered correctly without actually understanding the paragraph, and which might have multiple answers. The answer to each question should be unambiguous.
question:
Exhibit 10.14

                              OUTSOURCING AGREEMENT

                                     BETWEEN

                   INTERNATIONAL BUSINESS MACHINES CORPORATION

                                       AND

              MANUFACTURERS' SERVICES WESTERN U.S. OPERATIONS, INC.

                                 EFFECTIVE DATE

                                  JUNE 1, 1998

---------- [*] = Information redacted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

                                IBM Confidential

                           OUTSOURCING BASE AGREEMENT

This Outsourcing Base Agreement and the five (5) attachments listed below which are hereby incorporated by reference (Agreement) is entered into by and between International Business Machines Corporation, a corporation incorporated under the laws of New York, U.S.A., having an office for the transaction of business at 8501 IBM Drive, Charlotte, North Carolina 28262 (IBM), and Manufacturers' Services Western US Operations, Inc., a corporation incorporated under the laws of California, U.S.A., having an office for the transaction of business at 5600 Mowry School Road, Newark, CA 94560 (MSL).

WHEREAS, IBM desires to sell certain IBM assets and transition services to MSL and MSL desires to purchase certain IBM assets and transition services from IBM in order for MSL to manufacture and sell products to IBM, and

WHEREAS, MSL desires to employ certain IBM personnel and lease certain IBM space in Charlotte, North Carolina, and IBM desires to make available certain IBM personnel and lease certain IBM space to MSL in order for MSL to manufacture and sell products to IBM, and

WHEREAS, MSL desires to manufacture and sell products to IBM and IBM desires to purchase such products,

NOW THEREFORE, in consideration of the promises contained herein, IBM and MSL (each a Party and together the Parties) agree to the following terms and conditions:

The Parties agree that this Agreement regarding this transaction consists of:

a)    the Outsourcing Base Agreement

b)    Attachment 1: Statement of Work and its Product Attachments, Appendices,       and Supplements

c)    Attachment 2: Employee list and Benefits Information

d)    Attachment 3: Asset List

e)    Attachment 4: Expense Participation

f)    Attachment 5: Equipment and Program Loan List

g)    Agreement for Exchange of Confidential Information Number 4998S60076

h)    IBM Purchase Orders

i)    IBM Customer Orders

j)    Equipment and Program Loan Agreement

The following is a related agreement between MSL and IBM:

      IBM Corporation (Landlord) and MSL (Tenant) Lease Agreement

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                                IBM Confidential

By signing below, the Parties agree to the terms of this Agreement. Once signed, 1) any signed reproduction of this Agreement made by reliable means (for example, photocopy or facsimile) is considered an original, and 2) all products and services delivered by either Party to the other under this Agreement are subject to the terms and conditions of this Agreement.

Agreed to:                               Agreed to: Manufacturers' Services Western U.S.     International Business Machines





Operations, Inc.                         Corporation

By: /s/ Kevin C. Melia                   By: /s/ R. G. Richter     --------------------                     --------------------------     Authorized Signature                     Authorized Signature

Name: Kevin C. Melia                     Name: R. G. Richter       ------------------                       ------------------------

Date: May 5, 1998                        Date: May 5, 1998       ------------------                       ------------------------

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                                IBM Confidential

SECTION 1.0 DEFINITIONS........................................   Page 4

SECTION 2.0 ORDER OF PRECEDENCE................................   Page 5

SECTION 3.0 SCOPE OF WORK......................................   Page 6

SECTION 4.0 TERM...............................................   Page 6

SECTION 5.0 TERMINATION........................................   Page 6

SECTION 6.0 PAYMENT............................................   Page 9

SECTION 7.0 AUDIT..............................................  Page 10

SECTION 8.0 PURCHASE OF ASSETS.................................  Page 11

SECTION 9.0 PERSONNEL..........................................  Page 12

SECTION 10.0 LEASE OF PREMISES.................................  Page 13

SECTION 11.0 MANUFACTURING, FULFILLMENT, AND INTEGRATION.......  Page 13

SECTION 12.0 TRANSITION SERVICES...............................  Page 13

SECTION 13.0 INTELLECTUAL AND INDUSTRIAL PROPERTY..............  Page 13

SECTION 14.0 WARRANTIES........................................  Page 15

SECTION 15.0 INDEMNIFICATION AND LIMITATION OF LIABILITY.......  Page 18

SECTION 16.0 GENERAL...........................................  Page 19

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                                IBM Confidential

SECTION 1.0 DEFINITIONS

1.1   Effective Date shall mean the time when the Parties have acknowledged in       the certificate to be provided pursuant to Sections 14.1 and 14.2 that       approval has been obtained for all Governmental Actions required by all       Government Authorities necessary for each of the Parties to perform its       obligations under this Agreement including expiration or early termination       of the waiting period under the Hart-Scott-Rodino Antitrust Improvements       Act of 1976, as amended.

1.2   Execution Date shall mean the date this Agreement is signed by       authorized representatives of both Parties.

1.3   Days shall mean business days as followed by a particular Work Center       (as defined below).

1.4   Delivery Date shall mean the committed ship date on the IBM Customer       Order or as specified by IBM.

1.5   GMSV shall mean Global Manufacturers' Services Valencia S.A. (an MSL       Related Company in Spain).

1.6   Governmental Actions shall mean any authorizations, consents, approvals,       waivers, exceptions, variances, franchises, permissions, permits, and       licenses of, and filings and declarations with Governmental Authorities

1.7   Governmental Authority shall mean any United States federal, state or       local, or other non-US court, governmental or administrative agency or       commission or other governmental agency, authority, instrumentality or       regulatory body.

1.8   IBM Customer Order shall mean orders from IBM and IBM customers that       will trigger the MSL fulfillment, manufacturing and/or integration       processes to meet the requested Delivery Date. Only orders received via       IBM's AAS, GEMS, EOSE, IPLS, IPRS, Q-Ship or an IBM Purchase Order shall       be authorization for MSL to build Products or provide services under this       Agreement.





1.9   IBM shall mean International Business Machines Corporation, Armonk, New       York, USA, and its Subsidiaries.

1.10  Integration shall mean a service associated with fulfillment for IBM       Customer Orders that require special treatment. Special treatment usually       consists of taking IBM and third party products and configuring the total       system to meet the integration statement of work.

1.11  Miscellaneous Equipment Specification (MES) shall mean a set of Parts       used to upgrade Products.

1.12  MSL Related Companies shall mean Manufacturers' Services Limited       (Delaware, USA) and its Subsidiaries, including Global Manufacturers'       Services Valencia S.A.

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                                IBM Confidential

1.13  Parts shall mean parts, components, subassemblies and other materials       used by MSL to fulfill orders for IBM. Parts shall also include the       following:

            (a)   IBM Parts are those Parts which are purchased by MSL from                   IBM,.

            (b)   IBM Designated Parts are those Parts purchased by MSL from IBM                   nominated suppliers,

            (c)   IBM Consigned Parts are those Parts owned by IBM or IBM                   customers which are consigned to MSL, and

            (d)   MSL Procured Parts are those Parts which are directly procured                   by MSL and are other than IBM Parts or IBM Designated Parts.

1.14  Products shall mean Parts, a MES, machine types, request for price       quotation (RPQ's), model numbers and feature types purchased by IBM       under this Agreement and as further described in the Product Attachments.

1.15  Product Attachment shall mean Attachments A through G of the Statement       of Work and Exhibit 1 to Supplement 1 of the Statement of Work to this       Agreement which describes the details of a specific transaction or series       of transactions. Product Attachments are incorporated into and made a part       of this Agreement.

1.16  Product Group shall mean those Products relating to a particular       division's Product Attachment, each of which may include more than one       Product family.

1.17  Purchase Order shall mean a general order issued by IBM in which IBM       Customer Orders will be placed from IBM or its customers to MSL. Such       Customer Orders shall specify Products to be delivered to IBM, and shall       include Product identification, Delivery Dates, quantity and       specifications.

1.18  Subsidiary shall mean an entity during the time that more than 50% of       its voting stock (or, if no voting stock, decision-making power) is owned       or controlled, directly or indirectly, by another entity.

1.19  Services shall mean any services provided by one Party to the other,       which is not included in the services for specific Products described in       the applicable Product Attachment.

1.20  Transition Services shall mean services performed from the Effective       Date of Agreement through December 31, 1998, as described in Supplement 1       to the Statement of Work.

1.21  Work Center shall mean the MSL or MSL Related Company plant site       utilized to fulfill the obligations of this Agreement.

SECTION 2.0 ORDER OF PRECEDENCE

This Agreement replaces any prior oral or written communication between the Parties with respect to the subject matter of this Agreement. Order of precedence with regard to any conflict for this Agreement shall be as follows:

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                                IBM Confidential

            1)    Product Attachments

            2)    Appendices

            3)    Supplements

            4)    Statement of Work

            5)    Outsourcing Base Agreement, Employee List and Benefits                   Information, Asset Lists





            6)    Purchase Orders

      Notwithstanding the order of precedence set forth above, the following       sections of the Outsourcing Base Agreement shall not be modified or       superseded by any of the listed documents unless amended by a written       instrument duly executed by an authorized representative of each Party       making specific reference to such section:

            i)    Sections 5.1 and 5.2 of Termination,

            ii)   Section 8.0, Purchase of Assets,

            iii)  Section 13.0, Intellectual and Industrial Property,

            iv)   Section 14.0, Warranties, and

            v)    Section 15.0, Indemnification.

SECTION 3.0 SCOPE OF WORK

      MSL will perform and manage selected manufacturing, Integration, and other       Services, as well as sell Products to IBM, as stated in the Statement of       Work and its Appendices, Attachments and Supplement for the Retail Store       Solutions (RS), Global Embedded Production Solutions (GEPS), Finance       Solutions, and other IBM business units.

SECTION 4.0 TERM

      This Agreement shall become effective on the Effective Date and shall       continue for a period of three (3) years unless terminated as provided in       Section 5.0. This Agreement will automatically be renewed for periods of       twelve (12) months unless either Party gives six (6) months written       notice of its intent to terminate this Agreement. Such renewals shall       continue for successive periods under the same terms and conditions,       unless otherwise agreed in writing by both Parties.

SECTION 5.0 TERMINATION

5.1   Breach

      Notwithstanding anything in this Agreement to the contrary, this Agreement       may be terminated by either Party for cause as follows:

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      a)    in the event of a material breach or default by the other Party of a             material obligation of such Party under the Agreement which is not             remedied within [*] Days after a written notice is given of such             default or breach;

      b)    upon the occurrence of any of the following:

            i)    the other Party resolves to go into voluntary liquidation;

            ii)   a court orders the other Party to cease doing business;

            iii)  a receiver or administrative receiver is appointed over the                   whole or any part of the assets or property of the other                   Party;

            iv)   the other Party becomes unable to pay its debts because it is                   subject to a suspension of payments order, bankruptcy, or                   other insolvency proceeding; or

            v)    substantially all of the shares or assets of one Party are                   acquired by an entity that competes directly with the other                   Party.

      In the case of i to v above, termination may also be effected by serving       notice on the liquidator, administrator, acquirer, or receiver, as the       case may be.

      c)    notice of the inability of the other Party to perform due to the             existence of a Force Majeure event, as described in Section 16.17 of             this Agreement, which is reasonably determined by the terminating             Party to be a continuing condition.

      Provided, however, that no such termination under this section after the       Effective Date shall operate to rescind the transfer of the assets, as       listed in Attachment 3: Asset List, unless IBM terminates this Agreement       pursuant to Section 5.0 for MSL's failure to pay for such assets, in which       case MSL shall return, at its cost, all such assets in MSL's possession at       termination.

5.2   Rights Upon Termination





      a)    Upon the expiration or termination for default of this Agreement,             MSL will:

            i)    within [*] Days after expiration or receipt of termination                   notice for default of this Agreement from IBM, cancel all                   Parts purchase orders, and within [*] Days, after such                   expiration or termination notice, prepare and submit to IBM                   a written inventory in reasonable detail of each of the                   following items in MSL's possession as of the date of                   termination:

                  1. All Parts and partially completed Products. MSL shall             continue to provide a detailed listing of Parts purchase order             cancellations weekly until all issues are agreed to and resolved by             the Parties.

                  2. All labeling and packaging material used for Products.

                  3. All completed Products covered by a Purchase Order not             previously shipped to IBM.

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                                IBM Confidential

                  4. All IBM owned tooling.

            ii)   assist in the transfer of MSL responsibilities and Products as                   described in Attachment 1: Statement Of Work, to IBM or to                   another party that IBM designates.

            iii)  within [*] Days after expiration or termination of this                   Agreement, MSL shall return to IBM all copies of IBM Product                   documentation and all copies of any IBM confidential                   documents, discs, tapes and other media materials containing                   IBM confidential information of IBM.

      b)    Upon termination by IBM due to a default by MSL pursuant to Section             5.1 above, IBM shall, at its option, elect to do one of the             following:

            i)    be entitled to terminate all outstanding Purchase Orders                   without liability for such termination and purchase MSL's                   inventory of Parts, including Parts to be delivered to MSL to                   meet IBM's forecasted requirements, subject to the Supply                   Flexibility set forth in Appendix 4 to the Statement of Work.                   This purchase shall not include any Parts that are cancelable                   or otherwise transferable to IBM:

            ii)   require delivery of all partially completed, and completed                   Products and inventory of purchased Parts, and buy them. This                   shall include Parts purchased and to be delivered to MSL to                   meet IBM's forecasted requirements, subject to the Supply                   flexibility set forth in Appendix 4 to the Statement of Work,                   but shall not include any Parts that are cancelable or                   otherwise transferable to IBM; or

            iii)  require completion and delivery of any remaining units of                   Products on order as of the date of termination including                   inventory of purchased Parts and Parts purchased and to be                   delivered to MSL to meet IBM's forecasted requirements,                   subject to the Supply Flexibility set forth in Appendix 4 to                   the Statement of Work, but not including any Parts that are                   cancelable or otherwise transferable to IBM, and buy them, in                   which case MSL's obligations under 5.2 a) iii will be                   suspended until [*] Days after the appropriate Delivery Date.

      c)    Upon termination by MSL due to default by IBM, pursuant to Section             5.1 above, MSL shall complete Product(s) on order as of the date of             termination, sell them to IBM, and deliver and sell to IBM Parts             inventory. This shall include Parts purchased and to be delivered to             MSL to meet IBM's forecasted requirements, subject to the Supply             Flexibility set forth in Appendix 4 to the Statement of Work, but             shall not include any Parts that are cancelable or otherwise             transferable to IBM.

5.3   Prices Upon Termination

      a)    The price for completed Product(s) including provisions relating             to IBM's [*] status shall be as described in Attachment 1;             Statement of Work. The Parties agree to negotiate in good faith             the price for partially completed Products, but in no

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            event will MSL be required to accept a price for partially completed             Product that is lower than the completed Product price multiplied by             the percentage of Product completion. Such a percentage shall             equal [*] times a fraction, the numerator of which is the cost of             [*] within, and the cost of [*] and [*] expended on, such partially             completed Products to the date of termination, and the denominator             of which is equal to the [*] cost, and [*] and [*] cost of the             Product if completed, all as determined by MSL in good faith and             subject to verification and agreement by IBM. In no event will IBM             be required to pay more for a partially completed Product than the             price for a completed Product.

                                       [*]

      b)    The price for Parts, whether in inventory or on order to meet IBM's             forecasted requirements, shall be an amount equal to MSL's             cost for such [*] as provided in Apppendix I of the Statement of             Work. This shall not be applicable to Parts that are cancellable             or otherwise transferable to IBM.

SECTION 6.0 PAYMENT

6.1   IBM to MSL

      a)    MSL will invoice IBM [*] for all completed Products, after shipping             transactions have been processed by MSL. MSL will invoice IBM [*]             for all Integration work after shipping transactions have been             processed by MSL. For all other Services, MSL will invoice IBM [*].             IBM will pay MSL within [*] Days after receipt of an acceptable             invoice.

      b)    MSL may offset any amount owed IBM by MSL against any amounts owed             MSL by IBM upon written approval of IBM, provided any such debts             have been generated under this Agreement.

6.2   MSL to IBM

      a)    MSL will pay IBM within [*] Days of receipt of an acceptable invoice             from IBM.

            IBM may offset any amounts owed IBM by MSL against any amounts owed             MSL by IBM under this Agreement, upon written approval of MSL             provided any such debts have been generated under this Agreement

      b)    Invoices must reference this Agreement by name, date, and Purchase             Order number. Invoices will be sent to the addresses below:

            IBM Corporation             Accounts Payable             1701 North Street

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                                IBM Confidential

            P.O. Box 8098             Endicott, NY. 13760

            A copy of the invoice will be sent to:

            IBM Corporation             8501 IBM Drive             Charlotte, N.C. 28262-8563             Attn: MSL Project Office

      c)    Upon IBM request, MSL will send originals and copies of invoices to             other IBM locations.

      d)    Any amounts owed IBM should be sent to:

            IBM             8501 IBM Drive             Charlotte, NC 28262             Attn: MSL Project Office

6.3   Both parties agree to financially contribute to those activities defined       in Attachment 4: Expense Participation and at the stated contribution,       unless otherwise agreed to in writing.

SECTION 7.0 AUDIT





      a)    IBM may perform process audits at MSL's or an MSL Related Company's             Work Center or MSL's subcontractors' facilities to assure that             identified IBM specifications have been complied with. IBM shall             advise MSL [*] Days in advance of the scope and method by which             such audits are to be conducted. MSL will be given the opportunity             to comment upon these procedures prior to the audit taking place.             For all identified IBM specifications, MSL will maintain and             produce for IBM process documentation for use in all audits             performed by IBM and will have current copies of said documentation             available prior to the start of an audit.

      b)    Upon completion of all audits performed, IBM will provide written             documentation to MSL of the audit results in the form of an audit             report. MSL will be required to respond in writing to IBM on the             completion status of all actions and or requirements identified in             the audit report within [*] Days of receipt of the audit report.

SECTION 8.0 PURCHASE OF ASSETS

      a)    On the Effective Date, MSL shall purchase all tangible assets listed             in Attachment 3: Asset List, Part 1A and non-capitalized hand tools             used in the manufacture of Products for [*] U.S. dollars [*].             Within [*] days of the Effective Date, IBM shall give the tangible             assets listed in Attachment 3: Asset List, Part 1B to MSL. On the             Effective Date, MSL shall purchase

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            the assets listed in Attachment 3: Asset List, Part 2 for the amount             stated on the bill of sale for such assets and pay for such assets             in full by or before December 1, 1998 (the Payment Date).

      b)    The Parties acknowledge that the assets listed in Attachment 3:             Asset List, are a pro forma listing only and that within 10 (ten)             days of the Effective Date, both parties agree to perform a physical             audit of these assets listed and in IBM's possession as of the             Effective date to ascertain that the assets located during that             physical audit are verified. Within 20 (twenty) days after the             Effective Date, IBM will prepare a listing of the assets in             Attachment 3: Asset List, Part 1B to verify IBM's net book value of             the assets plus [*] for each non-capitalized printer. This listing             shall contain the price for each asset listed separately. MSL shall             notify IBM within 30 (thirty) days of the Effective Date if it does             not wish to receive all of the available tangible assets in             Attachment 3: Asset List, Part 1B by notifying IBM in writing of the             types of equipment it does not wish to receive. IBM shall choose             which equipment MSL will receive based on MSL's chosen equipment             type. The startup and investment expense defined in Attachment 4,             Section 3, shall be reduced by IBM's net book value of the assets in             Part 1B for the equipment accepted by MSL plus [*] U.S. dollars             [*] for each non-capitalized printer. In any event, the physical             audit for all assets shall result in a new listing for the assets             contemplated hereunder which listing shall be substituted for the             Attachment 3: Asset List that is attached to this Agreement at the             Effective Date. The amount stated on the bill of sale of the assets             listed in Part 2 shall reflect the results of a physical audit and             obsolescence review. Such adjustments shall be subject to the             mutual agreement of the Parties.

      c)    If by the Payment Date, MSL fails to pay IBM in full for the assets             listed in Attachment 3: Asset List, Part 2 at the price specified in             b) above, IBM may offset the balance owed by MSL as provided in             Section 6.2(a) above, and without MSL's further consent, until IBM             has recovered such balance.

      d)    MSL acknowledges that IBM has not made any representations or             warranties with respect to the assets listed in Attachment 3: Asset             List, except those expressly set forth in this Agreement, including,             but not limited to the representation and warranty of title. All             assets delivered to MSL pursuant to this section shall be provided             on an 'AS IS' basis. NO OTHER WARRANTIES, WHETHER EXPRESSED OR             IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF             MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR THE WARRANTY OF             NON-INFRINGMENT ARE PROVIDED HEREUNDER.

      e)    In the event of termination or expiration of this Agreement             pursuant to Section 5.0 above, IBM shall have an option, which             shall expire [*] days after such termination or expiration, to             purchase from MSL, at a reasonable price agreeable to the Parties,             all assets used by MSL to perform the manufacturing and fulfillment             functions

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            outlined in Attachment 1: Statement of Work, to the extent owned or             transferable by MSL, and required by IBM to perform such functions.

      f)    Assets purchased by MSL and listed in Attachment 3: Asset List, Part             2 are to be used solely in Products purchased by IBM pursuant to the             Attachment 1: Statement of Work.

SECTION 9.0 PERSONNEL

      a)    Attachment 2 contains a list of the individuals employed by IBM at             the date hereof in connection with this Agreement, including active             employees and employees who are on leave of absence or sick leave             (herein the Employees).

      b)    MSL will make an unconditional employment offer to the Employees,             listed in Attachment 2, to be effective on the Effective Date of             this Agreement. The Employees who accept employment offers from             MSL and who have begun their employment with MSL (Transferred             Employees) will be employed by MSL in accordance with the terms set             forth below. IBM will terminate all Employees, listed in Attachment             2, at the Effective Date of this Agreement and IBM will be             responsible for any and all employment related liabilities up to the             Effective Date, including, but not limited to, vacation and sick             time, workers compensation claims, variable compensation, and             severance.

      c)    MSL agrees that all Transferred Employees will be continuously             employed by MSL for at least [*] after the Effective Date, except as             otherwise provided herein, and will receive a total compensation             package as identified in Attachment 2: Employee list and Benefits             Information. Furthermore, with respect to the Transferred Employees,             MSL shall grant, to the extent granted by IBM, credit for service             with IBM prior to the Effective Date for purposes of participation             and eligibility to participate under MSL's employee benefit plans             and other policies and programs of MSL.

      d)    Nothing in this Agreement shall operate in any way to limit or             prevent MSL from terminating any Transferred Employee at any time             for reasons of cause related to poor job performance or conditions             of employment.

      e)    If MSL suffers a substantially adverse change in its business,             related to a reduction in IBM's Products requirements, including             reductions of Products requirements due to migration to a             competitive supplier, for the [*] from the Effective Date of this             Agreement, MSL may terminate such number of Transferred Employees             as it deems necessary. However, IBM shall only reimburse MSL for             termination benefits paid to such Transferred Employees, which are             substantially similar to IBM's then severance package, and             provided that all MSL subcontractors and other MSL non management             employees assigned to the US Work Center have been terminated             prior to or along with the termination of the Transferred             Employees.

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      f)    IBM agrees that, for a period of [*] years from the Effective Date             of this Agreement, it will not in any way solicit for employment             any Transferred Employees without the prior written consent of MSL;             provided, however, that the foregoing will not restrict or prevent             IBM from a) employing any such person who contacts IBM on his or her             own initiative without any solicitation or encouragement from IBM             or b) by using general employment advertising or communications or             independent search firms, hiring any person who responds thereto,             provided that IBM does not direct or encourage such independent             search firms to solicit such Transferred Employees.

SECTION 10.0 LEASE OF PREMISES

      The Lease of Premises Agreement is a separate agreement governing the       lease of certain IBM buildings to MSL, the execution of which is a       condition precedent to the effectiveness of this Agreement.

SECTION 11.0 MANUFACTURING, FULFILLMENT, AND INTEGRATION

      Attachment 1 is the Statement of Work that outlines the manufacturing,       fulfillment, and Integration requirements and responsibilities of both       parties.

SECTION 12.0 TRANSITION SERVICES





      Supplement 1 to the Statement of Work identifies the Transition Services       that the Parties are to perform in accordance with the prices set forth       therein and starting on the Effective Date of the Agreement. All       Transition Services will expire December 31, 1998.

SECTION 13.0 INTELLECTUAL AND INDUSTRIAL PROPERTY

13.1  IBM assumes and will assume ownership and MSL assigns and will assign all       intellectual and industrial property rights for hardware, software, design       and documentation of all Products delivered under this Agreement

      IBM will also own and MSL will assign any invention made by MSL on       Products, and on any invention related to IBM processes and systems that       MSL makes while MSL uses those processes and systems in the performance of       this Agreement provided that nothing herein shall restrict MSL's right to       use such inventions in the performance of its obligations hereunder. MSL       shall not use any proprietary processes for the assembly, subassembly and       final tests, and quality testing of the Products subject to this Agreement       unless otherwise agreed to by the Parties in writing.

13.2  Confidential Information and Advertising

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      a)    IBM shall not receive confidential information from MSL under this             Agreement. However, if it becomes necessary for IBM to give certain             confidential information to MSL, it will be done so pursuant to the             Agreement for Exchange of Confidential Information (AECI) Number             4998S60076.

      b)    All information considered confidential by IBM will be marked             confidential by IBM prior to the exchange. If the confidential             information is to be disclosed orally, IBM will promptly provide MSL             with a written summary following the disclosure. In the event, the             information is not marked confidential, it shall not be deemed             confidential.

      c)    Each time IBM wishes to disclose specific information to MSL, IBM             will issue a supplement to the above referenced AECI. All requests             to disclose confidential information must be approved by the             Relationship Managers. During the term of this Agreement and upon             the request of IBM, MSL shall return all confidential information             immediately.

      d)    Neither Party shall disclose the terms of this Agreement to any             third Party, including debt or financing institutions, without the             prior written consent of the other Party, which consent shall not be             unreasonably withheld or delayed, except as required by law. Each             Party shall provide the other with prior written notice of any such             required disclosure.

      e)    Neither Party shall make any public announcements regarding this             Agreement or matters pertaining hereto, other than as may be             expressly agreed upon in advance by the Parties in writing.

13.3  Licenses

      a)    Notwithstanding anything to the contrary in this Agreement, nothing             in this Agreement grants or may grant MSL any rights or licenses in             any preexisting intellectual property of IBM except that IBM grants             MSL a royalty-free license to use the confidential information             disclosed in connection with this Agreement under the AECI             referenced in 13.2 necessary to manufacture Products solely for IBM.             Any other license to IBM's intellectual property must be             accomplished through a separate written agreement signed by IBM.

      b)    As of the Effective Date, to the best of IBM's knowledge, IBM has             licenses and permits and other governmental authorizations and             approvals required for IBM's use of the assets in Attachment 3:             Asset List, except where the failure to have such licenses and             permits would not have a material adverse effect on IBM's ability to             use or operate the assets. All such licenses and permits held by IBM             which are material to the operation of the assets are valid and in             full force and effect and there are not pending or, to the knowledge             of IBM, threatened in a writing to IBM, any proceedings which could             result in the termination or impairment of any such license or             permit which termination or impairment would materially interfere             with the operation or use of the assets as

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            presently operated or used by IBM. The Parties acknowledge that MSL             may be required to seek and that IBM is not responsible for             obtaining for MSL regulatory or other permitted transfers of, or             obtain through separate application for itself, any applicable             licenses and permits, including environmental licenses and permits,





            which are required for MSL's operation or perfection ownership of             the assets.

SECTION 14.0 WARRANTIES

14.1  Representations and Warranties of IBM

      IBM represents and warrants to MSL that the statements contained in this       Section 14.1 are correct and complete, and the following representations       and warranties shall be deemed to have been made again on and as of the       Effective Date. The effectiveness of this Agreement shall be subject to       the condition that IBM deliver to MSL a certificate on and as of the       Effective Date that such representations and warranties are correct and       complete as of such date.

      To the best of IBM's knowledge shall be defined as the information       available to IBM Charlotte Management after due inquiry as of the       Effective Date. A materially adverse effect shall be defined as an outcome       where MSL is unable to acquire appropriate title for assets to be       purchased under this Agreement.

      a)    Organization of IBM

            IBM is a New York corporation, duly organized, validly existing, and             in good standing under the laws of New York. IBM has all corporate             powers and all material governmental licenses, authorizations,             permits, consents, and approvals required to carry on its business             as now conducted.

      b)    Authorization of Transaction

            IBM has the power and authority (including full corporate power and             authority) to execute and deliver this Agreement and all other             documents contemplated hereby and to perform its obligations             hereunder. All corporate and other actions or proceedings to be             taken by or on the part of IBM to authorize and permit the execution             and delivery by IBM of this Agreement and the instruments required             to be executed and delivered by IBM pursuant hereto, the performance             by IBM of its obligations hereunder, and the consummation by IBM of             the transactions contemplated herein, have been duly and properly             taken. This Agreement has been duly executed and delivered by IBM             and constitutes the legal, valid and binding obligation of IBM,             enforceable in accordance with its terms and conditions.

      c)    Noncontravention

            Neither the execution and the delivery of this Agreement, nor the             consummation of the transactions contemplated hereby do or will

Page 15                                  Dated 05/05/98

                                IBM Confidential

            i)    conflict with or result in a breach of any provision of the                   certificate of incorporation or bylaws of IBM, or

            ii)   result in or give rise to the imposition of any lien upon the                   assets listed in Attachment 3: Asset List that would have a                   materially adverse effect on the assets listed therein, or

            iii)  violate any constitution, statute, regulation, rule,                   injunction, judgment, order, decree, ruling charge or other                   restriction of any Governmental Authority to which IBM is                   subject.

            Except for the required filings under the Hart-Scott-Rodino Act, IBM             is not required by applicable law or other obligation to give any             notice to, make any filing with, or obtain any authorization,             consent, or approval of any Governmental Authority or other person             in order for the Parties to consummate the transactions contemplated             by this Agreement.

d)    Assets Used by IBM to Conduct Business

      The assets listed in Attachment 3: Asset List, Part 1 and in Attachment 5:       Equipment and Program Loan List are the tangible assets used by IBM up       until the Effective Date for the operation of the business to be conducted       by MSL on and after the Effective Date and pursuant to Attachment 1:       Statement of Work.

e)    Inventory

      The assets listed in Attachment 3: Asset Listing, Part 2 and in Attachment       5: Equipment and Program Loan List are the tangible assets used by IBM up       until the Effective Date to build to the IBM specification and designs to       be used by MSL in fulfilling its obligations on and after the Effective       Date and pursuant to Attachment 1: Statement of Work.

f)    Title to Assets

      IBM has good and marketable title to all assets listed on Attachment 3:       Asset Listing, free and clear of any liens or encumbrances and MSL shall       acquire a bill of sale transferring good and marketable title to said





      assets, free of liens and encumbrances. However, in the event MSL       discovers any materially adverse lien or encumbrance that prevents MSL       from using or operating the assets, within sixty (60) days after such       notice to IBM, IBM shall clear all such materially adverse lien or       encumbrances. If IBM is unable to clear all such materially adverse liens       or encumbrances within sixty (60) days after notice, IBM shall complete       reasonable actions necessary, to provide MSL with materially unencumbered       enjoyment of the assets.

g)    Employees

      To the best knowledge of the Charlotte Program Director of General       Hardware and Communications, Procurement, no employee or group of       employees has any plans to refuse to accept any offer of employment from       MSL made in compliance with this Agreement.

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                                IBM Confidential

14.2  Representations and Warranties of MSL

      MSL represents and warrants to IBM that the statements contained in this       Section 14.2 are correct and complete, and the following representations       and warranties shall be deemed to have been made again on and as of the       Effective Date. The effectiveness of this Agreement shall be subject to       the condition that IBM deliver to MSL a certificate on and as of the       Effective Date that such representations and warranties are correct and       complete as of such date.

      a)    Organization of MSL

            MSL is a California corporation, duly organized, validly existing,             and in good standing under the laws of California. MSL has all             corporate powers and all material governmental licenses,             authorizations, permits, consents, and approvals required to carry             on its business as now conducted.

      b)    Authorization of Transaction

            MSL has the power and authority (including full corporate power and             authority) to execute and deliver this Agreement and all other             documents contemplated hereby and to perform its obligations             hereunder. All corporate and other actions or proceedings to be             taken by or on the part of MSL to authorize and permit the execution             and delivery by MSL of this Agreement and the instruments required             to be executed and delivered by MSL pursuant hereto, the performance             by MSL of its obligations hereunder, and the consummation by MSL of             the transactions contemplated here, have been duly and properly             taken. This Agreement has been duly executed and delivered by MSL             and constitutes the legal, valid and binding obligation of MSL,             enforceable in accordance with its terms and conditions.

      c)    Noncontravention

            Neither the execution and the delivery of this Agreement, nor the             consummation of the transactions contemplated hereby do or will:

            i)    conflict with or result in a breach of any provision of the                   certificate of incorporation or bylaws of MSL or MSL Related                   Companies, or

            ii)   violate any constitution, statute, regulation, rule,                   injunction, judgment, order, decree, ruling charge or other                   restriction of any Governmental Authority to which MSL or MSL                   Related Companies is subject.

            Except for the required filings under the Hart-Scott-Rodino Act,             neither MSL nor any of its subsidiaries is required by applicable             law or other obligation to give any notice to, make any filing with,             or obtain any authorization, consent, or approval of any             Governmental Authority or other person in order for the Parties to             consummate the transactions contemplated by this Agreement.

      d)    I/T Solution Necessary to Conduct Business

            To the best of MSL's Vice President, Information Technology's             knowledge and in reliance on IBM's representations in Section             14.1(d), MSL has an appropriate I/T

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                                IBM Confidential

            Solution necessary to use the assets used by IBM as stated in             Section 14.1(d) to fulfill its obligations under Attachment 1:             Statement of Work.

SECTION 15.0 INDEMNIFICATION AND LIMITATION OF LIABILITY





15.1  Scope of MSL's Indemnity

      MSL agrees to protect, defend, hold harmless, and indemnify IBM from and       against any and all claims, damages, liabilities, losses and expenses,       arising out of the following, whether alleged or actual:

      a)    infringement by MSL in rendering performance under this Agreement or             any Product Attachments or by any MSL procured Parts, processes,             designs, deliverables or any preexisting material contributed by MSL             from which any Products are prepared, of any patent, trademark,             trade name, copyright, mask work right or trade secret valid             anywhere in the world, except that MSL shall have no indemnity             obligation for any claim alleging infringement of any trademark             including any trade name, product name or similar right resulting             from the use of any name or mark selected by IBM;

      b)    failure of MSL to comply with any governmental law, statute,             ordinance, administrative order, rule or regulation relating to the             manner of or carrying on of MSL's operations and/or parts and             processes used in Products,

      c)    failure of MSL to perform MSL's warranty described in the Statement             of Work and support obligations or similar services as set forth in             any Product Attachment issued hereunder.

            Notwithstanding the foregoing, MSL shall have no obligation to             indemnify IBM under this Section 15.1 to the extent that such third             party claim (i) is caused by MSL's material compliance with a             written specification provided by an authorized representative of             IBM or (ii) results from a defective design of a Product, to the             extent that such defect is the result of the written specifications             or designs provided by an authorized representative at IBM.

15.2  Payment and Cooperation

      a)    MSL shall pay all damages, settlements, expenses and costs,             including court costs and attorneys' fees, reasonably incurred by             IBM, arising out of the matters set forth in Section 15.1 provided             that such payment shall be contingent on:

            i)    prompt notice by IBM to MSL in writing of such claim to enable                   MSL to defend;

            ii)   cooperation by IBM and MSL in the defense thereof; and

            iii)  IBM allowing MSL to control the defense or settlement of the                   claim, provided that IBM may at its option participate in the                   proceeding with its own counsel and at its own expense, but                   MSL shall retain control of the defense of the claim.

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                                IBM Confidential

      b)    In the event that any occurrence within the scope of the indemnity             set forth in 15.1 above is alleged or proved, MSL may, at its sole             discretion and at its own expense in order to remedy any such             infringement for the future, procure any necessary license rights,             or make use of non-infringing designs, processes, Parts,             deliverables or other materials, so long as such substitute items do             not result in the Products failing to comply with the             specifications, requirements, and warranties set forth in this             Agreement.

15.3  Limitations of Liability

      a)    Neither Party will be liable to the other for lost profits,             consequential, punitive, or incidental damages, even if informed of             the possibility that such damages may be incurred.

      b)    The total liability for either Party, regardless of the form of             action, whether contract or tort, is limited to three percent (3%)             of the value of the bill of materials contained in the Products             delivered to IBM and IBM Customers by MSL in the period beginning             with the Effective Date of the Agreement through the resolution of             the action.  .

SECTION 16.0 GENERAL

16.1  Product, Technology and Process Changes

      a)    If IBM elects to amend the specification or the process for             manufacturing Products, IBM will notify MSL of the changes in             writing. MSL will promptly inform IBM of any changes to Delivery             Dates, lead times, process changes, Parts requirements, Parts             obsolescence, scrap, rework and any requested price changes that             will result from the required changes. If IBM then elects to proceed             in accordance with the changes proposed by MSL, IBM and MSL will             agree to a plan to address the issues described in the proceeding             sentence. MSL will thereafter implement the agreed to changes.





      b)    MSL will not implement any change to its specifications, technology,             materials or process that may affect form, fit, or function of             characteristics of Products without IBM's prior written consent. IBM             will make a reasonable effort to accommodate MSL's request for             change; however, IBM is not obligated to accept any changes proposed             by MSL.

      c)    Once a plan described in a. above has been agreed to, MSL will not             start any new units of Product which do not incorporate the agreed             change.

16.2  Assignment

      Neither Party may assign, transfer or subcontract any rights or duties       under this Agreement without prior written approval by the other Party.       MSL may assign or subcontract all or any part of this Agreement to any MSL       Related Company with IBM's prior written consent which shall not be       unreasonably withheld or delayed. MSL may not assign or transfer any       rights or duties under this Agreement without prior written approval by       IBM. MSL shall

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                                IBM Confidential

      provide IBM with all relevant details prior to implementing any change to       its use of subcontractors performing work relating to IBM's Purchase       Orders.

16.3  Gratuities

      Each Party agrees that it shall maintain and enforce a corporate policy       designed to ensure that its employees, agents, or representatives will not       offer any gratuity to the other Party's employees, agents, or       representatives for any reason, including a view towards securing       favorable treatment from such other Party.

16.4  Compliance with Law

      In the performance of this Agreement and related Purchase Orders the       Parties shall comply with the laws of the United States unless otherwise       specified, including but not limited to, those affecting price,       production, purchase, sale, use and export of Products, environmental and       labor laws.

16.5  Sale or Merger

      During the term of this Agreement, if MSL decides to sell a substantial       portion of its assets or operations outside the ordinary course of its       business, or to merge or transfer ownership of MSL to a third Party, MSL       will immediately notify IBM. MSL warrants that any new company resulting       from the sale or merger of MSL will accept and assume full responsibility       for the performance of this Agreement.

16.6  Trademark

      Nothing in this Agreement gives either Party the right to use the other       Party's name, trademark, or logo except where necessary in the ordinary       course to perform this Agreement or where otherwise authorized in writing       by the other Party in conjunction with this Agreement.

16.7  Assignees and Visits

      If IBM determines that there is a business need for employees of IBM to       reside on the premises of MSL Work Centers. IBM will request MSL's       approval, and will request that MSL provide suitable working office space       and associated utilities for employees of IBM on the premises of MSL Work       Centers. MSL's approval and MSL's provision of office space and utilities       shall not be unreasonably withheld. MSL will also allow business visits by       employees of IBM and IBM customers to facilities of MSL. The details of       such visits will be agreed to between the Parties on a case-by-case basis.       Where business visits are exceptional and primarily for the benefit of       MSL, they will be paid for by MSL.

16.8  Failure to Enforce

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                                IBM Confidential

      The failure of either Party to enforce at any time or for any period of       time the provisions of this Agreement shall not be construed to be a       waiver of such provisions or of the right of such Party to enforce each       and every provision in the future.

16.9  Governing Law

      This Agreement and the performance of transactions under this Agreement       shall be governed by the substantive laws of the state of New York. The       parties expressly waive any right to a jury trail regarding disputes





      related to this Agreement. Any legal or other action related to a breach       of this Agreement must be commenced no later than [*] years from the date       of the breach in a court sited within the State of New York.

16.10 Severability

      If any of the provisions of this Agreement shall be held by a court or       other tribunal of competent jurisdiction to be unenforceable, the       remaining portions of this Agreement shall remain in full force and       effect.

16.11 Notices

      Any notice which any Party desires or is obligated to give to the other       shall be given in writing or by telecopy and sent to the appropriate       address. Notices required under this section must be addressed to the       address shown below. All other notices shall be sent to the address       specified in the appropriate Product Attachment or, if none is specified,       to the address shown below or to such other address as the Party to       receive the notice may have last designated in writing.

      The addresses for notices shall be:

      IBM                                MSL       8501 IBM Drive                     200 Baker Avenue       Charlotte, NC 28262                Concord, MA 01742       Attn: MSL Project Office           Attn: General Counsel

      Telephone: 704-594-1964             Telephone: 978-287-5630       Facsimile: 704-594-4108             Facsimile: 978-287-5635

      Either Party may change its address for this section by giving written       notice to the other Party. The notifying Party must receive a confirmation       within seven (7) Days of notification.

16.12 Agency

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                                IBM Confidential

      This Agreement does not create either a principal to agent, employer to       employee, partnership, joint venture, or any other relationship except       that of independent contractors between MSL and IBM.

16.13 Headings

      Headings to paragraphs and sections of this Agreement are for the       convenience of the Parties only. They do not form a part of this Agreement       and shall not in any way affect its interpretation.

16.14 Records

      The Parties agree to keep complete and accurate records related to the       manufacture of Products for a period of five (5) years after the       termination or expiration of the Product Attachment to which they relate.

16.15 Prohibited Suppliers

      IBM may provide MSL a lists of suppliers with whom MSL is prohibited from       conducting any business in connection with this Agreement for the purposes       of ensuring that IBM comply with the requirements of any governing laws.       MSL agrees to abide by the reasonable requirements of these lists except       to the extend that such compliance itself would constitute a violation of       the laws of the United States or of any state or local government.

16.16 Entire Agreement

      The provisions of this Agreement, including all Appendices, Supplements,       Attachments, and Purchase Orders, and all documents expressly incorporated       herein by reference, constitute the entire agreement between the Parties       and supersede all prior intentions, proposals, understandings, and       communications.

16.17 Force Majeure

      Neither Party shall be liable to the other for its failure to perform any       of its obligations hereunder during any period in which such performance       is delayed by circumstances or events that were not foreseeable, or if       foreseeable could not have been reasonably avoided including, but not       limited to, fire, flood, war, embargo, strike, riot, prolonged scarcity of       necessary raw materials, inability to secure transportation or the       intervention of any governmental authority, provided that the Party       suffering such delay immediately notifies the other Party of the delay. If       such delay shall continue for more than [*] Days, the Party injured by       the inability of the other to perform shall have the right upon written       notice to either a) terminate this Agreement as set forth in Section       5.1 c or b) treat this Agreement as suspended during the delay and       reduce any commitment in proportion to the duration of the delay.





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                                IBM Confidential

16.18 No Third Party Beneficiaries

      This Agreement shall not confer any rights or remedies upon any person       other than the Parties and their respective successors or permitted       assigns

16.19 Expiration of Representations and Warranties

      All representations and warranties made by the Parties in this Agreement       or in any schedule, document, certificate or other instrument delivered by       or on behalf of the Parties pursuant to this Agreement shall expire on       the [*] anniversary of the Effective Date.

16.20 Remedies Cumulative

      The remedies set forth in this Agreement are cumulative and are in       addition to any other remedies allowed at law or in equity. Resort to one       form of remedy shall not constitute a waiver of alternate remedies.

16.21 Excused Exceptions to MSL Performance

      a)    Notwithstanding anything herein to the contrary, MSL may, upon             written notice to IBM, delay or suspend performance to supply any             Products or Services to IBM (i) if MSL has received notice from a             third party, or based on the reasonable advice of legal counsel             reasonably believes, that the supply of such Products or Services             would subject MSL to liability for infringement or liability related             to a defective design to a Product caused by MSL's material             compliance with a written specification provided by an authorized             representative of IBM or (ii) if IBM, pursuant to the Equipment             Program and Loan Agreement, requires MSL to return a Loaned Item (as             defined in said Equipment Program and Loan Agreement) which MSL             reasonably believes is necessary to supply such Products or             Services. MSL's decision not to supply Products or Services as             provided in this Section 16.21 shall not constitute a breach or             other violation of this Agreement.

      b)    IBM may, at its sole discretion and at its own expense in order to             remedy any such suspensions listed in a) above, procure any             necessary license rights, or make use of non-infringing designs,             processes, Parts, deliverables, equipment or other materials, so             long as such substitute items do not result in the Products failing             to comply with the specifications, requirements, and warranties set             forth in this Agreement.

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                                IBM Confidential

              [The remainder of this page intentionally left blank]

Page 24                                  Dated 05/05/98

                     Amendment 001 to Outsourcing Agreement                                     between                                    IBM and MSL

This document amends Attachment 4 to the Outsourcing Base Agreement between International Business Machines Corporation and Manufacturer's Services Western U.S. Operations, Inc. The effective date of this Amendment is the date executed by both parties.

The parties agree to make the following change:

Delete Item 3 a) of Attachment 4 to the Outsourcing Base Agreement in its entirety and replace it with the following:

a) IBM shall pay MSL up to [*] U.S. dollars [*] for 1998 start up and investment expenses related to the US Work Center. MSL may submit invoices to IBM commencing on the Effective Date of the Agreement through March 31, 1999 for the following actual startup and investment expenses for the US Work Center: I/T application set up including related travel and consultant fees, hardware, software including application software and licenses, network infrastructure, line servers and user workstations and training. MSL shall, if requested by IBM, provide a projection of expenses by quarter.

All other terms and conditions of the Outsourcing Base Agreement and it's attachments shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective authorized representatives.





          ACCEPTED AND AGREED TO:                 ACCEPTED AND AGREED TO:

          International Business                  Manufacturer's Services           Machines Corp.                          Western U.S. Operations, Inc

     By:  /s/ Roy B. Covington III           By:  /s/ Kevin C. Melia           ------------------------------          ----------------------------

          Roy B. Covington III                    Kevin C. Melia           ------------------------------          ----------------------------           Print Name                              Print Name

          Industry Solutions Production           President, CEO           ------------------------------          ----------------------------           Title  Procurement Manager              Title

          6/15/98                                 6/15/98           ------------------------------          ----------------------------           Date                                    Date

                     Amendment 002 to Outsourcing Agreement                                      between                                    IBM and MSL

The purpose of this document is to amend the Outsourcing Agreement between International Business Machines Corporation (IBM) and Manufacturer's Services Western U.S. Operations, Incorporated (MSL), dated 05/05/98 (Agreement). The effective date of this Amendment is the date executed by authorized representatives of both parties.

The parties agree to make the following changes:

1. Delete Section 24.2(d) in Attachment 1, Statement of Work of the Agreement in its entirety and replace with the following:

d) MSL SLA (Service Level Agreement) requirements for local or remote systems availability and performance will be negotiated in compliance with IBM's service level expectation for a manufacturing process on or before October 31, 1998.

2. Delete Section 3 (vii) in Supplement 1 Transition Services, Section II- Sale of IBM Services, Section 4.0 IBM Responsibilities in its entirety and replace with the following:

vii) create a net sum invoice to MSL weekly that represents monies owed to MSL by IBM and monies owed IBM by MSL. Lease payments will not be netted with this invoice.

All other terms and conditions of the Agreement and its attachments shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective authorized representatives.

          ACCEPTED AND AGREED TO:              ACCEPTED AND AGREED TO:

     By:  International Business          By:  Manufacturer's Services           Machines Corp.                       Western U.S. Operations, Inc

          /s/ Roy B. Covington III             /s/ Dale Johnson           ------------------------------       ----------------------------

          Roy B. Covington III                 Dale R. Johnson           ------------------------------       ----------------------------           Print Name                           Print Name

          Industry Solutions Production           Procurement                          Exec. Vice President           ------------------------------       ----------------------------           Title                                Title

          9/23/98                              9/23/98           ------------------------------       ----------------------------           Date                                 Date

                     Amendment 003 to Outsourcing Agreement                                      between                                    IBM and MSL

The purpose of this document is to amend the Outsourcing Agreement between International Business Machines Corporation (IBM) and Manufacture's Services Western U.S. Operations, Incorporated (MSL), dated May 5, 1998 (Agreement). Once signed by both parties the effective date of this amendment is January 1, 1999.

The parties agree to make the following changes:

1. Delete paragraph 2 in Supplement 1 to Attachment 1, Statement of Work, to the Agreement in its entirety and replace with the following:

This is a Supplement to Attachment 1, Statement of Work (SOW), and outlines the Transition Services that will be performed by both Parties from the Effective Date of the Agreement through February 25, 1999.





2. Delete Section 2.0 Term, SECTION I - Wedge Products in Supplement I to Attachment 1. Statement of Work, to the Agreement in its entirety and replace with the following:

The following replaces Section 2.0 of the SOW in its entirety.

This Supplement and its Attachments shall become effective upon execution of the SOW and expire February 26, 1999 unless terminated as provided in Section 5.0 of the Base Agreement. This Supplement may be extended for periods of three (3) months under mutually agreed to terms and conditions. Extensions will be mutually agreed to in writing by both parties.

3. Delete Section 2.0 Term. SECTION II - Sale of IBM Services in Supplement 1 to Attachment 1, Statement of Work, to the Agreement in its entirety and replace with the following:

The following replaces Section 2.0 of the SOW in its entirety.

This Supplement and its Attachments shall become effective upon execution of the SOW and expire February 26, 1999 unless terminated as provided in Section 5.0 of the Base Agreement. This Supplement may be extended for periods of three (3) months under mutually agreed to terms and conditions. Extensions must be mutually agreed to in writing by both parties.

4. Delete paragraph 2, Section 24.0 Information Technology Services (I/T Services), Section II - Sale of IBM Services in Supplement 1 to Attachment 1, Statement of Work, to the Agreement in its entirety and replace it with the following:

Within sixty (60) Days after the Effective Date of this Agreement, IBM and MSL must develop a mutually acceptable written migration plan to migrate to an MSL I/T solution for the U.S. Work Center. The migration plan will include the systems and applications identified on the attached Application Matrix below. All migration is to be completed by February 26, 1999. Any changes or upgrades to the mutually acceptable written migration plan shall be negotiated separately.

5. Delete Scope of Services: b), Section 24.0 Information Technologies Services (I/T Services), SECTION II - Sale of IBM Services in Supplement 1 to Attachment 1, Statement of Work, to the Agreement in its entirety and replace it with the following:

b) Any extension of the I/T Services beyond the February 26, 1999 date, due to an MSL delay, will be priced at IBM's then prevailing commercial rates.

                     Amendment 003 to Outsourcing Agreement                                      between                                    IBM and MSL

6. In addition to the above IBM and MSL agree to the following:

a) Negotiate in good faith an adjustment to the payment amount stated in Section 7.0 Price, SECTION II--Sale of IBM Services in Supplement 1 to Attachment 1, Statement of Work, to the Agreement on or before January 15, 1999. At this time, it is as follows,

Commencing on the Effective Date of the Agreement through December 31, 1998, IBM will not charge MSL for the services provided under Transition Services Section II--Sale of IBM Services. During any extension, due to any MSL delay, of Transition Services beyond December 31, 1998, MSL's payment to IBM shall be as mutually agreed to in writing by both parties and shall be [*] dollars per month.

b) Amend the Application Matrix of SECTION II--Sale of IBM Services in Supplement 1 to Attachment 1, Statement of Work, to the Agreement on or before January 15, 1999.

All other terms and conditions of the IBM/MSL Outsourcing Agreement, its attachments, and amendments shall remain in force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective authorized representatives.

          ACCEPTED AND AGREED TO:              ACCEPTED AND AGREED TO:

          International Business               Manufacturer's Services           Machines Corp.                       Western U.S. Operations, Inc.

     By:  /s/ Roy B. Covington III        By:  /s/ Dale Johnson           -------------------------------      --------------------------------

          Roy B. Covington III                 Dale R. Johnson           -------------------------------      --------------------------------           Print Name                           Print Name

          Industry Solutions Production           Proc Mgr                             Exec. V.P.           -------------------------------      --------------------------------           Title                                Title

          January 12, 1999                     January 12, 1999           -------------------------------      --------------------------------           Date                                 Date





                                  Supplement I                                Transition Services                                  (Amendment 003)

------------------------------------------------------------------------------------------------------------------                               Application Matrix ------------------------------------------------------------------------------------------------------------------ Application Name              Description                                    MSL Action ------------------------------------------------------------------------------------------------------------------

                                                                        ------------------------------------------------------------------------------------------------------------------ AAS                          Corp Order Entry System                         Cont to Use via online access ------------------------------------------------------------------------------------------------------------------ Alternate Channel Planning   Lotus Spreadsheets                              Cont to Use ------------------------------------------------------------------------------------------------------------------ ASPECT                       Eng for Technology Products                     N/A No longer ------------------------------------------------------------------------------------------------------------------ ATC                          EMLS transmission to Ger.                       Replace ------------------------------------------------------------------------------------------------------------------ Bwacs                        Box WAC Cost Application                        Replace ------------------------------------------------------------------------------------------------------------------ CADAM                        CAD Drawings                                    Replace ------------------------------------------------------------------------------------------------------------------ Carrier Direct               WT billing data & Mcs ships for Costs           Replace ------------------------------------------------------------------------------------------------------------------ CATIA                        CAD Application                                 MSL to use external license ------------------------------------------------------------------------------------------------------------------ Claim Ship                   Final Mach claims for Acct period               Replace ------------------------------------------------------------------------------------------------------------------ COATS & Bridges              COATS is corp bridges are local                 Replace ------------------------------------------------------------------------------------------------------------------ COLTS                        Purchasing Contracts                            Replace ------------------------------------------------------------------------------------------------------------------ Comp Trace Shell             Plant Control Shell                             Replace ------------------------------------------------------------------------------------------------------------------ Conveyor Shell               Plant Control Shell                             N/A No longer used ------------------------------------------------------------------------------------------------------------------ CPOPS                        Non Production Procurement                      Replace ------------------------------------------------------------------------------------------------------------------ CPQA                         CLT Product Quality Assurance                   Replace ------------------------------------------------------------------------------------------------------------------ CPS                          Common Purchasing Sys                           Replace ------------------------------------------------------------------------------------------------------------------ CPSLOCAL                     Common Purchasing Sys - Local                   Replace ------------------------------------------------------------------------------------------------------------------ CPS/CAPS Bridges             CPOPS orders for RTP nightly                    Replace ------------------------------------------------------------------------------------------------------------------ DAE                          Distributed Application Environment             Replace ------------------------------------------------------------------------------------------------------------------ DDB                          Boulder WT shipments                            Online Access ------------------------------------------------------------------------------------------------------------------ DDYS                         Distribution System                             Replace ------------------------------------------------------------------------------------------------------------------ DPRSBOX                      Development/Production Records Sys              Replace w/DPRS Receiver ------------------------------------------------------------------------------------------------------------------ EMLS                         Demands                                         Replace w/OEMLS interface ------------------------------------------------------------------------------------------------------------------ EMLS/EPRO Bridges            EMLSBX for the Box plant                        Replace ------------------------------------------------------------------------------------------------------------------ EOSE                         Enterprise Order/Scheduling & Excc              Interface ------------------------------------------------------------------------------------------------------------------ EPPS EXPRS                   Enterprise Prod Planning (feature planning)     Replace ------------------------------------------------------------------------------------------------------------------ ERE                          Engineering Documentation                       Replace with EGLNET ------------------------------------------------------------------------------------------------------------------ ESDP                         Enterprise Supply & Demand Planning             Interface ------------------------------------------------------------------------------------------------------------------ Financial MES                MES Billing System                              Interface ------------------------------------------------------------------------------------------------------------------ Fourth Element               Overhead Application                            Replace ------------------------------------------------------------------------------------------------------------------ FDR                          Financial Data Repository                       Interface ------------------------------------------------------------------------------------------------------------------ FQA                          Field Quality Assurance                         Replace ------------------------------------------------------------------------------------------------------------------ Gems                         Corp Order System                               Interface ------------------------------------------------------------------------------------------------------------------ Gems Billing Bridge          Corp Order System                               Interface ------------------------------------------------------------------------------------------------------------------ Gems MPI                     Warranty Tracking                               Interface ------------------------------------------------------------------------------------------------------------------ ICS                          Inventory Control System                        N/A no longer used ------------------------------------------------------------------------------------------------------------------ IDS                          Code A system orders                            Replace ------------------------------------------------------------------------------------------------------------------ IPBILL                       Financial Billing System                        Replace ------------------------------------------------------------------------------------------------------------------ IPLS                         Corporate Interplant System                     Interface via EDI ------------------------------------------------------------------------------------------------------------------ IPOPS                        Interplant Parts Order Process                  Replace ------------------------------------------------------------------------------------------------------------------ L718 Trx Interface           Pastes Serial # info into MCCS L718 scrn        Replace





------------------------------------------------------------------------------------------------------------------ MAC                          Mfg Auto Control Sys...controls UWIPS            Replace ------------------------------------------------------------------------------------------------------------------ Mach/Scl                     Costs to MCCS                                   Replace ------------------------------------------------------------------------------------------------------------------ Maptools                     Batch load of ME/PC data to DPRS                Replace ------------------------------------------------------------------------------------------------------------------ MAXI                         Mfg Inventory (Large parts)                     Interface ------------------------------------------------------------------------------------------------------------------ MCCS                         Material Cost & Control Sys                     Replace ------------------------------------------------------------------------------------------------------------------ MES EDI                      EDI                                             Replace ------------------------------------------------------------------------------------------------------------------ MES FC                       MES Forecasting                                 Replace ------------------------------------------------------------------------------------------------------------------ MES Global Labels            MES shipping label reqts                        Replace ------------------------------------------------------------------------------------------------------------------ MES Local                    Explode MES BOMs                                Replace ------------------------------------------------------------------------------------------------------------------ MFG Rel Shell                Plant control Inter to rel UWIPS                Replace ------------------------------------------------------------------------------------------------------------------ MODLOAD                      Machine ships for ACCT period                   Replace ------------------------------------------------------------------------------------------------------------------ MPL History                  MPL History pgms in 'C'                         N/A no longer used ------------------------------------------------------------------------------------------------------------------ Office products              LNOTES.VM.servers                               MSL IT Solution ------------------------------------------------------------------------------------------------------------------ OPAL                         Manual orders                                   Replace ------------------------------------------------------------------------------------------------------------------ P12l's                       FFI's                                           Manual Interface ------------------------------------------------------------------------------------------------------------------

1/14199                                                            Page 13 of 14

                                  Supplement I                                Transition Services                                  (Amendment 003)

                                                                        ------------------------------------------------------------------------------------------------------------------ Packaging Label set          Label Printing                                  Replace ------------------------------------------------------------------------------------------------------------------ Pallet Action set            Serial Numbers per Pallet                       N/A not needed ------------------------------------------------------------------------------------------------------------------ Pallet Label Printing        Prints label for NHD cust room & WH             N/A No longer used ------------------------------------------------------------------------------------------------------------------ Pallet Shell                 Plant Control Shell                             Replace ------------------------------------------------------------------------------------------------------------------ PCA                          M'burg PCA data                                 Interface ------------------------------------------------------------------------------------------------------------------ PCS                          Mach Shipping system                            Replace ------------------------------------------------------------------------------------------------------------------ PEP                          Paperless Eng Proc shadow                       Replace ------------------------------------------------------------------------------------------------------------------ Pick/Pack Validation         Validates all comps picked thru MAC             Replace ------------------------------------------------------------------------------------------------------------------ PIE                          Sourcing Approval System                        Interface ------------------------------------------------------------------------------------------------------------------ Plant Control                Plant Floor Control System                      Replace ------------------------------------------------------------------------------------------------------------------ Plant Works                  MPL conveyor interface                          N/A no longer used ------------------------------------------------------------------------------------------------------------------ PLUMP                        Plant Local Update Min corp I/F                 MFI manual interface ------------------------------------------------------------------------------------------------------------------ PPP                          Interplant sourcing                             Replace ------------------------------------------------------------------------------------------------------------------ PM                           Product Manager/DPRS Receiver                   Interface via DPRS Receiver ------------------------------------------------------------------------------------------------------------------ PRP                          Procurement Planning data                       Interface ------------------------------------------------------------------------------------------------------------------ PTS (ELITE)                  Product Tracking System                         EDI interface(data services gateway) ------------------------------------------------------------------------------------------------------------------ QSHIP                        Shipping System                                 Replace ------------------------------------------------------------------------------------------------------------------ RMAT                         Lotus Returns Tool                              Replace ------------------------------------------------------------------------------------------------------------------ RNB/BNR                      Rec'd not Billed/Billed not Rec'd               Replace ------------------------------------------------------------------------------------------------------------------ Ship Audit                   Mach ships and Costs to PCS deltas              Replace ------------------------------------------------------------------------------------------------------------------ TAXIS                        Engineering Development                         Manual lnterface ------------------------------------------------------------------------------------------------------------------ TEP                          Tracking Engineering Processes                  Replace ------------------------------------------------------------------------------------------------------------------ Transfer Price               Financial Billing System                        Interface ------------------------------------------------------------------------------------------------------------------ User Tools                   SAS, QMF, Smartsuite                            MSL IT solution ------------------------------------------------------------------------------------------------------------------ USPS                         US Postal Orders                                Interface ------------------------------------------------------------------------------------------------------------------ VMMCCS                       VM Matr'l Cost & Cntl Sys                       Replace ------------------------------------------------------------------------------------------------------------------





WSC                          Workstation Integration Database                Replace ------------------------------------------------------------------------------------------------------------------ WTBILL                       WT Billing/Ships to Boulder                     Interface ------------------------------------------------------------------------------------------------------------------

1/14199                                                            Page 14 of 14

                     Amendment 004 to Outsourcing Agreement                                      between                                    IBM and MSL

The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation (IBM) and Manufacture's Services Western U.S. Operations. Incorporated (MSL), dated May 5, 1998 (Agreement). This amendment will be effective upon execution by IBM and MSL (each a Party and together the Parties).

The Parties agree to amend the Agreement as follows:

1. Add to the Agreement as Attachment H, Product Attachment - Complementary Products, to Attachment 1, Statement of Work to the Agreement. Attachment H will be referred to as a Complementary Products. Complementary Products (CP) is an IBM business unit.

2. Delete the list of appendices, attachments, and supplements and associated attachments as listed on page 1 of Attachment 1, Statement of Work to the Agreement in its entirety and replace it with the following list:

a)  Appendix 1 Markup b)  Appendix 2 Requirements Accuracy c)  Appendix 3 Performance Specifications d)  Appendix 4 Inventory Supply Flexibility e)  Appendix 5 EC Process Flow and EC Cycle Time f)  Attachment A - Product Attachment for RS g)  Attachment B - Product Attachment for GEPS h)  Attachment C- Product Attachment for Finance Solutions i)  Attachment D - Product Attachment for OEM Agreement A j)  Attachment E - Product Attachment for OEM Agreement B k)  Attachment F - Product Attachment for OEM Agreement C l)  Attachment G - Product Attachment for Security Products m)  Attachment H - Product Attachment for Complimentary Products ('CP) n)  Supplement 1 - Transition Services and associated Attachments as listed; o)  Exhibit 1 to Supplement 1 - Product Attachment for Wedge Products p)  Exhibit 2 to Supplement 1 - Wedge Inventory List q)  Agreement Exchange of Confidential Information Number 4998S60076 r)  IBM Purchase Orders s)  IBM Customer Orders t)  Equipment and Program Loan Agreement

3. Delete the first sentence in Section 7.1 in Attachment 1, Statement of Work, to the Agreement in its entirety and replace with the following:

      MSL's price to IBM for the fulfillment of Products for RS and MSL's price       to IBM for the manufacturing and fulfillment of GEPS, Finance Products,       and CP will be determined according to the following formula:

                     Amendment 004 to Outsourcing Agreement                                      between                                    IBM and MSL

4. Delete the table in Section 7.3 a) in Attachment 1, Statement of Work, to the Agreement in its entirety and replace with the following:

SHIPMENT                       PROFIT RATE

                                 RS              GEPS, Finance, and CP      GEPS, Finance and CP                                  Fulfillment     A-Sourced                  Mfg. and Fulfillment

                                                                        On Time                      [*]             [*]                        [*]

    1 Day delinquent             [*]             [*]                        [*]

    2 or more Days delinquent    [*]             [*]                        [*]

5. Delete the table in 1. a) of Appendix 1: Mark Up to Attachment 1, Statement of Work of the Agreement in its entirety and replace it with the following:

  a) Value Add and Profit Rates are per the following table:

                                                       VALUE ADD RATES     PROFIT RATES (*)                                                        ---------------     ----------------







    RS Fulfillment (US & VALENCIA Work Centers               [*]                 [*]

    GEPS, Finance, CP, and Security Mfg & Fulfillment            A-Sourced Products                                [*]                 [*]            MSL Manufactured Products                         [*]                 [*]

    Spares to Mechanicsburg and Amsterdam            US Work Center                                    [*]                 [*]

           Valencia Work Center                              [*]                 [*]            (Through September 30, 1998)            Valencia Work Center                              [*]                 [*]            (After September 30, 1998)

    *Profit Rates are subject to the adjustments of Section 7.3, Attachment 1, SOW

                     Amendment 004 to Outsourcing Agreement                                      between                                    IBM and MSL

All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this amendment to be executed by their respective authorized representatives.

     ACCEPTED AND AGREED TO:               ACCEPTED AND AGREED TO:

     International Business                Manufacturer's Services      Machines Corp.                        Western U.S. Operations, Inc.

     By: /s/ Roy B. Covington III          By: /s/ Dale R. Johnson          ----------------------------          ----------------------------

         Roy B. Covington III                  Dale R. Johnson          ----------------------------          ----------------------------          Print Name                            Print Name

         Industry Solutions Production          Procurement Manager                   EXEC. V.P          ----------------------------          ----------------------------          Title                                 Title

         2/9/99                                2/10/99          ----------------------------          ----------------------------          Date                                  Date

                     Amendment 005 to Outsourcing Agreement                                Between IBM and MSL

The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation (IBM) and Manufacture's Services Western U.S. Operations, Incorporated (MSL), dated May 5, 1998 (Agreement). This amendment will be effective upon execution by IBM and MSL (each a Party and together the Parties).

The Parties agree to amend the Agreement as follow:

1. Delete October 31, 1998 from item 1. of Amendment 002 to the Agreement and replace it with the following:

April 3, 1999

2. Delete through February 26, 1999 from the end of sentence of item 1. in Amendment 003 to the Agreement and replace it with the following:

      Up to October 31, 1999 for SECTION I - WEDGE PRODUCTS to Supplement 1, -       Transition Services to Attachment 1,Statement of Work to the Agreement and       through April 3, 1999 for SECTION II - SALE OF IBM SERVICES to Supplement       1, - Transition Service to Attachment 1, Statement of Work to the       Agreement.

3. Delete the item 2 in Amendment 003 in its entirety and replace it with the following:

The following replace Section 2.0 of the SOW in its entirety.

      This Supplement and its Attachments shall become effective upon       execution of the SOW and will terminate upon [*] Days notice by IBM TO       MSL. Termination will be with the period from August 31, 1999 to       October 31, 1999 unless terminated as provided in Section 5.0 of the       Base Agreement. This Supplement may be extended under mutually agreed       to terms and conditions. Extensions will be in writing and signed by       both Parties.

4. Delete the wording in Section 7.0 Price, SECTION I Supplement 1, Transition Services to Attachment 1 Statement of Work to the Agreement in its entirety and replace it with the following:





The following replaces Section 7.0 of the SOW in its entirety.

      Commencing on the Effective Date of this Agreement, IBM shall pay MSL [*]       dollars [*] on the first Day of each calendar month through March

      31, 1999. Beginning April 1, 1999 and through the end of the period       defined in Section

                     Amendment 005 to Outsourcing Agreement                                between IBM and MSL

      2.0 Term SECTION I - WEDGE PRODUCTS in Supplement 1 to Attachment 1,       Statement of Work to the Agreement, as amended in item 3 of Amendment 005.       IBM shall pay MSL [*] dollars [*] on the first day of each calendar       month. For any period of less than one month, the above amount shall be       apportioned based on the number of Days in the Month.

5. Delete February 26, 1999 from item 3. of Amendment 003 to the Agreement and replace it with the following:

April 3, 1999

6. Delete the last two sentences from item 3. of Amendment 003 to the Agreement and replace them with the following:

This Supplement may be extended under mutually agreed to terms and conditions. Extensions will be in writing and signed by both parties.

7. Delete February 26, 1999 from item 4. of Amendment 003 to the Agreement and replace it with the following:

April 3, 1999

8. Delete item 5. of Amendment 003 to the Agreement in its entirety and replace it with the following:

b) Any extension of the I/T Services beyond the April 3, 1999 date, due to an MSL delay, will be priced at IBM's then prevailing commercial rates.

If the implementation of the MSL I/T solution for the U.S. Work Center is delayed beyond April 3, 1999 by IBM, other than for reasons attributable to MSL, then IBM shall continue to provide I/T Services to MSL at no cost and shall also bear all of MSL's incremental costs associated with such delay including without limitation, hardware, software and consulting costs subject to a maximum amount of [*] ([*] dollars) per month. For any period of less than one month, the above amount shall be apportioned based on the number of Days in that month.

9. Add the following, as a new paragraph, to the bottom of Page 1, following the paragraph that reads In addition, there may be associated features or accessory part numbers (not included in the Bill of Material listing). of Exhibit 1, Product Attachment - Wedge Products to Supplement 1, Transition Services to Attachment 1, SOW to the agreement.

                     Amendment 005 to Outsourcing Agreement                                between IBM and MSL

The Wedge Machine Types and the ARCTIC product set will be phased out of the transition services described in SECTION I - WEDGE PRODUCTS in Supplement 1 - Transition Services prior to October 31, 1999.

Note: Wedge Machine Types 5308, 7429, 7526 no longer apply to Exhibit 1 - Product Attachment - Wedge Products as they have been phased out.

10. Delete January 15, 1999 from 6. a) from Amendment 003 to the Agreement and replace it with the following:

March 15, 1999

All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment 005 to be executed by their respective authorized representatives.

ACCEPTED AND AGREED TO:                        ACCEPTED AND AGREED TO:

International Business Machines Corp.          Manufacturer's Services                                                Western U.S. Operations, Inc.

By: /s/ Roy B. Covington III                   By: /s/ Dale Johnson     -------------------------------------          -----------------------------





    Roy B. Covington III                           Dale R. Johnson     -------------------------------------          -----------------------------     Print Name                                     Print Name

    Ind. Solutions Production Procurement          Exec. V.P.     -------------------------------------          -----------------------------     Title                                          Title

    2/8/99                                         2/8/99     -------------------------------------          -----------------------------     Date                                           Date

                     Amendment 006 to Outsourcing Agreement                                      between                                    IBM and MSL

The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation (IBM) and Manufacture's Services Western U.S. Operations, Incorporated (MSL), dated May 5, 1998 (Agreement). This amendment will be effective upon execution by IBM and MSL (each a Party and together the Parties).

The Parties agree to amend the Agreement as follow:

1. Delete the following Product Attachments to Attachment 1, Statement of Work to the Agreement in their entirety and replace them with the attached Product Attachments, of the same name:

      *     Attachment A - Product Attachment - Retail Store Solutions (RS)       *     Attachment B - Product Attachment - GEPS, Global Embedded Production             Solutions       *     Attachment C - Product Attachment - Finance Solutions       *     Attachment D - Product Attachment - OEM A, Global Embedded             Production Solutions       *     Attachment E - Product Attachment - OEM B, Global Embedded             Production Solutions       *     Attachment F - Product Attachment - OEM C, Global Embedded             Production Solutions       *     Attachment G - Product Attachment - Security Products

2. Delete the table in 1. a) of Appendix 1: Mark Up, as amended by Amendment 004, to Attachment 1, Statement of Work of the Agreement in its entirety and replace it with the following:

   a) Value Add and Profit Rates are per the following table:

                                                         VALUE ADD RATES       PROFIT RATES (**)                                                          ---------------       -----------------                                                                                       RS Fulfillment (US & VALENCIA Work Centers                      [*]                [*]

     GEPS, Finance, CP, and Security Mfg & Fulfillment              [*]                [*]            [*]                                                      [*]                [*]

     Spares to Mechanicsburg and Amsterdam             US Work Center                                          [*]                [*]

            Valencia Work Center                                    [*]                [*]             (Through September 30, 1998)             Valencia Work Center                                    [*]                [*]             (After September 30, 1998)

*     [*]                                                           [*]                [*]

**    Profit Rates are subject to the adjustments of Section 7.3, Attachment 1,       SOW

                                                                     Page 1 of 2

                     Amendment 006 to Outsourcing Agreement                                      between                                    IBM and MSL

All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment 006 to be executed by their respective authorized representatives.

ACCEPTED AND AGREED TO:                        ACCEPTED AND AGREED TO:

International Business Machines Corp.          Manufacturer's Services                                                Western U.S. Operations, Inc.

By: /s/ Roy B. Covington III                   By: /s/ Dale Johnson





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

    Roy B. Covington III                           Dale R. Johnson     -------------------------------------          -----------------------------     Print Name                                     Print Name

    Ind Solutions Procurement MGR                  Exec. V.P.     -------------------------------------          -----------------------------     Title                                          Title

    3/15/99                                        6/25/99     -------------------------------------          -----------------------------     Date                                           Date

                                                                     Page 2 of 2

                     Amendment 007 to Outsourcing Agreement                                      between                                    IBM and MSL

The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation (IBM) and Manufacturer's Services Western U.S. Operations, Incorporated (MSL), dated May 5, 1998 (Agreement). This amendment will be effective upon execution by IBM and MSL (each a Party and together the Parties).

The Parties agree to amend the Agreement as follow:

1. Add Attachment I, Product Attachment - OEM Agreement D, and Attachment J, Product Attachment - OEM Agreement E, to Attachment 1, Statement of Work to the Agreement.

2. Delete the list of appendices, attachments, and supplements and associated attachments as listed on page 1 of Attachment 1, Statement of Work to the Agreement, and as amended by Amendment 004, in its entirety and replace it with the following list:

a) Appendix 1 Markup b) Appendix 2 Requirements Accuracy c) Appendix 3 Performance Specifications d) Appendix 4 Inventory Supply Flexibility e) Appendix 5 EC Process Flow and EC Cycle Time f) Attachment A - Product Attachment for RS g) Attachment B - Product Attachment for GEPS h) Attachment C - Product Attachment for Finance Solutions i) Attachment D - Product Attachment for OEM Agreement A j) Attachment E - Product Attachment for OEM Agreement B k) Attachment F - Product Attachment for OEM Agreement C l) Attachment G - Product Attachment for Security Products m) Attachment H - Product Attachment for Complimentary Products ('CP) n) Attachment I - Product Attachment for OEM Agreement D 0) Attachment J - Product Attachment for OEM Agreement E p) Supplement 1 - Transition Services and associated Attachments as listed; q) Exhibit 1 to Supplement 1 - Product Attachment for Wedge Products r) Exhibit 2 to Supplement 1 - Wedge Inventory List s) Agreement Exchange of Confidential Information Number 4998S60076 t) IBM Purchase Orders u) IBM Customer Orders v) Equipment and Program Loan Agreement

3. Delete the following Product Attachments to Attachment 1, Statement of Work to the Agreement in their entirety and replace them with the attached Product Attachments, of the same name:

      Attachment F - Product Attachment - OEM C, Global Embedded Production           Solutions       Attachment H - Product Attachement - Complementary Products

                                                                     Page 1 of 3

                     Amendment 007 to Outsourcing Agreement                                      between                                    IBM and MSL

4. Delete the table in 1 a) of Appendix 1: Mark Up, as amended by Amendment 006, to Attachment 1, Statement of Work of the Agreement in its entirety and replace it with the following:

     a) Value Add and Profit Rates are per the following table:

                                                         VALUE ADD RATES     PROFIT RATES (**)                                                          ---------------     -----------------

                                                                                  RS Fulfillment (US & VALENCIA Work Centers                [*]                [*]

         GEPS, Finance, CP, and Security Mfg & Fulfillment             [*]                                                [*]                [*]                                                                [*]                [*]





         Spares to Mechanicsburg and Amsterdam             US Work Center                                     [*]                [*]

            Valencia Work Center                               [*]                [*]             (Through September 30, 1998)             Valencia Work Center                               [*]                [*]             (After September 30, 1998)

         *  [*]                                                [*]                [*]          *  [*]                                                [*]                [*]          *  [*]                                                [*]                [*]          *  [*]                                                [*]                [*]          *  [*]                                                [*]                [*]

      ** Profit Rates are subject to the adjustments of Section 7.3, Attachment 1, SOW

5. Delete in Section 17.0 b) to Attachment 1, Statement of Work to the Agreement, 12/31/98 and replace it with 12/31/99.

                                                                     Page 2 of 3

                     Amendment 007 to Outsourcing Agreement                                      between                                    IBM and MSL

All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment 006 to be executed by their respective authorized representatives.

     ACCEPTED AND AGREED TO:               ACCEPTED AND AGREED TO:

     International Business                Manufacturer's Services      Machines Corp.                        Western U.S. Operations, Inc.

     By: /s/ Roy B. Covington III          By: /s/ Dale R. Johnson          ----------------------------          ----------------------------

         Roy B. Covington III                  Dale R. Johnson          ----------------------------          ----------------------------          Print Name                            Print Name

         Industry Solutions Production          Procurement Manager                   EXEC. V.P          ----------------------------          ----------------------------          Title                                 Title

         May 20, 1999                          6/25/99          ----------------------------          ----------------------------          Date                                  Date

                                                                     Page 3 of 3

                     Amendment 008 to Outsourcing Agreement                                      between                                    IBM and MSL

The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation (IBM) and Manufacturer's Services Western U.S. Operations, Incorporated (MSL), dated May 5, 1998 (Agreement). This amendment will be effective upon execution by IBM and MSL (each a Party and together the Parties).

The Parties agree to amend the Agreement as follow:

1. Add Attachment K, Product Attachment - IBM 5494 for NHD, to Attachment 1, Statement of Work to the Agreement.

2. Delete the list of appendices, attachments, and supplements and associated attachments as listed on page 1 of Attachment 1, Statement of Work to the Agreement, and as amended by Amendment 007, in its entirety and replace it with the following list:

a)  Appendix 1 Markup b)  Appendix 2 Requirements Accuracy c)  Appendix 3 Performance Specifications d)  Appendix 4 Inventory Supply Flexibility e)  Appendix 5 EC Process Flow and EC Cycle Time f)  Attachment A - Product Attachment for RS g)  Attachment B - Product Attachment for GEPS h)  Attachment C - Product Attachment for Finance Solutions i)  Attachment D - Product Attachment for OEM Agreement A j)  Attachment E - Product Attachment for OEM Agreement B k)  Attachment F - Product Attachment for OEM Agreement C l)  Attachment G - Product Attachment for Security Products m)  Attachment H - Product Attachment for Complimentary Products (CP)





n)  Attachment I - Product Attachment for OEM Agreement D o)  Attachment J - Product Attachment for OEM Agreement D p)  Attachment K - Product Attachment for IBM 5494 for NHD q)  Supplement 1 - Transition Services and associated Attachments as listed; r)  Exhibit 1 to Supplement 1 - Product Attachment for Wedge Products s)  Exhibit 2 to Supplement 1 - Wedge Inventory List t)  Agreement Exchange of Confidential Information Number 4998S60076 u)  IBM Purchase Orders v)  IBM Customer Orders w)  Equipment and Program Loan Agreement

                                                                     Page 1 of 2

                     Amendment 008 to Outsourcing Agreement                                      between                                    IBM and MSL

All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment 008 to be executed by their respective authorized representatives.

     ACCEPTED AND AGREED TO:               ACCEPTED AND AGREED TO:

     International Business                Manufacturer's Services      Machines Corp.                        Western U.S. Operations, Inc.

     By: /s/ Roy B. Covington III          By: /s/ Dale R. Johnson          ----------------------------          ----------------------------

         Roy B. Covington III                  Dale R. Johnson          ----------------------------          ----------------------------          Print Name                            Print Name

         Industry Solutions Production          Procurement Manager                   EXEC. V.P          ----------------------------          ----------------------------          Title                                 Title

         6/7/99                                July 5, 1999          ----------------------------          ----------------------------          Date                                  Date

                                                                     Page 2 of 2

                     Amendment 009 to Outsourcing Agreement                                      between                                    IBM and MSL

The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation (IBM) and Manufacturer's Services Western U.S. Operations, Incorporated (MSL), dated May 5, 1998 (Agreement). This amendment will be effective upon execution by IBM and MSL (each a Party and together the Parties).

The Parties agree to amend the Agreement as follow:

1. Add Attachment 6: Software Installation Terms and Conditions to Outsourcing Base Agreement.

2. Delete the list following the sentence The Parties agree that this Agreement regarding this transaction consist of: found on Page 1 of the Outsourcing Base Agreement in its entirety and replace it with the following:

a) the Outsourcing Base Agreement b) Attachment 1: Statement of Work and its Product Attachments, Appendices, and    Supplements c) Attachment 2: Employee list and Benefits Information d) Attachment 3: Asset List e) Attachment 4: Expense Participation f) Attachment 5: Equipment and Program Loan List g) Attachment 6: Software Installation Terms and Conditions h) Agreement for Exchange of Confidential Information Number 4998S60076 i) IBM Purchase Orders j) IBM Customer Orders k) Equipment and Program Loan Agreement

All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment 009 to be executed by their respective authorized representatives.

     ACCEPTED AND AGREED TO:               ACCEPTED AND AGREED TO:

     International Business                Manufacturer's Services      Machines Corp.                        Western U.S. Operations, Inc.

     By: /s/ Roy B. Covington III          By: /s/ Dale R. Johnson





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

         Roy B. Covington III                  Dale R. Johnson          ----------------------------          ----------------------------          Print Name                            Print Name

         Industry Solutions Production          Procurement Manager                   EXEC. V.P, GENERAL COUNSEL          ----------------------------          ----------------------------          Title                                 Title

         6/7/99                                6/9/99          ----------------------------          ----------------------------          Date                                  Date

                                                                     Page 1 of 1

                     Amendment 010 to Outsourcing Agreement                                      between                                    IBM and MSL

The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation (IBM) and Manufacturer's Services Western U.S. Operations, Incorporated (MSL), dated May 5, 1998 (Agreement). This amendment will be effective upon execution by IBM and MSL (each a Party and together the Parties).

The Parties agree to amend the Agreement as follow:

1. Delete up to October 31, 1999 for SECTION I - WEDGE PRODUCTS to Supplement 1, Transition Services to Attachment 1, Statement of Work to the Agreement and through April 3, 1999 for SECTION II - SALE OF IBM SERVICES to Supplement 1, Transition Services to Attachment 1, Statement of Work to the Agreement., as amended in Amendment 005, from the end of sentence in paragraph 2 in Supplement 1 to Attachment 1, Statement of Work, to the Agreement, in its entirety and replace with the following:

      through March 31, 2000 for SECTION I-WEDGE PRODUCTS to Supplement 1,       Transition Services to Attachment 1, Statement of Work to the Agreement       and through April 3, 1999 for SECTION II - SALE OF IBM SERVICES to       Supplement 1, Transition Services to Attachment 1, Statement of Work to       the Agreement.

2. Delete the wording in Section 2.0 Term, as last amended in Amendment 005, from SECTION I - WEDGE PRODUCTS to Supplement 1, Transitions Services to Attachment 1, Statement of Work to the Agreement, in its entirety and replace with the following:

The following replaces Section 2.0 of the SOW in its entirety.

      This Supplement and its Attachments shall become effective upon execution       of the SOW and expire March 31, 2000 unless terminated as provided in       Section 5.0 of the Base Agreement. This supplement may be extended under       mutually agreed to terms and conditions. Extensions will be in writing       and signed by both Parties.

3. Delete the wording in Section 7.0 Price, as amended in Amendment 005, from SECTION I - WEDGE PRODUCTS to Supplement 1, Transitions Services to Attachment 1, Statement of Work to the Agreement, in its entirety and replace with the following:

The following replaces Section 7.0 of the SOW in its entirety.

      Commencing on the Effective Date of this Agreement, IBM shall pay MSL       [*] dollars ([*]) on the first Day of each calendar month through March       31, 1999. Beginning April 1, 1999 and through October 31, 1999, IBM       shall pay MSL [*] dollars ([*]) on the first Day of each calendar month.       Beginning November 1, 1999 and through the end of the period defined in       Section 2.0 Term, SECTION I - WEDGE PRODUCTS in Supplement 1 to       Attachment 1 of Work to the Agreement, IBM shall pay MSL [*] dollars       ([*]) on the first day of each calendar month. For any period of less       than one month, the above amount shall be apportioned based upon the       number of Days in that month.

                                                                     Page 1 of 2

                     Amendment 010 to Outsourcing Agreement                                      between                                    IBM and MSL

4. Delete the wording in the last paragraph of Specific Product Description as added by Amendment 005, of Exhibit 1, Product Attachment - Wedge Products to Supplement 1, Transition Services to Attachment 1, Statement of Work to the Agreement, in its entirety and replace it with the following:





      The ARCTIC product set will be phased out of the transition services       described in SECTION I - WEDGE PRODUCTS prior to October 31, 1999. The       Wedge Machine Types will be phased out of the transitions services       described in SECTION I - WEDGE PRODUCTS on or before March 31, 2000.

5. Delete Attachment 5: Equipment and Program Loan List, to the Outsourcing Base Agreement dated October 01, 1998 and replace it in its entirety with the Attachment 5: Equipment and Program Loan List, to the Outsourcing Base Agreement dated July 20, 1999.

All other terms and conditions of the IBM/MSL Outsourcing Agreement, its attachments, and amendments shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment 010 to be executed by their respective authorized representatives.

     ACCEPTED AND AGREED TO:               ACCEPTED AND AGREED TO:

     International Business                Manufacturer's Services      Machines Corp.                        Western U.S. Operations, Inc.

     By: /s/ Nigel D. Davis                By: /s/ Dale R. Johnson          ----------------------------          ----------------------------

         Nigel D. Davis                        Dale R. Johnson          ----------------------------          ----------------------------          Print Name                            Print Name

         [ILLEGIBLE] Procurement Mgr.          EXEC. V.P          ----------------------------          ----------------------------          Title                                 Title

         11-16-99                              11/29/99          ----------------------------          ----------------------------          Date                                  Date

                                  ATTACHMENT 1

              IBM/MSL Outsourcing Base Agreement Statement of Work

The Statement of Work (SOW) is an Attachment issued under the IBM/MSL Outsourcing Base Agreement (Base Agreement) for the manufacturing, fulfillment, Integration, and Services currently performed and managed by and for IBM that are to be performed and managed by MSL for the Retail Store Solutions (RS), Global Embedded Production Solutions (GEPS), Finance Solutions, other IBM business units, and current IBM OEM Agreements.

By signing below, each of us agrees that the complete agreement between us regarding this transaction document consists of the Outsourcing Base Agreement and this SOW and associated Appendices, Attachments, and Supplements and associated Attachments as listed:

a) Appendix 1 Markup b) Appendix 2 Requirements Accuracy c) Appendix 3 Performance Specifications d) Appendix 4 Inventory Supply Flexibility e) Appendix 5 EC Process Flow and EC Cycle Time f) Attachment A - Product Attachment for RS g) Attachment B - Product Attachment for GEPS h) Attachment C - Product Attachment for Finance Solutions i) Attachment D - Product Attachment for OEM Agreement A j) Attachment E - Product Attachment for OEM Agreement B k) Attachment F - Product Attachment for OEM Agreement C l) Attachment G - Product Attachment for Security Products m) Supplement 1 - Transition Services and associated Attachments as listed; n) Exhibit 1 to Supplement 1 - Product Attachment for Wedge Products o) Exhibit 2 to Supplement 1 - Wedge Inventory List p) Agreement Exchange of Confidential Information Number 4998S60076 q) IBM Purchase Orders r) IBM Customer Orders s) Equipment and Program Loan Agreement

The following is a related agreement between MSL and IBM:

      IBM Corporation (Landlord) and MSL (Tenant) Lease Agreement

IBM Confidential                                                    Page 1 of 39 sow501.lwp

                                  ATTACHMENT 1

              IBM/MSL Outsourcing Base Agreement Statement of Work

Any signed copy of this SOW and its Attachments made by reliable means (for example, photocopy or facsimile) is considered an original.

Agreed To:                           Agreed To:

Manufacturers' Services Western      International Business Machines Corporation U.S. Operations, Inc.





By: /s/ Kevin C. Melia               By: /s/ R. G. Richter     -----------------------------        -----------------------------     Authorized Signature                 Authorized Signature

Name: KEVIN C. MELIA                 Name: R. G. Richter       ---------------------------          ---------------------------

Date: May 5, 1998                    Date: May 5, 1998       ---------------------------          ---------------------------

IBM Confidential                                                    Page 2 of 39 sow501.lwp

                                  ATTACHMENT 1

              IBM/MSL Outsourcing Base Agreement Statement of Work

SECTION 1.0 DEFINITIONS ...............................................   Page 5

SECTION 2.0 TERM ......................................................   Page 6

SECTION 3.0 MSL RESPONSIBILITIES ......................................   Page 7

SECTION 4.0 IBM RESPONSIBILITIES ......................................   Page 8

SECTION 5.0 MUTUAL RESPONSIBILITIES ...................................   Page 9

SECTION 6.0 PURCHASE OF PRODUCTS ......................................  Page 11

SECTION 7.0 PRICE .....................................................  Page 11

SECTION 8.0 PARTS PRICING .............................................  Page 16

SECTION 9.0 PREMIUM COST ..............................................  Page 16

SECTION 10.0 ORDER MANAGEMENT, DELIVERY, AND SHIPMENT .................  Page 18

SECTION 11.0 PRODUCT FORECAST .........................................  Page 20

SECTION 12.0 ENGINEERING CHANGE .......................................  Page 21

SECTION 13.0 INVENTORY ................................................  Page 22

SECTION 14.0 INTEGRATION ..............................................  Page 24

SECTION 15.0 DROP SHIPMENTS ...........................................  Page 29

SECTION 16.0 PACKAGING ................................................  Page 30

SECTION 17.0 QUALITY ..................................................  Page 30

SECTION 18.0 ACCEPTANCE TEST ..........................................  Page 31

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SECTION 19.0 WARRANTY .................................................  Page 32

SECTION 20.0 COMMON TOOLING ...........................................  Page 34

SECTION 21.0 TOOLING TO BE ACQUIRED ...................................  Page 34

SECTION 22.0 RETURN OF PRODUCT - US AND VALENCIA WORK CENTER. .........  Page 36

SECTION 23.0 DISASTER RECOVERY ........................................  Page 37

SECTION 24.0 INFORMATION TECHNOLOGIES SERVICES (I/T) SYSTEMS ........  Page 37

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              IBM/MSL Outsourcing Base Agreement Statement of Work

SECTION 1.0 DEFINITIONS

      For purposes of this Attachment, the following capitalized terms shall       have the following meaning All other capitalized terms not otherwise       defined herein shall have the meaning assigned in the Agreement:

1.1   AP shall mean Asia and Pacific geographies.

1.2   Bulk Shipment shall mean a fulfillment sub process for Products       identified by part numbers, by which aggregate IBM Customer Orders are       delivered together to the IBM Customer.





1.3   Code A shall mean a service available from MSL to IBM 6:00am to Midnight       local Work Center time, and seven (7) days a week for the delivery of       emergency Parts requested by IBM, IBM Document VFM043.

1.4   Delivery Point shall mean the location where IBM is to take delivery of       Products, excluding Products which are Drop Shipments, from MSL as       described in the Product Attachments. This may be an MSL site, an IBM site       or such location as required by the Product Attachment. If no Delivery       Point is stated for a particular Product, it shall be the location       described in a separate IBM notice.

1.5   Drop Shipment shall mean a fulfillment sub process by which Products are       directly delivered from the IBM supplier to an IBM Subsidiary or IBM       customer. These Products do not pass physically through any MSL facility.

1.6   EMEA shall mean the Europe, Middle East and Africa geographies.

1.7   End of Life (EOL) shall mean the date after which IBM does not require       MSL to provide Products and/or Services for specific Products.

1.8   Engineering Change (EC) shall mean a mechanical or electrical design       and/or specification changes which, if made, would in the good faith       opinion of IBM, affect the schedule, performance, reliability,       availability, serviceability, appearance, dimensions, tolerance, safety or       cost of Products, and which, in IBM's good faith opinion, would eventually       require additional approval tests.

1.9   Failure Analysis shall mean first pass failure analysis investigation       and testing performed by MSL to identify the failing Parts. The Part level       to which MSL will conduct Failure Analysis is described in the Quality       Section 17.0.

1.10  Field Bill of Materials (FBM) shall mean a set of Parts for machine       upgrade.

1.11  Follow on Product shall mean a new IBM Product which has similar       functional characteristics to current Products and that is intended to       replace such current Products in the marketplace.

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1.12  Hot line shall mean a service available from 7:30 am to Midnight local       Work Center time, Mondays through Fridays for emergency problem resolution       requested from IBM customers, IBM Document VFM045.

1.13  IBM Classified Part(s) shall mean a Part subject to be managed by MSL       according to IBM asset control rule, IBM Document CP10.13.

1.14  IBM Nominated Supplier shall mean a supplier from which MSL is       specifically required by IBM to purchase specific Parts.

1.15  NIC shall mean MSL's out of pocket costs for freight, duty, customs,       clearance, and appropriate insurance, and any other costs it incurs to       bring Product into a Work Center.

1.16  Order Fulfillment shall mean MSL's disbursement of Products, including       Pick & Pack, any Integration, shipment and delivery in order to satisfy an       IBM Customer Order.

1.17  Order Desk shall mean the function consisting of 1) receiving IBM       Customer Orders, 2) communicating with the requesting IBM party to ensure       the fulfillment commitments satisfy the request, 3) scheduling delivery of       the order and 4) communicating with the necessary goods processing       organizations to ensure the order is delivered at the committed date and       place.

1.18  Pick & Pack shall mean fulfillment a sub process for individual IBM       Customer Orders, by which all items of an IBM Customer Order are       consolidated into an over pack. Pick & Pack ensures that all items of the       IBM Customer Order arrive together at the customer location.

1.19  Product Recall shall mean a systematic effort to locate all Products in       the field in order to repair or replace such Products.

1.20  Relationship Managers shall mean the primary contact of the Parties with       respect to this Agreement. The Relationship Managers or their delegates       are solely authorized to make commitments between the parties. Each Party       shall designate a Relationship Manager.

1.21  Request Price Quotation (RPQ), shall mean a customized Product       configuration.

1.22  Wedge Products shall mean Products as described in a specific Product       Attachment, which are fulfilled by MSL from IBM Consigned Parts from the       Effective Date of this Agreement through December 31, 1998.

SECTION 2.0 TERM





      This Attachment and its Product Attachments shall become effective on the       Effective Date and shall continue for a period of three (3) years unless       terminated as provided in Section 5.0 of the Base Agreement. This       Attachment will automatically be renewed for periods of six (6) months       unless either party gives twelve (12) months written notice of its intent       to terminate this Agreement. Such renewals shall continue for successive       periods under the same terms and conditions, unless otherwise agreed in       writing by both Parties.

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SECTION 3.0 MSL RESPONSIBILITIES

      The following is a list of responsibilities that will be required of MSL       in order to fulfill the requirements of this Agreement. This list may not       be all inclusive.

      MSL shall:

            1)    provide suitable installations, common tools and equipment,                   skilled human resources, and adequate warehousing facilities                   at all delivery points listed in the Product Attachments as                   MSL may need for execution of this Agreement,             2)    manage, control, and execute EC's,             3)    qualify processes in accordance with IBM specified criteria,             4)    review and update product inventory profiles semiannually,             5)    purchase from IBM Nominated Suppliers based on IBM specified                   terms and conditions,             6)    utilize product forecasts to determine requirements and plans                   to fulfill such requirement,             7)    manage requirements generation for materials for Products,                   plan the procurement of materials from suppliers, and identify                   the Work Center where materials must be delivered,             8)    commit sufficient supply for IBM business units for Products                   with Product Attachments hereto and subject to the parameters                   of Appendix 4 Supply Flexibility,             9)    inspect incoming materials and supplies for compliance with                   IBM specified criteria,             10)   maintain appropriate stock to satisfy IBM Customer Orders                   within the parameters of Appendix 4 Supply Flexibility,             11)   manage inventory and associated liabilities,             12)   manage inbound transportation and cost for all Part and                   Products excluding those Parts considered IBM Consigned Parts,             13)   handle the reception and management of worldwide IBM Customer                   Orders, including new orders, alteration, reschedules,                   Integration as per customer requirements and cancellations,             14)   handle order processing, fulfillment and delivery for Products                   and Bulk Shipments at defined Delivery Points,             15)   provide account management, technical support and interface to                   IBM customers for Integration,             16)   provide packing and packaging for all Products and Parts,             17)   deliver complete assembled, inspected and tested Products that                   meet the requirements defined by the engineering documentation                   and specifications as defined in the Product Attachments,             18)   fulfill all obligations as outlined in the Integration Section                   14.0,

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            19)   manage Drop Shipments of Products to designated IBM                   Subsidiaries and/or foreign companies and prepare invoice for                   the corresponding IBM country unit,             20)   perform all distribution and shipping for Products from the US                   Work Center, arrange for carriers for all outbound shipments                   of Products to IBM customer destinations per the IBM Customer                   Order,             21)   perform kitting of parts as required for IBM,             22)   provide machine level control when required by Product                   specifications,             23)   process returned Products in accordance with IBM criteria for                   the same,             24)   perform first pass Failure Analysis on returned Products,             25)   manage and control of Consigned Products and equipment,             26)   provide detailed reporting as defined in the Performance                   Appendix,             27)   fulfill obligations as outlined in the Transition Services                   Supplement from the Effective Date of the Agreement to                   12/31/98,             28)   manage all Products to EOL dates as defined by IBM,             29)   provide Code A and Hot Line support for all Products as                   requested by IBM,





            30)   perform all forecasting for features,             31)   supply spare Parts until EOL,             32)   fulfill duties of Order Desk,             33)   provide timely estimates of any new Product activity, and             34)   support new Product introduction activities such as prototype                   build, sourcing, test and manufacturing process development.

SECTION 4.0 IBM RESPONSIBILITIES

      The following is a list of responsibilities that will be required of IBM       in order to fulfill the requirements of this Agreement. This list may not       be all inclusive.

      IBM shall

            1)    negotiate and manage contracts and technical support with IBM                   Nominated Suppliers,             2)    supply to MSL required IBM Parts and needed IBM Consigned                   Parts,             3)    define allocation of IBM Customer Order deliveries if total                   demand cannot be supported for a period of time,             4)    approve all EC's for Products prior to MSL's implementation of                   any change,             5)    provide technical and business interface through the IBM                   Relationship Manager,             6)    fulfill obligations as outlined in the Transition Services                   Supplement from the Effective Date to 12/31/98,             7)    process qualification approval of all processes utilized by                   MSL,             8)    provide engineering documentation and specifications as needed                   by MSL to manufacture and test Products as defined in the                   Product Attachments,             9)    execute approve tooling agreements as needed,             10)   provide maintenance for IBM IT systems that IBM requires MSL                   to use,

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            11)   provide a forecast to MSL on a monthly basis for all machine                   types and models by geography,             12)   approve/reject all requests for premium expenditures for                   materials, labor and other extraordinary items,             13)   provide EOL dates for all Products, at least [*] months prior                   to desired EOL date, and             14)   provide new product information required for estimates and new                   product introduction activities which are requested of MSL.

SECTION 5.0 MUTUAL RESPONSIBILITIES

5.1   Delivery/Quality/Cost Performance Process

      a)    MSL and IBM will communicate weekly on measurements and reports for:

            i)    Weekly shipments

            ii)   On-time shipments

            iii)  Responsiveness as defined in Appendix 3

            iv)   Order-to-ship lead-time, Pick and Pack

            v)    Order-to-ship lead-time, Bulk Shipments

            vi)   Product invoice information

      b)    MSL and IBM will communicate monthly on measurements and reports for

            i)    Monthly shipments

            ii)   Inventory

            iii)  Product quality

            iv)   Serviceability to IBM plants as defined in Appendix 3

            v)    Serviceability to IBM services as defined in Appendix 3

      c)    MSL and IBM will perform monthly reconciliation of invoices for             Product shipments and will determine payment adjustments as defined             in Section 7.3 ,Payment Adjustments. Payments of credits and debits             that may result from reconciliation and payment adjustments will             take place within the month following the reconciled month.

      d)    MSL and IBM will meet [*] at the US Work Center and/or the             Valencia Work Center or a place to be mutually agreed to.:

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            i)    define prices for the coming [*] based upon procedures                   defined in Section 7.5 e)i) below,

            ii)   determine credits and debits to material costs and NIC for the                   previous [*] caused by [*] to the material costs from those                   estimated at the prior [*] meeting, and

            iii)  determine Requirements Accuracy liabilities for the previous                   [*] as defined in Section 13.0 Inventory and Appendix 2.

      e)    Measurements, Targets and Reports to be provided by MSL are             specified in Appendix 3.

5.2   Relationship Management

      a)    MSL expressly recognizes that only commitments made to MSL by the             IBM Relationship Managers or their delegates are IBM commitments to             MSL with respect to this Agreement. The following are some, but not             all of, the communications that MSL can validly receive from the             Relationship Managers or their delegates: requirements forecasts,             price approval, orders for Products or Services, approval of EC             applications, approval of premium expenses, and approval of price             reconciliation. These communications must be in writing by IBM.

      b)    In the event of a necessary or desired change in any material aspect             of the Agreement, the Parties shall mutually agree to any such             change in writing prior to its implementation. A proposed change             shall be initiated by the proposing Party in a written notice to the             other Party.

      c)    MSL and IBM shall appoint program managers to handle communications             specific to each Product Group related to this Agreement. Names of             the program managers will be listed in each Product Attachment.

      d)    Either Party may change its program manager by written notice.

      e)    Both Parties recognize that efficiency of operation may frequently             require direct communication between program managers, or other             individuals working for the Parties, without the intermediation of             the Relationship Managers. Notwithstanding the above, MSL accepts             that only commitments issued by the IBM Relationship Managers or             their delegates are valid IBM commitments with respect to this             Agreement. Also, IBM accepts that only commitments issued by the MSL             Relationship Managers or their delegates are valid MSL commitments             with respect to this Agreement.

      f)    The Relationship Managers or their delegates will also coordinate             review meetings and will provide each other assessments of the             performance and the business situation of the relationship             throughout the duration of this Agreement.

      g)    Each Party may at any time redesignate a person as Relationship             Manager by written notice to the other.

      Relationship Managers:

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      for US Work Center

      IBM:

      MSL:

      IBM will separately designate a Relationship Manager for EMEA.

SECTION 6.0 PURCHASE OF PRODUCTS

      Subject to the terms and conditions of this Agreement, MSL agrees to       produce and sell, and IBM agrees to purchase Products. This Agreement does       not authorize MSL to produce or deliver any Product.

6.1   Cancellation of Purchase Order

      IBM may cancel any and all Purchase Orders against this Agreement at any       time. In the event IBM cancels Purchase Order as the result of MSL's       default, no cancellation charge shall be applicable. IBM's termination of       Purchase Orders for its convenience shall not relieve IBM of any cost       reimbursements under the Price section.

SECTION 7.0 PRICE

      Pricing for all Products and related services of this Agreement are as





      specified herein unless stated elsewhere in this Agreement. All prices       stated herein are defined in United States dollars, unless otherwise       noted.

7.1   Manufacturing and Fulfillment Pricing

      MSL's price to IBM for the fulfillment of Products for RS and MSL's price       to IBM for the manufacturing and fulfillment of GEPS and Finance Products       will be determined according to the following formula:

      {P=A+B+C+D}, where the following values are assigned to such formula:

      a)    'P' shall mean 'Price' or the price IBM shall pay for Products             under this Agreement.

      b)    'A' shall mean [*] or the cost of all MSL [*] and any [*] as             determined by the [*] described in Section 7.5 e) i) below. For             RS Products, manufactured by MSL, the cost of [*] shall be             consistent with the terms of section 7.2, below.

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      c)    'B' shall mean 'MSL [*]' or a value determined by multiplying the             [*] times the [*]. [*] are listed in Markup Appendix 1.

      d)    'C' shall mean 'MSL [*]' or a value determined by multiplying the             [*] times the [*]. [*] are listed in Markup Appendix 1.

      e)    'D' shall mean [*] or a value determined by multiplying the [*]             times the [*]. [*] are listed in Markup Appendix 1.

7.2   Prices for MSL Manufactured RS Products and RS Integration

      a)    For RS Products, the cost of components manufactured by MSL, and not             sourced from third party suppliers, will be determined by the             following formula: {TMC = [*]}, where the following values are             assigned to such formula:

           i)       TMC shall mean Total Manufacturing Cost.

           ii)      1 shall mean [*] or the cost of all [*] and any [*] as                     determined by the [*] described in Section 7.5 e) i) below

           iii)     2 shall mean [*] to be determined by multiplying MSL's                     [*] by MSL's [*] rate per hour ([*] x MSL [*]). [*] are                     stated in Product Attachment A. MSL's [*] Rate Per Hour                     for [*] is as listed in the Markup Appendix 1.

           iv)      3 shall mean [*] to be determined by multiplying the [*]                     by the [*]. The [*] are as listed in the Markup Appendix 1.

           v)      4 shall mean the [*] to be determined by multiplying the                    [*]. The [*] are as listed in the Markup Appendix 1.

      b)    For RS orders that include Integration, MSL will invoice IBM the             Integration charges separately from the fulfillment price defined in             this Section 7.1. The price for integration will be determined by             multiplying the [*] times the [*] performed for the [*] services.             [*]. [*] are listed in the Markup Appendix 1. [*] are the direct  .

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            [*] needed to integrate a unit for a specific Integration project.             [*] will be agreed to between MSL and IBM prior to the start of             each Integration project.

7.3   Payment Adjustment for Delinquent Shipments and MSL not Achieving       Responsiveness Objective.

      a)    For any calendar month, if a Work Center fails to ship any machine             type on at least a [*]% on time shipment rate to all committed             Delivery Points, and such failure is not a result of Force Majeure





            activity under Section 16.17 of the Base Agreement, or a delay             caused substantially by IBM, the Profit Rates defined in Section             7.1(d) and Appendix 1, shall be based on the following table for all             delinquent shipments of such machine types, from that Work Center.

SHIPMENT                                      PROFIT RATE

                           RS            GEPS and Finance   GEPS and Finance                            Fulfillment   A-Sourced          Mfg. and Fulfillment

On Time                    [*]           [*]                [*]

1 Day delinquent           [*]           [*]                [*]

2 or more Days delinquent  [*]           [*]                [*]

      b)    For any calendar month, if MSL fails to achieve a responsiveness, as             defined in Appendix 3, of at least [*]% for any machine type, in a             Work Center, a penalty of [*]% will be applied to that Work Center's             monthly total material cost of that machine type multiplied by             ([*]% minus actual responsiveness %). This penalty shall not apply             if requirements accuracy for that machine type, as defined in             Appendix 2, exceeds [*]% and demand, for that machine type, exceeds             Supply Flexibility as defined in Section 13.2 and Appendix 4. The             first month for which this penalty shall be effective is June 1998.

      c)    Any price adjustments that are due per Sections 7.3 a) or 7.3 b)             will be invoiced by IBM to MSL in the following calendar month.

7.4   [*]

      Notwithstanding anything in this Agreement to the contrary, MSL represents       and warrants that

      a)    If MSL [*] to another [*] under similar terms and conditions             including without limitation, [*], to those [*] to IBM and in [*]

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            or [*] during the same period, those [*] shall be made known and             available to IBM at the time of their availability to that [*].

      b)    In the event IBM reasonably questions whether it is receiving [*]             treatment as described in Section 7.4 a), and MSL cannot otherwise             provide IBM with proof of its compliance due to third party             restrictions, both parties agree to have an independent party             evaluate IBM's inquiry to determine whether IBM has received proper             treatment under this Section. IBM and MSL agree that the information             disclosed by MSL to the independent party pursuant to this Section             7.4 b), will be subject to the Confidentiality Agreement described             in the Agreement.

      c)    For purposes of this Section a [*] shall mean a [*] from a qualified             third party [*] that contains an ongoing sustainable [*], which is             more [*] than MSL's [*] and which is subject to comparable terms and             conditions and for substantially similar [*], to build Product(s)             as opposed to provide [*] services for the Products(s).

            i)    If IBM gets a [*] from an [*] resulting in a [*] which                   demonstrates MSL [*], IBM will notify MSL. MSL shall have [*]                   Days after written notice of such [*] to [*] or [*] such [*].                   If MSL is unable to [*] the [*] subject to the conditions set                   forth in ii) below, then IBM may [*] the Product to the [*],                   and IBM and MSL shall mutually agree on a [*] plan for such                   Product(s). In this case MSL shall have all remedies for [*]                   in accordance with [*] of the Agreement.

            ii)   If MSL is unable or unwilling to [*] the [*] because IBM's [*]                   for the Product has been below the minimum [*] parameter for                   the prior [*] months, MSL shall have a grace period [*] months                   from written notice of the [*] to make adjustments it deems                   necessary to [*] the [*]. This grace period is contingent upon                   MSL making, within [*] Days of notice of the [*], a commitment                   to [*] the [*] at the end of the grace period.

      d)    In the event, IBM Latin America or IBM Asian Pacific were to receive             an [*] from a [*] that contains an ongoing [*], which is more [*]             than MSL's [*] and which is subject to comparable terms and             conditions and for substantially similar [*], to provide [*]             services for the Product(s), IBM will notify MSL.  MSL shall have             [*] Days after written notice of such [*] to [*] or [*] such [*].             MSL shall have a grace period of [*] months from written notice of





            the [*] to make adjustments it deems necessary to [*] the [*] quote             at the end of the grace period.  If MSL is unable to [*] the [*]             then IBM may [*] the [*] to the [*] and IBM and MSL shall mutually             agree on a [*] plan for the Product(s).

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         e)       In the event, IBM were to receive an [*] from a [*] that                   contains an ongoing [*], which is more [*] than MSL's [*] and                   which is subject to comparable terms and conditions and for                   substantially similar [*], to provide Integration for the                   Product(s), IBM will notify MSL. MSL shall have [*] Days                   after written notice of such [*] to [*] or [*] such [*]. If                   MSL is unable to [*] the [*] then IBM may [*] the [*] to the                   [*] and IBM and MSL shall mutually agree on a [*] plan for                   the Product(s).

7.5      [*] of Product [*]. The unit [*] and elemental [*], i.e., [*], and [*],          listed in the Markup Appendix 1 and Product Attachments shall [*]          during the term of this Agreement subject to the following:

         a)       If [*] and/or elemental [*] are reduced by MSL or lower [*]                   are [*] by MSL to other [*] for a [*] that is similar to [*]                   under similar terms and conditions, including without                   limitation [*], MSL will reduce the [*], or reduce the [*] to                   IBM to the [*] as those [*] to other [*]. The [*] and [*] will                   apply to all [*] IBM [*] and to all [*] Product deliveries                   during the term of this Agreement.

         b)       If IBM or MSL negotiate or schedule a [*] for [*], the                   corresponding [*] will be effective when MSL begins using and                   shipping the [*].

         c)       A negotiated [*] could result if there is a significant                   increase or decrease in the Product [*] from those assumed                   for [*] definition. If this occurs, the parties shall                   negotiate in good faith an appropriate adjustment to MSL's                   [*]. The revised [*] will apply to all [*] which have been                   [*] but not [*] and to all [*] releases during the term of                   this Agreement.

         d)       A [*] increase or decrease may result if IBM makes an [*] to a                   Product. Any [*] change will be per the terms of [*] and the                   [*] of the changed Product will carry the same inherent [*]                   as the original Product.

         e)       Proposals for updates to the initial [*] will be reviewed each                   [*] on a [*] day cycle. The schedule will be as follows:

                  T shall be the date that MSL [*] and IBM [*] are ready for                   table load; it is the last day of a calendar [*] end [*].

                  [*] Days before T, MSL shall initiate an update proposal.

                  [*] Days before T, MSL shall answer all IBM questions and                   issues and revise its proposal.

                  Update reviews shall include:

                  i)       Updates of [*] costs, including [*] costs, with                            latest [*] of IBM [*] and MSL [*]. IBM [*] costs                            will

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                           be updated to the latest IBM [*]. For Parts with a                            low annual [*], the [*] costs will be updated to                            the latest [*] costs.

                  ii)      Update of MSL [*] for MSL [*] Product(s).

                  iii)     Changes in MSL [*] and [*], in accordance with the                            [*] and Product [*] conditions of Sections 7.4 and                            7.5 a), b), c), and d).

                  iv)      Changes in [*] for specific Integration projects                            based on the latest IBM agreed to [*].

         f)       Any [*] or [*] necessary to update MSL [*] will be paid                   through a specific purchase order and an acceptable invoice.





                  MSL [*] to be used will be the [*] costs used for [*] in the                   previous quarter.

         g)       Any differences between [*] costs, as defined in Section 7.1,                   assumptions used in determining [*] at the beginning of a [*]                   and actual [*] by MSL during the [*] will be determined and                   agreed in the first month of the following [*]. NIC will be                   applied to [*] costs differences at the [*] defined in                   Appendix 1 to this SOW. No other components of [*] will be                   applied to [*] costs differences. Differences will be                   invoiced separately to MSL or to IBM as the case may be.

SECTION 8.0 PURCHASE OF PARTS BY MSL

8.1   IBM Parts, IBM Strategic Parts, and IBM Designated Parts

      MSL will purchase IBM Parts, IBM Strategic Parts, and IBM Designated Parts       solely for use in IBM Products. MSL will provide IBM Strategic Parts and       IBM Designated Parts as follows:

      a)    IBM procurement may sell IBM Strategic Parts to MSL by specifying             price, lead time and other terms with mutually agreed to ordering             processes such as;

            i)    MSL may order IBM Strategic Parts from IBM procurement through                   standard purchase orders, and/or

            ii)   MSL may issue periodic blanket purchase orders to IBM                   procurement for lineside stocking and pull logistics                   requirements for IBM Strategic Parts.

      b)    MSL may purchase IBM Designated Parts through IBM nominated             suppliers, as agreed to by IBM. IBM will disclose, as confidential             to MSL, terms and conditions contained in the subject IBM nominated             supplier/IBM contract, which IBM determines are relevant to MSL's             performance under the Agreement. MSL shall be responsible for all             liabilities to IBM nominated suppliers for IBM Designated Parts             ordered by MSL. If an IBM nominated supplier objects, MSL shall             immediately inform IBM. IBM agrees to provide reasonable assistance             to MSL in resolving the situation. If such IBM nominated supplier             refuses to [*] to MSL at IBM's [*], IBM cannot use [*] from such             supplier to determine MSL [*] described in Section 7.5 e) i) above,             and upon written notice to IBM, MSL will be entitled to increase             the [*] of the [*] to

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            reflect MSL's actual increase in IBM [*]. The corresponding [*]             increase will be effective when MSL begins using and shipping the             higher [*] IBM [*].

8.2   Parts Cost Reductions

      a)    In the event MSL can purchase the same parts as available through             IBM Procurement or IBM Designated Suppliers at lower costs, MSL will             identify those reduction opportunities to IBM on a monthly basis.

      b)    The Parties agree that [*]% of all Parts price reductions will be             [*] to IBM when MSL begins using and shipping the lower costs             Parts. However, if a specific price reduction is the direct result             of a previously IBM approved substantial engineering, design, or             resourcing change by MSL, that price reduction will be [*] for a             period of [*] months, then [*]% of the Parts price reduction will             be [*] to IBM.

SECTION 9.0 PREMIUM COST

      Premium costs may be incurred in order to meet Delivery Dates.

      a)    MSL may submit premium costs to IBM for reimbursement that are in             addition to prices defined in Sections 7.1, and 7.2. Premium costs             include materials, labor and other extraordinary items.

      b)    The Parties agree that [*] of all Parts price reductions will be [*]             to IBM when MSL begins using and shipping the lower costs Parts.             However, if a specific price reduction is the direct result of a             previously IBM approved substantial engineering, design, or             resourcing change by MSL, that price reduction will be [*] for a             period of [*] months, then [*] of the Parts price reduction will be             [*] to IBM.

      b)    If Requirements Accuracy, as defined in Appendix 2, exceeds [*]%             and if demand is beyond Supply Flexibility as defined in Section             13.2 and Appendix 4, premium costs resulting solely from unplanned





            demand shall be subject to reimbursement.

      c)    Total premium costs for any single event which are equal to or             exceed [*] must be pre-approved in writing by IBM prior to MSL             authorizing or expending the premium. Total premium costs for any             single event which are less than [*] may be incurred by MSL without             IBM authorization to later be negotiated with IBM in good faith.

      d)    MSL will use the following process for requesting authorization             and/or reimbursement of premium costs from IBM:

      e)    Premium Price

            i)    Material

                  MSL agrees to use commercially reasonable efforts to purchase                   materials at the lowest possible cost within the lead times                   required or authorized by IBM. However, when materials are not                   available with IBM's lead times, premium cost for materials                   may apply. Premium cost for Parts is the [*] (which will not                   exceed MSL's actual cost paid to it's suppliers to be paid                   by IBM when the

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                  Parts are required earlier than on the stated and mutually                   agreed upon lead time. MSL's request for authorization                   and/or reimbursement must state:

                  (a)    Cost variance due to [*].

                  (b)    Product(s) part number affected.

                  (c)    Product(s) quantity affect.

                  (d)    Justification for Premium.

            ii)   Labor

                  MSL shall have sole responsibility for setting the                   compensation rates for its staff. MSL staff shall in no way be                   deemed to be employees of IBM.

                  [*] rate is the rate at which [*] are charged to IBM (as                   required by IBM), and will be in accordance with the [*]                   basis. The [*] rate shall not exceed [*]([*]%) of [*] rate.                   The actual [*] will be negotiated on a case-by-case basis by                   IBM and MSL and will not exceed MSL's actual [*] paid to its                   [*] and [*]. MSL's request for authorization and/or                   reimbursement must state:

                  (a)    Purchase price variance due to [*] or [*].

                  (b)    Quantity of [*] by Product(s) part number.

                  (c)    Quantity of units to be shipped due to [*].

                  (d)    [*] Rate: US dollars/hour.

                  (e)    Justification for [*].

                  MSL agrees that it will invoice quoted Direct Labor Hours for                   actual Products Delivered.

            iii)  Extraordinary Items

                  MSL may propose premium rates for expedited tooling orders,                   premium transportation, and other extraordinary requirements.                   If IBM agrees that the resources are required, MSL and IBM                   will negotiate in good faith the price for such resources.

                  MSL will report all open premium costs, which are subject to                   request for reimbursement by IBM as a part of monthly                   Measurements.

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              IBM/MSL Outsourcing Base Agreement Statement of Work

SECTION 10.0 ORDER MANAGEMENT, DELIVERY, AND SHIPMENT





10.1  Order Management

      a)    IBM Customer Orders will be placed from IBM to MSL. MSL will fulfill             these orders according to the Performance Appendix 3 unless IBM             gives MSL specific written instruction otherwise. MSL will ship and             deliver these Products in accordance with the ship and delivery             dates stated on the order. In the case of Integration, shipments and             deliveries will be made in accordance to the customer roll out             schedules provided by IBM. MSL will conform to the stated lead times             agreed to and published by IBM to the Delivery Point as long as the             requested Delivery Date on the IBM Customer Order falls within MSL's             commitment to the forecast. Product lead times are published in the             Product Attachments.

      b)    MSL will manage the applicable IBM Customer Order back logs. These             include but are not limited to AAS, EOSE, GEMS, IPRs, Q-Ship, MES             and others as defined by IBM. In conjunction with these IBM ordering             channels MSL will perform Order Desk responsibilities. MSL will             review all orders requesting delivery improvements, improving these             order to satisfy the customer required delivery dates given supply             continuity and available capacity. At [*] to IBM, MSL will accept             [*]. Deferments will be requested of MSL through the IBM ordering             systems mentioned above, or in writing from IBM. MSL will             reschedule the deferred orders to meet the requested ship dates.             In addition MSL will accept request to alter order content if Parts             and capacity are available. MSL will respond to all request to             improve, defer and/or alter orders in [*] Days. MSL agrees to             maintain the above mentioned IBM Customer Order backlogs keeping             these back logs up to date. MSL agrees to maintain local Order             Desk support in the geography specific Work Center.

      c)    MSL agrees to perform materials requirement planning (MRP) on top             level requirements input and acquire the appropriate Parts to             support Delivery Dates and IBM Customer Orders. This includes the             placing of purchase orders and/or IPRs on suppliers, some of which             may be IBM locations.

      d)    Due to the high commonality of Parts in IBM's Products, MSL will             allow IBM to revise Product model mix as required. MSL will             acknowledge IBM's Product mix changes within [*] Days after receipt             of IBM's change notice.

10.2  Schedule / On Time Delivery

      a)    MSL will maintain [*] ([*]%) on time shipment. Specifically             Product(s) are to arrive in full at the Delivery Points on the             Delivery Date.

      b)    MSL agrees to track and report on shipments/deliveries to IBM             customers per the IBM Customer Orders at the request of IBM.

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10.3  Delivery

      a)    Title and risk of loss to Products shall pass to IBM at the time of             shipment from the Delivery Point unless otherwise stated in Section             15.0.

      b)    If Product shipments are made prior to the Delivery Date without             IBM's prior written approval, IBM may elect to delay passage of the             title until the Delivery Date. If the delivery is late then transfer             of Product title will be made on the later date. In addition MSL             will not deliver Products in quantities in excess of those set forth             in on the IBM Customer Order, without IBM's prior written approval.

10.4  Delays in Shipment

      MSL shall notify IBM immediately of any anticipated late deliveries and       any impending plant or facility shut downs for any reasons. If MSL fails       to ship Product to the Delivery Point on schedule for any reason other       than Force Majeure or delays caused substantially by IBM, MSL shall ship       Product to the Delivery Point by air or in the most expeditious manner       possible. After MSL delivers Product to the Delivery Point, MSL will ship       Product to the designation stated on the IBM Customer Order by air or in       the most expeditious manner possible. MSL will be responsible for any       additional premium costs associated with the late shipment of Product       not only to the [*] but also to the [*] stated on the IBM Customer       Order.

10.5  Shipment Terms





      a)    The prices set forth in Section 7.0 Product Price include MSL's out             of pocket costs for freight, duty, customs, clearance, and             appropriate insurance, and any other costs related to the shipment,             export, or import of the Products before delivery to IBM. The cost             are the responsibility of MSL. The method of transportation shall be             suitable surface or air transport to the Delivery Point, Customer             location, or point of entry sufficient to meet IBM's Delivery Date.             The Product Attachment(s) shall state the Delivery Points.

      b)    MSL shall arrange shipment with IBM carriers that will deliver             product to the destination on the IBM Customer Order in time for the             product to arrive on the committed arrival date which is stated on             the Customer Order. MSL shall utilize IBM carriers for all outbound             shipments, unless prior written approval from IBM to do otherwise.             IBM's approval will not be unreasonably withheld. Contractual             conflict with IBM carriers, or added IBM cost are some, but not all,             reasonable causes for denial of IBM approval.

SECTION 11.0 PRODUCT FORECAST

11.1  MSL agrees to participate in the IBM supply and demand process adhering to       the IBM EMLS corporate calendar. MSL will utilize the EMLS regen and or       provide the input into EMLS to insure a successful supply and demand       interlock. The EMLS regen must include all part numbers consumed in the       Charlotte Work Center.

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11.2  Each month IBM will provide MSL, one rolling [*] month forecast by machine       type, model, and by geography. This forecast will be MSL's authorization       to order/purchase Parts only for the fulfillment of orders, in accordance       to the IBM published lead-times for such materials. Products shall be       produced and delivered according to actual intake of IBM Customer Orders.       MSL will participate in the process of requirements planning by giving the       best Product supply projection and participating in cross functional       meetings when required.

      The following will apply:

      a)    The forecast will contain anticipated Delivery Dates for specified             quantities of machine types, models and geographies and lead-time             profile updates, as required, for specific Parts.

      b)    MSL will notify IBM within [*] Days of receipt of a forecast if MSL             is unable to meet the quantities and Delivery Dates. If MSL fails to             notify IBM within the [*] Days, MSL will be deemed to have accepted             the quantities and Delivery Dates and will be bound by them;             provided, however, that MSL's actual or deemed acceptance of any             forecast shall be subject to the availability of IBM Parts and IBM             Designated Parts as needed, and MSL shall not be subject to any             penalties (and IBM shall not be able to reject any proposed             rescheduling of Delivery Dates) under this Agreement for failure to             meet Delivery Dates due to the unavailability of such Parts at the             times necessary to meet Delivery Dates, provided further however             that such unavailability of IBM Parts or IBM Designated Parts is not             due to MSL's failure to properly order such Parts or otherwise             properly manage its relationship with the provider of such Parts.

      c)    If MSL notifies IBM that it cannot meet the quantities and Delivery             Dates in IBM's forecast, MSL's notification will include the             quantities MSL can deliver within the forecast's Delivery Dates and             proposed schedule of Delivery Dates for delivering the quantities             MSL cannot deliver within the forecast. IBM shall notify MSL in             writing, within [*] Days of receipt of MSL's notification, of its             decision either, in its sole discretion to:

            i)    agree to the quantities and Delivery Dates in MSL's                   notification, which will then become binding upon both                   parties; or

            ii)   agree to the quantities that will meet the forecast's Delivery                   Dates, which will then become binding on both parties, and                   either begin good faith negotiations with MSL to resolve any                   shortfall or reject MSL's proposed schedule for the remaining                   quantities; or provided, however that IBM may not reject MSL's                   proposed schedules if the reason for MSL's inability to meet                   the Delivery Dates is directly attributable to a breach of                   this Agreement by IBM. MSL may, with IBM's prior written                   approval and at MSL's expense, employ another manufacturer for                   the quantities that MSL cannot deliver within the forecast for                   the affected products. Notwithstanding any other term of this                   Agreement, if IBM rejects all or any part of MSL's proposal,                   IBM shall also be free to seek





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                  another manufacturer (internally or externally) for the                   quantities MSL can not deliver within the forecast for the                   affected Products.

            iii)  If good faith negotiations fail to resolve the shortfall                   within [*] Days, IBM shall have the option to reject MSL's                   whole proposal.

      d)    The forecasts provided by IBM, or agreed to by IBM hereunder, do not             obligate IBM to purchase any Product.

11.3  Feature Forecast

      a)    MSL agrees to perform all feature forecasting as part of their             responsibilities. MSL agrees to forecast features in full support of             the requirements forecast that IBM passes at a machine type level             per Section 11.1 above.

      b)    MSL will notify IBM within [*] Days of receipt of the monthly             requirements forecast, at the machine type level, if MSL is unable             to support the features necessary to meet the Delivery Dates of the             machine types per Section 11.1 above of this Agreement.

SECTION 12.0 ENGINEERING CHANGE

      a)    MSL is required to inform IBM of any necessary or required EC which             would be applicable to the Products in general. In no event shall             MSL make any changes or incorporate any modification to Products             without the prior written agreement of IBM.

      b)    IBM may, at its option, propose ECs to the Products to be delivered,             in which event MSL will be notified in writing. MSL agrees that IBM             shall have the right to require the incorporation of such ECs and             MSL shall, within [*] Days of such notification, give to IBM a             written evaluation of EC stating the cost increase or cost decrease             to the Products. In addition, this evaluation should include, but is             not limited to, MSL's evaluation of the ECs effect on the inventory,             delivery schedules and impact effect on function, reliability and             performance of Products. If such evaluation cannot be completed             within such period, notice to this effect shall be given by MSL as             soon as MSL learns that such evaluation cannot be completed and in             no event later than the [*] Days following notification. MSL will             give IBM a future completion date and reason for delay in such             notice.

      c)    Upon completion of MSL's evaluation, IBM and MSL agree that 1) MSL             will implement the EC after MSL has received IBM's consent in             writing to the mutually agreed upon cost and delivery schedule, 2)             MSL will provide additional information that IBM may reasonably             require to further evaluate the EC, or 3) IBM will cancel the             specific EC.

      d)    ECs will be brought to the attention of MSL via Engineering Change             Notifications (ECNs), that may have various forms, and may come from             IBM or IBM designated parties. However, the ECN is not an             authorization to execute the change. Upon receipt of an ECN, MSL             will respond by quoting the cost of that EC to IBM. MSL will not             implement any EC without an explicit authorization from IBM to             implement it. The

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            ECN will contain information such as priority of change (routine,             expedited, emergency), description of change, machines effected,             requested implementation date, marked up prints, marked up bill of             materials, dispositions and recommended/specified sourcing. Appendix             5 contains requirements for EC process flow and EC cycle times.

      e)    MSL will process ECs according to IBM rules and specific IBM             requirements, and will enter corresponding data in EC application             systems. MSL will need to have the capability to receive IBM             development released ECs in both the Charlotte Work Center and the             Valencia Work Center.

      f)    EC administration cost are included in the prices as defined in             Section 7.0.





SECTION 13.0 INVENTORY

      a)    MSL is fully responsible for inventory ownership, excluding             consigned inventory, however MSL agrees to manage all inventories.             MSL will manage the material in the supply pipeline, as well as own             and manage work in process and finished goods until shipment of the             Product to the IBM Customer Order. On the Effective Date, MSL will             accept responsibility and liability for all open purchase orders and             IPRs for Parts, excluding Consigned Parts, which are required by             Products listed in the Product Attachments. MSL owns inventory,             excluding consignment, until title transfer at the time of shipment.             IBM will not be responsible for any associated carrying costs,             warehousing costs, excess and or scrap of MSL owned inventory. If             requested by IBM, MSL will subcontract to IBM the scrapping of Parts             owned by MSL. Actual costs charged to IBM by certified scrap             suppliers for the scrapping of Parts owned by MSL will be invoiced             by IBM to MSL.

      b)    MSL will control all inventories in support of this Agreement per             IBM's guidelines concerning value classified parts, IBM Document             CP10.13.

      c)    MSL will also be responsible for the data management necessary to             separate IBM consigned inventory from MSL inventory within the same             facility and systems.

      d)    MSL will perform Rotating Inventory Audits and Counts (RIA/RIC) on             IBM consigned inventory in compliance to IBM's instructions.

      e)    MSL and IBM will review inventory monthly, during this review MSL             will provide a written report that includes the items detailed under             Inventory in the Performance Appendix.

      f)    MSL prices include charges for MSL inventory management and             ownership. Both parties agree that IBM has no liability for             inventories that MSL purchases for the purposes of this contract,             providing that forecast (requirements) accuracy is equal to or             greater than the level defined in Appendix 2. If Requirements             Accuracy falls below [*]% liabilities for any machine type for any             quarter, IBM will compensate MSL according to the method describe in             Appendix 2.

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13.1  Consigned Products

      a)    MSL acknowledges that it will manage inventory consigned to MSL by             IBM. As it relates to Integration, MSL will manage not only IBM             consigned inventory but also inventory consigned to MSL by IBM's             customers.

      b)    MSL will be [*]% for inventory accuracy within the logistics             systems and related financial liability for all consigned             Products under MSL's control. MSL will be responsible for all lost,             damaged, or destroyed Parts. MSL will provide replacement value             insurance coverage for consigned Products. IBM will be named as a             joint insured with respect to consigned Products for its interest.             IBM shall have the right at all reasonable times to audit and             inspect the consigned Products. MSL will take no actions that             might encumber IBM's consigned Products.

      c)    MSL will also provide the following services as it pertains to             managing IBM consigned Products; receiving, storage, disbursement,             handling, order management, order fulfillment, packaging, light             manufacturing, and shipping.

      d)    MSL will provide inventory reports on all consigned Parts. These             reports will contain at least the information required in the             Performance Appendix 3. In case of Integration consigned inventory             will be reported by customer account.

      e)    MSL agrees to furnish resources, at no additional cost, as part of             this agreement to assist in the annual physical inventory audit of             consigned inventory that MSL is managing on IBM behalf.

      f)    MSL must assist IBM in processing any scrap for consigned Products             without additional charge to IBM.

      g)    If IBM and MSL mutually agree to change a Part from a non-consigned             Products to a consigned Products, the Parties agree that IBM will             purchase MSL's inventory of affected Parts on the date of the change             at MSL actual cost that was paid to the supplier plus NIC.

      h)    MSL shall store all consigned Products in separate locations from             all other Parts and or Products belonging to any other person or





            company so as to clearly identify the consigned Products as property             of IBM. In the case of Integration consigned inventory will be             stored and identified in logistics and physically by customer             account.

      i)    Work labor and materials applied to the management of the consigned             inventory by MSL in the course of the performance of this Agreement             shall be paid for by IBM, as defined in Section 7.0, in accordance             with the terms of this Agreement and shall not at any time give rise             to any claim over the consigned Products. MSL hereby waives any             rights it may have to claim any liens against consigned Products.

      j)    MSL will handle the scrapping of IBM consigned inventory per IBM's             guidelines concerning scrap.

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13.2  Supply Flexibility

      a)    MSL will ensure flexibility for volumes, as specified in the Supply             Flexibility Appendix 4.

      b)    Quarterly, MSL will update IBM on progress in improving Supplier             Flexibility.

      c)    IBM will use commercially reasonable efforts to transfer LSS and SSS             arrangements with IBM suppliers to MSL.

      d)    [*] months before EOL, MSL and IBM will agree on a transition plan             to regulate the flexibility.

      e)    Cost of the Supply Flexibility as defined in Appendix 4 is included             in Product pricing per Section 7.0. IBM will have no liability for             unused flexibility.

13.3  End of Life (EOL) Inventory

      a)    IBM agrees to share an annual plan with quarterly updates on product             EOL activity. Included will be the following scheduled events:             product withdrawal, end of manufacture, and transfer to IBM, if             applicable.

      b)    MSL agrees to provide inventory planning support and squared set             analysis on these inventories participating in EOL activities prior             to any transfer to IBM. Any inventories not transferred to IBM will             remain the sole responsibility of MSL.

13.4  Sale of Inventory

      MSL agrees not to sell excess or surplus inventory purchased by MSL in       support of this Agreement without the prior written approval of IBM which       shall not be unreasonably withheld.

SECTION 14.0 INTEGRATION

14.1  Overview

      The typical Integration consists of: assembly, unit testing, code load,       system test, personalization, repackaging and distribution.

14.2  Customer Integration Statement of Work (Integration SOW)

      IBM will provide MSL with a work scope for Integration for each       Integration project. Based on the work scope, MSL will provide IBM with a       SOW and the associated direct labor hours. This will be the base from       which future modification to the individual SOW will be based.

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14.3  MSL Account Coordinator

      The account coordinator is the primary interface with IBM project managers       and/or customers for the delivery of Integration Products. This person       will be responsible for insuring that the necessary IBM Products which are       delivered by MSL are on order, that a roll out schedule is received by       MSL, the necessary consigned Products are received in sufficient time       prior to their need in the Integration process and/or delivery to the       customer, the required software is received, the line processes are in       place, the necessary pilots have been performed and the work is properly       scheduled on the line to insure an on time delivery. They are the prime





      contact for problem resolution, issues, concerns, delivery tracking and       all other issues which affect customer satisfaction.

14.4  Responsibilities

      a)    IBM will be responsible for defining the process to be used on the             Integration line, for the assembly and test of those Products being             customized, tested or passed through the process. MSL will be             responsible for defining the process to be used on the Integration             line, for the code load and system test of units requiring this             work.

      b)    MSL will be responsible for the implementation and execution of             these processes. MSL will be responsible for maintaining the             necessary technical support to implement these processes and             identify problems in the integration process. Process deficiencies             will be brought to the attention of the IBM Integration program             manager staff for resolution. Deficiencies realized due to customer             provided items will be resolved directly with the customer through             the MSL account coordinator or by the technical staff, whichever is             appropriate.

      c)    MSL will own the entire manufacturing and delivery process and be             the sole interface with the customer (IBM and/or end user) through             the account coordinators.

14.5  Inventory Management

      a)    Provide a secure environment for the management and control of             consigned Products. This area should be fenced, with limited access             and within a reasonable distance from the manufacturing area and the             receiving docks.

      b)    An automated inventory management system must be used to track             receipts, disposition and balance on hand at any point in time.             Information required by IBM personnel performing project management             activities for customers will be provided on an 'as required' basis             and will be readily available to such personnel. This inventory must             be labeled (bar coded) and separated by customer.

      c)    Physical inventory counts are to be performed as needed for all             consigned inventory, for each customer, counted at least every [*]             Days with a accuracy target of [*]. This target is based on the             delta between the actual inventory count and the inventory             management system. Discrepancies are to identified, root cause             analysis performed, results reported (quarterly) and corrective             actions initiated. MSL is responsible for the cost associated with             the replacement of IBM and/or IBM customer

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              IBM/MSL Outsourcing Base Agreement Statement of Work

            consigned Products which have been received by MSL and need to be             replaced as the result of theft or negligence.

      d)    All consigned inventory is the responsibility of MSL until Delivery.

14.6  Manufacturing

      a)    The integration line should use a line control system that ties to             an automated ordering system that provides order accuracy, tracking,             disposition and history. The work environment should be kept             presentable and organized and available for customer tours.

      b)    Incomplete shipments, with the customer approval, should use a             deviation process and be documented with the customer authorization.

      c)    The manufacturing process must continue to use the line break in,             pilot and certification process currently in use unless mutually             agreed to in writing.

14.7  On Site Repairs

      a)    The consigned Product set may include both IBM and non-IBM Products,             new as well as used which may or may not be covered by a new product             warranty, IBM maintenance or another maintenance provider. In the             case of IBM logo Products, MSL will initiate repair of these             Products in the most cost effective and efficient manner. In the             case of repairs required to be performed by the third party             maintainers, MSL will provide a suitable work area for these repairs             and ensure that the necessary security requirements are met when             visited by non IBM personnel. When consigned Product defects are to             be returned to the manufacturer for either repair/replacement, MSL             will control this process.

      b)    Out of box failures of RS Products will be replaced from inventory             or repaired as directed by IBM. These replacements are to be given             priority over new orders during times of product constraints.





14.8  Packaging

      Integrated machines may require unique packaging based on their       configuration and the individual customers requirement. MSL will design       these boxes in accordance with IBM design criteria to insure that they       provide maximum protection against in route damage. All shipping       containers must be labeled in accordance with the guidelines outlined in       the Section 16.0 Packaging and in addition to any unique labeling customer       requirements.

14.9  Security

      a)    Sufficient security must be provided for work in process items,             customer and MSL/IBM provided. In addition, secured spaces will be             required from time to time for individual customers depending on the             nature of the work. Currently there is a contractual requirement for             secured space to perform the US Postal Service, hard drive, code             load program.

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              IBM/MSL Outsourcing Base Agreement Statement of Work

      b)    All reasonable precautions must be exercised to prevent unauthorized             access, use, modification, tampering or theft of software and             hardware consigned to MSL for the execution of Integration. Also,             these precautions must prevent unauthorized access to a customer's             remote system used in the performance of Integration.

14.10 Scheduling

      Product orders placed on MSL by IBM, in most cases, the CRAD (Customer       Required Arrival Date) will tie to the Integration roll out delivery date.       In those cases where there is a difference, MSL will validate the correct       delivery date with the IBM project manager. If an improvement or deferral       is required in the Product build schedule and based on Product       availability, MSL will schedule the Product build to insure arrival by the       required CRAD.

14.11 Delivery

      MSL will maintain [*] percent ([*]%) on time delivery, measured against       the CRAD date in the integration roll out schedule. Due to the nature of       the integration orders, there is no [*] option, unless agreed to prior to       shipment by the IBM project manager and/or the customer.

14.12 Customer Satisfaction

      Customer satisfaction is the responsibility of MSL. IBM will measure the       customer satisfaction via surveys. MSL commits to a customer satisfaction       target of [*]. This will be a reflection of MSLs on time deliveries,       flexibility in meeting the customers unplanned requirements, the quality       of the services performed and MSL's relationship, in general with IBM's       customers. The customer set will include the IBM Global Services project       managers and IBM's customers.

14.13 Integration Quality

      The service being performed is to be of high quality and free from process       defects. The target objective will be [*]%, measured monthly. MSL will be       responsible for the repair and/or replacement of Parts and Products which       have been damaged during the performance of the Integration. MSL will be       responsible for cost incurred by IBM as a direct result of MSL's failure       to follow the Integration procedures subject to the limitations contained       in Section 15.3 of the Base Agreement.

14.14 Price

      a)    IBM will establish a list of those items which are standard             components of the Integration process. IBM and MSL will agree upon             an execution time and a price, as stated in Section 7.2 b), for each             standard item. Integration requirements outside of these standard             items will be individually determined. Once these prices for these             standard items are established they will remain in effect during             the entire term of this Agreement.

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              IBM/MSL Outsourcing Base Agreement Statement of Work

      b)    MSL will be responsible to track items which are beyond the             individual Integration SOW being executed when performed at IBM's             request and provide sufficient documentation to support the price             along with IBM's authorization of the added cost. MSL will invoice             IBM weekly for these costs. In those cases when a specific request             becomes standard, or a change in effort is requested by a customer,             a revision to the Integration SOW will be made and the contracted             price between IBM and MSL will be updated.

      c)    MSL will be responsible for any cost beyond the agreed to [*] if             these costs were within the control of MSL.

14.15 Transportation

      a)    Premium outbound transportation may be used when requested by a             customer. In these cases, MSL must provide sufficient documentation             of the customer approval, and to support the cost.

      b)    If premium outbound transportation is necessary due to MSL's             failure to ship on time, this cost is the responsibility of MSL             and IBM will invoice MSL for these costs.

14.16 Integration SOW Completion

      At the completion of an individual Integration SOW, a complete       reconciliation will be completed within 60 Days. This reconciliation will       be between MSL and the IBM project manager/customer and will include, but       not limited to, an inventory reconciliation, any outstanding cost and       disposition of all customer software and hardware in MSL's possession.

14.17 Equipment

      IBM will identify the current equipment, owned by IBM, needed to perform       Integration and it will be made available to MSL at an agreed to price per       Attachment 3 of the Base Agreement. If, at any time, MSL chooses to       replace Integration support equipment and the associated programs, IBM's       written concurrence will be required.

14.18 Restrictions and Limitations

      Nothing in this Agreement authorizes MSL to use any of IBM's tangible,       real or intangible property for the performance of any services       contemplated hereunder on IBM Logo products or for Integration services of       non-IBM Logo products related to a customer for whom Integration is being       provided by IBM. In any event, MSL will ensure that the IBM customer       delivery schedules will not be impacted based on other performance       obligations it may have during the term of the Agreement.

14.19 Measurements/Reports

      a)    MSL will be required to provide IBM with monthly reports detailing             their performance in relation to these Integration.

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              IBM/MSL Outsourcing Base Agreement Statement of Work

            These monthly report should provide at a minimum:

            i)    On time delivery

            ii)   Quality

            iii)  Inventory management

      b)    The specific targets are covered in this document under their             appropriate sections. These measurements should include a root cause             analysis, MSL actions to resolve and an action plan to achieve the             targeted objectives when there are deficiencies.

SECTION 15.0 DROP SHIPMENTS

      MSL will complete processes required to meet the following obligations       within [*] Days following the Effective Date.

      a)    For Drop Shipments to IBM, MSL will be responsible for all             activities required to deliver the Products to the destination port             of the IBM company in the destination country. MSL will issue an IBM             invoice to the destination IBM company on behalf of the IBM business             area invoiced by MSL for these deliveries. MSL will ensure that             invoices and other required documentation are ready at the             destination port for timely importation into the country, but, MSL             will not be responsible for importation into the destination





            country.

      b)    For Drop Shipments in AP, MSL will transfer title to IBM when             Products are in highseas and after MSL has exported them through             the customs of the country of origin of the goods.

      c)    For Drop Shipments to IBM customers, MSL will be responsible for all             activities required to deliver products to the customer in the             destination country, independently of when MSL transfers title of             property to IBM. MSL will be responsible for importation into the             destination country and delivery of Products to the customer after             clearing customs in that country. MSL will provide information to             IBM to allow IBM to issue an invoice to the final customer.

      d)    For Drop Shipments to IBM US or IBM CANADA customers, MSL will             transfer title to IBM at the port of entry at USA or CANADA after             MSL has imported them through USA or CANADA customs.

      e)    MSL will ensure timely distribution operations, irrespective of             whether MSL or another subcontractor is selected for outbound             distribution.

      f)    MSL will comply with the IBM Import/Export Operation Application and             Instructions.

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              IBM/MSL Outsourcing Base Agreement Statement of Work

SECTION 16.0 PACKAGING

      MSL must meet requirements of IBM specification GA219261. MSL must also       package all Products according to packaging Specifications listed in the       Product Attachments. Each delivered container must be labeled and marked       so that the contents of the package can be identified without opening and       all boxes and packages must contain packing sheets listing contents. IBM's       part number, quantity and appropriate purchase order number must appear on       all packing sheets and bills of lading. In addition to standard IBM       packaging requirements, MSL must meet packaging, labeling and packing       sheet requirements of OEM customers.

SECTION 17.0 QUALITY

17.1  Commitment

      MSL commits to provide all Products and related processes and material in       conformance in all material respects with the requirements of all       applicable IBM and MSL specifications. MSL shall ensure that with respect       to assembly and workmanship, all material requirements, IBM's quality       requirements and all applicable industry standards are met.

17.2  Quality Requirements

      a)    MSL's target is [*]% defect free production. MSL shall follow an             established continuous improvement program directed toward zero             defect production. MSL will report progress quarterly to IBM. MSL             will provide quality reports monthly as defined in the Product             Attachments.

      b)    MSL shall at all times maintain ISO 9001 or 9002 registration. MSL             will achieve ISO 14001 Environmental Management Certified, by             12/31/98, for all Work Centers that are active in the execution of             this contract. Other specific standard compliance requirements are             defined in the Product Attachments.

      c)    For MSL's programs described in 17.2 a above, MSL will maintain             pertinent control charts in fundamental variables or attributes that             affect IBM's specifications. These charts will be updated on a             periodic basis, and provided to IBM upon request. Exceptions to the             limits will be highlighted to IBM along with corrective action             plans.

      d)    A philosophy of continuous improvement shall be stated and             practiced. This means that effort will be expended to improved             processes by reducing or eliminating causes of variability, even             after the process is in control to meet specifications.

      e)    Modifications, adds or deletions, to process steps by MSL must be             done with concurrence by IBM.

      f)    MSL will take demonstrable action whenever a process goes out of             control parameters. The record of what was done and what results             were achieved shall be clearly documented and related directly on             the control charts.

IBM Confidential                                                   Page 31 of 39 sow0501.lwp





                                  ATTACHMENT 1

              IBM/MSL Outsourcing Base Agreement Statement of Work

      g)    MSL will maintain an ongoing reliability test program for Products             requested by IBM (quality plan attachments) and will submit reports             as specified in the appropriate specification(s) listed in the             Product Attachment(s).

      h)    MSL shall supply a Failure Analysis report for rejected material             within [*] weeks after receipt. After the Failure Analysis plan is             completed, MSL shall forward a corrective action plan for MSL             Procured Parts that is acceptable to IBM. MSL is responsible for             first pass Failure Analysis (i.e. identification of the failure to             the level of material provided to MSL by IBM) on IBM provided             materials. IBM may provide engineering support to investigate any             IBM Nominated Supplier components which are confirmed defective by             MSL failure analysis, but which are reported NDF (No defect found)             by the IBM Nominated Supplier.

      i)    IBM and MSL will conduct regular meetings together to cover open             issues. Both parties will share openly their problems relevant to             the relationship.

      j)    MSL shall follow the quality specifications identified in the             Product Attachments.

17.3  MSL Support for IBM Customer Warranty

      MSL agrees to:

      a)    provide IBM a monthly shipment list by machine type and serial             number, as listed in the attached Performance Appendix,

      b)    identify at product level all units to facilitate recall or             notification,

      c)    obtain supplier support to implement needed changes,

      d)    support IBM services planning groups on warranty cost reduction task             forces as needed,

      e)    receive warranty and quality claims from the field, including OEM             customers, perform first pass failure analysis when needed, and             forward data and materials to their sources, or to IBM under IBM             instruction,

      f)    provide warranty replacement support to OEM customers to include             receiving, tracking; and fulfillment of parts replacement to OEM             customers and,

      g)    provide Part traceability to machine serial number as defined in             Product Attachments.

SECTION 18.0 ACCEPTANCE TEST

      a)    IBM may conduct, at its own expense, source inspection, , and/or             acceptance tests to assure that Products furnished by MSL conform to             specification, samples and/or descriptions as set forth in this             Agreement and the Product Attachment(s). IBM may reject any units of             Product which it finds in good faith not to meet the specifications             of this Agreement in any material respects. IBM should perform             incoming inspection within [*] Days after receipt of goods by IBM.             If IBM has not notified MSL of any defects in a unit of Product             within [*] Days of receipt, such unit shall

IBM Confidential                                                   Page 32 of 39 sow0501.lwp

                                  ATTACHMENT 1

              IBM/MSL Outsourcing Base Agreement Statement of Work

            be deemed to be accepted. Acceptance by IBM of Product shall not             relieve MSL of any responsibility for latent non-conformance with             IBM specifications, fraud, negligence, title defects, or             infringement or warranty. Failure by IBM to perform testing shall             not be construed as a waiver to later asserting claims based on such             above mentioned defects.

      b)    Acceptance of new Products by IBM shall not occur until a letter             documenting acceptance and any conditions of acceptance has been             issued to MSL by IBM. New Products are not subject to the [*] Day             from receipt requirement defined in the preceding paragraph.

18.1  Nonconforming Acceptance

      a)    IBM may choose to accept Products which fail to conform to the





            specifications established in a Product Attachment without prejudice             to its right to reject nonconforming items in the future. If IBM so             chooses, IBM will notify MSL of its intent to accept nonconforming             items. MSL agrees to negotiate in good faith a price reduction for             such items based upon IBM's reasonable added expense to correct and             otherwise deal with such deficiencies. After the parties agree on a             price, IBM will notify MSL that IBM has accepted the nonconforming             items. No items for which IBM has issued a notice of nonconformance             shall be deemed accepted, except as provided in the first sentence             of this Section.

      b)    IBM's payments for Products shall not signify that IBM has accepted             Product.

SECTION 19.0 WARRANTY

19.1  Scope of Warranty

      a)    MSL expressly warrants that all Products, MSL supplied materials and             Parts, and work prepared for IBM will conform in all material             respects to the specifications, drawings, or other descriptions             furnished or adopted by IBM, and will be of specified quality, good             workmanship, and free from defect subject to the following terms:

            i)    MSL's warranty for IBM Designated Parts will be as long as,                   and will be on the same terms and conditions as the Parts                   supplier's warranty stated in the relevant purchasing                   contract.

            ii)   MSL will not provide a warranty for IBM Parts. However, MSL                   will provide Failure Analysis for such parts. MSL will process                   such failed Parts as Return to MSL for credit to IBM in a                   timely manner.

            iii)  MSL will not provide a warranty for consigned Products.                   However, MSL will provide failure analysis for such Products.                   MSL will process such failed Products per IBM's instruction in                   a timely manor.

            iv)   MSL will warrant all MSL Procured Parts for [*] months unless                   otherwise stated in the applicable Product Attachment, or                   agreed to by IBM in writing.

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                                  ATTACHMENT 1

              IBM/MSL Outsourcing Base Agreement Statement of Work

            v)    MSL will warrant its workmanship for [*] months unless other                   stated in the applicable Product Attachment.

      b)    All of the above described warranty periods will commence on the             date that the Products containing the above Parts are delivered to             IBM. The above warranties shall survive acceptance test, and IBM's             Product test procedure. MSL's warranty described above also covers             latent defects resulting from MSL's specification, workmanship,             process, and/or Parts purchased from MSL's suppliers and IBM's             Nominated Suppliers.

19.2  Defective Field Replaceable Units

      a)    A defective FRU shall be a FRU that does not conform in all material             respects to that Product's particular specifications.

      b)    IBM will return defective FRUs that are under warranty to MSL             freight collect. MSL will perform Failure Analysis and incoming             inspection and testing as described in the applicable Product             Attachment for FRU's rejected or returned to MSL which are still             under warranty. If the rejected FRU passes all inspection and test             criteria, the FRU shall be classified as NDF and such FRU shall be             returned to IBM freight collect.

19.3  Exclusions

      The warranty set forth above specifically excludes and does not apply to       defects caused by a) the use or operation of the Product in an application       or environment other than as described in or contemplated by the       specifications issued by IBM or b) IBM or the end user through misuse,       excessive shock or improper maintenance procedures.

19.4  Title

      MSL warrants that the title to all Products purchased by and delivered to       a Delivery Point under this Agreement shall be free and clear of all       liens, encumbrances, security interests or other adverse interests or       claims. Title and risk of loss shall pass from MSL to IBM at time of       shipment per the IBM Customer Order, unless otherwise stated in Section       10.0.





19.5  Returned Product Turn Around Time

      MSL shall set an objective to complete Failure Analysis, repair or       replacement of defective Products, within [*] Days after receipt from IBM.       Upon or before the [*] Day, MSL will ship the repaired or replaced       Product, to IBM at MSL's expense. If repair or replacement is not       possible, MSL will refund to IBM, MSL's price associated with the failed       Product, that is under warranty and the price paid by IBM to MSL or any       third parties or the intercompany transfer price for IBM Parts, for all       Parts, if the price of such Parts were not included in MSL's price.

19.6  Implied Warranties

      a)    MSL'S WARRANTY OBLIGATIONS DESCRIBED IN THIS SECTION 19 ARE IN LIEU             OF AND ENTIRELY REPLACE ALL OTHER TERMS AND CONDITIONS RELATING TO             THE QUALITY, MERCHANTABILITY, CONFORMANCE TO

IBM Confidential                                                   Page 34 of 39 sow0501.lwp

                                  ATTACHMENT 1

              IBM/MSL Outsourcing Base Agreement Statement of Work

            SPECIFICATION AND/OR FITNESS FOR PURPOSE OF THE PRODUCTS, WHETHER             EXPRESS OR IMPLIED, WHICH OTHER TERMS AND CONDITIONS ARE HEREBY             EXPRESSLY EXCLUDED.

      b)    IBM'S WARRANTIES CONTAINED HEREIN AND ANY PRODUCT ATTACHMENT WITH             RESPECT TO PARTS, IF ANY, ARE IN LIEU OF AND ENTIRELY REPLACE ALL             OTHER TERMS AND CONDITIONS RELATING TO THE QUALITY, MERCHANTABILITY,             CONFORMANCE TO SPECIFICATIONS AND/OR FITNESS FOR PURPOSE WHETHER             EXPRESS OR IMPLIED, WHICH OTHER TERMS AND CONDITIONS ARE HEREBY             EXPRESSLY EXCLUDED.

19.7  Epidemic Failure

      In the case where any specific Product, shipped to IBM from MSL within any       [*] month experiences a defect rate of [*]% or greater, resulting from a       common cause due to MSL's non-conformance to specifications, drawings,       other descriptions furnished or adopted by IBM, or due to workmanship, MSL       will accept the cost of a Product Recall.

SECTION 20.0 COMMON TOOLING

      Tools commonly used in production and/or Integration will be owned and       managed by MSL.

SECTION 21.0 TOOLING TO BE ACQUIRED

21.1  Purchase

      a)    MSL will submit requests for additional tooling, if any, quarterly             for inclusion in IBM's capital request process.

      b)    MSL shall not purchase any tooling or other capital equipment on             IBM's account without IBM's prior written approval.

            i)    If specifically required in a Product Attachment, IBM will                   supply tooling for Products to MSL. It shall be IBM's option                   whether the tooling will be consigned by IBM to MSL or                   purchased by MSL.

            ii)   If IBM elects to have MSL purchase tooling, MSL shall be                   responsible for the design, cost and build of all new or                   replacement tooling which shall be capable of producing                   Product in accordance with the IBM specification in the                   Product Attachment. MSL warrants that the tooling used under                   this Agreement shall be capable of producing the quantity of                   Product as specified by IBM.

            iii)  If IBM elects to have MSL purchase the tooling, MSL shall                   invoice IBM for the cost of such tooling at such time as the                   tooling is placed into service. The cost of such tooling                   includes, but is not limited to, the cost of any purchased                   components (including parts and complete items), fully                   burdened MSL engineering and/or manufacturing labor use in the                   design and/or construction of such tools, duties, insurance,                   transportation, installation, costs and costs of

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                                  ATTACHMENT 1

              IBM/MSL Outsourcing Base Agreement Statement of Work

                  money, if any. MSL agrees that MSL engineering will be priced                   to IBM on a most favored customer basis.





            iv)   Both parties may agree to amortize the tooling and shall put                   such agreement in writing and any terms and conditions                   associated with such amortization. If IBM and MSL agree to                   amortize the tooling, IBM agrees to pay for the tooling and                   any associated carrying cost agreed to between the Parties via                   an amortization charge in addition to the respective Product                   price as defined in Section 7.0. The amortization period for                   each tool will be stated in the applicable Product Attachment                   and shall be triggered by the initial delivery of the                   Product(s) for which the tooling expenses are incurred.

                  IBM will state the estimated ship quantity and maximum monthly                   ship rate for the amortization period. MSL will define the                   total tooling cost to support the maximum ship rate. The total                   tooling cost will be divided by the estimated ship quantity                   provided by IBM. This unit amortization cost will be itemized                   in MSL's quotes as tooling adder.

            v)    The tooling cost recovery, via the tooling adder, will be                   analyzed during each quarterly review meeting between IBM and                   MSL. The intent is to adjust the tooling adder based upon                   volume changes, such that the total tooling cost will be                   recovered by the end of the amortization period. If at the end                   of the amortization period the tooling cost have been over or                   under recovered, an adjustment invoice will be processed                   accordingly.

      c)    MSL acknowledges and agrees that its utilization of any tooling for             other customers will not impact IBM's product requirements. MSL will             obtain IBM's written approval prior to entering into a contract with             a third party involving tooling for Products listed in the Product             Attachment.

      d)    In the event that MSL owns the tooling and has received a bona fide             third party offer to purchase any or all of the tooling, before MSL             may accept such offer, MSL shall notify IBM in writing, and IBM             shall have [*] Days after such notice to agree to purchase such             tooling on the same terms and conditions as such third party offer.

      e)    All tools, dies, jigs, patterns, equipment or Parts purchased,             furnished, charged to or paid for by IBM and any replacement thereof             shall become and remain the property of IBM. IBM agrees to provide             MSL appropriate technical support for IBM owned tooling at no charge             to MSL. IBM shall have the option of removing IBM owned tooling from             MSL directly, depending upon Product strategy and production.

21.2  Care

      MSL is responsible for protection, calibration, maintenance and care of       all tooling owned by IBM and shall be liable for loss or damage of such       tooling while in MSL's possession or control. IBM agrees to insure tooling       it owns. Where possible, MSL will be jointly insured with respect to the       IBM owned tooling for its interest. This tooling shall be subject to       inspection by IBM upon notice and shall be returned in an acceptable       condition, reasonable wear and tear excepted, upon demand or notice by       IBM. MSL will be responsible for

IBM Confidential                                                   Page 36 of 39 sow0501.lwp

                                  ATTACHMENT 1

              IBM/MSL Outsourcing Base Agreement Statement of Work

      removing and shipping IBM owned tooling from MSL's plant. IBM shall be       responsible for transportation cost for the return of tooling to IBM's       facility as designed by IBM.

21.3  Inspection

      MSL will identify the location of tooling and at any reasonable time allow       IBM or IBM's designee to inspect the equipment and to purchase related       parts. MSL shall not mortgage, pledge, or take any other action that might       encumber IBM owned tooling in any way.

SECTION 22.0 RETURN OF PRODUCT - US AND VALENCIA WORK CENTER.

22.1  Return to MSL by IBM

      a)    MSL agrees to manage Products and Parts that can be returned to the             US and Valencia Work Centers through the following, but not limited             to, IBM processes, IBM Document PC 2801:

            i)    shipped and uninstalled,

            ii)   returns per IBM contracts with IBM Business Partners, and

            iii)  new defective

      b)    MSL will accept the return of all shipped Products returned to MSL             within [*] Days from the Delivery Date.





            i)    Products returned to the US Work Center will be shipped                   freight [*] to MSL.

            ii)   For Products returned to the Valencia Work Center, MSL will                   pay IBM the NIC for the returned Products (NIC is the [*]                   multiplied by the NIC rates defined in Section 1.b)ii) of                   Appendix 1.)

            iii)  MSL will buy back the returned Product at [*]% of the amount                   invoiced to IBM for such Product within [*] Days of receipt of                   the return by MSL.

            iv)   MSL's price for the acceptance of returned non-warranty                   Products shall be [*]% of the amount invoiced to IBM for such                   Product [*] NIC (NIC is the [*] multiplied by the NIC rates                   defined in Section 1.b) ii) of Appendix 1).

            v)    For the Valencia Work Center, 22.1 b) iii) and iv) will be                   processed as MSL buying back the returned Product at [*]% of                   the amount invoiced to IBM [*] NIC within [*] Days of                   receipt of the return by MSL.

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                                  ATTACHMENT 1

              IBM/MSL Outsourcing Base Agreement Statement of Work

            vi)   IBM may use payments due IBM per 22.1 b) iii) and iv) to                   offset amounts owed to MSL or request reimbursement from                   MSL at IBM's sole discretion.

            vii)  Any defective Product returned to MSL will be returned with a                   copy of any applicable IBM inspection report and will                   reference MSL's Return Material Authorization (RMA).

            viii) When replacement or repaired Products are shipped, MSL must                   submit a new invoice.

SECTION 23.0 DISASTER RECOVERY

      MSL will have a documented disaster recovery program which would allow MSL       to resume all responsibilities under the terms and conditions of this       Agreement within [*] Days of a disaster. A copy of the MSL documented       disaster recovery program will be submitted to IBM for IBM's approval       within sixty (60) Days after the Effective Date.

SECTION 24.0 INFORMATION TECHNOLOGIES SERVICES (I/T) SYSTEMS

24.1  System Access

      a)    MSL's access to IBM applications, tools, licenses, networks, and             equipment will be based upon business need determined by IBM. IBM             shall grant MSL, under a separate written agreement, the right to             use certain versions of IBM owned software resident on the             workstations to be transferred from IBM to MSL during the Transition             Period. MSL must obtain a license from the software owner of any             nontransferable third party or IBM software identified by IBM. IBM             retains the right to audit. IBM conveys to MSL no software title or             license under the intellectual property rights of IBM or of any             third party except as may be otherwise provided herein. MSL is             responsible for obtaining all licenses for third party software. MSL             conveys to IBM no software title or license under the intellectual             property rights of MSL or of any third party.

      b)    Neither IBM or MSL will be provided any license rights and/or source             code to any software subject to this Agreement unless approved by             the owning Party.

      c)    No software may be installed on either IBM or MSL systems by its             employees or contractors without the prior written consent of the             owning Party. MSL may install software on MSL-owned or provided I/T             assets which are isolated from and not a part of the networks. MSL             will not install software that adversely impacts IBM systems or             networks.

24.2  General I/T

      a)    MSL must provide the required information and interfaces to IBM's             systems, as needed for execution of this Agreement. MSL must             participate in any upgrade and testing of local and corporate             applications, interfaces, and tools during its use of IBM owned

IBM Confidential                                                   Page 38 of 39 sow0501.lwp

                                  ATTACHMENT 1





              IBM/MSL Outsourcing Base Agreement Statement of Work

            applications or environments and insure continuous application             operation as changes are made. IBM agrees to participate in the             testing of IBM interfaces changed as a result of any upgrade             activity. IBM will provide visibility and the necessary technical             details on IBM system changes to ensure MSL is able to update their             systems and processes.

      b)    MSL prices for I/T costs are included in the prices as defined in             Section 7.0 and Appendix 1 Markup. Costs for implementing any change             requested by IBM after the Transition Period that substantially             impact MSL's systems and processes will be sized separately.

      c)    MSL will support IBM's EPRG/ECPS using a separate location code for             Charlotte.

      d)    MSL SLA (Service Level Agreement) requirements for local or remote             systems availability and performance will be negotiated in             compliance with IBM's service level expectation for a manufacturing             process within sixty (60) Days of the Effective Date.

      e)    MSL will be responsible for the service and support of any asset             transferred from IBM ownership to MSL. System or end user software             or requests for version upgrades will be under separate agreement.

      f)    MSL will transmit reports and data files as IBM requires for             history, audit, validation, and measurements as defined in Appendix             3.

      g)    MSL will provide the necessary capability to accommodate non             AAS/GEMS orders and provide confirmation/status information as             required.

      h)    Except as otherwise provided herein, MSL will obtain the systems ,             applications, and licenses they deem necessary by their own means.

      i)    MSL agrees to have all MSL applications Year 2000 compliant prior to             migrating any IBM data into it's applications or data bases.

      j)    MSL must obtain IBM's Global Services' written permission prior to             making any connection to any IBM network or system other than the             networks and systems subject to the Agreement.

IBM Confidential                                                   Page 39 of 39 sow0501.lwp

APPENDIX 1: MARK UP

1. Prices for manufacturing and fulfillment of Products will be per the formula of section 7.1 with the following rates:

a) Value Add and Profit Rates are per the following table:

                                                 VALUE ADD RATES   PROFIT RATES(*)                                                  ---------------   ---------------                                                               RS Fulfillment (US & VALENCIA Work Centers                         [*]   GEPS, Finance, and Security Mfg & Fulfillment                    [*]

  Spares to Mechanicsburg and Amsterdam      US Work Center

     Valencia Work Center         (Through September 30, 1998)      Valencia Work Center          (After September 30, 1998)

     *Profit Rates are subject to the adjustments of Section 7.3,       Attachment 1, SOW

b) Other Cost Provision rate is equal to the Scrap Rate plus the NIC Rate where:

     i) The Scrap Rate is equal to [*] except no scrap provision will be applied to OEM Products

     ii) The following NIC rates will be multiplied by the material costs by geographical source to derive an average NIC Rate for each Product

                                                         NIC RATE                                                          --------                                                             US WORK CENTER:                                        [*]

     Valencia to US work Center      Far East to US Work Center





     US Suppliers to US Work Center      Mexico/Canada to US Work Center      South America to US Work Center      Line Side Stocked Products to US Work Center      Mfg to Fulf./Integration within US Work Center

IBM Confidential                                                   Page 1 of 7 appls.lwp

                                                         NIC RATE                                                          --------                                                             VALENCIA WORK CENTER:                                  [*]

     Far East to Valencia Work Center      US to Valencia Work Center      European (non-Spanish) Suppliers to VALENCIA Work Center      Spanish Suppliers to Valencia Work Center      Line Side Stocked Products to Valencia Work Center      Mfg to Fulf./Integration within Valencia Work Center

     ** No NIC will be applied to the final assembly cost of a Product         manufactured by MSL that is subsequently shipped against a Customer         Order within the same Work Center (ie, fulfillment and/or Integration         is within the same Work Center). NIC for the Parts used in a Product         Manufactured by MSL will be calculated using the above NIC rates.

2. For RS Products with components manufactured by MSL, the price for MSL manufacturing services will be per the formula of Section 7.2 with the following rates:

     a) Asm/Test/Handling, Unburden Labor Rate:

                                                    US Work Center:                            [*]          Valencia Work Center

     b) MBA burden absorption rate of [*]

        MBA will be reviewed by IBM and MSL if the annual volume of         manufactured Products is less than [*] or greater than [*]. Adjustments         shall be mutually agreed upon by IBM and MSL, and shall be based on         but not limited to volumes, mix of Products, and costs.

     c) Component NIC rate is per Appendix 1, b) ii

3. RS Integration prices will be per the formula of Section 7.2.b with the following rates:

                                               US Work Center                      [*]          Valencia Work Center

     *Without MSL account coordinator.

4. All prices are effective for the US Work Center on the Effective Date.    All prices for Valencia Work Center manufactured Products and their fulfillment are effective on the Effective Date. All other prices excluding spares (see 1 a) above) are effective for the Valencia Work Center on June 1, 1998.

IBM Confidential                                                   Page 2 of 7 appls.lwp

APPENDIX 2: REQUIREMENTS ACCURACY

The formula for measuring the accuracy of requirements placed on MSL for a given quarter accompanied with an explanation, is the following:

Requirements Accuracy % = [*]

Where [*] represents the performance [*] months prior to the last month of the quarter in which you are measuring the Requirements Accuracy. The Forecast represents the requirements that was passed by IBM [*] months prior, for the total volume by machine type for the quarter that is being measured. Actual Order Load represents the final amount of orders scheduled for the quarter being measured. For example when measuring the [*] for the first quarter in 1998 you would calculate [*] by taking the [*] that was passed [*] for the first [*] in [*] and subtract the actual [*] for that [*]. Then divide by the forcast and multiply by [*]. You follow the same methodology for [*] looking at the forecast [*] months prior to the last month of the quarter being measured. Once [*] through [*] is calculated you apply these results to the formula above.

                                       [*]





The formula measures the accuracy of requirements placed on MSL for a given quarter, each month, starting [*] months prior to the end of the quarter, using a [*] weighted calculation.

The following percentages will be multiplied by the material cost of the volume of the machine type shipped in the quarter that fell below [*]% of the Requirements Accuracy calculation.

            REQUIREMENTS ACCURACY          INCREMENTAL %             AS DEFINED ABOVE               APPLIED TO MATERIAL COST                                                         [*] and Greater                  [*]%                Less than [*]%                   [*]%

Payments for these liabilities will be made via a separate invoice.

IBM and MSL Confidential                                           Page 3 of 7

APPENDIX 3: PERFORMANCE SPECIFICATIONS

The following SPECIFICATIONS apply to MSL services at each work center:

Measurement                              Period           Target ------------------------                 ------           ------                                                      On-time shipment (a)(c)                             [*] Responsiveness (b)(c) Order to ship leadtime (Pick&Pack) (d) Order to ship leadtime (Bulk) (d) Product quality Serviceability to IBM Plants Serviceability to IBM Services

(a) Percentage of finished orders that are shipped from MSL and delivered to     IBM on the committed Delivery Date. (b) Percentage of finished orders that are shipped from MSL and delivered to     IBM in line with the requested supply ship date, and according to the IBM     Customer Order requested arrival date and the published IBM distribution     lead times. (c) With IBM's approval, MSL may normalize this measurement for errors that     are beyond MSL's control. Errors must be in the categories of: integration     orders, IBM system errors, system updates that are IBM's responsibility,     orders requesting delivery dates which exceed Requirements Accuracy, as     defined in Appendix 2, of [*] and are not within Supply Flexibility as     defined in Section 13.2 and Appendix 4. (d) These are IBM Customer Orders. Order to ship leadtime is the number of     Days from MSL receipt of a valid IBM Customer Order to planned and     committed MSL ship date.

MSL will also provide to IBM the following information reports:

REPORTS                              PERIOD ---------------------                ------                                    Weekly shipments (1)                   [*] Monthly shipments (2) Inventory (3)(4)(5) Product Invoice Information (6) Product quality (7) Requirements accuracy (8) Consigned tooling MSL Procured Parts (9) Planning Parameters (10)

(1) List of shipments by machine type, serial number and delivery program     (COATS, Q Ship, IPR, industry standard, integration, other). (2) List of shipments by machine type and serial number, to requesting IBM     organizations.

IBM and MSL Confidential                                           Page 4 of 7

(3) MSL will report, by business area, MSL owned inventory by machine type     and/or part number, with detail of item quantity and value including Parts,     work in process and finished goods. IBM Parts, IBM Designated Parts and MSL     Procured Parts will be reported separately, IBM document CAI 97-11. MSL will     report how each inventory price is formed monthly upon request. MSL will     identify separately the inventory of all street value parts and IBM     classified parts by using IBM's guidelines.

(4) MSL will report, by business area, the inventory of IBM Consigned Parts by     machine type and/or part number, with detail of item quantity and value     including Parts, work in process and finished goods.     MSL will report how each inventory price is formed monthly and upon request.     All IBM Consigned Parts in Integration will be reported separately and by





    customer monthly and upon request.     MSL will identify the location of IBM Consigned Parts by location within the     MSL Work Center.     MSL will identify separately the inventory of all street value parts and IBM     classified parts by class using IBM's guidelines.

(5) MSL will identify the volume and value in the LS, S, SSS, and MSL owned     inventory buffers and additional information that would define MSL's     inventory posture as it relates to product availability.     This information will be reported for [*] months after the Effective Date.

(6) For shipment invoices, MSL will provide validation information as follows:     Invoice number     Currency and currency rate     Order type, order label     IFC, Division, ITC, date, invoice type, ST., STALL     MSL value of goods, MSL emergency, MSL special casing     IBM value of goods, IBM emergency, IBM special casing     This information will be supplied at invoice level, detail (S/A or P/N) and     also at feature level. (7) As per the Product Attachments. (8) Formula for requirements accuracy is as per Requirements Accuracy Appendix. (9) At the beginning of each year of operation, MSL will identify to IBM the MSL     sources from which MSL buys MSL Procured Parts and will provide latest     source quotes for each one. At the beginning of each quarter, MSL will     report to IBM any changes in MSL sources and any changes in their costs. (10) This note applies only to the Valencia Work Center. A report of the type     regularly produced by the MSL Valencia Work Center as EPRG parameters     Exxx. The report contains values for parameters associated with a REGEN:

        a)  Parameters defined at plant level, i.e. currency, value class start             month, value class length, inventory carrying rate, box explosion             offset, stock to dock time, effective code date, excess, surplus and             scrap at start of month, unit price, % add value, dollar rate,             etc.         b)  Parameters defined at source level, for each source, i.e. MS, FZI,             FZO, FZC, MI, MO, CH, OAT, DTS, DEL COST, DEL R.OUT, NTT, ETT, LCT,             AI, AC, etc.         c)  Parameters defined at Value-class level, for each value class, i.e.             flags, PPS, PS, MIC, FDS, MAC, Min D Val, Max Del Val, FZI, FZO, ZC,             MRI, MRO, CH, High Val Limit, DN, OH, etc.         d)  Parameters defined at P/N family level *(management group level),             for each family/group, i.e. OPC, FDS, CII, NSI, PS, AI, mdq, Mdq,             OAT, DI, OC, SED, description, etc.

IBM and MSL Confidential                                            Page 5 of 7

(11) In addition MSL will provide on demand a history of all shipments for a given period of time by order, configuration, ship to address, and date of shipment.

MSL will report to IBM the measurements separately for each Work Center.

REPORTING

MSL will transmit the reports described in the Appendix 3, the Product Attachment and those agreed upon by the Parties by facsimile, electronic data interchange, or otherwise, as IBM reasonably requires. MSL also agrees to establish, maintain and link the related complete and accurate data base system to IBM's specified systems and other electronic communication links as are deemed necessary and agreed to by both parties.

IBM and MSL Confidential                                            Page 6 of 7

APPENDIX 4: SUPPLY FLEXIBILITY

MSL agrees to maintain Supply Flexibility to meet requirements increase on forecasted volumes as follows:

MONTH                      M(CURRENT MO.)    M+1    M+2   M+3   M+4   M+5                                                      Additional % on plan          [*]

The Supply Flexibility will be available at model and feature level.

IBM and MSL Confidential                                           Page 7 of 7

                      ATTACHMENT 4 - EXPENSE PARTICIPATION

1.    Valencia Product Engineering and New Program Management Support





      Commencing on the Effective Date of the Agreement, but not before July 1,       1998, IBM shall pay MSL [*] pesetas on the first day of each calendar       month during the term of the Agreement for MSL's completion of the product       engineering and new program management responsibilities defined in Product       Attachment A of the Statement of Work. For any period of less that one       month, the above amount shall be apportioned based on the number of days       in that month.

2.    MVS License for the Valencia Work Center

      The terms and conditions, including pricing, governing the use of IBM's       MVS software shall be granted under a separate licensing agreement between       IBM Spain and MSL. For MVS software modules (including additions and       upgrades) that IBM agrees in writing, before fees are incurred, are       required by MSL to fulfill this Agreement, IBM shall reimburse MSL the       actual MVS license charges through separate invoices and payments. MSL       agrees that these payments will not take place before MSL has made the       corresponding payment for the license fees.

3.    Startup and Investment Expenses for the US Work Center

      a) IBM shall pay MSL up to [*] U.S. dollars [*] for 1998 startup and       investment expenses related to the US Work Center. MSL may submit invoices       to IBM commencing on the Effective Date of the Agreement through       December 31, 1998 for the following actual startup and investment expenses       for the US Work Center: I/T application set up including related travel       and consultant fees, AS 400 hardware and software, application software       and licenses, network infrastructure, line servers and user workstations,       training, radio frequency equipment, tooling, material handling equipment,       shelving, furniture, line fitup and facilities fitup expenses.

      b) IBM has budgeted a total of [*] to relocate manufacturing lines from       Building 103 to Building 002; and for non-manufacturing fit up. Relocation       of the manufacturing lines is budgeted at [*], and non-manufacturing fit       up is budgeted at [*]. MSL will be responsible for any overruns of these       budgets incurred as a result of MSL's requests.

      c) MSL acknowledges and agrees that its utilization of any tooling and/or       I/T systems for other customers shall not impact IBM's product       requirements. MSL shall obtain IBM's written approval prior to entering       into a contract with a third party involving tooling and/or I/T systems       charged to IBM as part of the US Work Center startup.

      d) IBM reserves the right of first refusal to purchase any tooling and       equipment, that was reimbursed by IBM as part of the US Work Center       startup, at any time for MSL's [*] or [*], whichever is less.

IBM Confidential                                                     Page 1 of 3 att4016.lwp

                      ATTACHMENT 4 - EXPENSE PARTICIPATION

      e) MSL shall report all open startup and investment expenses, which are       subject to request for reimbursement by IBM, as part of the monthly       measurement reviews in 1998.

4.    Personnel Expense Participation

4.1   Salary Participation

      a) Commencing on the Effective Date of the Agreement, IBM shall compensate       MSL for the salaries of Transferred Employees, as defined in Attachment 2       of the Base Agreement, that are actually retained by the US Work Center       and supporting this Agreement. IBM's payment to MSL shall be determined by       the following formula: {Salary Payment = A x B}, where the following       values are assigned to such formula:

            i)    A shall mean actual Transferred Employees, as defined in                   Attachment 2 of the Base Agreement, that are retained by MSL                   at the US Work Center and supporting this Agreement as of the                   last day of a quarter.

            ii)   B shall mean the IBM's salary participation rate as defined                   in Attachment 4,4.1 b).

      b) IBM's quarterly salary participation rates shall be:

                  Year 1            Year 2            Year 3                   ------            ------            ------

                  [*]               [*]               [*]

      c) For any period of less than [*], the amount determined by (a) above,       shall be apportioned based on the actual number of days in that quarter.

      d) Payment for these liabilities shall be made via a separate invoice       quarterly.





      e) IBM shall make no payments for any extension periods to the       Agreement.

4.2   Medical and Vision Plan Participation

      a) Commencing on the Effective Date of the Agreement, MSL shall offer to       Transferred Employees medical and vision plans that have employee       contribution rates equal to the IBM contribution rates that IBM offers to       its employees for that calendar year.

      b) IBM shall pay MSL [*] dollars [*] on the Effective Date of the       Agreement for IBM's participation in the medical and vision plans       for Transferred Employees for the term of the Agreement. IBM shall make       no payments for any extension periods to the Agreement.

IBM Confidential                                                     Page 2 of 3 att4016.lwp

                      ATTACHMENT 4 - EXPENSE PARTICIPATION

4.3   401K Plan Participation

      a) Commencing on the Effective Date of the Agreement, MSL shall offer to       Transferred Employees a 401K plan that reflects a [*] percent employer       matching contribution.

      b) IBM's payment to MSL for a quarter shall be MSL's actual employer       matching contributions for the Transferred Employees minus MSL       participation as defined by Attachment 4, 4.3 c). IBM shall make no       payments for Transferred Employees that are not retained by MSL at the US       Work Center and supporting this Agreement as of the last day of the       quarter.

      c) MSL's 401K Plan participation for the Transferred Employees shall be       based on the following percentages of salary:

                  Year 1            Year 2            Year 3                   ------            ------            ------

                  [*]               [*]               [*]

      d) For any period of less than [*] months, the amount determined by (a)       above, shall be apportioned based on the actual number of days in that       quarter.

      e) Payment for these liabilities shall be made via a separate invoice       quarterly.

      f) IBM shall make no payments for any extension periods to the Agreement.

IBM Confidential                                                     Page 3 of 3 att4016.lwp

ATTACHMENT 5: EQUIPMENT AND PROGRAM LOAN LIST                      July 20, 1999

HARDWARE

ASSET IDENTIFIER OR SERIAL NUMBER       DESCRIPTION            QUANTITY      COMMENT     VERIFIED

                                                             [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99





[*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1                      verified Wayne Cato, 07/08/99 [*]                    [*]                       1            [*]       verified Wayne Cato, 07/08/99 [*]                    [*]                       1            [*]       verified Wayne Cato, 07/08/99

ATTACHMENT 5: EQUIPMENT AND PROGRAM LOAN LIST                      July 20, 1999

[*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99 [*]                    [*]                       1          [*]         verified Gary Holman, 07/19/99 [*]                    [*]                       1          [*]         verified Gary Holman, 07/19/99 [*]                    [*]                       1          [*]         verified Gary Holman, 07/19/99

One (1) item is located in the Bldg. 002 structure but cannot be individually identified as a unit

ASSET IDENTIFIER OR SERIAL NUMBER       DESCRIPTION            QUANTITY      COMMENT     VERIFIED

[*]                    [*]                       1          [*]         verified Wayne Cato, 07/08/99

ATTACHMENT 5: EQUIPMENT AND PROGRAM LOAN LIST                      July 20, 1999

SOFTWARE

ASSET IDENTIFIER OR SERIAL NUMBER       DESCRIPTION            QUANTITY      COMMENT     VERIFIED

[*]                    [*]                       1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99





[*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99 [*]                                              1          [*]         verified Donovan Dandurand, 6/16/99

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

The purpose of this Attachment 6 is to provide terms and conditions under which MSL may install IBM Software Packages on Products. MSL shall not prepare a preload image of an IBM Software Package or install any IBM Software Packages, unless authorized by IBM in writing or expressly instructed under this Attachment 6. All Appendices and Exhibits referred to in this Attachment 6 are incorporated herein by reference. If there is a conflict between the Agreement and this Attachment 6, the terms of this Attachment 6 will prevail.

1.0. DEFINITIONS. For purposes of this Attachment 6 only, the following definitions shall apply:

1.1 Approved Location is a location at which IBM has expressly authorized MSL     in writing to perform its IBM Software Package installation responsibilities     under the Agreement, and which has also been so authorized by Microsoft     Corporation (MS);

1.2 Code shall mean statements or instructions, whether in a human readable     source form or machine readable object form of programming code,     intended to bring about a certain result in the operation of a computer.     Code shall include (a) all supporting documentation, including but not     limited to all documentation needed to assist each Party in understanding     all technical aspects of the Code and all applicable end user documents and     materials, and (b) all corrections, modifications and enhancements to     Code.

1-3 Customers shall mean IBM, IBM subsidiaries, distributors, retailers, IBM     authorized resellers, end users and others as may be specified by IBM.

1.4 Derivative Work shall mean a work that is based upon one or more     pre-existing copyrighted or patented works, such as a revision, enhancement,     modification, translation, abridgment, condensation, expansion,     compilation or any other form in which such pre-existing work may be recast     transformed or adapted.

1.5 End User is any one who acquires Products for its own use and not for     resale.

1.6 Harmful Code shall mean any computer code, programming instruction, or set     of instructions that is constructed with the ability to damage, interfere     with, or otherwise adversely affect computer programs, data, files, or     hardware, without the consent or intent of the computer user. This     definitions includes, but is not limited to, self-replicating and self     propagating programming instructions commonly called viruses and worms.

1.7 IBM Software Package shall mean a software package that is owned by or     licensed to IBM, and is provided to MSL only for purposes of this Attachment     6 and the Agreement.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 1 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

1.8 Preload, Preloading, and Preloaded refer to the process by which MSL     is authorized, subject to the terms and conditions of the Agreement, to load     a single copy of the IBM Software Package only onto the hard drive of a     Product;

1.9 Products shall mean IBM and OEM machine types as defined in Product     Attachments to the IBM/MSL Outsourcing Base Agreement Statement of Work.

2.0. SOFTWARE PACKAGE REQUIREMENTS

2.1. When authorized by IBM in writing or expressly instructed under this     Attachment 6, MSL agrees to prepare the IBM Software Package Preload image     in support of Products.

2.2. MSL agrees to Preload IBM Software Packages (only at Approved Locations) on     Products as set forth in this Attachment 6.

2.3. MSL shall establish and maintain electronic installation records (as     described in Exhibits 2, 3, and 4 of Appendix A to this Attachment 6) of all     IBM Software Packages installed, and maintain adequate business controls to     prevent unauthorized use or copies of any IBM Software Package.

2.4. MSL shall establish, maintain and report to IBM the number of individual     software programs (including operating systems and program applications)     included in IBM Software Packages that are (a) installed on Products, (b)     shipped with Products, and (c) shipped without Products for purposes of     Product support. MSL shall secure IBM's prior written permission regarding





    any IBM Software Package shipped without the Product to ensure that all     licenses to IBM are adhered to by MSL.

2.5. MSL acknowledges that MS requires additional restrictions on its operating     system Code and other Code and documentation from MS, and therefore, MSL     agrees to also comply with the additional obligations set forth in Exhibit 5     of Appendix A of this Attachment 6 for all Code and documentation from MS.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 2 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

3.0. ADDITIONAL WARRANTIES

MSL represents and warrants that at all times:

3.1. MSL will not copy or permit the copying (including back-up copies) of all     or any part of the IBM Software Packages, except to the extent required for     MSL to perform its obligations hereunder for IBM's benefit;

3.2. MSL will not sublicense, rent, lease, distribute, assign or otherwise     transfer (including distributing back-up copies of) all or any part of the     IBM Software Packages, except as expressly authorized by IBM in writing;

3.3. MSL will not reverse engineer, disassemble, or decompile all or any part of     the IBM Software Packages;

3.4. MSL will not remove any intellectual property marking or identification     code that may be in the IBM Software Packages;

3.5. MSL will not add to, delete from, or otherwise modify any Code included in     the IBM Software Packages, or create any Derivative Work therefrom, except     as expressly authorized by IBM in this Attachment 6 or otherwise authorized     herein.

3.6. MSL will comply with the additional requirements set forth in this     Attachment 6 and its Appendix A (including its Exhibits);

3.7. MSL will not export any IBM Software Package to any country without IBM's     prior express written permission (such permission, if any, shall not relieve     MSL of its obligations hereunder, and MSL shall remain fully responsible for     all such exporting).

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 3 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

4.0. ADDITIONAL AUDIT RIGHTS

IBM may regularly monitor, inspect and/or audit any software installation location utilized or planned to be utilized hereunder pursuant to Section 7.0 of the Outsourcing Base Agreement.

MSL will not utilize any location in performance of this Attachment 6 which is not an Approved Location. MSL agrees to provide IBM at least ninety (90) calendar days advanced written notice for any MSL facility planned to be used (including the intended activity for each such facility) in the performance of work hereunder, to allow IBM, and/or MS, to inspect each such facility. MSL agrees to promptly correct any deficiencies discovered in such inspections. Such IBM inspections, approvals and deficiency corrections shall not in any way relieve MSL of its ongoing obligations under the Agreement.

IBM shall have the option to monitor, inspect, audit and take other necessary actions in order to comply with IBM's requirements to MS regarding any of MS's Code, or documentation, used hereunder.

IBM's right to audit hereunder shall continue for a period up to [*] years following expiration or termination of the Agreement.

Any audit provided for herein shall be conducted during MSL's normal business hours, after reasonable advance notice, and shall not unreasonably interfere with MSL's normal operations.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 4 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                                   APPENDIX A





           ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION

1. AUTHORIZATION.

1.1. ATTACHMENT 6. The terms and conditions of this Attachment 6 are in addition     to, and not in lieu of, the terms and conditions of the Agreement.

1.2. SCOPE. The additional restrictions in this Appendix A shall apply to the MS     Code referenced in Exhibit 1 of this Appendix A, including any and all     revisions, enhancements, supplements or releases thereto (collectively, MS     Software Images) and related MS documentation, if such MS Software Images     are made available by IBM to MSL. If required by MS, IBM has the right,     without limitation, to include additional Code as MS Software Images and     documentation by notifying MSL in writing. Provided that MSL complies fully     with the terms and conditions of this Attachment 6 pursuant to the terms of     the MS License to IBM (MS License), IBM hereby authorizes MSL at Approved     Locations only to Preload MS Software Images on Products and to distribute     Preloaded Products as otherwise permitted in the Agreement. IBM may revoke     these authorizations in whole or in part at any time in its sole discretion.

1.3. MSL'S AUTHORIZED SUBSIDIARIES. With prior written approval from IBM, which     approval may be withheld in IBM's sole discretion, MSL may authorize its     Subsidiaries that are authorized to assemble and test Products pursuant to     the Agreement to Preload MS Software Images only at Approved Locations in     accordance with the terms, and conditions of the Agreement, including     Attachment 6, PROVIDED THAT MSL hereby unconditionally guarantees each of     its authorized SUBSIDIARIES' full and complete compliance with the terms and     conditions of the Agreement, including Attachment 6. Pursuant to this     guarantee, IBM shall not be required to make demand upon MSL's Subsidiary as     a condition to making demand upon MSL. Each authorized Subsidiary shall     execute an agreement with MSL sufficient to COMPLY with MSL's obligations to     IBM under this Attachment 6, and the term MSL as used elsewhere herein     shall include any authorized Subsidiaries who execute such an agreement and     are approved in writing by IBM to Preload MS Software Images as provided     herein.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 5 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                                   APPENDIX A            ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION

1.4. MS APPROVAL. Notwithstanding anything herein to the contrary, MSL,     Subsidiaries of MSL, and Approved Locations, are subject to approval or     immediate revocation in writing by MS as provided in the MS License. MSL is     prohibited from Preloading the MS Software Image at any Preload location not     approved by MS. MSL shall provide IBM with the addresses of its     headquarters, the proposed Preload location(s) for which approval is     requested, the business profiles in the English language (including years in     business, ownership profile, nature of principal business activities,     general description of site security procedures, any nonstandard reporting     procedures from MSL site to IBM, and a summary of any prior experiences with     installation or replication of MS products), and such other relevant     information as MS or IBM may request, at least ninety (90) calendar days in     advance of the anticipated first installation date for such location

2. MSL'S RESPONSIBILITIES. MSL represents, warrants and agrees that it shall:

         (a) Comply full), and completely with all of the terms and conditions          of this Attachment 6 and the MS License, including, but not limited to,          all terms regarding Preloading MS Software Images and related MS          documentation. Further, MSL represents, warrants and agrees:

                  (i) to create an electronic assembly record for each Product                   in the format prescribed by IBM and transmit it to IBM prior                   to shipment of Product, via electronic data transmission after                   completion of assembly;

                  (ii) to include, in unmodified form, all publications, license                   agreements, certificates of authenticity, labels and ship                   groups with each Product as set forth in the Product's Bill of                   Materials;

                  (iii) to use the master media, and the MS Software Images                   obtained therefrom, only at an Approved Location and only to                   Preload, in a manner expressly permitted by IBM, a single copy                   of the Software Image designated for each Product in the Bill                   of Materials onto the approved Product, and for no other                   purpose whatsoever;

                  (iv) to maintain adequate business controls for the master                   media, and the MS Software Images and supporting MS                   documentation obtained therefrom, to prevent unauthorized use                   or copies of any MS Software Image and supporting MS                   documentation;

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 6 of 19





                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                                   APPENDIX A            ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION

                  (v) not to copy or permit the copying (including back-up                   copies) of all or any part of any MS Software Image and MS                   supporting documentation, except as expressly authorized by                   this Attachment 6; and

                  (vi) not to sublicense, rent, lease, distribute, assign or                   otherwise transfer (including distributing back-up copies of)                   all or any part of any MS Software Image including supporting                   documentation, except as expressly authorized by this                   Attachment 6;

         (b) When expressly authorized by IBM in writing, implement one, or          more, of the following separate processes, which are described more          fully in Exhibits 2, 3 and 4 of this Appendix A, at each Approved          Location to ensure protection of the MS Software Image during the          Preload process:

                  (i) PROCESS ONE. An IBM or IBM contractor employee (who is not                   an employee of MSL) shall periodically monitor the Preload                   process, and the IBM or IBM contractor employee or an employee                   of MSL shall ensure that the master media containing the MS                   Software Image used for the Preload process is retained in a                   secure area accessible only to such IBM or IBM contractor                   employee or by MSL when not in use by the MSL (any oversight                   on the part of IBM shall not relieve MSL of any of its                   obligations hereunder); and/or

                  (ii) PROCESS TWO. MSL may use the recovery CD for the product                   (if any) that ships with, or is designated by IBM for, the                   Product to Preload Software Images onto each such Product. MSL                   will maintain the recovery CD in a secure area until it is                   used for installation and returned to a secure place or                   packaged with the Product or its accompanying ship group. MSL                   shall run image verification testing on all Products Preloaded                   using a recovery CD; and/or

                  (iii) PROCESS THREE. The master media containing the MS                   Software Image used for the Preload process shall be located                   exclusively on a server system where it will be accessible                   only by an IBM or IBM contractor employee or by MSL,                   replication of the MS Software Image shall be performed only                   under the authorization of IBM or MSL, and all copies shall be                   monitored and tracked to an individual Product serial number.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 7 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                                   APPENDIX A            ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION

         If Process One or Process Two is selected, MSL shall take all necessary          steps to ensure that only IBM and IBM contractor employees and          designated MSL employees shall have access to such secured area where          the master image or recovery CDs are maintained when not in use,          including, without limitation, installing locks and ensuring no other          possible access through doors, ceilings, walls, or floors. If Process          Three is selected, MSL shall designate a dedicated server system for          such purpose, and access to the data and master images stored on such          server shall be limited to IBM and IBM contractor employees and          designated MSL employees through passwords, keyboard lock, and a locked          cover over all diskette drives and CD drives. Further, MSL shall take          all necessary steps to protect such server system from unauthorized          use. MSL's compliance with such processes will be subject to audit by          IBM and/or MS as provided herein in this Attachment 6 and in the          Agreement;

         (c) Comply fully and completely with the obligations of the MS License,          including, but not limited to, those specifically set forth in Exhibit          5 of Appendix A, the Additional MS Provision: MS License Obligations          Imposed On MSL hereto, in the same manner and to the same extent that          IBM is required to comply with such obligations; provided, however,          that, except as expressly provided in this Attachment 6 (including, but          not limited to, any Appendices and Exhibits), this provision is not a          sublicense or assignment of any rights of IBM under the MS License, and          MSL shall not have any right or license to use, reproduce or distribute          any MS Software Images. Copies of the MS License are available for          review upon request, subject to the requirements of Subsection (d)          below;

         (d) Prior to the receipt of any confidential information obtained from





         MS, execute a non-disclosure agreement sufficient to comply with IBM's          confidentiality obligations to MS;

         (e) Provide access to MSL's premises during normal business hours (with          prior notice of at least 48 hours) to inspection teams sent on behalf          of MS and/or IBM if MS or IBM has reason to believe that MSL may be in          violation of this Attachment 6, in order that such team may perform an          inspection of the MSL'S procedures to determine compliance with the          terms of this Attachment 6;

         (f) Immediately stop Preloading of all MS Software Images upon notice          from IBM or MS of termination, as set forth in Section 7 of this          Appendix A of this Attachment 6, the MS License, or the Agreement;

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 8 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                                   APPENDIX A            ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION

         (g) Distribute Products Preloaded with MS Software Images only to IBM          or IBM Subsidiaries, or on behalf of IBM or IBM Subsidiaries to the          extent permitted in the Agreement;

         (h) Reimburse MS's and IBM's reasonable attorney's fees and costs if MS          or IBM employs attorneys to enforce any rights arising out of this          Attachment 6;

         (i) Record, track and report to IBM (for consolidated reporting to MS)          in the form, manner and at intervals required by IBM, information          concerning MS Software Images Preloaded and supporting MS          documentation, including without limitation, the number of units, the          model number, the configuration, the name or part number of the MS          Software Image Preloaded, and the unique serial number of the Products          Preloaded and distributed with an MS Software Image.

3. ADDITIONAL WARRANTY BY MSL. MSL further represents, warrants and agrees to notify IBM immediately in writing of any suspected or actual noncompliance with the terms and conditions of this Attachment 6 or the MS License by MSL, its employees, Subsidiaries, or agents.

4. THIRD PARTY BENEFICIARY. Notwithstanding Section 16.18 of the Outsourcing Base Agreement, MS is an intended third party beneficiary of this Attachment 6 only, with full rights to enforce the terms of this Attachment 6 on its own behalf, but only to the extent that the terms of this Attachment 6 pertains to the MS Software Images and related MS documentation.

5. ADDITIONAL INDEMNIFICATION. MSL agrees to indemnify and hold harmless MS and IBM, its Subsidiaries, employees, and directors, from all fines, claims and expenses of any kind (including reasonable attorneys' fees and expenses) incurred by IBM or MS arising from or connected with (a) any breach, default or noncompliance by MSL of its representations, warranties or obligations under this Attachment 6, (b) alteration or modification by MSL of any MS Software Image, (c) installation on a Product of an image or Code other than the IBM Software Package, and (d) any unauthorized use, reproduction or distribution of MS Software Images or related documentation by MSL, or its employees or agents, whether or not authorized by MSL; provided, however, that MSL shall not be liable only to the extent that any such fines, claims or expenses are attributable to IBM's gross negligence or willful misconduct or to written instructions provided by an authorized representative of IBM to MSL.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 9 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                                   APPENDIX A            ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION

6. ADDITIONAL MODIFICATION AND AMENDMENT RIGHTS. IBM may modify, add or delete terms or conditions of this Attachment 6 (including its Appendices and Exhibits) in response to a modification or amendment of the MS License by providing MSL thirty (30) calendar days advance written notice or the same period of time MS gives IBM to comply with a modification or amendment, if such period is less than thirty (30) calendar days. MSL agrees to comply with such modifications, additions, or deletions to this Attachment 6 if it continues to Preload MS Software Images on Products after such notice period.

7. ADDITIONAL TERMINATION RIGHTS. In addition to the termination provisions provided in Section 5.0 of the Outsourcing Base Agreement, IBM may terminate this Attachment 6, in whole or in part (in part including any or all provisions regarding MS Software Images), without liability, due to: (a) the expiration or termination of the MS License; or (b) the expiration or termination of the Agreement, including without limitation, termination of this Attachment 6 as specified below:





         (i) IBM may, at IBM's sole discretion, terminate all rights granted to          MSL under this Attachment 6 (and its associated Exhibits and          Appendices), with cause immediately upon written notice to MSL;

         (ii) MS may terminate this Attachment 6 in part (i.e., to the extent MS          Software Images are included in this Attachment 6) immediately upon          written notice to MSL and IBM in the event that MS learns of any          unauthorized use, reproduction or distribution of MS Intellectual          property by MSL, or its employees or agents;

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 10 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                             EXHIBIT I OF APPENDIX A                                MS SOFTWARE IMAGES

The term MS Software Images consists of the following Microsoft Corporation products:

A. [*]

B. [*]

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 11 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                             EXHIBIT 2 OF APPENDIX A                             EXTERNAL DOWNLOAD PROCESS

EXTERNAL DOWNLOAD PROCESS. The following process shall comply with the requirements set forth in Subsection 2(c)(i) of Appendix A, Attachment 6:

(a) download tools (which are off the shelf products) used to perform installation process are not required to be in a secured area (1,2);

(b) the master image is retained in a secured area (which is either a locked room or cabinet) when not in use;

(c) the installation process is periodically monitored by an IBM employee or IBM contractor employee (who is not an employee of MSL);

(d) if the image is installed on a hardfile prior to installation of the hardfile on the Product, such installed hardfile serial numbers will be separately tracked and any such hardfiles that are not installed in a Product by the end of the work session will be secured in the secured area;

(e) the hardfile on which the image is installed is electronically verified and associated to the Product unit serial number;

(f) MSL electronically tracks the system unit serial number, hardfile serial number, and designated model number;

(g) access to the secured area where the master image is retained when not in use is limited to an IBM employee, IBM contractor employee, or MSL;

(h) the MS Certificate of Authenticity (COA) serial number is electronically associated by MSL to the Product serial number;

Notes: 1. Customer Product model and serial number electronically captured via the vital product data. 2. IBM proprietary software, maintained and accessible only by IBM or MSL, shall be used for the download process.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 12 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                             EXHIBIT 3 OF APPENDIX A                             RECOVERY CD INSTALLATION

RECOVERY CD INSTALLATION. The following process shall comply with the requirements set forth in subsection 2(c)(ii) of Appendix A, Attachment 6:

(a) download tools (which are off the shelf products) used to perform the installation process are not required to be in a secured area;

(b) the recovery CDs are retained in a secured area when not in use;





(c) the installation process is periodically monitored by an IBM employee or IBM contractor employee (who is not an employee of MSL);

(d) the hardfile on which the image is installed is electronically verified and associated to the Product serial number;

(e) MSL electronically tracks the Product serial number, hardfile serial number, and designated model number;

(f) access to the secured area where the recovery CDs are retained when not in use is limited to an IBM employee, IBM contractor employee or MSL;

(g) the MS Certificate of Authenticity (COA) serial number is electronically associated to the Product serial number by the MSL.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 13 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                             EXHIBIT 4 OF APPENDIX A                          SECURED SERVER DOWNLOAD PROCESS

SECURED SERVER DOWNLOAD PROCESS. The following process shall comply with the requirements set forth in Subsection 2(c)(iii) of Appendix A, Attachment 6:

(a) the master image shall be maintained on a secured server with access limited to an IBM employee, an IBM contractor employee, or MSL;

(b) the server shall be accessible only to an IBM employee, an IBM contractor employee, or MSL through keyboard locks and power-on passwords;

(c) only operators with valid user ids and passwords are authorized to initiate download. The IBM employee or IBM contractor employee need not be present for installation process;

(d) the server electronically logs the model number, serial number, user id, and image part number when the installation process is initiated;

(e) MSL electronically tracks the Product serial number, hardfile serial number and designated model number;

(f) the MS COA serial number is electronically associated by MSL to the Product serial number

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 14 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                             EXHIBIT 5 OF APPENDIX A                             ADDITIONAL MS PROVISIONS:                       MS LICENSE OBLIGATIONS IMPOSED ON MSL

1. INSTALLATION OBLIGATIONS. MSL represents, warrants and agrees that when performing work pursuant to this Attachment 6, it shall:

        (a) install no more than one (1) copy of the MS Software Image on each     Product system hard disk (Preinstalled MS Software);

        (b) unless expressly authorized by IBM in writing to perform otherwise,     pre-install the MS Software Image as the default operating system on each     Product distributed with the MS Software Image (i.e., the MS Software Image     will set up and execute unless the End User Customer configures the Approved     Product otherwise). MSL shall preinstall the MS Software Image solely in     accordance with the installation instructions set forth in this Attachment 6     and as further directed by IBM in Appendices. MSL may use the tangible forms     of the programming code (tools and software) provided by IBM solely to     preinstall the MS Software Image in accordance with this Attachment 6 and     for no other purpose;

        (c) distribute, to IBM and IBM's subsidiaries, Products with only one     (1) copy each of the Preloaded MS Software and related documentation as     directed by IBM in writing; PROVIDED, HOWEVER, that if IBM provides MSL     with a recovery CD of the MS Software Image (Recovery CD) or back-up copy     of the MS Software Image on CD (Back-up Copy) in a Product's ship group,     MSL shall distribute one copy of such Recovery CD or Back-up CD along with     the Product, if so directed by IBM in writing;

        (d) distribute MS Software Image(s) and MS Software Image documentation     only with Product(s) and only inside the Product package;

        (e) except as expressly authorized by IBM in writing, not modify, in any     way, or delete any aspects of the MS Software Image and MS related     documentation provided by IBM to MSL;

        (f) except as provided in this Attachment 6 or expressly authorized by     IBM in writing, not remove or modify the package contents of any MS Software





    Image package or modify or translate any related End User documentation;

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 15 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                             EXHIBIT 5 OF APPENDIX A                             ADDITIONAL MS PROVISIONS:                       MS LICENSE OBLIGATIONS IMPOSED ON MSL

        (g) include an IBM-specified MS Software Image package with each Product     distributed with an MS Software Image; A COA must be affixed to or accompany     each copy of the MS Software Image documentation, and the COA serial number     must be registered with the Product during the assembly process as provided     in Exhibits 2, 3, and 4 of Appendix A of this Attachment 6.

        (h) if expressly authorized by IBM to distribute the MS Software     Images(s) on media other than installed on the Product hard disk, distribute     the MS Software Image(s) on separate media (e.g., separate diskettes,     CD-ROM disc, etc.) from other software, except for distribution of a     Recovery CD approved by IBM and MS;

        (i) Preload MS Software Images on Products, and place MS Software Image     packages in Product packages, only at an Approved Location and solely by     MSL's employees or contractors;

        (j) not reverse engineer any MS Software Image provided by IBM to MSL,     except as permitted by applicable law without the possibility of contractual     waiver. Except as necessary to Preload MS Software Images or as otherwise     permitted in Attachment 6, MSL shall not reproduce the MS Software Image or     any part of the related documentation. MSL shall make no use of the tangible     MS Software Image and related documentation except as expressly described in     this Attachment 6;

        (k) not distribute MS Software Images or any part of the related     documentation in encrypted form, unless provided by IBM in such form and     expressly directed by IBM to distribute in such form;

        (l) where MSL distributes Preinstalled MS Software within the Products,     place a notice over either the Product power switch in the OFF position or     the power inlet connector which informs the End User that turning on the     Product system indicates acceptance of the terms of the End User License     Agreement (EULA), or comply with such other procedure authorized by IBM     to ensure EULA acceptance;

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 16 of 19

                                  ATTACHMENT 6                     SOFTWARE INSTALLATION TERM AND CONDITIONS

                             EXHIBIT 5 OF APPENDIX A                             ADDITIONAL MS PROVISIONS:                       MS LICENSE OBLIGATIONS IMPOSED ON MSL

        (m) if IBM expressly authorizes MSL in writing to enter End User     information on behalf of End Users in the boxes provided for the on-screen     End User registration process for the MS Software Image, not to enter     Supplier's own name or make any other false or fictional registrations. MSL     shall not (A) relieve End Users of their obligations to enter COA     registration numbers in the on-screen End User registration process and to     reply to on-screen EULA inquiries or (B) insert COA registration numbers or     reply to EULA inquiries for or on behalf of End Users;

        (n) unless expressly authorized by IBM in writing, not install multiple     versions of MS Software Images;

        (o) except as expressly authorized by IBM in writing, not distribute     more than one MS Windows operating system (i.e., [*]) with the same     Product.

2. INTELLECTUAL PROPERTY NOTICES. MSL will not remove, modify or obscure any copyright, trademark, patent, or mask work notices that appear on the MS Software Image or related documentation as delivered to MSL.

3. OBLIGATIONS UPON TERMINATION.

        (a) Except as otherwise provided in Subsection 3(b) below, within [*]     calendar days after termination or expiration of the Agreement (or this     Attachment 6, in the event of termination in part) for any reason,     MSL shall return to IBM all MS Software Image(s) master media and all MS     Software Image documentation which has not been placed in a Product package     prior to such termination or expiration, and MSL shall provide written     notice to IBM signed by a representative certifying that MSL has fulfilled     such requirements.

        (b) Except as otherwise provided in this Subsection 3(b), upon     termination or expiration of the Agreement (or this Attachment 6, in the





    event of termination in part) for any reason, MSL's authority to Preload MS     Software Images and to place MS Software Image documentation in Product     packages shall immediately cease.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 17 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                             EXHIBIT 5 OF APPENDIX A                             ADDITIONAL MS PROVISIONS:                       MS LICENSE OBLIGATIONS IMPOSED ON MSL

4. ADDITIONAL AUDITS AND INSPECTIONS.

        (a) During the Term of the Agreement, and for [*] years thereafter,     MSL agrees to keep all usual and proper records and books of account and     all usual and proper entries relating to each MS Software Image sufficient     to substantiate the number of copies of MS Software Image packages acquired     and placed into Product packages, the number of copies of MS Software Images     installed, and the number of Products distributed by MSL. MSL shall maintain     on MSL's premises (or commercial archive facility) such records, and all     other records required to be kept by this Attachment 6, for itself and for     each Subsidiary of MSL that exercises rights under this Attachment 6. Any     audit must be initiated within [*] years after termination or expiration of     this Attachment 6, the Agreement, or of the MS License, whichever occurs     last.

        (b) In order to verify statements issued by MSL and Subsidiaries of MSL     and compliance with the terms and conditions of this Attachment 6, IBM or MS     may, at IBM's or MS's sole discretion, cause (i) an audit to be made of     MSL's and/or MSL's Subsidiaries' books and records and/or (ii) an inspection     to be made of those portions of MSL's and/or MSL's Subsidiaries' facilities     and procedures reasonably necessary to verify such compliance. Except as     otherwise provided in the Agreement, any audit and/or inspection shall be     conducted during regular business hours at MSL's and/or MSL's Subsidiaries'     facilities, with at least forty-five (45) calendar days prior written     notice. Any audit and/or inspection shall be conducted (other than on a     contingent fee basis) by an independent certified public accountant which is     either (1) jointly selected by MSL and IBM (or MS, as applicable), (2) has     been agreed to by the Parties for any prior audit of any MSL/IBM (or MS, as     applicable) license or agreement, or (3) has been agreed to by IBM and MS     for any prior audit of any IBM/MS license or agreement.

        (c) MSL agrees to provide the audit or inspection team reasonable access     to the relevant MSL's and/or MSL's Subsidiaries' records and facilities for     the purpose of performing the audit.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 18 of 19

                                  ATTACHMENT 6                    SOFTWARE INSTALLATION TERMS AND CONDITIONS

                             EXHIBIT 5 OF APPENDIX A                            ADDITIONAL MS PROVISIONS:                       MS LICENSE OBLIGATIONS IMPOSED ON MSL

        (d) Prompt adjustment shall be made to compensate for any errors or     omissions disclosed by such audit. Any such audit shall be paid for by IBM     (or MS, as applicable) unless material discrepancies are disclosed.     Material shall mean an underaccounting of installed MS Software Images     valued at more than [*]. If material discrepancies are disclosed, MSL     agrees to pay IBM or MS for the costs associated with the audit. Further,     MSL agrees to indemnify IBM and its subsidiaries for any additional costs     incurred by IBM as a result of any unauthorized copies or copies which were     not reported to IBM. In no event shall audits be made more frequently than     semiannually unless the immediately preceding audit disclosed a material     discrepancy.

5.  EXPORT OR RE-EXPORT. MSL agrees that it will not export or re-export an MS     Software Image to any country to which such export is restricted by export     administration regulations, without prior written consent, if required, of     the Office of Export Administration of the U.S. Department of Commerce, or     such other governmental entity as may have jurisdiction over such export.     Restricted countries currently include, but are not necessarily limited to,     Cuba, Sudan, Iran, Iraq, Libya, North Korea, and Syria. MSL warrants and     represents that neither the U.S.A. Bureau of Export Administration nor any     other federal agency has suspended, revoked or denied MSL's export     privileges. MSL further agrees that it shall not export or re-export an MS     Software Image in violation of applicable laws or regulations to (i) any End     User who MSL knows will utilize an MS Software Image in the design,     development or production of nuclear, chemical or biological weapons; or     (ii) any End User who has been prohibited from participating in U.S.A.     export transactions by any federal agency of the U.S.A. government.

6. CONFIDENTIALITY. As provided in the Agreement, the terms and conditions of this Attachment 6 (including this Exhibit 5 of Appendix A of Attachment 6) are confidential, and MSL shall not disclose the terms or conditions to any third





party without the prior written approval of IBM.

IBM Confidential                                                  June 2, 1999 ATT6.1wp                                                          Page 19 of 19

                           IBM AGREEMENT FOR EXCHANGE                           OF CONFIDENTIAL INFORMATION

                           Document Number: 4998S60076

                   International Business Machines Corporation                              Armonk, New York 10504

                                                                     Page 1 of 5

                                                               [GRAPHIC OMITTED]

               Agreement for Exchange of Confidential Information

IBM ============================================================================

      Our mutual objective under this Agreement is to provide appropriate       protection for Confidential Information (Information) while maintaining       our ability to conduct respective business activities. Each of us agree       that the following terms apply when one of us (Disclose) discloses       Information to the other (Recipient) under this Agreement.

SECTION 1 ASSOCIATED CONTRACT DOCUMENTS

      Each time one of the parties wishes to disclose specific Information to       the other, the Discloser will issue a Supplement to this Agreement       (Supplement) before disclosure.

      The Supplement will identify the Recipient's person designated to be its       Point of Contact for the disclosure and will contain the Initial and Final       Disclosure Dates. If either of these dates is omitted from the Supplement,       such date will be deemed to be the actual date of disclosure. Information       becomes subject to this Agreement on the Initial Disclosure Date. The       Supplement will also contain a non-confidential description of the       specific Information to be disclosed and any additional terms for that       Information.

      The only time Recipient and Discloser are required to sign the Supplement       is when it contains additional terms. When signatures are not required,       the Recipient indicates acceptance of Information under the terms of this       Agreement by participating in the disclosure, after receipt of the       Supplement.

SECTION 2 DISCLOSURE

      The Discloser and Recipient's Point of Contact will coordinate and control       the disclosure. Information will be disclosed either:

            1)    In writing;             2)    By delivery of items;             3)    By initiation of access to information, such as may be                   contained in a data base; or             4)    By oral and/or visual presentation.

      Information should be marked with a restrictive legend of the Discloser.       If Information is not marked with such legend or is disclosed orally:

            1)    The Information will be identified as confidential at the time                   of disclosure, and             2)    The Discloser will promptly provide the Recipient with written                   summary.

SECTION 3 OBLIGATION

      The Recipient agrees to:

            1)    use the same care and discretion to avoid disclosure,                   publication or dissemination of the Discloser's Information as                   it uses with its own similar Information that it does not wish                   to disclose, publish or disseminate; and             2)    use the Discloser's Information for the purpose for which it                   was disclosed or otherwise for the benefit of the Discloser.

      The Recipient may disclose Information to:

                                                                     Page 2 of 5

            1)    its employees and employees of its parent and subsidiary                   companies who have a need to know; and             2)    any other party with the Discloser's prior written consent.





      Before disclosure to any of the above parties, the Recipient will have a       written agreement with such party sufficient to require that party to       treat information in accordance with this Agreement.

      The Recipient may disclose Information to the extent required bylaw.       However, the Recipient must give the Discloser prompt notice to allow the       Discloser a reasonable opportunity to obtain a protective order.

SECTION 4 CONFIDENTIALITY PERIOD

      Information disclosed pursuant to this Agreement will be subject to the       terms of this Agreement for [*] years following the Final Disclosure Date.

SECTION 5 EXCEPTIONS TO OBLIGATIONS

      The Recipient may disclose, publish, disseminate, and use Information that       is:

            1)    already in its possession without obligation of                   confidentiality;             2)    developed independently;             3)    obtained from a source other than the Discloser without                   obligation of confidentially;             4)    publicly available when received, or thereafter becomes                   publicly available through no fault of the Recipient; or             5)    disclosed by the Discloser to another party without obligation                   of confidentially.

SECTION 6 RESIDUAL INFORMATION

      The recipient may disclose, publish, disseminate, and use the ideas,       concepts, know-how and techniques, related to the Recipient's business       activities, which are contained in the Discloser's information and       retained in the memories of Recipient's employees who have had access to       the Information pursuant to this Agreement (Residual Information).

      Nothing contained in this Section gives the Recipient the right to       disclose, publish, or disseminate, except as set forth elsewhere in this       Agreement:

            1)    the source of Residual Information;             2)    any financial, statistical or personnel data of the                   Discloser; or             3)    the business plans of the Discloser.

SECTION 7. DISCLAIMERS

      THE DISCLOSER PROVIDES INFORMATION ON AN AS IS BASIS.

      The discloser will not be liable for any damages arising out of use of       Information disclosed hereunder.

      Neither this Agreement nor any disclosure of Information hereunder grants       the Recipient any right or license under any trademark, copyright or       patent now or hereafter owned or controlled by the Discloser.

      Disclosure of Information containing business plans is for planning       purposes only. The Discloser may change or cancel its plans at any time.       Use of such Information is at the Recipient's own risk.

      The receipt of Information pursuant to this Agreement will not preclude,       or in any way limit, the Recipient from:

                                                                     Page 3 of 5

            1)    providing to others products or services which may be                   competitive with products or services of the Discloser;             2)    providing products or services to others who compete with the                   Discloser; or             3)    assigning its employees in any way it may choose.

SECTION 8 GENERAL

      This Agreement does not require either party to disclose or to receive       Information.

      Neither party may assign, or otherwise transfer, its rights or delegate       its duties or obligations under this Agreement without prior written       consent. Any attempt to do so is void.

      The Recipient will comply with all applicable United States and foreign       export laws and regulations.

      Only a written agreement signed by both of us can modify this Agreement.

      Either party may terminate this Agreement by providing [*] month's written       notice to the other. Any provisions of this Agreement which by their       nature extend beyond its termination remain in effect until fulfilled,       and apply to respective successors and assignees.





      If there is a conflict between the terms of this Agreement and a       Supplement, those of the Supplement prevail. Except as modified by a       Supplement, the terms of this Agreement remain in full force and effect.

      The laws of the State of New York govern this Agreement.

                                                                     Page 4 of 5

      This Agreement and its Supplements are the complete and exclusive       agreement regarding our disclosures of Information, and replace any prior       oral written communications between us. By signing below for our       respective enterprises, each of us agrees to the terms of this Agreement.       Once signed, any reproduction of this Agreement made by reliable means       (for example, photocopy or facsimile) is considered an original.

      International Business Machines     Manufacturer Services Limited       Corporation                         200 Baker Avenue       Armonk, New York                    Concord, Massachusetts

By: /s/ Craig Bloszinsky                  By: ----------------------------------        ----------------------------------     Authorized Signature                      Authorized Signature

Name: Craig Bloszinsky                    Name: ----------------------------------        ----------------------------------

Date: 3/10/98                             Date: ----------------------------------        ----------------------------------

Agreement Number 4998S60076 International Business Machines Corporation Armonk, New York 10504

                                                                     Page 5 of 5

                      EQUIPMENT AND PROGRAM LOAN AGREEMENT

                                     between

                                 IBM Corporation

                                       and

               Manufacturers' Services Western US Operations, Inc.

                                                               [GRAPHIC OMITTED]

IBM Equipment and Program Loan Agreement     ============================================================================

This is an Equipment and Program Loan Agreement (EPLA) between International Business Machines Corporation (hereinafter called IBM), a New York corporation, with an address for the purpose of this Agreement at 8501 IBM Drive, Charlotte, NC 28262, and Manufacturers' Services Western US Operations, Inc. (hereinafter called MSL), with an address at 5600 Mowry School Road, Newark, CA 94560.

IBM and MSL agree that the following terms and conditions apply when IBM loans MSL equipment and programs including associated user manuals and similar documentation (Loaned Items). Loaned Items may also be referred to as Loaned Equipment or Loaned Programs, as applicable.

SECTION 1 ASSOCIATED CONTRACT DOCUMENTS

      Attachment 5 of the Outsourcing Agreement lists the Loaned Items. A       revised Attachment 5 sets forth any additions or deletions to the listed       Loaned Items. MSL's continued use of the Loaned Items or acceptance of       additional Loaned Items after its receipt of a revised Attachment 5 will       constitute its acceptance of such Attachment.

      The loan of Loaned Items is made in conjunction with the IBM and MSL       Outsourcing Agreement dated _____________________ (Referenced       Agreement) for the purpose of MSL fulfilling its responsibilities and       obligation as stated in the Reference Agreement.

SECTION 2 TERM AND TERMINATION

      Unless otherwise mutually agreed, the EPLA will be in effect for as long       as the Referenced Agreement is effective.

SECTION 3 LOANED PERIOD

      IBM will provide the Loaned Items to MSL on or about the Effective Date of       the Referenced Agreement. The Loan Period for each Loaned Item will extend       from the actual date IBM delivers the Loaned Items(s) to MSL, until the





      earliest of:

      a)    the applicable return date specified in the Attachment or revised             return date specified in a revised Attachment;

      b)    the date MSL acquires i) title to the Loaned Equipment or ii) a             continuing license to the Loaned Program, should such acquisition or             licensing be available to MSL under Section 12: or

      c)    on the Referenced Agreement expiration date.

SECTION 4 AUTHORIZED USE

      IBM provides Loaned Items to MSL solely for use in accordance with the       terms of this Agreement and for the Purpose of the loan described either       in this Agreement or in the Referenced Agreement (Authorized Use). There       are no charges for Authorized Use of the Loaned Items. MSL may not use the       Loaned Items for any other purposes.

EPL00L(CLT-EPL 1.1-02/93)                                            Page 2 of 7

SECTION 5 OWNERSHIP AND LICENSE

      IBM or another party retains title to all Loaned Items. MSL may not       transfer Loaned Items to anyone else. For Loaned Programs which are not       subject to IBM's or another supplier's or publisher's license agreement,       IBM grants MSL a license to use, store, modify and make sufficient copies       to support MSL's Authorized Use under this Agreement. Such copies will be       deemed to be Loaned Items. For Loaned Programs which are subject to       another supplier's or publisher's license agreement, however, the terms       and conditions of that supplier or publisher are passed to MSL through       IBM. Such terms and conditions will be shipped with the Loaned Program.       For Loaned Programs which IBM licenses to others under an IBM license, the       terms of the applicable IBM license which are not inconsistent with this       Agreement apply. IBM will provide such terms to MSL upon request Any       authorized copies made by MSL will be deemed to be Loaned Items.

SECTION 6 LICENSED INTERNAL CODE

      If the Loaned Equipment contains Licensed Internal Code (Code), so       identified by IBM, IBM grants MSL a license only to execute such Code to       enable the Loaned Equipment to perform in accordance with IBM's official       published specifications. MSL may not reverse assemble, reverse compile,       decode, translate, or make any other copies of the Code. MSL must return       the original copy of the Code to IBM at the conclusion of the Loan Period.

SECTION 7 DELIVERY AND INSTALLATION

      IBM will deliver the Loaned Items to 8501 IBM Drive, Charlotte, NC 28262.

      MSL will:

            1)    set-up all Loaned Equipment, and

            2)    install all Loaned Programs

SECTION 8 RISK OF LOSS OR DAMAGE

      IBM relieves MSL of the risk of loss of, or damage to, all Loaned Items,       except for loss or damage resulting from MSL's breach of this Agreement       including use other than Authorized Use.

SECTION 9 SECURITY

      MSL will provide, at no cost to IBM, adequate security to protect the       Loaned Items from theft, damage or misuse.

      MSL will use reasonable care in the use of all Loaned Items. MSL will       provide an operating environment for the Loaned Items consistent with the       related user documentation.

      MSL will keep the Loaned Items at the Installation Address specified in       the Attachment. MSL will not move the Loaned Items to another location       without IBM's prior written approval.

SECTION 10 SERVICE AND SUPPORT

      During the time the Loaned Items are in MSL's possession, MSL shall, at       its own expense:

      a)    Develop and maintain the expertise to operate the Equipment             independent of IBM and ensure that the Equipment complies at all             times with all federal, state, and local governmental safety and             other requirement (including OSHA regulations). If MSL determines             that any of the Loaned Items received from IBM fails to comply with             any such requirements, MSL shall promptly notify IBM, and IBM shall

EPL00L(CLT-EPL 1.1-02/93)                                            Page 3 of 7

            either replace the Loaned Item or instruct MSL to modify the Loaned             Item so that it compiles, at IBM's expense.





      b)    Service the Loaned Items and maintain them in good operating             condition at all times.

      c)    Replace or repair all items lost, damaged or destroyed except to the             extent MSL proves to IBM that such loss, damage or destruction is             caused by circumstances beyond MSL's control. All replacement of             Loaned Items Shall become IBM property and shall be Subject to all             the terms and conditions of this Agreement.

      MSL will permit IBM personnel full, free and safe access to MSL's       facilities, during normal business hours, after reasonable notice, for the       purpose of inspection and inventory as IBM deems necessary.

SECTION 11 ALTERATIONS AND ATTACHMENTS

      MSL may make an alteration to Loaned Equipment (e.g., a change in the       structure of the equipment) only upon IBM's prior written approval. MSL       may make an attachment to Loaned Equipment (e.g., coupling a printer to a       loaned personal computer) without notice to IBM.

      MSL will remove any alteration or attachment and restore Loaned Equipment       to its unaltered condition before its return to IBM or upon IBM's notice       to MSL that the alteration or attachment creates a safety hazard or       renders maintenance of the Loaned Equipment impractical.

SECTION 12 DISPOSITION OF LOANED ITEMS

12.1  Return to IBM

      MSL will return the Loaned Equipment to IBM at the end of the Loan Period,       except as may be provided for in this Section. MSL will return the Loaned       Equipment to IBM in the same condition as when delivered to MSL,       reasonable wear and tear excepted.

      MSL will return the original and all copies of the Loaned Programs at the       end of the Loaned Period, except as may be provided in this Section.

      MSL will permit IBM personnel access during IBM's normal business hours to       allow IBM to remove the Loaned Items.

12.2  Acquisition and Continued Licensing

      IBM will determine the availability of Loaned Equipment for MSL's       acquisition and Loaned Programs for MSL's continued licensing beyond the       applicable Loan Period. MSL must inform IBM, prior to the end of the       applicable Loan Period, of MSL's interest in the acquisition of specific       Loaned Equipment or the continued licensing of specific Loaned Programs.       IBM will then notify MSL in writing either;

            1)    of the terms and conditions under which MSL may acquire such                   Loaned Equipment or continue to license such Loaned Programs,                   or

            2)    that the Loaned Items are not available for acquisition or                   continued licensing.

      Continued Licensing of Loaned Programs will be governed by the provisions       of the applicable IBM license agreement or another supplier's or       publisher's license agreement. IBM will identify to MSL the applicable       agreement which governs such licensing.

EPL00L(CLT-EPL 1.1-02/93)                                            Page 4 of 7

SECTION 13 DISCLAIMER OF WARRANTY

      IBM PROVIDES LOANED ITEMS ON AN AS IS BASIS. IBM MAKES NO WARRANTY,       EXPRESS OR IMPLIED, WITH RESPECT TO SUCH ITEMS, INCLUDING THE IMPLIED       WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

SECTION 14 PATENTS AND COPYRIGHTS

      If the operation of a Loaned Item becomes, or IBM believes is likely to       become, the subject of a claim that it infringes a patent or copyright in       the United States or Puerto Rico, MSL will permit IBM, at its option and       expense, either to secure the right for MSL to continue using the Loaned       Item or to replace or modify it so that it becomes noninfringing. However,       if neither of the foregoing alternatives is available on terms which are       reasonable in IBM's judgment, MSL will return the Loaned Item upon IBM's       written request.

      IBM will have no obligation with respect to any such claim based upon       MSL's modification of IBM equipment, programs or programming or their       combination, operation or use with any non-IBM apparatus, data or       programs.

      IBM will not have any liability regarding patent or copyright infringement       for non-IBM Loaned Items.

      This Section states IBM's entire obligations to MSL regarding infringement       or the like.

SECTION 15 LIMITATION OF REMEDIES





      IBM's entire liability and MSL's exclusive remedy for actual damages from       cause whatsoever relating to the subject matter of this Agreement will be       limited to the amount of $25,000. This limitation will apply, except as       otherwise stated in this Section, regardless of the form of action,       whether in contract or in tort, including negligence. This limitation will       not apply to claims by MSL for bodily injury or damage to real property or       tangible personal property for which IBM is legally liable.

      In no event will IBM be liable for any lost profits, lost savings,       incidental damages, or other economic consequential damages, even if IBM       has been advised of the possibility of such damages. In addition, IBM will       not be liable for any damages claimed by IBM based on any third party       claim.

      In no event will IBM be liable for any damages caused by MSL's failure to       perform MSL's responsibilities.

SECTION 16 GENERAL

      MSL may not assign this Agreement without IBM's prior written consent. Any       attempted assignment without such consent is void.

      Loaned Items are to be installed only in the United States or Puerto Rico.

      IBM will pay destination charges, both from and to IBM-designated       locations, for each Loaned Item shipped in accordance with IBM's then       current shipping practice. MSL will pay any rigging charges. MSL will       furnish all labor for unpacking and packing except as IBM otherwise       specifies or when performed at an IBM-designated location.

      IBM may provide services described in this Agreement by using IBM-selected       independent contractors.

      Neither party is responsible for failure to fulfill its obligations under       this Agreement due to causes beyond its control.

EPL00L(CLT-EPL 1.1-02/93)                                            Page 5 of 7

      Neither party may bring an action, regardless of form, arising out of this       Agreement more than [*] years after the cause of action arose.

      In the event of termination or expiration of this Agreement, the       provisions of this Agreement which, by their nature, extend beyond the       expiration or termination of this Agreement shall remain in effect beyond       such expiration or termination until fulfilled.

      If there is a conflict between this Agreement and an Attachment, the terms       and conditions of the Attachment will prevail. Except as modified by an       Attachment the terms of this Agreement remain in full force and effect.       The terms of any Attachment not inconsistent with a subsequent Attachment       remain in full force and effect.

      This Agreement and the rights and obligations of the parties hereto shall       be construed in accordance with the substantive laws of the State of New       York.

EPL00L(CLT-EPL 1.1-02/93)                                            Page 6 of 7

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be       executed by their respective authorized representatives.

      ACCEPTED AND AGREED TO:               ACCEPTED AND AGREED TO:

      IBM Corporation                       Manufacturers' Services Western                                             US Operations, Inc.       --------------------------------------------------------------------------

      By: /s/ Craig A. Bloszinsky           By: /s/ Kevin C. Melia       --------------------------------------------------------------------------

      CRAIG A. BLOSZINSKY                   KEVIN C. MELIA       --------------------------------------------------------------------------       Print Name                            Print Name

      PURCHASING PROGRAM DIRECTOR           PRESIDENT, CEO       --------------------------------------------------------------------------       Title                                 Title

      5/1/98                                MAY 5, 1998       --------------------------------------------------------------------------       Date                                  Date





EPL00L(CLT-EPL 1.1-02/93)                                            Page 7 of 7
answer:
Highlight the parts (if any) of this contract related to Third Party Beneficiary that should be reviewed by a lawyer. Details: Is there a non-contracting party who is a beneficiary to some or all of the clauses in the contract and therefore can enforce its rights against a contracting party?


question:
Exhibit 10.1

INTELLECTUAL PROPERTY AGREEMENT

THIS INTELLECTUAL PROPERTY AGREEMENT (this IP Agreement) is entered into as of April 14, 2014 (the Effective Date), by and between Motorola Solutions, Inc., a Delaware corporation (the Seller), and Zebra Technologies Corporation, a Delaware corporation (the Purchaser).

RECITALS

WHEREAS, the Seller, directly and through certain of its Affiliates, is engaged in the Business;

WHEREAS, the Seller desires to sell and transfer to the Purchaser, and the Purchaser desires to acquire from the Seller, the Business, and in furtherance thereof, at each applicable Closing, the Seller will sell and assign, and will cause the other members of the Seller Group to sell and assign, to the Purchaser Group, and the Purchaser will purchase and assume, and will cause the other members of the Purchaser Group to purchase and assume, from the Seller Group, certain of the assets and liabilities of the Business, including all of the capital stock of the Acquired Companies, all on terms and conditions set forth in that certain Master Acquisition Agreement of even date herewith (the Acquisition Agreement);

WHEREAS, certain assets owned, developed, or used by the Seller Parties in connection with the Business constitute Intellectual Property (as defined below);

WHEREAS, as part of the Purchaser's acquisition of the Business, the Seller intends to assign to the Purchaser Assignees certain of such Intellectual Property and to license the Purchaser Licensees to use certain of such Intellectual Property, in each case pursuant to the terms and conditions set forth herein; and

WHEREAS, as part of such acquisition, the Purchaser Assignees and Acquired Companies intend to license the Seller Parties to use certain of such assigned Intellectual Property and certain other Intellectual Property owned by the Acquired Companies.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual representations, warranties and covenants set forth in this IP Agreement and the other Transaction Agreements, and other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows:

ARTICLE I DEFINITIONS

Section 1.1 Definitions. For the purposes of this IP Agreement, the following terms have the meanings set forth below. Capitalized terms used in this IP Agreement but not otherwise defined herein have the meanings ascribed to them in the Acquisition Agreement.

(a) Acquired Company IP means all Intellectual Property owned by, as of the Initial Closing Date, any of the Acquired Companies, including the Acquired Company Patents and the Acquired Company Trademarks, but for the avoidance of doubt, excluding any Assigned IP.





(b) Acquired Company Patents means (i) all of the Patents owned by, as of the Initial Closing Date, any of the Acquired Companies, including those set forth on Schedule 1.1(b) of the Seller IPA Disclosure Schedule, and (ii) any Patents that are based on any invention disclosure that is owned by, as of the Initial Closing Date, any of the Acquired Companies, but for the avoidance of doubt, excluding any Assigned IP.

(c) Acquired Company Trademarks means all of the Trademarks owned by, as of the Initial Closing Date, any of the Acquired Companies, including those set forth on Schedule 1.1(c) of the Seller IPA Disclosure Schedule, but for the avoidance of doubt, excluding any Assigned IP.

(d) Acquisition Agreement has the meaning ascribed to it in the recitals.

(e) Additional Patents has the meaning ascribed to it in Section 2.1(b)(iii)(F).

(f) Ancillary IP Rights means, with respect to any Intellectual Property, any and all of the following in any jurisdiction throughout the world: (i) rights to pursue and collect damages, costs, injunctive relief and other remedies for past, current or future infringement, misappropriation, or conflict with such Intellectual Property; and (ii) royalties, fees, income and other payments and proceeds due or accrued as of the Initial Closing Date and thereafter under or arising from such Intellectual Property.

(g) Assigned Copyright Materials means all of the copyrightable or copyrighted materials owned by any Seller Party as of the Initial Closing Date that were created by a Business Employee, including the materials set forth on Schedule 1.1(g); provided that, for the avoidance of doubt, the Assigned Copyright Materials do not include any copyrightable or copyrighted material that is Software.

(h) Assigned Copyrights means all of the (i) Copyright registrations and unregistered Copyrights owned by of any Seller Party as of the Initial Closing Date that are for the Assigned Copyright Materials or the Assigned Software, and (ii) other Copyrights owned by any Seller Party as of the Initial Closing Date that were created by a Business Employee, including the Copyrights set forth on Schedule 1.1(h) of the Seller IPA Disclosure Schedule; provided that, for the avoidance of doubt, the Assigned Copyrights do not include any copyright registrations or unregistered copyrights for Software other than Assigned Software.

(i) Assigned IP means: (i) Assigned Copyrights, Assigned Copyright Materials, Assigned Patents, Assigned Know-How, Assigned Software, Assigned Trademarks, and Assigned Other IP; and (ii) any other Intellectual Property that is owned by any Seller Party as of the Initial Closing Date and that (a) is Formerly Owned by the Business, or (b) is or was used exclusively in connection with the Business on or prior to the Initial Closing Date.

(j) Assigned Know-How means all of the Know-How owned by any Seller Party as of the Initial Closing Date that was created by a Business Employee, including the Know-How set forth on Schedule 1.1(j).   2





(k) Assigned Other IP means all of the Intellectual Property (other than Copyrights, Know-How, Patents, and Software), if any, owned by any Seller Party as of the Initial Closing Date that was created by a Business Employee, including the Trademarks and other Intellectual Property set forth on Schedule 1.1(k)(i), but for the avoidance of doubt, excluding the Trademarks set forth on Schedule 1.1(k)(ii).

(l) Assigned Patents means (i) all of the Patents owned by any Seller Party as of the Initial Closing Date that are set forth on Schedule 1.1(l) of the Seller IPA Disclosure Schedule, and (ii) any Patents that are based on any invention disclosure that is owned by any Seller Party as of the Initial Closing Date and that is assigned to any of the Purchaser Assignees.

(m) Assigned Software means all of the Software owned by any Seller Party as of the Initial Closing Date that was created by a Business Employee, including the Software set forth on Schedule 1.1(m); provided that, for the avoidance of doubt, the Assigned Software does not include any rights under any Licensed Patents that cover Software.

(n) Assigned Trademarks means all of the Trademarks owned by any Seller Party as of the Initial Closing Date that are exclusively used in connection with the Business on the Initial Closing Date, including the Trademarks set forth on Schedule 1.1(n) of the Seller IPA Disclosure Schedule.

(o) Intentionally Omitted.

(p) Business Employee means any current or former employee or independent contractor of any Seller Party or any Acquired Company who, at the time of creation of Intellectual Property, was performing work for the Business and created such Intellectual Property for the Business in connection with the performance of such work.

(q) Buyer has the meaning ascribed to it in Section 6.3.

(r) Change of Control Event has the meaning ascribed to it in Section 6.3.

(s) Copyrights has the meaning ascribed to it in the definition of Intellectual Property.

(t) Derivative Works (i) with respect to copyrightable works shall have the meaning set forth in the U.S. Copyright Act, 17 U.S.C. §101, et seq. (including translation into other computer language and any other form in which an existing work may be recast, transformed or adapted which would constitute a derivative work under the U.S. Copyright Act, 17 U.S.C. §101), and (ii) with respect to Know-How, it shall also mean any material derived from such Know-How.

(u) Enterprise Data Capture Products means (i) bar code scanner products for reading machine-readable symbols (including fixed, handheld, portable, wearable, and vehicle-mounted laser scanners and linear and area imagers), (ii) radio frequency identification (RFID) reader products used to communicate with RFID tags (including portal RFID readers, doorway, forklift, crane and delivery-door RFID readers, handheld RFID readers, and fixed, vehicle-mounted, wearable, portable, hands-free and mobile RFID readers), or (iii) associated   3





accessories and Software, in each case, to the extent such products are the same as those (a) offered by the Enterprise Segment on or prior to the Initial Closing Date or (b) under development by the Enterprise Segment on the Initial Closing Date.

(v) Enterprise Mobile Computing Products means durable or rugged enterprise-grade fixed, handheld, wearable, vehicle-mounted, or portable computing or smartphone products, which products shall include handheld and portable mobile computers, gun handle mobile computers, tablet computers, vehicle-mounted computers and wearable computers, in each case, to the extent such products are the same as those (i) offered by the Enterprise Segment on or prior to the Initial Closing Date, or (ii) under development by the Enterprise Segment on the Initial Closing Date.

(w) Enterprise Products means (i) Enterprise Data Capture Products, (ii) Enterprise Mobile Computing Products, or (iii) Enterprise Wireless LAN Products.

(x) Enterprise Segment means the Enterprise reporting segment as reflected in the Seller Financial Statements except to the extent they include Integrated Digital Enhanced (iDEN) protocol network infrastructure products and related Software and services.

(y) Enterprise Wireless LAN Products means products that provide connectivity to wireless products within a local area network (whether indoors or outdoors) and that operate in compliance with the IEEE 802.11 standard (which products shall include types of products that are wireless local area network (LAN) products, including (i) wireless access points and ports compliant with the IEEE 802.11 standard, (ii) wireless controllers compliant with the IEEE 802.11 standard, (iii) wireless switches designed for use with the foregoing wireless access points, ports and controllers, and (iv) related LAN accessories and Software), in each case, to the extent such products are the same as those (a) offered by the Enterprise Segment on or prior to the Initial Closing Date, or (b) under development by the Enterprise Segment on the Initial Closing Date.

(z) Excluded Field Products means any product to the extent it was designed, developed, or manufactured for use in conjunction with or for interoperability with a (i) Public Safety Next-Gen LTE Network or (ii) Two-Way Radio Network.

(aa) Excluded Infrastructure Equipment means (i) (a) government, public safety or defense communications network infrastructure equipment and systems, or (b) professional and commercial communications network infrastructure equipment and systems, in each case of clauses (a) and (b), to the extent designed, developed, or manufactured to operate with Excluded Mobile Radio Products, or (ii) network infrastructure equipment to the extent designed, developed, or manufactured to operate with a Public Safety Next-Gen LTE Network and on the frequency band allocated to the Public Safety Community.

(bb) Excluded Mobile Radio Products means any product (including any government, public safety and defense, professional, and commercial product): (i) to the extent that such product has a primary communication mode of Push-to-Talk and contains a transceiver that operates: (a) in a frequency band that is allocated for land mobile radio users; and (b) in compliance with any Two-Way Radio Standard; or (ii) to the extent that such product contains a transceiver that operates in compliance with the Integrated Digital Enhanced (iDEN) protocol.   4





(cc) Excluded Software and Solutions means (i) a command and control solution (hardware and Software) to the extent that it is designed, developed, or manufactured primarily for use by the Public Safety Community or Government Entities, or (ii) Software to the extent designed primarily to operate Excluded Mobile Radio Products or Excluded Infrastructure Equipment.

(dd) Existing Stock has the meaning ascribed to it in Section 2.2(d).

(ee) Formerly Owned by the Business means, with respect to any type of Intellectual Property, any item of such Intellectual Property that (i) is owned by any Seller Party as of the Initial Closing Date and (ii) was at any time prior to the Initial Closing Date owned by any Acquired Company in any form, e.g., an invention owned by an Acquired Company prior to the Initial Closing Date for which a patent or patent application is owned by a Seller Party as of the Initial Closing Date.

(ff) Future Acquisition has the meaning ascribed to it in Section 6.4.

(gg) Group means (i) with respect to the Seller, the Seller Group, and (ii) with respect to the Purchaser, the Purchaser Group.

(hh) In-bound Licenses has the meaning ascribed to it in Section 3.4.

(ii) Incorporated Into means, with respect to a product, embedded in, used in, incorporated into, combined with, linked with, distributed with, provided as a service with or made available with such product, including any Object Code that is referenced or required to be present or available (e.g., available via another machine connected directly or through a network) in such product for such product to properly function in accordance with its specifications.

(jj) Insolvent Party has the meaning ascribed to it in Section 4.5.

(kk) Intellectual Property means any and all of the following in any jurisdiction throughout the world: (i) patents, patent applications, industrial design rights (including utility model rights, design rights, and industrial property rights), registrations and applications for registration of industrial design rights, patents of importation/confirmation, statutory invention registrations, and certificates of invention and like statutory right, all counterparts, continuations, divisions, continuations-in-part, revisions, extensions, supplementary certificates, substitutions, reexaminations, renewals, and reissuances of any of the foregoing and any patent or patent application that claims priority to any of the foregoing (collectively, Patents); (ii) Trademarks; (iii) copyright registrations and applications, and unregistered copyrights, published and unpublished works of authorship, and Mask Works, together with all applications, registrations, and renewals in connection therewith, and all common-law rights to any of the foregoing (collectively, Copyrights); (iv) computer programs, whether embodied in software, firmware or otherwise, including, software compilations, software implementations of algorithms, software tool sets, compilers, and software models and methodologies (whether in Source Code or Object Code form), and (C) translation, ported   5





versions and modifications of any of the foregoing (collectively, Software); (v) trade secrets, know-how, inventions, invention disclosures, and other confidential or proprietary information (collectively, Know-How); and (vi) all other intellectual property rights or industrial property rights.

(ll) Invention Disclosure Review List has the meaning ascribed to it in Section 2.1(b)(iii)(A).

(mm) Invention Disclosure Review Team means Paul Steinberg and Bob Sanders (or their replacements or proxies, as applicable, as determined by their respective then-current employer).

(nn) IP Agreement has the meaning ascribed to it in the preamble.

(oo) Know-How has the meaning ascribed to it in the definition of Intellectual Property.

(pp) LAN has the meaning ascribed to it in the definition of Enterprise Wireless LAN Products.

(qq) Licensable means, with respect to Intellectual Property, that (i) such Intellectual Property is owned by a third Person (other than a Seller Party), and (ii) as of the Initial Closing Date, a Seller Party has (to the extent which and for such time that a Seller Party has) a right to grant to any Purchaser Licensee the licenses, sublicenses, or related rights to such Intellectual Property as set forth in this IP Agreement without the payment of royalties or other consideration to third Persons (except for payments for which the Purchaser agrees to reimburse the Seller or payments to any third Person: (A) for inventions made by such third Person while engaged by any Seller Party; and (B) as consideration for the acquisition of such Intellectual Property) and without obtaining the consent of any third Person (except where such consent has already been granted).

(rr) Licensed Copyright Materials means all of the copyrighted and copyrightable materials owned or Licensable by any Seller Party as of the Initial Closing Date that are or have been, on or prior to the Initial Closing Date, (i) used in connection with the Business, (ii) used in connection with the development of any product, service, or system in the Business, or (iii) incorporated into any product, service, or system in the Business; provided, that, for the avoidance of doubt, the Licensed Copyright Materials do not include (A) the Assigned Copyright Materials, (B) works authored after, or acquired by any Seller Party after, the Initial Closing Date, or (C) Software.

(ss) Licensed Copyrights means: (i) all of the copyright registrations and unregistered copyrights owned or Licensable by any Seller Party as of the Initial Closing Date that are for the Licensed Copyright Materials or the Licensed Software; and (ii) all other Copyrights that are owned or Licensable by any Seller Party as of the Initial Closing Date that are or have been, on or prior to the Initial Closing Date, (A) used in connection with the Business, (B) used in connection with the development of any product, service, or system in the Business, or (C) incorporated into any product, service, or system in the Business; provided that, for the avoidance of doubt, the Licensed Copyrights do not include the Assigned Copyrights or   6





any copyright registrations or unregistered copyrights that are for (I) copyrightable works authored after, or acquired by any Seller Party after, the Initial Closing Date or (II) Software (other than the Licensed Software).

(tt) Licensed IP means the Licensed Copyrights, Licensed Copyright Materials, Licensed Know-How, Licensed Patents, Licensed Software, Licensed Trademarks, Mobility Trademarks, Non-Mobility Trademarks, and Licensed Other IP.

(uu) Licensed Know-How means all of the Know-How owned or Licensable by any Seller Party as of the Initial Closing Date that is or has been, on or prior to the Initial Closing Date, (i) used in connection with the Business, (ii) used in connection with the development of any product, service, or system in the Business, or (iii) incorporated into any product, service, or system in the Business; provided that, for the avoidance of doubt, the Licensed Know-How does not include (A) the Assigned Know-How, or (B) any Know-How that is developed or acquired by any Seller Party after the Initial Closing Date.

(vv) Licensed Other IP means all of the Intellectual Property (other than the Licensed Copyrights, Licensed Patents, Licensed Copyright Materials, Licensed Know-How, Licensed Software, and Trademarks), if any, owned or Licensable by any Seller Party as of the Initial Closing Date that is or has been, on or prior to the Initial Closing Date, (i) used in connection with the Business, (ii) used in connection with the development of any product, service, or system in the Business, or (iii) incorporated into any product, service, or system in the Business; provided that, for the avoidance of doubt, the Licensed Other IP does not include the Assigned Other IP.

(ww) Licensed Patents means all of the Patents (i) owned by any Seller Party as of the Initial Closing Date or that are based on an invention disclosure owned by any Seller Party as of the Initial Closing Date, or (ii) Licensable by any Seller Party as of the Initial Closing Date; provided that, for the avoidance of doubt, the Licensed Patents do not include the Assigned Patents.

(xx) Licensed Software means the Software owned or Licensable by any Seller Party as of the Initial Closing Date that is or has been, on or prior to the Initial Closing Date, (i) used in connection with the Business, (ii) used in connection with the development of any product, service, or system in the Business, or (iii) incorporated into any product, service, or system in the Business; provided that, for the avoidance of doubt, the Licensed Software does not include (I) the Assigned Software, (II) Software developed or acquired by any Seller Party after the Initial Closing Date, or (C) Seller Group Software specifically licensed to the Purchaser Group under another Transaction Agreement.

(yy) Licensed Trademarks means the Trademarks set forth on Schedule 1.1(yy); provided that, for the avoidance of doubt, the Licensed Trademarks do not include the Assigned Trademarks, the Mobility Trademarks, or the Non-Mobility Trademarks.

(zz) LTE means the Long Term Evolution (LTE) or Long Term Evolution Advanced (LTE-A) fourth generation (4G) broadband communications standards, including various derivations thereof that do not fundamentally alter the character thereof (e.g., wireless air-interface, framing structure, control, call set-up and connection management).   7





(aaa) Mask Work means: (i) any mask work, registered or unregistered, as defined in 17 U.S.C. §901; (ii) all registrations and applications to register the foregoing anywhere in the world; (iii) all foreign counterparts and analogous rights anywhere in the world (including semiconductor topography rights); and (iv) all rights in and to any of the foregoing.

(bbb) Material IP Contracts has the meaning ascribed to it in Section 3.4.

(ccc) Mobility Intellectual Property License means that certain Amended and Restated Intellectual Property License Agreement, by and between Motorola Mobility, Inc. and Motorola, Inc., effective as of July 31, 2010.

(ddd) Mobility Trademark License means that certain Amended and Restated Exclusive License Agreement, by and between Motorola Trademark Holdings, LLC and Motorola, Inc., effective as of July 30, 2010.

(eee) Mobility Trademarks means any Trademarks licensed to any Seller Party or any Acquired Company pursuant to the Mobility Trademark License that are, as of the Initial Closing Date, used in connection with the Business or any product, service, or system in the Business.

(fff) Mobility Transition Period has the meaning ascribed to it in Section 2.2(d)(i)(A).

(ggg) New Business Employee has the meaning ascribed to it in Section 2.1(b)(iii)(D).

(hhh) Non-Mobility Trademarks has the meaning ascribed to it in Section 2.2(d)(i)(B).

(iii) Non-Mobility Transition Period has the meaning ascribed to it in Section 2.2(d)(i)(B).

(jjj) Object Code means one or more computer instructions in machine readable form (whether or not packaged in directly executable form), including any such instructions that are readable in a virtual machine, whether or not derived from Source Code, together with any partially compiled or intermediate code that may result from the compilation, assembly or interpretation of any Source Code. Object Code includes firmware, compiled or interpreted programmable logic, libraries, objects, bytecode, machine code, and middleware.

(kkk) Off-the-Shelf Software Licenses means licenses in respect of commercially available, unmodified, off-the-shelf Software used by any of the Seller Entities solely for its own internal use with respect to the Business.

(lll) Open Source Software means any Software that is subject to any license that is, or is substantially similar to, a license approved by the Open Source Initiative and listed   8





at http://www.opensource.org/licenses as of the Initial Closing Date, which licenses include all versions of the GNU General Public License (GPL), the Lesser GNU Public License (LGPL), the GNU Affero GPL, the MIT License, the Eclipse Public License, the Common Public License, the CDDL, the Mozilla Public License, the Academic Free License, the BSD License and the Apache License, or any Reciprocal License.

(mmm) Out-bound Licenses has the meaning ascribed to it in Section 3.4.

(nnn) Outstanding Patents has the meaning ascribed to it in Section 2.1(b)(iii)(F).

(ooo) Patent Review List has the meaning ascribed to it in Section 2.1(b)(iii)(A).

(ppp) Patents has the meaning ascribed to it in the definition of Intellectual Property.

(qqq) Permitted Type of Enterprise Mobile Computing Product means a Type of Enterprise Mobile Computing Product that: (i) (a) is a component used in a solution, (b) interoperates with one or more Purchaser Excluded Products in such solution, and (c) is designed primarily for such use and interoperation; (ii) is a standalone product that is designed primarily for use by the Public Safety Community or Governmental Entities; or (iii) is a Purchaser Excluded Product that is designed primarily (A) for use by the Public Safety Community or Governmental Entities, (B) to operate in compliance with the Integrated Digital Enhanced (iDEN) protocol, or (C) to operate in compliance with any Two-Way Radio Standard.

(rrr) product means device or product.

(sss) Public Safety LTE Smartphone Devices means any fixed, handheld, vehicle-mounted, wearable, or portable wireless product that is compliant with LTE and is designed primarily for use by either the Public Safety Community or Governmental Entities.

(ttt) Public Safety Next-Gen LTE Network means a network that is based upon LTE and operates on a frequency band allocated to the Public Safety Community.

(uuu) Purchaser has the meaning ascribed to it in the preamble.

(vvv) Purchaser Assignees means one or more Persons designated, on or prior to the Initial Closing Date, by Purchaser to Seller.

(www) Purchaser Excluded Products means (i) Excluded Infrastructure Equipment, (ii) Excluded Mobile Radio Products, (iii) Excluded Software and Solutions, or (iv) Excluded Field Products.

(xxx) Purchaser Licensees means each (for the avoidance of doubt, and without limiting any other provision of this IP Agreement, current or future) Affiliate of the Purchaser (including the Acquired Companies).   9





(yyy) Push-to-Talk (PTT) means a method of transmitting voice or data communications on simplex and half-duplex channels that uses a momentary button to switch from voice or data reception mode to transmit mode.

(zzz) Reciprocal License means a license of an item of Software that requires or conditions any rights granted in such license upon: (i) the disclosure, licensing or distribution of other Software (whether or not in Source Code form); (ii) a requirement that any other licensee of the Software be permitted to modify, make Derivative Works of, or reverse-engineer any such other Software; (iii) a requirement that such other Software be redistributable by other licensees; (iv) the grant of any patent rights including non-assertion or patent license obligations; or (v) the imposition of any other material limitation, restriction, or condition on any Seller Entity's right to use or distribute other Software in connection with the Business (other than a requirement to include an acknowledgement of authorship of such item of Software or to distribute a copy of the terms and conditions of the applicable license agreement with respect to such Software).

(aaaa) Registered Intellectual Property has the meaning ascribed to it in Section 3.1.

(bbbb) Retained Seller Trademarks means any and all Trademarks owned or used by any Seller Party on or prior to the Initial Closing Date or at any time thereafter (but excluding, for the avoidance of doubt, any Trademarks that constitute an Acquired Asset).

(cccc) Review Patent has the meaning ascribed to it in Section 2.1(b)(iii).

(dddd) Review Period means the period of time on or prior to the one year anniversary of the Initial Closing Date.

(eeee) RFID has the meaning ascribed to it in Enterprise Data Capture Products.

(ffff) SDO means a patent pool, official or de facto standards setting or development organization, industry standards body industry, trade association or other similar organization.

(gggg) SDO Member means any Person that is or has ever been, directly or indirectly, (i) a member or promoter of, or a contributor to or a participant in, any SDO, (ii) obligated to license or disclose any Intellectual Property to, or made any commitments or agreements regarding, any SDO, or (iii) a participant in the writing, preparing, amending, revising, sponsoring, organizing, promulgating, setting, or approving of any specifications, standards, requirements, or guidelines related to the Business.

(hhhh) Section 365 has the meaning ascribed to it in Section 4.5.

(iiii) Section 365(n) has the meaning ascribed to it in Section 4.5.

(jjjj) Seller has the meaning ascribed to it in the preamble.   10





(kkkk) Seller Business means, collectively, the businesses of each member of the Seller Parties as of the Initial Closing Date, but excluding the Business.

(llll) Seller Entity means each Acquired Company and each Seller Party.

(mmmm) Seller Excluded Products means a (i) Type of Enterprise Data Capture Product, (ii) Type of Enterprise Mobile Computing Product, or (iii) Type of Enterprise Wireless LAN Product.

(nnnn) Seller IP means any and all Intellectual Property owned by any Seller Party prior to the Initial Closing Date or at any time thereafter.

(oooo) Seller IPA Disclosure Schedule has the meaning ascribed to it in Article III.

(pppp) Seller Licensed Activities has the meaning ascribed to it in Section 2.1(d).

(qqqq) Seller Party means Seller and each of its Affiliates (but, for the avoidance of doubt, excluding the Acquired Companies).

(rrrr) Shared Review Invention Disclosure has the meaning ascribed to it in Section 2.1(b)(iii)(C).

(ssss) Shared Review Patent has the meaning ascribed to it in Section 2.1(b)(iii)(B).

(tttt) Smart Sensing Network Equipment means any sensing equipment for use in conjunction with or interoperable with a distributed network of sensors intended to measure or ascertain data, including video, imaging, RFID, audio, temperature, and data measurements.

(uuuu) Software has the meaning ascribed to it in the definition of Intellectual Property.

(vvvv) Source Code means one or more statements in human readable form, including comments, definitions and annotations, which are generally formed and organized to the syntax of a computer or programmable logic programming language (including such statements in batch or scripting languages and including hardware definition languages such as VHDL), together with any and all text, data and data structures, diagrams, manuals, instructions, procedures, and other information that describe the foregoing.

(wwww) Third-Party Intellectual Property means any and all Intellectual Property licensed to any Seller Party from, or otherwise owned by, a Person other than a Seller Party (including open source Software, freeware or other publicly available Software).

(xxxx) Trademarks means (i) trademarks, service marks, logos, product numbers, trade dress, trade names, corporate names and Internet domain names, slogans, and   11





other indicia of commercial source or origin (whether registered, common law, statutory, or otherwise, and together with all translations thereof), (ii) all registrations and applications to register the foregoing anywhere in the world (including all renewals in connection therewith), and (iii) all goodwill symbolized by any of the foregoing clauses (i) and (ii).

(yyyy) Transferred IP means the Assigned IP and the Acquired Company IP.

(zzzz) Transferred IP Docket has the meaning ascribed to it in Section 2.3(a).

(aaaaa) Two-Way Radio Network means a wireless network (whether implemented in hardware or Software) capable of enabling, managing, supervising, or securing a communication of voice, data, or multimedia information in compliance with any one or more of the Two-Way Radio Standards.

(bbbbb) Two-Way Radio Standards means (i) any of the following standards: (A) Association of Public-Safety Communications Officials Project 25 (including Digital APCO P25), (B) European Telecommunications Standards Institute Terrestrial Trunked Radio (including TETRA), (C) European Telecommunications Standards Institute Digital Mobile Radio (including TETRAPOL), (D) European Telecommunications Standards Institute Digital Private Mobile Radio, (E) MotoTalk, (F) General Mobile Radio Service, (G) Family Radio Service, (H) Analog MDC-1200, (I) Analog Conventional, (J) Private Mobile Radio (PMR), Logic Trunked Radio (LTR), MPT 1327 / MPS 1327, Selcall (5-Tone), and NXDN, (K) Dogota, Mobile Radio (DMR), digital Private Mobile Radio (dPMR), and Police Digital Trunking (PDT), (L) Global Open Trunked Architecture (GoTa), (M) ARIB standards T-98 and T-102 (also known as DCR for Japan), (N) China specific protocol (PDMS/CDMR), (O) Enhanced Digital Access Communication System (EDACS), (P) OpenSky and GSM-R (Railway variant of GSM for Two-Way Radio), and (Q) Project 25 Conventional TDMA and China specific protocols (PDMR-T, PDMR-F); and (ii) various derivations thereof that do not fundamentally alter the character thereof. For the avoidance of doubt, Two-Way Radio Standards do not include Wireless Standards.

(ccccc) Type of Enterprise Data Capture Product means (i) bar code scanner products for reading machine-readable symbols (including fixed, handheld, portable, wearable, and vehicle-mounted laser scanners and linear and area imagers), (ii) RFID reader products used to communicate with RFID tags (including portal RFID readers, doorway, forklift, crane and delivery-door RFID readers, handheld RFID readers, and fixed, vehicle-mounted, wearable, portable, hands-free and mobile RFID readers), or (iii) associated accessories and Software.

(ddddd) Type of Enterprise Mobile Computing Product means durable or rugged enterprise-grade fixed, handheld, wearable, vehicle- mounted, or portable computing or smartphone products, which products shall include handheld and portable mobile computers, gun handle mobile computers, tablet computers, vehicle mounted computers and wearable computers.

(eeeee) Type of Enterprise Wireless LAN Product means products that provide connectivity to wireless products within a local area network (whether indoors or outdoors) and that operate in compliance with the IEEE 802.11 standard (which products shall include types of   12





products that are wireless LAN products, including (i) wireless access points and ports compliant with the IEEE 802.11 standard, (ii) wireless controllers compliant with the IEEE 802.11 standard, (iii) wireless switches designed for use with the foregoing wireless access points, ports and controllers, and (iv) related LAN accessories and Software).

(fffff) Wireless Standards means: (i) all cellular communication technical specifications adopted as a standard by either an SDO or a major operator of public subscription systems for in-country requirements (e.g., frequency spectrum availability, interconnection with preexisting telephony networks, etc.), as well as various adjunct protocols to the extent incorporated into such standards, including those technical specifications for digital radiotelephone service (A) promulgated by ETSI and presently known as the GSM, Pan-European Digital Cellular radiotelephone service (including Personal Communications Network services, presently known as DCS1800 and in the United States PCS1900), (B) promulgated in the United States by the Telecommunications Industry Association / Electronic Industries Associates (TIA/EIA) and presently known as AMPS (Advanced Mobile Phone System), NAMPS (Narrowband AMPS), TDMA Cellular/PCS - Radio Interface Interim Standards IS-I36, IS-137 or IS-138 (including IS-54, IS-55 and IS-56 and PCS 1900 standards JSTD-009, JSTD-010 and JSTD-011), (C) promulgated by ARIB (formerly RCR) and presently known as PDC (Personal Digital Cellular), (D) promulgated by the TIA and presently known as IS-95, IS-95B, RTT MC 1X, 1X Plus, and 1Xtreme Code Division Multiple Access services, (E) presently known as third generation (3G) cellular standards currently under development and known by such designations, including 3GPP, UMTS, WCDMA, 3GPP2, and CDMA2000, or (F) presently known as LTE; (ii) all technical specifications promulgated or currently under development by any of (A) IEEE and presently known as IEEE 802.11/WiFi or 802.15/WPAN standards, (B) EPCGlobal and presently known as EPC Radio Frequency Identity Protocols, (C) ISO/IEC 18000, 13157, 21481, 14443, or 15693, and presently known as RFID or NFC, or (D) Bluetooth; (iii) various derivations of the specifications and protocols referenced in clauses (i) and (ii) that do not fundamentally alter the character of such specifications and protocols (e.g., wireless air-interface, framing structure, control, call set-up and connection management); and (iv) any and all international versions of the specifications and protocols referenced in clauses (i) through (iii).

Section 1.2 Construction. Section 11.10 of the Acquisition Agreement shall apply mutatis mutandis to this IP Agreement.

ARTICLE II ASSIGNMENTS AND LICENSES

Section 2.1 Transferred IP.

(a) Acquired Company IP. For the avoidance of doubt, the Purchaser Group will acquire all Acquired Company IP by virtue of the acquisition by the Purchaser Group of the Acquired Company Shares pursuant to the terms of the Acquisition Agreement.   13





(b) Assignment of Assigned IP.

(i) Assignment. Effective as of the applicable Closing Date, the Seller hereby sells, assigns, transfers, conveys and delivers all of its right, title, and interest in and to the Assigned IP (together with the goodwill of the business symbolized by any Trademarks that constitute Assigned IP) and all Ancillary IP Rights with respect thereto, and shall cause the other Seller Parties to do the same, to the Purchaser Assignees and, effective as of the applicable Closing Date, the Purchaser Assignees hereby purchase, acquire and accept the same from the Seller Parties. The Seller hereby waives (and shall cause the other Seller Parties to waive) any moral rights, including rights of attribution, integrity, and disclosure, arising from all or any part of any Copyrights that constitute Assigned IP, together with all claims for damages and other remedies asserted on the basis of moral rights, and hereby sells, assigns, transfers, conveys, and delivers (and shall cause the other Seller Parties to do the same) to the Purchaser Assignees any waivers granted to any Seller Party of any such moral rights.

(ii) Mandatory Laws. If and to the extent that, as a matter of Law in any jurisdiction, ownership, title, or any rights or interest in or to any of the Assigned IP cannot be assigned as provided in Section 2.1(b)(i), (A) the Seller irrevocably agrees to (and shall cause the other Seller Parties to) assign and transfer, and the Seller hereby assigns and transfers (and shall cause the other Seller Parties to assign and transfer) to the Purchaser Assignees all rights (including all economic and commercialization rights) that can be assigned pursuant to Section 2.1(b)(i) to the fullest extent permissible, and (B) the Seller hereby grants to the Purchaser Assignees, and hereby agrees to cause the other Seller Parties to grant to the Purchaser Assignees, an unlimited, exclusive, irrevocable, assignable, transferable, sublicenseable, worldwide, perpetual, royalty-free, fully-paid up license to use, exploit, and commercialize in any manner now known or in the future discovered and for whatever purpose, any and all rights to Assigned IP that cannot be assigned as contemplated by Section 2.1(b)(i).

(iii) Patent Review Process.

(A) Information Exchange. Within forty-five (45) days after the Effective Date, Seller shall provide (I) to the Purchaser, an updated list of all Patents (other than those set forth on Schedule 1.1(l) of the Seller IPA Disclosure Schedule) owned by any Seller Party that (x) have an effective filing date or are based on an invention disclosure having a date of disclosure that is on or after January 9, 2007, and (y) that name as inventors, in Seller's reasonable, good-faith belief, one or more Business Employees and one or more Persons that are not Business Employees (the Patent Review List), and (II) to the Invention Disclosure Review Team, a list of invention disclosures (other than those set forth on Schedule 1.1(l) of the Seller IPA Disclosure Schedule or Schedule 1.1(j)) owned by any Seller Party that name as contributors one or more Business Employees   14





and one or more Persons that are not Business Employees (which list shall include the contributors, the title thereof, and the location code therefor) (the Invention Disclosure Review List). The Patent Review List shall include the Patents set forth on Schedule 2.1(b)(iii)(A).

(B) Patent Review and Ownership. The parties shall promptly review the Patent Review List and, in good-faith, discuss and negotiate during the Review Period whether any of the Patents listed on such Patent Review List (each, a Shared Review Patent) should be or should have been, as applicable, an Assigned Patent, based upon the general guideline and principle that Shared Review Patents that are primarily paid for, primarily used by, or primarily arising out of, or for which associated costs and fees were primarily allocated to, the Business or any Acquired Company (as compared with the Seller Business) should be or should have been, as applicable, Assigned Patents. Seller shall provide to Purchaser, upon Purchaser's reasonable request during the Review Period, information regarding such Patent Review List, the Patents listed thereon, and each such determination. If the parties agree, during the Review Period, that a Shared Review Patent should be or should have been, as applicable, an Assigned Patent, then, if such agreement was reached on or prior to the Initial Closing Date, the parties shall add such Shared Review Patent to Schedule 1.1(l) of the Seller IPA Disclosure Schedule and, if such agreement was reached after the Initial Closing Date, Seller shall (and shall cause the other Seller Parties to) promptly execute a Contract containing a present grant of assignment (or, if and to the extent, as a matter of Law in any jurisdiction, ownership, title, or any rights or interest in or to any such Shared Review Patent cannot be so assigned, a license) of such Shared Review Patent to the Purchaser Assignees, consistent with the terms and conditions of Section 2.1(b)(i) or Section 2.1(b)(ii), as applicable. If the parties cannot agree on whether any Shared Review Patent should be or should have been, as applicable, an Assigned Patent, the parties shall, during the Review Period, escalate such dispute to successively more senior-levels of executives and shall each make sure each such senior executive is promptly available to speak with (including by telephone) his or her counterpart.

(C) Invention Disclosure Review and Ownership. During the Review Period, within seventy-five (75) days after the Effective Date (or, in the event of any repeat of the process set forth in this Section 2.1(b)(iii)(C) in accordance with Section 2.1(b)(iii)(D), promptly (and no later than seventy-five (75) days) thereafter), Seller shall cause (on and prior to the Initial Closing Date), or the parties shall each cause (following the Initial Closing Date), as applicable, their respective employees on the Invention Disclosure Review Team to: (I) promptly review the Invention Disclosure Review List; (II) in good-faith determine whether any of the invention disclosures (and inventions listed on the Invention Disclosure Review List (and inventions described therein))   15





(each, a Shared Review Invention Disclosure) should be or should have been, as applicable, Assigned Know-How, based upon the general guideline and principle that Shared Review Invention Disclosures that are primarily paid for, primarily used by, or primarily arising out of, or for which associated costs and fees were primarily allocated to, the Business or any Acquired Company (as compared with the Seller Business) should be Assigned Know-How; and (III) provide to Purchaser the applicable Invention Disclosure Review List and such determinations of the Invention Disclosure Review Team with respect to such Invention Disclosure Review List.

Seller shall provide to Purchaser, upon Purchaser's reasonable request during the Review Period, information regarding such Invention Disclosure Review List, the invention disclosures listed thereon, and each such determination; provided, however, that Seller shall not be required to disclose to Purchaser the content of any Shared Review Invention Disclosure in response to any such request. Upon review of such determinations or information, as applicable, the parties shall promptly jointly review such determinations and information, during the Review Period, and determine, in good faith, whether the Invention Disclosure Review Team should re-review any Shared Review Invention Disclosures on such Invention Disclosure Review List and, if so, the parties shall repeat the process set forth in this Section 2.1(b)(iii)(C) with respect to such Shared Review Invention Disclosures. If the Invention Disclosure Review Team determines, during the Review Period, that a Shared Review Invention Disclosure should be or should have been, as applicable, Assigned Know- How, then, if such agreement was reached on or prior to the Initial Closing Date, the parties shall add such Shared Review Invention Disclosure to Schedule 1.1(j) and, if such agreement was reached after the Initial Closing Date, Seller shall (and shall cause the other Seller Parties to) promptly execute a Contract containing a present grant of assignment (or, if and to the extent, as a matter of Law in any jurisdiction, ownership, title, or any rights or interest in or to any such Shared Review Invention Disclosure cannot be so assigned, a license) of such Shared Review Invention Disclosure to the Purchaser Assignees, consistent with the terms and conditions of Section 2.1(b)(i) or Section 2.1(b)(ii), as applicable.

(D) Newly Identified Business Employee. If, during the Review Period, the Purchaser identifies a Person (New Business Employee) that the Purchaser reasonably believes, in good faith, is or was a Business Employee and (I) such New Business Employee is not named as a contributor on any Shared Review Invention Disclosure on an Invention   16





Disclosure Review List and is not named as an inventor on any Shared Review Patent on a Patent Review List, in each case previously provided to the Purchaser, or (II) Purchaser reasonably believes, in good faith, that Seller has not provided a complete and accurate Invention Disclosure Review List or Patent Review List with respect to any Patents or invention disclosures for which such New Business Employee is named as an inventor or contributor, respectively, then in each case of clauses (I) and (II), the Purchaser may notify Seller of such belief, and Seller shall promptly (but in no event more than thirty (30) days following such notice) provide to the Purchaser or the Invention Disclosure Review Team, as applicable, an updated Patent Review List and Invention Disclosure Review List with respect to such New Business Employee, and the parties shall repeat the process set forth in Section 2.1(b)(iii)(B) and Section 2.1(b)(iii)(C) with respect to such updated Patent Review List and Invention Disclosure Review List, respectively.

(E) Inventors Are All Business Employees. If (i) during the Review Period, Purchaser identifies a Patent or invention disclosure owned by any Seller Party where all of the inventors of such Patent or all of the contributors of such Invention Disclosure, respectively, are Business Employees, and (ii) Purchaser provides to Seller the evidence on which Purchaser is basing such identification, then such Patent or Invention Disclosure shall be an Assigned Patent or Assigned Know-How, as applicable, and the parties shall, where applicable on or prior to the Initial Closing Date, add such Patent or invention disclosure, as applicable, to Schedule 1.1(l) of the Seller IPA Disclosure Schedule or Schedule 1.1(j), as applicable, or, where applicable after the Initial Closing Date, Seller shall (and shall cause the other Seller Parties to) promptly execute a Contract containing a present grant of assignment (or, if and to the extent, as a matter of Law in any jurisdiction, ownership, title, or any rights or interest in or to any such Patent or Invention Disclosure, as applicable, cannot be so assigned, a license) of such Patent or Invention Disclosure, as applicable, to the Purchaser Assignees, consistent with the terms and conditions of Section 2.1(b)(i) or Section 2.1(b)(ii), as applicable.

(F) Arbitration. Attached as Schedule 2.1(b)(iii)(F) is a schedule of additional Patents provided by Seller to Purchaser prior to the Effective Date for review with respect to ownership allocation between the parties pursuant to the general guidelines and principles set forth in Section 2.1(b)(iii)(B) (the Additional Patents). The parties shall promptly, in good- faith, discuss and negotiate whether any of the Additional Patents should be or should have been, as applicable, an Assigned Patent. If any of such Additional Patents are not reviewed, or the parties cannot agree on whether any Additional Patent should be or should have been, as applicable, an Assigned Patent, prior to the Initial Closing Date, then the parties shall escalate such dispute to successively more senior-levels of executives as set forth in Section 2.1(b)(iii)(B). If such senior-levels of executives cannot resolve the dispute with respect to any such Patents (the Outstanding Patents) by the Initial Closing Date, then either party may, within thirty (30) days after the Initial Closing Date,   17





submit such Outstanding Patents for dispute resolution as follows. One or both parties may, within thirty (30) days after the Initial Closing Date, submit the dispute with respect to such Outstanding Patents for arbitration in Chicago, Illinois before a single arbitrator. The arbitration shall be administered by JAMS pursuant to JAMS' Streamlined Arbitration Rules and Procedures, as those Rules may be amended by written agreement of the parties. The parties shall cooperate, in good faith, prior to the commencement of any arbitration under this Section 2.1(b)(iii)(F), to agree to any such amendments or other processes with respect to such arbitration (e.g., timing of the arbitration, arbitrator's familiarity with patent law). The parties shall instruct the arbitrator, and the arbitrator shall resolve each dispute regarding the ownership of each Outstanding Patent, based upon the general guideline and principle that such Outstanding Patents that are primarily paid for, primarily used by, or primarily arising out of, or for which associated costs and fees were primarily allocated to, the Business or any Acquired Company (as compared with the Seller Business) should be or should have been, as applicable, Assigned Patents. The parties shall maintain the confidential nature of all information, documents and materials disclosed and statements made in connection with any negotiations or arbitration proceeding, and any arbitration proceeding and the judgment, including any hearing or award, except as may be necessary to prepare for or conduct the arbitration hearing on the merits. The parties shall each bear their respective costs and expenses with respect to any arbitration pursuant to this Section 2.1(b)(iii)(F); provided, however, that the parties shall equally share (on a 50/50 basis) the cost of the arbitrator. If the arbitrator determines that any Outstanding Patent should be or should have been, as applicable, an Assigned Patent, Seller shall (and shall cause the other Seller Parties to) assign such Patent to the Purchaser Assignees in accordance with Section 2.1(b)(iii)(E).

(c) License-Back of Patents. Effective as of the Initial Closing Date, the Purchaser will cause each Acquired Company and each Purchaser Assignee to grant, following each applicable Closing Date, to the Seller Parties, an irrevocable (except as expressly set forth herein), perpetual, non-sublicenseable (except as expressly set forth herein), fully paid-up, royalty-free, worldwide, non-transferable (except as expressly set forth herein), non-exclusive license, under the Acquired Company Patents and Assigned Patents:

(i) (A) to use the Acquired Company Patents and Assigned Patents in the operation of the Seller Business and to practice any methods, processes, and procedures in connection therewith and (B) to make, have made, use, sell, offer for sale, import, and otherwise dispose of products, services, and systems that were designed, developed, manufactured, distributed, offered for sale, sold, resold, supported, otherwise under development, or provided, as of the applicable Closing Date, by the Seller Parties in connection with the Seller Business and to practice any methods, processes, and procedures in connection therewith, and in each case of clauses (A) and (B), including with respect to all Derivative Works and natural evolutions thereof;   18





(ii) to make, have made, use, sell, offer for sale, import, and otherwise dispose of Smart Sensing Network Equipment; and

(iii) to make, have made, use, sell, offer for sale, import, and otherwise dispose of Public Safety LTE Smartphone Devices.

(d) License-Back of Non-Patent, Non-Trademark IP. Effective as of the Initial Closing Date, the Purchaser will cause each Acquired Company and each Purchaser Assignee to grant, following each applicable Closing Date, to the Seller Parties, an irrevocable (except as expressly set forth herein), non-sublicenseable (except as expressly set forth herein), perpetual, fully paid-up, royalty-free, worldwide, non-transferable (except as expressly set forth herein), non-exclusive license, under the Transferred IP (other than Trademarks and Patents) that is or has been, on or prior to the Initial Closing Date, (x) used in connection with the Seller Business, (y) used in connection with the development of any product, service, or system in the Seller Business, or (z) incorporated into any product, service, or system in the Seller Business:

(i) (A) to use such Transferred IP in the operation of the Seller Business and to practice any methods, processes, and procedures in connection therewith and (B) to make, have made, use, sell, offer for sale, import, and otherwise dispose of products, services, and systems that were designed, developed, manufactured, distributed, offered for sale, sold, resold, supported, otherwise under development, or provided, as of the applicable Closing Date, by the Seller Parties in connection with in the Seller Business and to practice any methods, processes, and procedures in connection therewith, and in each case of clauses (A) and (B), including with respect to all Derivative Works and natural evolutions thereof;

(ii) to make, have made, use, sell, offer for sale, import and otherwise dispose of Smart Sensing Network Equipment; and

(iii) to make, have made, use, sell, offer for sale, import, and otherwise dispose of Public Safety LTE Smartphone Devices.

Clauses (i) through (iii) above are collectively referred to as the Seller Licensed Activities. The license rights granted under this Section 2.1(d) include:

(1) with respect to such Transferred IP that constitutes Copyrights or copyrightable materials (other than Software), the rights to reproduce, prepare Derivative Works of, perform, display, and distribute such Copyrights and copyrightable materials in connection with the Seller Licensed Activities; and

(2) with respect to such Transferred IP that constitutes Software, the rights to: (I) use, reproduce, prepare Derivative Works of,   19





perform, and display such Software in connection with the Seller Licensed Activities; and (II) distribute such Software and Derivative Works of such Software in connection with the Seller Licensed Activities (but in Source Code form, solely as permitted pursuant to Section 2.1(f) and in accordance with Article V).

For the avoidance of doubt, this Section 2.1(d) shall not constitute a license to Trademarks.

(e) Seller Excluded Products. The licenses granted pursuant to Section 2.1(c)(i), Section 2.1(c)(ii), Section 2.1(d)(i), and Section 2.1(d)(ii) do not extend to any product, system, or service if and solely to the extent such product, system, or service constitutes or includes a Seller Excluded Product; provided, that if any such Seller Excluded Product is a Type of Enterprise Mobile Computing Product, then if and solely to the extent that such Seller Excluded Product is a Permitted Type of Enterprise Mobile Computing Product, such licenses will extend solely to such Permitted Type of Enterprise Mobile Computing Product that constitutes such product, system, or service or, as included in such product, system, or service, is included in such product, system, or service, as applicable. By way of example, if a Seller Excluded Product is a single component of a product, system, or service that is otherwise licensed under Section 2.1(c)(i), Section 2.1(c)(ii), Section 2.1(d)(i), or Section 2.1(d)(ii) and such Seller Excluded Product is not a Permitted Type of Enterprise Mobile Computing Product, such licenses do not extend to such component, but such licenses do extend to the remainder of such licensed product, system, or service. By way of further example, if a Seller Excluded Product is a single component of a product, system, or service that is otherwise licensed under Section 2.1(c)(i), Section 2.1(c)(ii), Section 2.1(d)(i), or Section 2.1(d)(ii), then to the extent such Seller Excluded Product is a Permitted Type of Enterprise Mobile Computing Product, such licenses extend to such component as included in such licensed product, system, or service.

(f) Sublicenses. Each of the Seller Parties may grant sublicenses of the licenses granted to it pursuant to Section 2.1(c) or Section 2.1(d): (i) to any (for the avoidance of doubt, and without limiting any other provision of this IP Agreement, current or future) direct or indirect Subsidiary of Seller (but only for so long as such Person remains such a Subsidiary); (ii) to any other Person in connection with the sale or disposition of substantially all of the assets of a business or product line of any of the Seller Parties; (iii) other than with respect to Section 2.1(c), for the purpose of any Person's (including resellers, distributors, and OEMs) distribution of products licensed under Section 2.1(c) or Section 2.1(d); (iv) other than with respect to Section 2.1(c), to any Person (including OEMs, JDMs, suppliers, contractors, and subcontractors) solely for the purpose of, and to the extent necessary for, such Person to perform any service (including any service with respect to the design, manufacture, import, export, or supply of any product, service, or system in the Seller Business or any components thereof) for a Seller Party, and not for the direct benefit of such Person or any other Person, (v) other than with respect to Section 2.1(c), to a customer of a Seller Party for such customer's use of a product licensed under Section 2.1(c) or Section 2.1(d); or (vi) other than with respect to Section 2.1(c), with respect to Software, to any Person for the purpose of such   20





Person's development of Software that is compatible or interoperates with a product licensed under Section 2.1(c) or Section 2.1(d). The Seller Parties have no other right to grant sublicenses under any of the licenses granted to the Seller Parties under this IP Agreement.

(g) No Implied Rights. The Seller acknowledges and agrees that, except as expressly set forth in this Section 2.1 of this IP Agreement, the Seller Parties are not obtaining any rights under this IP Agreement in or to any Intellectual Property owned by Purchaser or any Purchaser Licensee as of the Initial Closing Date or at any time thereafter, and nothing in this IP Agreement confers on any Seller Party any right to use any names of the Purchaser or any Purchaser Licensee in any advertising publicity or other promotional activities.

Section 2.2 Licensed IP.

(a) Patent License. Effective as of the Initial Closing Date, the Seller hereby grants (and will cause each other Seller Party to grant following each applicable Closing Date), to the Purchaser Licensees an irrevocable (except as expressly set forth herein), perpetual, non-sublicenseable (except as expressly set forth herein), fully paid-up, royalty-free, worldwide, non-transferable (except as expressly set forth herein), non-exclusive license, under the Licensed Patents:

(i) (A) to use the Licensed Patents in the operation of the Business and to practice any methods, processes, and procedures in connection therewith and (B) to make, have made, use, sell, offer for sale, import and otherwise dispose of products, services, and systems that were designed, developed, manufactured, distributed, offered for sale, sold, resold, supported, otherwise under development, or provided, as of the applicable Closing Date, by the Seller Entities in connection with the Business and to practice any methods, processes, and procedures in connection therewith, and in each case of clauses (A) and (B), including with respect to all Derivative Works and natural evolutions thereof; and

(ii) to make, have made, use, sell, offer for sale, import, and otherwise dispose of Smart Sensing Network Equipment.

(b) License of Non-Patent, Non-Trademark Licensed IP. Effective as of the Initial Closing Date the Seller hereby grants (and will cause each other Seller Party to grant, following each applicable Closing Date), to the Purchaser Licensees an irrevocable (except as expressly set forth herein), non-sublicenseable (except as expressly set forth herein), perpetual, fully paid-up, royalty-free, worldwide, non-transferable (except as expressly set forth herein), non-exclusive license, under the Licensed IP (other than Trademarks and Patents):

(i) (A) to use such Licensed IP in the operation of the Business and to practice any methods, processes, and procedures in connection therewith and (B) to make, have made, use, sell, offer for sale, import, and otherwise dispose of products, services, and systems that were designed, developed, manufactured,   21





distributed, offered for sale, sold, resold, supported, otherwise under development, or provided, as of the applicable Closing Date, by the Seller Entities in connection with the Business and to practice any methods, processes, and procedures in connection therewith, and in each case of clauses (A) and (B), including with respect to all Derivative Works and natural evolutions thereof; and

(ii) to make, have made, use, sell, offer for sale, import, and otherwise dispose of Smart Sensing Network Equipment.

Clauses (i) and (ii) above are collectively referred to as the Purchaser Licensed Activities. The license rights granted under this Section 2.2(b) include:

(1) with respect to Licensed IP that constitutes Copyrights or copyrightable materials (other than Software), the rights to reproduce, prepare Derivative Works of, perform, display, and distribute such Copyrights and copyrightable materials in connection with the Purchaser Licensed Activities; and

(2) with respect to Licensed IP that constitutes Software, the rights to (I) use, reproduce, prepare Derivative Works of, perform, and display such Software in connection with the Purchaser Licensed Activities; and (II) distribute such Software and Derivative Works of such Software in connection with the Purchaser Licensed Activities (but in Source Code form, solely as permitted pursuant to Section 2.2(f) and in accordance with Article V).

For the avoidance of doubt, this Section 2.2(b) shall not constitute a license to Trademarks.

(c) License of Trademark IP.

(i) License Grant. Effective as of the Initial Closing Date, the Seller hereby grants (and will cause each other Seller Party to grant, following each applicable Closing Date, to the Purchaser Licensees) a perpetual (unless terminated in accordance with Section 4.2(ii)(c)), fully paid-up, royalty-free, worldwide, non-transferable (except as set forth herein), non-exclusive license to use any and all Licensed Trademarks in the Business (including with respect to the Purchaser Licensed Activities), including with respect to all Derivative Works and natural evolutions of such Business, in a manner that is the same or substantially similar to the manner in which the Seller Entities have used the Licensed Trademarks in the Business.

(ii) Quality Control. Purchaser will cause each Purchaser Licensee, following the Initial Closing Date, to include appropriate Trademark notices as required by applicable Law in connection with each of their respective uses of the Licensed Trademarks. The Purchaser acknowledges and agrees that all use of the Licensed Trademarks by the Purchaser Licensees following the Initial Closing Date and all goodwill associated therewith shall inure to the benefit of the Seller.   22





Purchaser will cause the Purchaser Licensees to use the Licensed Trademarks following the Initial Closing Date with appropriate legends as required under applicable Law. Purchaser agrees that the quality of all Seller Excluded Products and any other products and services marketed or sold by the Purchaser Licensees under the Licensed Trademarks will conform to at least the level of quality of the Enterprise Products as currently provided by the Seller Entities as of the Initial Closing Date. Purchaser will (and will cause each Purchaser Licensee to) reasonably cooperate with Seller in facilitating Seller's control of such quality, permit reasonable inspection of the Purchaser Licensees' operations (upon reasonable notice and during normal business hours) solely with respect to their respective use of the Licensed Trademarks (if any), and supply Seller with specimens of any of their respective uses of the Licensed Trademarks (if any), including such specimens that are advertising or marketing materials, upon Seller's reasonable request, at Seller's expense.

(d) Transitional Trademark License.

(i) License Grant. Effective as of the Initial Closing Date, the Seller hereby grants (and will cause each other Seller Party to grant following each applicable Closing Date) to the Purchaser Licensees:

(A) for a period of one hundred eighty (180) days after the applicable Closing Date (the Mobility Transition Period), a fully paid-up, royalty-free, worldwide, non-transferable, non-exclusive sublicense to use any and all Mobility Trademarks, in accordance with the terms and conditions of the Mobility Trademark License; and

(B) for a period of seven hundred thirty (730) days after the applicable Closing Date (the Non-Mobility Transition Period), a fully paid-up, royalty-free, irrevocable (except as expressly set forth herein), worldwide, non-transferable, non- exclusive license to use any and all Retained Seller Trademarks (other than the Mobility Trademarks and Licensed Trademarks) that are or have been, on or prior to the Initial Closing Date, used in connection with the Business or any product, service, or system in the Business (the Non-Mobility Trademarks),

in each case of clauses (A) and (B), solely in connection with the operation of the Business or with the exercise of the licenses granted pursuant to Section 2.2(a) and Section 2.2(b), in a manner that is the same or substantially similar to the manner in which the Seller Entities used the Mobility Trademarks or Non-Mobility Trademarks, as applicable, in connection with the Business as of the Initial Closing Date, including with respect to existing signs and stocks of advertisements and promotional materials and items, inventory and packaging included in the Acquired Assets (Existing Stock) containing any Mobility Trademark or Non- Mobility Trademark. Seller Excluded Products manufactured during the Mobility Transition Period or Non-Mobility Transition Period that bear the Mobility Trademarks or the Non-Mobility Trademarks will be treated as   23





Existing Stock under this Section 2.2(d), except to the extent a Purchaser Licensee is separately sublicensed with respect to any such Mobility Trademark or Non-Mobility Trademark.

(ii) Purchaser Transition Efforts. Notwithstanding Section 2.2(d)(i), each Purchaser Licensee shall use Reasonable Efforts to discontinue the use of, exhaust, or otherwise dispose of, the Existing Stock after the Initial Closing Date and to modify all manufacturing equipment to cease to manufacture Seller Excluded Products marked with the Mobility Trademarks as soon as reasonably practicable after the Initial Closing Date.

(e) Purchaser Excluded Products. The licenses granted pursuant to Section 2.2(a), Section 2.2(b), and Section 2.2(c) do not extend to any product, system, or service if and solely to the extent such product, system, or service constitutes or includes a Purchaser Excluded Product, except for a Purchaser Excluded Product that is Smart Sensing Network Equipment that is, as manufactured by or for a Purchaser Licensee, not specifically enabled for use in conjunction with or for interoperability with a (i) Public Safety Next-Gen LTE Network or (ii) Two-Way Radio Network. By way of example, if a Purchaser Excluded Product is a single component of a product, system, or service that is otherwise licensed under Section 2.2(a), Section 2.2(b), or Section 2.2(c), such licenses do not extend to such component, but such licenses do extend to the remainder of such licensed product, system, or service.

(f) Sublicenses. Each Purchaser Licensee may grant sublicenses of the licenses granted to it pursuant to Section 2.2: (i) to any (for the avoidance of doubt, and without limiting any other provision of this IP Agreement, current or future) direct or indirect Subsidiary of Purchaser (but only for so long as such Person remains such a Subsidiary); (ii) to any other Person in connection with the sale or disposition of substantially all of the assets of a business or product line of any Purchaser Licensee; (iii) other than with respect to Section 2.2(a), for the purpose of any Person's (including resellers, distributors, and OEMs) distribution of products licensed under Section 2.2; (iv) other than with respect to Section 2.2(a), to any Person (including OEMs, JDMs, suppliers, contractors, and subcontractors) solely for the purpose of, and to the extent necessary for, such Person to perform any service (including any service with respect to the design, manufacture, import, export, or supply of any product, service, or system in the Business or any components thereof) for a Purchaser Licensee, and not for the direct benefit of such Person or any other Person, (v) other than with respect to Section 2.2(a), to a customer of a Purchaser Licensee for such customer's use of a product licensed under Section 2.2; or (vi) other than with respect to Section 2.2(a), with respect to Software, to any Person for the purpose of such Person's development of Software that is compatible or interoperates with a product licensed under Section 2.2. The Purchaser Licensees have no other right to grant sublicenses under any of the licenses granted to the Purchaser Licensees under this Section 2.2.

(g) Acknowledgement. The Purchaser acknowledges and agrees that the licenses granted under this Section 2.2 do not extend to Purchaser or any product, system or service manufactured, sold, designed, distributed, or supported by Purchaser directly or indirectly through any Purchaser Licensee, other than any Business Activities for Seller Excluded Products or Smart Sensing Network Equipment.   24





Section 2.3 Delivery.

(a) Documentation. To the extent in the possession or under the control of any Seller Party, the Seller shall provide (and shall cause the other Seller Parties to provide) to the Purchaser: (i) promptly after the Initial Closing Date, complete and accurate copies of all the following that constitute Transferred IP: file histories and notes (where such notes are regarding, with respect to Transferred IP, actual or potential disclosure dates or prior art dates, standards-essential Patents, or license or covenants not to sue granted to any Person with respect to such Transferred IP) from the Seller Parties' docketing systems of the pending Patent applications and issued Patents (and invention disclosures, if any, for all such applications and Patents that any Seller Party is able to provide using Reasonable Efforts), pending Trademark applications and Trademark registrations, Copyright applications and Copyright registrations, and unpublished Patent applications; (ii) within thirty (30) days after the Effective Date, for Transferred IP throughout the world, a list of the names, addresses, email addresses, and phone numbers of prosecution counsel and agents; (iii) within thirty (30) days after the Effective Date, a list of all actions that must be taken for Transferred IP throughout the world (a Transferred IP Docket) within one hundred eighty (180) days after the Effective Date (including the payment of any registration, maintenance, or renewal fees or the filing of any documents, corrections, or replies to any Governmental Entity, applications or certificates, for the purposes of prosecuting, maintaining, or renewing any such registered, issued, or applied-for Transferred IP); and (iv) at least on a monthly basis during the period of time from the Effective Date until the Initial Closing Date, reasonable access to the docketing information (with respect to such Transferred IP) generated by any Seller Party in the Ordinary Course consistent with how such Seller Party generates such information for itself. As of the Initial Closing Date, the Purchaser assumes all responsibility for the prosecution, maintenance and enforcement of the Transferred IP assigned under this IP Agreement as of the Initial Closing Date to a Purchaser Assignee, and the payment of all fees, and all other prosecution and maintenance activities associated with such Transferred IP. After the Effective Date, Seller shall (and shall cause the other Seller Parties to) cooperate and assist Purchaser in good faith with respect to: (A) providing information to Purchaser that is reasonably sufficient to allow Purchaser to understand prosecution, maintenance, renewal, and new filing activities with respect to the Transferred IP that occur or will occur between the Effective Date and the Initial Closing Date; and (B) providing written instructions to all prosecution counsel and agents throughout the world who are responsible for the Transferred IP to instruct such counsel and agents that Purchaser and the Purchaser Assignees will be responsible for the Transferred IP as of the Initial Closing Date and that all reasonably necessary steps should be taken to prevent the loss of any rights embodied by the Transferred IP unless such counsel and agents have received express written instructions to the contrary from Purchaser.

(b) Obligation to Deliver Technology. Following the Initial Closing Date, to the extent in the possession or under the control of any Seller Party and to the extent not   25





contained in storage media that constitutes an Acquired Asset and is delivered to the Purchaser, the Seller shall (and shall cause the other Seller Parties to), upon the Purchaser's reasonable request, use Reasonable Efforts to provide the Purchaser with all materials, Software, information, tangible embodiments, and other tangible things, as those terms have been interpreted pursuant to any applicable Laws governing the production of documents and things, constituting, comprising, related to, or necessary to practice the Transferred IP or Licensed IP. To the extent that such materials, Software, information, tangible embodiments, and other tangible things constitute, comprise or relate to any Intellectual Property licensed to Seller under Section 2.1(c) or Section 2.1(d) or the Licensed IP, the Seller shall be permitted to retain a reasonable number of copies of such documents, materials, Software, information, tangible embodiments, and other tangible things. Purchaser shall use Reasonable Efforts to inform Seller of the locations of any such materials, Software, information, tangible embodiments, and other tangible things requested by Purchaser, where Purchaser has actual knowledge of such locations.

Section 2.4 General Intellectual Property Provisions.

(a) Termination of Third Party Contracts. The license rights granted to the Purchaser Licensees under any Licensed IP that constitutes Third-Party Intellectual Property, if any, are subject to the terms and conditions of the Contracts applicable to such Licensed IP, and will terminate upon (i) termination of such Contracts, or (ii) termination of the Seller Parties' right to sublicense the Purchaser Licensees under such Contracts, in each case by the applicable third party licensor or sublicensor, as applicable (and not by a Seller Party).

(b) Compliance with Third Party Contracts. Following the Initial Closing Date, the Purchaser shall cause the Purchaser Licensees and its and their employees, contractors and agents to, comply with the terms and conditions of any such Contracts that are listed on Schedule 2.4(b) to the extent such terms and conditions are applicable to the Third-Party Intellectual Property sublicense rights granted to the Purchaser Licensees pursuant to this IP Agreement; provided, however, that the foregoing shall not require any Purchaser Licensee (or any current or future Affiliate thereof) or any of their respective employees, contractors, or agents (i) to pay or otherwise be responsible for any direct or indirect amounts, fees, charges, costs, or other consideration to any Person or (ii) to grant any license (or covenant not to sue) with respect to any Intellectual Property, in each case of clauses (i) and (ii) with respect to any such Contract.

(c) No Implied Rights. The Purchaser acknowledges and agrees that, except as expressly set forth in Section 2.1 and Section 2.2 of this IP Agreement, (i) the Purchaser Licensees are not obtaining any rights in or to any Seller IP or Retained Seller Trademarks under this IP Agreement, and (ii) nothing in this IP Agreement confers on the Purchaser Licensees any right to use any name of any Seller Party in any advertising, publicity or other promotional activities; provided, however, that notwithstanding anything to the contrary contained in this IP Agreement, the Purchaser Licensees and any of their current or future Affiliates may make factual, non-trademark use of Seller's and the other Seller Parties' full corporate names in order to fairly and accurately describe the history of the Business. Nothing herein prohibits such Purchaser Licensees and such   26





Affiliates from maintaining books and records containing documents of files marked with any Retained Seller Trademarks in the Ordinary Course for archival and regulatory compliance purposes.

(d) Third-Party Trademarks. Except as otherwise expressly provided herein, nothing in this IP Agreement confers on the Purchaser Licensees any right to use any Trademarks owned by any Person other than the Seller Parties. Except with respect to the Trademarks set forth on Schedule 2.4(d), following the Initial Closing Date, the Purchaser Licensees may not add any such Trademarks to any inventoried Enterprise Products of the Business existing as of the Initial Closing Date that are part of the Acquired Assets and that contain a Trademark licensed to the Seller Parties pursuant to the Mobility Trademark License without the Seller's prior written consent.

Section 2.5 Standards Organizations. The Seller or at least one other Seller Party is a member of the SDOs listed on Schedule 3.8(a) of the Seller IPA Disclosure Schedule. The Seller shall provide (and shall cause the other Seller Parties to provide) to Purchaser within ninety (90) days of the Initial Closing Date, complete and accurate copies of, any IP policies, other licensing commitments, and generally applicable member requirements that are associated with any SDO listed on Schedule 3.8(a) of the Seller IPA Disclosure Schedule and complete copies of all IP declarations, pledges, commitments, and other statements that any Seller Party has made in association with the Transferred IP, in all cases, with respect to each such copy, to the extent that Purchaser cannot obtain such copy using Reasonable Efforts and Seller is not prohibited from providing such copy to Purchaser). During the period of time between the Effective Date and the Initial Closing Date, Seller shall promptly notify Purchaser if any Seller Party becomes a member of any SDO not listed on Schedule 3.8(a) of the Seller IPA Disclosure Schedule, becomes subject to any other IP policy, licensing commitment, or generally applicable member requirement of any SDO, or submits any IP declaration, pledge, commitment, or other statement to any SDO. The Purchaser acknowledges and agrees that Patents that are Transferred IP may be subject to the requirements of such SDOs. Subject to the Purchaser's receipt prior to the Initial Closing Date of such applicable IP policies, other licensing commitments, and generally applicable member requirements, the Purchaser agrees, with respect to Patents that are Transferred IP, to comply (and will cause the Purchaser Assignees to comply) with the licensing commitments imposed on members of such SDOs and to comply with any other requirements of such SDOs that are generally applicable to members thereof, to the extent Seller is required to pass such commitments or requirements on to Purchaser under its agreements with the applicable SDO.

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER

Except as specifically set forth in, or qualified by any matter set forth in, the disclosure schedules, dated as of the date of this IP Agreement and delivered by the Seller to the Purchaser (collectively, the Seller IPA Disclosure Schedule) (it being agreed that the disclosure of any matter in any section or subsection in the Seller Disclosure Schedule, the Seller IPA Disclosure Schedule or the Seller EMA Disclosure Schedule shall be deemed to have been disclosed in any other section or subsection in the Seller Disclosure Schedule to which the applicability of such   27





disclosure is reasonably apparent on the face of such disclosure), the Seller represents and warrants to the Purchaser as follows:

Section 3.1 Ownership. With respect to each item of Assigned IP and Acquired Company IP, respectively, such item is owned by a Seller Party or an Acquired Company, respectively, and such Seller Party or Acquired Company, respectively, has marketable title to such item. Schedules 1.1(b) and 1.1(c) of the Seller IPA Disclosure Schedule collectively set forth a complete and accurate list of all registered, issued, or applied-for Intellectual Property that constitutes Acquired Company IP and Schedules 1.1(h), 1.1(l), and 1.1(n) of the Seller IPA Disclosure Schedule collectively set forth a complete and accurate list of all registered, issued, or applied-for Intellectual Property that constitutes Assigned IP (such Acquired Company IP and Assigned IP, collectively, the Registered Intellectual Property). For each listed item, each of Schedule 1.1(b), 1.1(c), 1.1(h), 1.1(l), and 1.1(n) of the Seller IPA Disclosure Schedule, as applicable, indicates, as applicable, each owner of each such item of Registered Intellectual Property, the jurisdictions in which each such item of Registered Intellectual Property has been issued or registered or in which any application for such issuance or registration has been filed, the registration or application number, and the application filing or registration dates thereof. Each such item of Registered Intellectual Property is subsisting and, to the Knowledge of the Seller, valid and enforceable (except with respect to applications for Intellectual Property). A Seller Party has sufficient right, title, and interest in and to the Licensed IP to grant the licenses granted under this IP Agreement with respect thereto.

Section 3.2 Encumbrances. Except as set forth on Schedule 3.2(a) of the Seller IPA Disclosure Schedule, the Transferred IP is free and clear of any Encumbrances (other than Permitted Encumbrances and obligations under applicable SDO agreements with SDOs listed on Schedule 3.8 of the Seller IPA Disclosure Schedule) and, as of the Initial Closing Date, will be fully transferable, alienable, and licensable by the Purchaser Assignees and Acquired Companies without restriction and without payment to any Person and, except as set forth on Schedule 3.2(b) of the Seller IPA Disclosure Schedule, no Person has an option to take an assignment or license of any Transferred IP.

Section 3.3 Claims. Except as set forth on Schedule 3.3(a) of the Seller IPA Disclosure Schedule, (i) no Legal Proceeding is pending against any Seller Entity, (ii) no Legal Proceeding has been brought against any Seller Entity during the last three (3) years that was not resolved (other than pursuant to a settlement or license Contract), and (iii) no Claim has been threatened in writing against any Seller Entity during the last three (3) years (and, with respect to clause (B), was directed to the Seller Entities' Legal and Governmental Affairs group (including any member or representative thereof and any attorney of any of the Seller Entities) or of which any of them were aware), in each case of clauses (i) through (iii), (A) with respect to any infringement, misappropriation, or other violation, of any Intellectual Property of any Person (or any unfair competition or trade practices) by any Seller Entity in connection with an Enterprise Product (including by any making, having made, using, selling, offering for sale, importing, and otherwise disposing of an Enterprise Product or any services in connection therewith), including any unsolicited offers to license specifically directed (in whole or in part) to an Enterprise Product and directed to the Seller Entities' Legal and Governmental Affairs group (including any member or representative thereof and any attorney of any of the Seller Entities) or of which any of them were aware, unsolicited demands to license, or cease and desist letters, or   28





(B) challenging the enforceability, use, ownership, scope, or validity, of any Transferred IP (other than office actions issued in the ordinary course of prosecuting any pending patent or trademark application). Except as set forth on Schedule 3.3(b) of the Seller IPA Disclosure Schedule, with respect to the infringement, misappropriation, or other violation of any Transferred IP, (1) no Legal Proceeding has been brought during the last six (6) years or is pending, and (2) no Claim has been threatened in writing during the last three (3) years, against any Person by any Seller Entity. None of the Enterprise Products or Transferred IP are subject to any outstanding Order restricting or otherwise limiting the use, validity, enforceability, disposition, or exploitation thereof or any right, title, or interest of any Seller Entity with respect thereto.

Section 3.4 Material IP Contracts. Schedule 3.4 of the Seller IPA Disclosure Schedule sets forth a complete and accurate list of all of the following (the Material IP Contracts): (i) Contracts to which any Acquired Company is a party under which (A) a Person grants to an Acquired Company a license to (or covenant not to sue with respect to) Intellectual Property in connection with the Business (the In-bound Licenses) (provided that Seller shall not be required to list Off-the-Shelf Software Licenses and Contracts for Open Source Software), or (B) an Acquired Company grants to any Person a license to (or covenant not to sue with respect to) Intellectual Property (the Out-bound Licenses) (provided that Seller shall not be required to so list non-exclusive licenses granted in the Ordinary Course to a (I) supplier solely for the purposes of, and to the extent necessary for, such supplier to design, manufacture and supply Enterprise Products for any Seller Entity with respect to the Business, and not for the direct benefit of such supplier or any other Person, or (II) customer solely for such customer's use of an Enterprise Product), (ii) other than In-Bound Licenses and Out-Bound Licenses set forth in Schedule 3.4(a) or Schedule 3.4(b) of the Seller IPA Disclosure Schedule, material Contracts entered into by any Seller Entity that materially adversely affect any Seller Entities' ability to own, use, transfer, license, or enforce any Transferred IP (including any sole or exclusive license grants) or that require payment of royalties with respect to any Transferred IP, and (iii) all Contracts (other than Assumed Contracts set forth on Schedule 1.1(c) of the Acquisition Agreement) entered into by any Seller Entity pursuant to which, as of the Initial Closing Date, any Acquired Company is a licensee or sublicensee of any cross-license to any Patent that claims or is alleged to claim any Wireless Standard or that is a general cross-license to any Patent, excluding any such Contracts that will expire or terminate within six (6) months after the Effective Date.

Section 3.5 Non-Infringement. Except as set forth on Schedule 3.5(a) of the Seller IPA Disclosure Schedule, the operation of the Business as currently conducted does not infringe, misappropriate, or otherwise violate (or constitute any unfair competition or trade practices), and has not, during the past six (6) years with respect to Patents and during the past three (3) years with respect to all other Intellectual Property, infringed, misappropriated, or otherwise violated (or constituted unfair competition or trade practices), of any Intellectual Property of any Person in any material respect; provided that the foregoing representation is limited to the Knowledge of the Seller with respect to any third party Patents to the extent they claim or are alleged to claim Wireless Standards. Except as set forth on Schedule 3.5(b) of the Seller IPA Disclosure Schedule, to the Knowledge of the Seller, no Person is infringing, misappropriating, or otherwise violating, or, within the last three (3) years, has infringed, misappropriated, or otherwise violated, any Transferred IP in any manner material to the Business.   29





Section 3.6 Employees. All Persons (including current and former employees, contractors, and consultants of any of the Seller Entities) who have conceived, created, invented, modified, improved, or developed any Intellectual Property material to, and used in or necessary for, the operation of the Business, for (or under the direction or supervision of) any Seller Entity (during the course of such employment, engagement, or Contract term therewith, as applicable) have executed and delivered to a Seller Entity, a Contract (i) providing for the non-disclosure by such Person of any trade secrets or other material confidential information of any of the Seller Entities with respect to such Intellectual Property, and (ii) providing for the assignment by way of a present grant of assignment (or, in the case of an independent contractor or consultant of (a) a Seller Entity (other than an Acquired Company), a sublicenseable license, or (b) an Acquired Company, a license) by such Person to a Seller Entity of any such Intellectual Property arising out of such Person's employment by, engagement by, or Contract with such Seller Entity, except where the failure to have such a Contract would not reasonably be expected to have a material adverse effect on the Business; provided, however, that the foregoing representation shall be to the Knowledge of the Seller solely with respect to any such contractor or consultant engaged by, or contracted with, a Seller Entity other than with the involvement or awareness of the Seller Entities' Legal and Governmental Affairs group (including any member or representative of and any attorney of any of the Seller Entities). No such Person has made any assertions with respect to any alleged ownership or title to any such Intellectual Property. To the Knowledge of the Seller, no such Person is in violation of any term or condition of any such Contract.

Section 3.7 Software. None of the Seller Entities (i) has delivered, licensed, released, or disclosed to any Person any of the Source Code for any Enterprise Product (other than, in the Ordinary Course to: (1) an employee of a Seller Entity, (2) a contractor or supplier of a Seller Entity solely for the purposes of, and to the extent necessary for, such contractor or supplier to develop, manufacture, and supply Enterprise Products for any Seller Entity, and not for the direct benefit of such contractor or supplier or any other Person, or (3) with respect to Source Code that is not material to the Business, a customer of a Seller Entity with respect to Enterprise Products or to any Person for the purpose of such Person's development of Software that is compatible or interoperates with an Enterprise Product, in each case of clauses (1) through (3), under written Contracts (which include confidentiality, use, and disclosure restrictions) normally used by the applicable Seller Entity to protect its own similar confidential or proprietary information (and in no event less stringent than the terms and conditions of Article V)), except as would not reasonably be expected to have a material effect on the Business, or (ii) is a party to any Contract requiring the deposit of any such Source Code with an escrow agent or escrow service (or other escrow Contract) or requiring the sharing or disclosure of any such Source Code with any Person. With respect to any Open Source Software that is or has been used by a Seller Entity in any way in connection with any Enterprise Product (including any Open Source Software that is Incorporated Into any Enterprise Product by or on behalf of a Seller Entity), the Seller Entities are and have been in compliance in all material respects with all applicable licenses with respect thereto. No Software that is governed by (or has otherwise been licensed or made available to a Seller Entity under) a Reciprocal License has been (a) Incorporated Into any Enterprise Product by or on behalf of a Seller Entity, or (b) distributed or made available to any Person in connection with the Business by any Seller Entity, in each case of clauses (a) and (b), in a manner that would or does require or condition any right to perform the activity described in clause (a) or (b) on any of clauses (i) through (v) of the definition of Reciprocal License (with   30





respect to such Software). The Seller Entities are in possession of any material Source Code owned by any of the Seller Entities (including any such Source Code to any Enterprise Product) that is related to the Business.

Section 3.8 SDOs. Except as set forth on Schedule 3.8(a) of the Seller IPA Disclosure Schedule, no Seller Entity is an SDO Member. To the extent any Seller Entity is an SDO Member, such Person complies and has complied with all applicable rules and terms and conditions of membership (including all related disclosure obligations), and each Seller Entity is and has been, in material compliance with all Laws related to being an SDO Member, in each case, in connection with the Business. Schedule 3.8(b) of the Seller IPA Disclosure Schedule sets forth a complete and accurate list, to the Knowledge of the Seller, of all Transferred IP that constitutes a Patent that is specifically identified in a disclosure to any SDO where such Patent is subject to any rule, term or condition, license, disclosure obligation, commitment, or agreement related to such SDO (together with a description or reference to such rule, term or condition, license, disclosure obligation, commitment, or agreement).

Section 3.9 Intellectual Property Assets. Assuming (i) the receipt of all consents required to assign or transfer any Assumed Contract (or, with respect to those which are not received, the cooperation by Seller pursuant to Section 10.6 of the Acquisition Agreement), (ii) the replication or split and partial assignment of all Non-Assignable Shared Contracts material, individually or in the aggregate, to the Business as contemplated by Section 10.7 of the Acquisition Agreement, and (iii) the acquisition of all regulatory approvals of Governmental Entities required in connection with the authorization, execution and delivery of the Acquisition Agreement and the consummation of the Contemplated Transactions and excluding all (A) with respect to the receipt of administrative or corporate services or benefits (as set forth in Section 1.2(b) of the Acquisition Agreement), Software and other Third-Party Intellectual Property used in connection with such services or benefits provided to the Acquired Companies pursuant to the Transition Services Agreement, (B) rights granted to the Seller Group under the Contracts set forth on Schedule 3.9 of the Seller IPA Disclosure Schedule, (C) Licensed Mobility Patents (as defined in the Mobility Intellectual Property License) and Mobility Technology (as defined in the Mobility Intellectual Property License), in each case to the extent licensed to each member of the Motorola Group (as defined in the Mobility Intellectual Property License) as of the Initial Closing Date pursuant to the Mobility Intellectual Property License, and (D) Intellectual Property (other than Licensed IP) owned by, or licensed from any Person (other than the Seller Entities) to, a supplier of the Seller Entities that is used by such supplier for the purposes of, and to the extent necessary for, such supplier to manufacture and supply Enterprise Products for the Seller Entities with respect to the Business, and (E) Patents to which the Seller Entities are not licensed as of the Effective Date and that claim Wireless Standards,: the Transferred IP and the Licensed IP, taking into account all provisions of this IP Agreement and the other Transaction Agreements, will be sufficient to enable the Purchaser Assignees and Purchaser Licensees to design, develop, manufacture, import, market, distribute, offer for sale, sell, resell, import, export, use, and support the Enterprise Products and perform services in connection therewith immediately following the Initial Closing in all material respects as designed, manufactured, imported, marketed, distributed, offered for sale, sold, imported, exported, used, supported, and provided, as applicable, by the Seller Entities as of the Effective Date; provided that the foregoing shall not be construed as a representation or warranty against third party Intellectual Property infringement claims. The Purchaser Licensees shall have,   31





following the Initial Closing Date, sufficient rights with respect to the Trademarks licensed to the Purchaser Licensees pursuant to Section 2.2(d), to resell after the Initial Closing Date, finished Enterprise Products that are part of the Acquired Assets or Acquired Company Assets and that bear, as of the Initial Closing Date, any of such Trademarks.

Section 3.10 Disclaimer. EXCEPT AS SPECIFICALLY SET FORTH IN THIS IP AGREEMENT OR ANOTHER TRANSACTION AGREEMENT, NEITHER PARTY (NOR ANY MEMBER OF ITS GROUP OR ANY OF ITS AFFILIATES) MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER RELATING TO ANY INTELLECTUAL PROPERTY ASSIGNED OR LICENSED BY ANY OF THEM TO THE OTHER PARTY (OR ANY MEMBER OF THE OTHER PARTY'S GROUP OR ANY OF ITS AFFILIATES), IN EACH CASE INCLUDING ITS CONDITION, ITS MERCHANTABILITY, ITS FITNESS FOR ANY PARTICULAR PURPOSE, OR TITLE OR NON- INFRINGEMENT.

Section 3.11 No Other Warranties or Covenants. Without limiting Section 3.11, except as expressly set forth in this IP Agreement or another Transaction Agreement, nothing contained in this IP Agreement shall be construed as: (i) a warranty or representation by any Seller Party or Purchaser Assignee or Acquired Company as to the validity or scope of the Transferred IP or the Licensed IP; (ii) conferring any license or any other right, by implication, estoppel or otherwise, under any Seller IP or Transferred IP, except as expressly granted herein; (iii) imposing on any Seller Party or Purchaser Assignee or Acquired Company any obligation to institute any suit or action for infringement of any Transferred IP or Licensed IP, or to defend any suit or action brought by any Person which challenges or concerns the validity of any Transferred IP or Licensed IP; (iv) a warranty or representation by any Seller Party or Purchaser Assignee or Acquired Company that any manufacture, use, sale, lease or other disposition of products by the Purchaser Licensees or Seller Parties or the use of any Transferred IP or Licensed IP will be free from infringement of any Intellectual Property; or (v) imposing on either party any obligation to file any patent application or to secure any patent or maintain any patent in force.

ARTICLE IV TERM AND TERMINATION

Section 4.1 Term. The term of this IP Agreement shall be from the Effective Date until all of the Intellectual Property licensed hereunder is in the public domain (provided, however, that in such event the representations and warranties in Article III shall survive (and terminate) in accordance with the Acquisition Agreement) or this IP Agreement is terminated pursuant to Section 4.3. This IP Agreement shall not expire or terminate for any other reason (even in the event of a material breach).

Section 4.2 Irrevocability of Licenses. Each of the parties acknowledges and agrees that the licenses granted hereunder (i) are irrevocable and (ii) may not be terminated for any reason (even in the event of a material breach), except that (a) with respect to Licensed IP that constitutes Third-Party Intellectual Property, solely as provided in Section 2.4(a), (b) with respect to a particular Patent licensed under this IP Agreement, the license granted to such Patent shall automatically terminate upon the expiration of the statutory term (including all extensions   32





and renewals) of such Patent, and (c) Seller may terminate the license granted to the Purchaser Licensees pursuant to Section 2.2(c) (and no other provision of this IP Agreement), following the Initial Closing Date and upon prior written notice to Purchaser, in the event Purchaser materially breaches Section 2.2(c) and fails to cure such material breach within one hundred twenty (120) days after Purchaser's receipt of written notice from Seller (which such notice shall contain a reasonable description of such material breach and a statement of Seller's intent to terminate the license granted to the Purchaser Licensees pursuant to Section 2.2(c) if such material breach is not cured within such one hundred twenty (120) day period). Nothing herein shall preclude any party from seeking damages or other remedies at law or in equity (other than termination of this IP Agreement or any license to any Intellectual Property granted under this IP Agreement) for any breach hereof.

Section 4.3 Termination of Agreement. This IP Agreement will terminate automatically and without need for further action by either party in the event that the Acquisition Agreement is terminated in accordance with its terms.

Section 4.4 Effect of Termination. Upon termination of this IP Agreement pursuant to Section 4.3, this IP Agreement and the rights and obligations of the parties under this IP Agreement, including any obligation to make any assignment or grant any license hereunder, automatically end without any liability against any party or its Affiliates, except as otherwise provided in the Acquisition Agreement and except that the provisions of this Section 4.4, Article V, Section 6.1, Section 6.2, Section 6.6, Section 6.7, Section 6.8, Section 6.9, Section 6.10, Section 6.11, Section 6.12, and Section 6.13 will remain in force and survive any termination of this IP Agreement.

Section 4.5 Bankruptcy. The parties acknowledge and agree that the licenses granted hereunder are licenses of intellectual property within the meaning of Section 365(n) of the Bankruptcy Code (Section 365(n)), which have been licensed hereunder in a contemporaneous exchange for value. The parties further acknowledge and agree that if the Seller (or any of its Affiliates) or the Purchaser (or any of its Affiliates), as applicable (the Insolvent Party): (i) becomes insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due; (ii) applies for or consents to the appointment of a trustee, receiver or other custodian for it, or makes a general assignment for the benefit of its creditors; (iii) commences, or has commenced against it, any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceedings; or (iv) elects to reject, or a trustee on behalf of it elects to reject, this IP Agreement or any agreement supplementary hereto, pursuant to Section 365 of the Bankruptcy Code (Section 365), or if this IP Agreement or any agreement supplementary hereto is deemed to be rejected pursuant to Section 365 for any reason, this IP Agreement, and any agreement supplementary hereto, shall be governed by Section 365(n) and the other party may elect to fully exercise its rights under this IP Agreement in accordance with Section 365(n). Upon written request from such other party to the Insolvent Party, its applicable Affiliates, or the bankruptcy trustee, of such other party's election to proceed under Section 365(n), such Insolvent Party, its applicable Affiliates, such bankruptcy trustee, or any third party agent shall comply in all respects with Section 365(n), including providing such other party (and its Affiliates) with the Intellectual Property licensed to such other party (and its Affiliates) and not interfering with the rights of such other party (and such Affiliates) as provided in this IP Agreement to obtain access to such Intellectual Property from such Insolvent Party, its applicable Affiliates, the bankruptcy trustee, or any third party agent.   33





ARTICLE V CONFIDENTIALITY

Each party shall (and shall cause the other members of its Group and its Affiliates to) hold the Source Code, trade secrets and other confidential information licensed to any of them under this IP Agreement in confidence, and shall protect the confidentiality thereof using at least the same degree of care that it uses to protect its own similar confidentiality or proprietary information, but in no event using less than a reasonable degree of care. Each party shall not (and shall cause the other members of its Group and its Affiliates not to) (i) disclose any such Source Code, trade secrets, or confidential information to any Person other than to (a) those of its employees who have a need to know, or (b) other third Persons (including customers, suppliers, prospective suppliers, or joint developers), or (ii) use or disclose such Source Code, trade secrets and other confidential information except as necessary to exercise its rights or perform its obligations under this IP Agreement in accordance with any applicable restrictions or obligations with respect thereto, in each case of clauses (i) and (ii), under written Contracts (which include confidentiality, use, and disclosure restrictions) normally used by such party to protect its own similar confidential or proprietary information (and in no event less stringent than the terms and conditions of this Article V). This Article V will not apply to Source Code, trade secrets, or other confidential information of a party or any other member of its Group or any of its Affiliates where the other party can demonstrate such Source Code, trade secrets, or other confidential information (A) is or becomes generally known to the public or enters the public domain, other than as a result of a breach of this IP Agreement by such other party or a member of its Group or its Affiliates, (B) was rightfully disclosed to such other party or a member of its Group or its Affiliates by a third Person provided that such other party or member complies with the restrictions imposed by the third Person, or (C) was developed independently by such other party or member or Affiliate without use of or reference to any information disclosed to any of them by such party. If a party or any of members of its Group or its Affiliates is legally required to disclose any of the other party's Source Code, trade secrets, or other confidential information in connection with any legal proceeding, such party shall promptly notify the other party of the foregoing so that the other party may seek to prevent such disclosure or obtain the entry of a protective order or other appropriate protective device or procedure. The disclosing party shall fully cooperate with and aid such other party in connection with the foregoing. If a protective order or other protective device satisfactory to such other party is not obtained, the disclosing party or its applicable member will disclose only that portion of such Source Code, trade secrets, or other confidential information that is legally required to be disclosed (and will notify the other party of which portions are disclosed). Each party shall take steps reasonable under the circumstances to protect the confidentiality of all Source Code, trade secrets, and other confidential information licensed under this IP Agreement by it or its Affiliates to the other party or a member of its Group or any of its Affiliates.   34





ARTICLE VI GENERAL PROVISIONS

Section 6.1 Remedies. The sole and exclusive remedy for any breach of this IP Agreement, including the representations and warranties and covenants herein, shall be as set forth in Article 8 of the Acquisition Agreement. The representations and warranties and covenants contained herein shall terminate in accordance with Section 8.4 of the Acquisition Agreement

Section 6.2 Assignment. Neither party may assign (whether by operation of law or otherwise) this IP Agreement, or any of its licenses, rights, privileges or obligations hereunder, without the prior written consent of the other party, and any such attempted assignment shall be void; provided, however, that, following the Initial Closing Date, without any such prior written consent but upon prior written notice to the other party, each party may assign this IP Agreement to: (i) an Affiliate; (ii) a lender for collateral security; (iii) a Person that succeeds to all or substantially all of its business or assets to which this IP Agreement relates in connection with a merger or sale of all or substantially all of its assets to which this IP Agreement relates; or (iv) corporate reorganization of the party in which the ultimate ownership of the party immediately prior to such reorganization is the same as the ultimate ownership of the party immediately after such reorganization. If a Seller Party assigns or transfers any Licensed IP, the Seller shall (or shall cause the applicable Seller Party to) expressly condition such assignment or transfer on the express acknowledgement and agreement of the assignee or transferee that all such Licensed IP is bound by the license grants set forth herein. If Purchaser or a Purchaser Assignee assigns or transfers any Intellectual Property licensed to the Seller Parties pursuant to Section 2.1(c) or Section 2.1(d), the Purchaser shall (or shall cause the applicable Purchaser Assignee to) expressly condition such assignment or transfer on the express acknowledgement and agreement of the assignee or transferee that all such Intellectual Property is bound by such license grants. Notwithstanding anything to the contrary contained in this IP Agreement, Article III may only be assigned by a party (and shall be assigned by a party) together with such party's assignment of the Acquisition Agreement in accordance with the terms and conditions thereof. Subject to the foregoing limitations, this IP Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

Section 6.3 Effect of Merger or Change of Control. Upon a merger or change of control of a party (including, for purposes of this Section 6.3, with respect to Purchaser any Purchaser Licensee and with respect to Seller any Seller Party) (a Change of Control Event) with or to a Person (other than a Person that is a then-current Affiliate of such party) (the Buyer), the license rights granted under Article II to such party shall not extend to the Buyer or any of its Affiliates existing immediately prior to the Change of Control Event or any of its or their past, current, or future products, systems or services. If as a result of the Change of Control Event such party remains a separate, independent legal entity (or is merged into another Person, where such Person was formed or created for the purpose of the Change of Control Event or where such Person is a then-current Affiliate of such party), then the license rights granted to such party under Article II shall continue in full force and effect. If as a result of the Change of Control Event such party is merged into the Buyer (other than if the Buyer is formed or created for the purpose of the Change of Control Event) or another Person (other than if such Person is formed or created for the purpose of the Change of Control Event or if such Person is a then-   35





current Affiliate of such party) or otherwise does not remain a separate, independent legal entity (except if such party is merged into another Person, where such Person was formed or created for the purpose of the Change of Control Event or where such Person is a then-current Affiliate of such party), then (i) the license rights granted to such party under Article II shall be limited to the operation of the business and the products, systems, and services (including Smart Sensing Network Equipment and Public Safety LTE Smartphone Devices, as applicable) of such party existing as of the effective date of the Change of Control Event and Derivative Works and natural evolutions thereof (but, in all cases, with respect to such license rights, subject to Section 2.1(e) or Section 2.2(e), as applicable), and (ii) no rights or licenses granted to such party under Article II may be extended to the Buyer or any of its Affiliates existing immediately prior to the Change of Control Event in connection with any of its or their past, current, or future products, systems or services.

Section 6.4 Acquisitions. If either party acquires a business or a Person that conducts a business covering any of the same products, systems, or services as those covered by any license granted under Article II to such acquiring party (a Future Acquisition) (whether in an asset or equity transaction), any such license shall be deemed to apply to such same products, systems, and services (but no other products, systems or services) of such acquired business or Person; provided, that all Patents acquired in connection with such Future Acquisition are licensed to the non-acquiring party and, in the case of Seller, the Seller Parties or, in the case of Purchaser, the Purchaser Licensees, pursuant to the terms and conditions of this IP Agreement. In such event, any such acquired Person shall be deemed a Seller Party or a Purchaser Licensee hereunder, as the case may be.

Section 6.5 Further Assurances. Each of the parties agrees that from time to time, at the reasonable request and expense of the other party, it shall execute and deliver such other documents and take such other actions as the other party may reasonably request to effectuate the transactions contemplated by this IP Agreement (including any short form documentation evidencing the licenses granted by any Seller Party hereunder or other documentation to perfect or record the rights granted hereunder in the Transferred IP or Licensed IP in any jurisdiction throughout the world). The Seller acknowledges and agrees (including on behalf of the other Seller Parties) that the Purchaser or any of its Affiliates may record and perfect this IP Agreement or such documentation in any jurisdiction throughout the world, and the Seller shall (and shall cause the other Seller Parties to) cooperate therewith, at the Purchaser's expense. The Purchaser hereby requests, and the Seller hereby grants (and shall cause the other Seller Parties to grant) to the Purchaser and its Affiliates, all rights necessary to record this IP Agreement or such documentation with the United States Patent and Trademark Office, the United States Copyright Office, and any equivalent office or agency in any jurisdiction in the world. Seller shall (and shall cause the other Seller Parties) to, between the Effective Date and the Initial Closing Date, cooperate with the Purchaser in connection with the Purchaser's preparation for acquiring the Business, including (i) by reasonably sharing information to prevent any loss of any of the Seller Entities' rights to any Intellectual Property constituting Transferred IP or Licensed IP, and (ii) facilitating between the parties and their respective Affiliates' communication and sharing of information related to this IP Agreement.   36





Section 6.6 Governing Law; Forum.

(a) The Laws of the State of Delaware (without reference to its principles of conflicts of law) shall govern the construction, interpretation and other matters arising out of or in connection with this IP Agreement and its schedules (whether arising in contract, tort, equity or otherwise).

(b) Except with respect to (i) the result arising out of the escalation referenced in Section 2.1(b)(iii)(B) and (ii) the result of the escalation referenced in Section 2.1(b)(iii)(F) and any arbitration pursuant to Section 2.1(b)(iii)(F) (other than to enforce any arbitral judgment), the parties hereto irrevocably submit to the exclusive jurisdiction of the courts of the State of Delaware and the federal courts of the United States of America located in the State of Delaware over any Dispute arising out of or relating to this IP Agreements or any agreement or instrument contemplated thereby or entered into in connection herewith or therewith or any of the transactions contemplated hereby or thereby. Each party hereby irrevocably agrees that all claims in respect of such Dispute or proceeding will be heard and determined in such courts (and the courts hearing appeals from such courts). The parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection which they may now or hereafter have to the laying of venue of any such Dispute brought in such court or any defense of inconvenient forum in connection therewith. TO THE EXTENT PERMITTED BY APPLICABLE LAW THEN IN EFFECT, EACH PARTY HERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM WHETHER BASED ON CONTRACT, TORT OR OTHERWISE ARISING OUT OF OR RELATING TO THIS IP AGREEMENT OR THE ACTION OF ANY OF THE PARTIES THERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.

Section 6.7 Severability. If any term or provision of this IP Agreement is determined to be invalid, illegal or unenforceable, the remaining terms and provisions of this IP Agreement remain in full force, if the essential terms and conditions of this IP Agreement for each party remain valid, binding and enforceable. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto will negotiate in good faith to modify this IP Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

Section 6.8 Entire Agreement; Conflicting Provisions. This IP Agreement, together with the other Transaction Agreements and any side letters executed by the parties in connection therewith, and all of the exhibits and schedules appended hereto and thereto, constitute the final, complete and exclusive statement of the parties' agreement on the matters contained herein and therein. All prior and contemporaneous negotiations and agreements between the parties on the matters contained in this IP Agreement and the other Transaction Agreements are superseded by this IP Agreement and the other Transaction Agreements, including, but subject to Section 5.5(b) of the Acquisition Agreement, the NDA. In the event of any conflict between any specific provision of this IP Agreement (including Article V) and the provisions of the Acquisition Agreement with respect to the subject matter hereof, the provisions of this IP Agreement will control.





Section 6.9 Counterparts. The parties may execute this IP Agreement in multiple counterparts, each of which constitutes an original as against the party that signed it, and all of which together constitute one agreement. This IP Agreement is effective upon delivery of one executed counterpart from each party to the other party. The signatures of all parties need not appear on the same counterpart. The delivery of signed counterparts by facsimile or email transmission which includes a copy of the sending party's signature(s) is as effective as signing and delivering the counterpart in person.

Section 6.10 Amendment. The parties may amend this IP Agreement only by a written agreement signed by the parties and that identifies itself as an amendment to this IP Agreement.

Section 6.11 Waiver. The parties may waive a provision of this IP Agreement only by a writing signed by the party against whom enforcement of the waiver is sought. A party is not prevented from enforcing any right, remedy or condition in the party's favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a party's rights and remedies in this Agreement is not intended to be exclusive, and a party's rights and remedies are intended to be cumulative to the extent permitted by Law and include any rights and remedies authorized in Law or in equity.

Section 6.12 Notices. Each party giving any notice required or permitted under this IP Agreement will give the notice in writing, and shall be deemed to have been duly given: (i) when received if delivered personally; (ii) when transmitted if sent by facsimile (with transmission confirmed); (iii) the day after it is sent if sent by commercial overnight courier; (iv) upon receipt if sent by certified or registered mail (return receipt requested); or (v) when transmitted if sent by email (with receipt confirmed by recipient). Notice to a party is effective for purposes of this Agreement only if given as provided in this Section 6.12 at the address of which the sending party has been notified in accordance with this Section 6.12.   If to the Seller:



Motorola Solutions, Inc. 1303 E. Algonquin Road Schaumburg, Illinois 60196 Facsimile: +847.576.4688 Email: michael.annes@motorolasolutions.com



Attention: Michael Annes, Senior Vice President, Business Development and Ventures   38





With copies to:



Motorola Solutions, Inc. 1303 E. Algonquin Road Schaumburg, Illinois 60196 Facsimile: +847.576.4688 Email: mark.hacker@motorolasolutions.com Attention: Mark Hacker, General Counsel   Winston & Strawn LLP 35 West Wacker Drive Chicago, Illinois 60601 United States of America Facsimile: +1.312.558.5700 Email: mcostigan@winston.com odavid@winston.com Attention: Matthew D. Costigan Oscar A. David

If to the Purchaser:



Zebra Technologies Corporation 475 Half Day Road Suite 500 Lincolnshire, IL 60069 Facsimile: (847) 821-1492 Email: jkaput@zebra.com Attention: Jim Kaput, General Counsel

With a copy to:



Kirkland & Ellis LLP 300 N. LaSalle Street Chicago, Illinois 60654 Facsimile: +1.312.862.2200 Email: henry.kleeman@kirkland.com scott.falk@kirkland.com Attention: R. Henry Kleeman R. Scott Falk, P.C.

Section 6.13 No Joint Venture. Nothing in this IP Agreement creates a joint venture or partnership between the parties. This IP Agreement does not authorize any party (i) to bind or commit, or to act as an agent, employee or legal representative of, another party, except as may be specifically set forth in other provisions of this Agreement, or (ii) to have the power to control the activities and operations of another party. The parties are independent contractors with respect to each other under this IP Agreement. Each party agrees not to hold itself out as having any authority or relationship contrary to this Section 6.13.

[Remainder of Page Intentionally Left Blank]   39





IN WITNESS WHEREOF, the parties have duly executed and delivered this Intellectual Property Agreement on the date first written above.   MOTOROLA SOLUTIONS, INC.

By:   /s/ Anders Gustafsson Name:   Anders Gustafsson Title:   Chief Executive Officer

ZEBRA TECHNOLOGIES CORPORATION By:   /s/ Michael Annes Name:   Michael Annes Title:   Senior Vice President
answer:
Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.


question:
CONTENT LICENSE AGREEMENT



THIS AGREEMENT is made as of this 2nd day of June, 2008 by and among Digicorp, Inc., a corporation organized under the laws of the State of Delaware, United States of America with offices at 4143 Glencoe Avenue, Unit B, Marina Del Rey, California 90291, U.S.A. (COMPANY) and New China Media LLC, a Florida limited liability company (a/k/a New China Media Limited) with offices at 400 Alton Road, Penthouse 7, Miami Beach, Florida 33139 (NCM); YGP, LLC, a Florida limited liability company with offices at 4000 Hollywood Blvd, Suite 485 South, Hollywood, Florida, 33021 (YGP) and TWK Holdings, LLC with offices at Room 4301, 43/F, Jardine House , One Connaught Place, Central, Hong Kong (TWK) (NCM, YGP and TWK shall be individually and collectively referred to as CONTENT PROVIDER) (COMPANY and CONTENT PROVIDER are hereinafter sometimes collectively referred to as the Parties).



                W I T N E S S E T H:

  WHEREAS, COMPANY intends to build and maintain web sites based in the People's Republic of China which will include content provided to COMPANY by third parties for the purpose of providing information to users of the web site, and providing access to the products and/or services of such third parties;





WHEREAS, CONTENT PROVIDER has acquired from one or more third parties (individually a Licensor and collectively the Licensors) the right to distribute by means of the internet certain content described more fully in the attached Exhibit A (the Current Content) and intends to acquire from Licensors in the future the right to distribute by means of the internet additional content (the Future Content) (the Current Content and the Future Content are hereinafter sometimes collectively referred to as the Content); and,





  WHEREAS, COMPANY and CONTENT PROVIDER wish to distribute the Content through the web sitesreferred to above.



  NOW, THEREFORE, in consideration of the promises and the mutual covenants of this Agreement, the partieshereto agree as follows:



  1. LICENSE



A. Subject to the terms and conditions of this Agreement, CONTENT PROVIDER hereby grants and assigns by means of present assignment to COMPANY and COMPANY hereby assumes for the Term of this Agreement (as set forth in paragraph 8, below), CONTENT PROVIDER'S rights and obligations regarding the Content from Licensors as set forth in Exhibit A with respect to the right and license for the territory of the People Republic of China to use, reproduce, distribute, transmit and publicly display the Current Content and the Future Content by means of the internet in accordance with Exhibit A and this Agreement. In this regard, it is specifically understood and agreed that CONTENT PROVIDER will not during the Term of this Agreement take any action to exploit or otherwise use, reproduce, distribute, transmit and publicly display any of the Content via the internet to Universities and College students in the People's Republic of China except for the benefit of the COMPANY.







B. CONTENT PROVIDER further grants to COMPANY (i) the right to sublicense the Content to COMPANY'S wholly-owned subsidiaries or to joint ventures in which COMPANY participates for the sole purpose of using, reproducing, distributing, transmitting and publicly displaying the Content in accordance with this Agreement; and, (ii) the right, in COMPANY'S discretion, to use and exploit the Content at one or more other web sites in addition to or in lieu of the web sites referred to in the recital above (the web sites referred to above and any other web sites in addition to or in lieu thereof where COMPANY, its subsidiaries or joint ventures in which it might participate might use or exploit the Content are hereinafter collectively referred to as the Web site).



Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008





                2. CONSIDERATION



A. In consideration for the license of rights granted hereunder in the Current Content, COMPANY hereby agrees to issue to YGP 16,200 shares of its Series A Convertible Preferred Stock for which YGP will pay COMPANY the sum of $1.00 per share or $16,200 in the aggregate; NCM 3,000 of its Series A Convertible Preferred Stock for which NCM will pay COMPANY the sum of $1.00 per share or $3,000 in the aggregate and TWK 12,000 of its Series A Convertible Preferred Stock for which TWK will pay COMPANY the sum of $1.00 per share or $12,000 in the aggregate. Prior to the execution hereof, CONTENT PROVIDER has been furnished with a copy of the Certificate of Designation for the Series A Convertible Preferred Stock and is fully familiar with the terms and conditions thereof.







B. In addition to the foregoing, and subject to the terms and conditions of the applicable content agreement with such Licensor, COMPANY agrees to pay directly to each Licensor from whom CONTENT PROVIDER might obtain Content which CONTENT PROVIDER licenses to COMPANY pursuant hereto a royalty equal to that royalty which CONTENT PROVIDER might be obligated to pay to that Licensor with respect to the use and exploitation of that Content in the manner licensed to and actually used by COMPANY pursuant hereto provided, however, unless the Parties might agree in writing to the contrary, in no event will COMPANY be obligated to pay such Licensor for the use of such Content more than fifty percent (50.0%) of all revenues generated during the Term of this Agreement from banner advertising that appears on Web site pages that display that Content or any portion thereof and with respect to which at least a majority of the content (excluding advertisements) on such pages is composed of the Content (the Net Advertising Revenue).







C. Subject to the terms and conditions of the applicable content agreement with such Licensor, the Net Advertising Revenue shall be calculated on a quarterly calendar basis (the Net Advertising Revenue Period) and shall be payable no later than sixty (60) days after the termination of the preceding full quarter-annual period, i.e., commencing on the first (1st) day of January, April, July and October except that the first and last calendar periods may be short, depending on the effective date of this Agreement.







D. For each Net Advertising Revenue Period, COMPANY shall provide the Licensor of such Content with a written statement of account setting out the actual number of visits to the Web Site during the applicable Net Advertising Revenue Period. Such statement shall be furnished to the Licensor of such Content regardless of whether any visits to the Web site were made during the applicable period.





    E. COMPANY'S obligation for the payment of the Net Advertising Revenue shall survive expiration or termination of this Agreement and will continue for as long as COMPANY continues to use the Content.





F. For the avoidance of doubt or confusion, the sole consideration paid or payable to CONTENT PROVIDER pursuant to this Agreement is that provided for in paragraph 2A hereof and in no event will CONTENT PROVIDER be entitled to receive any participation in any of the revenues which COMPANY might derive from the Content.



                3. CONTENT PROVIDER'S RESPONSIBILITIES

    A. CONTENT PROVIDER will provide to COMPANY the Content, which will comply with thedescription attached hereto as Exhibit A.



    B. CONTENT PROVIDER will have sole responsibility for providing, at its expense, the Content to COMPANY. CONTENT PROVIDER and COMPANY will determine mutually agreeable methods for the transmission and incorporation of updates to the Content.



Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008





  4. RIGHTS OF COMPANY



A. Subject to the terms and conditions of the applicable content agreement with such Licensor, COMPANY may incorporate the Content into certain pages in the Web Site (the Content Pages) and reasonable excerpts or portions of the Content may be incorporated into the Web site at COMPANY'S discretion.





    B. COMPANY shall have sole control over the content, composition, and look and feel of the Web site, and will have sole responsibility for providing, hosting and maintaining, at its own expense, the Web site.

                5. RIGHTS OF CONTENT PROVIDER

    A. Subject to the terms and conditions of the applicable content agreement with such Licensor, CONTENT PROVIDER will have sole control and responsibility over the data and information contained in the Content.





B. CONTENT PROVIDER will not alter the Content without COMPANY'S prior written consent; provided, however, that, subject to the terms and conditions of the applicable content agreement with such Licensor,CONTENT PROVIDER may promptly and without prior consent of COMPANY make any changes in the Content to correct errors and the like, or to remove any defamatory materials or any other materials that CONTENT PROVIDER can demonstrate are offensive to a reasonable number of users of the Web site.



                6. RECORD INSPECTION, AUDIT AND INCONTESTABILITY PERIOD



A. COMPANY will maintain accurate books and records with respect to the calculation of all payments due under this Agreement. The Licensors shall have the right, upon reasonable notice, to inspect COMPANY'S books and records and all other documents and material in COMPANY'S possession or control with respect to the Content each has or might license to CONTENT PROVIDER which becomes the subject matter of this Agreement (and only with respect to Content each has or might license to CONTENT PROVIDER which become the subject matter hereof).





    B. All books and records relative to COMPANY'S obligations to a particular Licensor hereunder shall be maintained and made accessible to that Licensor for inspection at a location in Los Angeles, California for at least twelve (12) months after termination of this Agreement.





C. Each report rendered by COMPANY to a Licensor hereunder shall become final and incontestable twelve (12) months following the date COMPANY might render same to that Licensor unless prior to the expiration of that twelve (12) month period that Licensor provides COMPANY with a detailed written objection thereto.



                7. OWNERSHIP



A. CONTENT PROVIDER, LICENSORS or either of them, as appropriate, shall retain all worldwide rights, title and interest in and to the Content (including, but not limited to, ownership of all copyrights and other intellectual property rights therein), as well as all right, title and interest in and to their and each of their trademarks, service marks and trade names, worldwide, including any goodwill associated therewith, subject to the limited license granted to COMPANY hereunder.







B. COMPANY will retain all worldwide rights, title, and interest in and to the Web Site (including, but not limited to, ownership of all copyrights, trademarks, look and feel and other intellectual property rights therein), as well as all right, title and interest in and to its trademarks, service marks and trade names worldwide, including any goodwill associated therewith, subject to the limited license granted

Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008





to  CONTENT PROVIDER hereunder. Any use of any such trademarks by CONTENT PROVIDER shall inure to the benefit of COMPANY and CONTENT PROVIDER shall take no action that is inconsistent with COMPANY'S ownership thereof.



C. Each party hereby grants to the other a non-exclusive, limited royalty-free license to use its trademarks, service marks or trade names only as specifically described in this Agreement. All such use shall be in accordance with each party's reasonable policies regarding advertising and trademark usage as established from time to time.



                8. TERM



A. This Agreement and the provisions hereof, except as otherwise provided, shall be in full force and effect commencing on the date of execution by both Parties and shall extend for an initial term of two (2) years. This Agreement shall be automatically renewed for additional extended terms each of two (2) years duration unless either party notifies the other in writing of its intention not to renew the Agreement, such notification to be provided at least ninety (90) days prior to the expiration of the then in-effect term. The initial two (2) year term as it might be extended herein is referred to herein as the Term.







B. Notwithstanding anything in the foregoing paragraph to the contrary, with respect to each item of Current Content or Future Content the Term during which COMPANY may use and exploit same shall commence on the date hereof and continue for that period of time which is the longer of: (i) two (2) years following the date on which CONTENT PROVIDER might make full delivery of such Content to COMPANY; and (ii) the duration of the term of the license concerning that Content between CONTENT PROVIDER and its Licensor thereof.



                9. TERMINATION

    A. This Agreement may be terminated by either party upon thirty (30) days written notice to the other in the event of a breach of a material provision hereof unless, during that thirty (30) day period, the party receiving the notice cures the breach.



    B. COMPANY may, in its unfettered discretion, terminate this Agreement at any time after first givingCONTENT PROVIDER ten (10) days advance notice thereof.

                10. EFFECT OF TERMINATION

    A. The termination or expiration of this Agreement will in no way affect COMPANY'S obligation to render reports or pay sums shown as owing thereon for periods of time prior to the termination or expiration of this Agreement;.



    B. The warranties, representations and indemnity obligations of this Agreement will survive terminationor expiration of this Agreement.

                11. CONFIDENTIALITY

    A. Confidential Information shall mean any confidential technical data, trade secret, know-how or other confidential information disclosed by any party hereunder in writing, orally, by drawing or otherwise.

              B. Notwithstanding the foregoing, Confidential Information shall not include information which: (i) is known to the receiving party at the time of disclosure or becomes known to the receiving party without breach of this Agreement; (ii) is or becomes publicly known through no wrongful act of the

Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008





    receiving party or any subsidiary of the receiving party; (iii) is rightfully received from a third partywithout restriction on disclosure; (iv) is independently developed by the receiving party or any of its subsidiaries; (v) is furnished to any third party by the disclosing party without restriction on its disclosure; (vi) is approved for release upon a prior written consent of the disclosing party; or, (vii) is disclosed pursuant to judicial order, requirement of a governmental agency or by operation of law.







C. The receiving party agrees that it will not disclose any Confidential Information to any third party and will not use Confidential Information of the disclosing party for any purpose other than for the performance of the rights and obligations hereunder during the term of this Agreement and for a period of three (3) years thereafter, without the prior written consent of the disclosing party. The receiving party further agrees that Confidential Information shall remain the sole property of the disclosing party and that it will take all reasonable precautions to prevent any unauthorized disclosure of Confidential Information by its employees. No license shall be granted by the disclosing party to the receiving party with respect to Confidential Information disclosed hereunder unless otherwise expressly provided herein.





    D. Upon the request of the disclosing party, the receiving party will promptly return all ConfidentialInformation furnished hereunder and all copies thereof.





E. The Parties agree that all publicity and public announcements concerning the formation and existence of this Agreement shall be jointly planned and coordinated by and among the Parties. Neither party shall disclose any of the specific terms of this Agreement to any third party without the prior written consent of the other party, which consent shall not be withheld unreasonably. Notwithstanding the foregoing, any party may disclose information concerning this Agreement as required by the rules, orders, regulations, subpoenas or directives of a court, government or governmental agency, after giving prior notice to the other party.







F. If a party breaches any of its obligations with respect to confidentiality and unauthorized use of Confidential Information hereunder, the non-breaching party shall be entitled to equitable relief to protect its interest therein, including but not limited to injunctive relief, as well as money damages notwithstanding anything to the contrary contained herein.





    G. Except as otherwise set forth in this Agreement, neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written approval of the other, which approval shall not be unreasonably withheld.

                12. WARRANTIES AND REPRESENTATIONS                     A. CONTENT PROVIDER warrants and represents that



(i) CONTENT PROVIDER has the full right, power, legal capacity and authority to enter into this Agreement, to carry out the terms and conditions hereof and to grant to COMPANY the rights, licenses and privileges herein granted to COMPANY. Except as otherwise provided herein, CONTENT PROVIDER does not need the consent or release of any other person, firm or entity in order for CONTENT PROVIDER to enter into this Agreement and to grant to COMPANY the rights granted pursuant to this Agreement.







(ii) With respect to the Content and each item thereof, the execution, delivery and performance of this Agreement by CONTENT PROVIDER shall not violate or contravene any certificate of incorporation or by-laws of CONTENT PROVIDER or any agreement or other instrument to which CONTENT PROVIDER is a party. This Agreement has been duly authorized, executed and delivered by CONTENT PROVIDER.



              (iii) With respect to the Content and each item thereof, neither the Content nor anything contained therein (including, but not limited to, the title thereof and any music and sound synchronized

Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008







therewith), nor any use or distribution or exploitation of the Content, nor any exercise by COMPANY of any or all of the rights granted to COMPANY pursuant to this Agreement, nor any materials delivered hereunder shall at any time during the Term as it might be extended, violate or infringe upon any right or interest of any person or entity, including, but not limited to, any copyright, literary right, dramatic right, privacy right, musical right, publicity right, artistic right, personal right, property right, civil right, trademark right, trade name, service mark or any other right or interest of any person or entity.







(iv) With respect to the Content and each item thereof, during the Term as it might be extended, there shall not be any actual or threatened liens, claims, encumbrances, legal proceedings, restrictions, agreements or understandings which will conflict or interfere with, limit, derogate from, or be inconsistent with, or otherwise affect any of the provisions of this Agreement, any of the representations and warranties of CONTENT PROVIDER contained herein or the enjoyment by COMPANY of any or all of the rights granted to COMPANY hereunder.







(v) With respect to the Content and each item thereof, CONTENT PROVIDER owns and controls and shall for the full Term as it might be extended own and control, any and all rights necessary to enable CONTENT PROVIDER to grant to COMPANY the rights granted pursuant to this Agreement and to enable COMPANY to exercise and enjoy the rights granted to COMPANY pursuant to this Agreement (without COMPANY incurring any obligation or liability to any person or entity) including, but not limited to, all performance rights and advertising rights and all other rights granted to COMPANY hereunder in and to all literary, dramatic, musical and other material contained in the Content and each item thereof. With respect to the Content and each item thereof, CONTENT PROVIDER has secured and obtained, and CONTENT PROVIDER shall maintain throughout the Term as it might be extended all rights as may be required for the full and unlimited exercise and enjoyment by COMPANY of each and all of the rights herein granted to COMPANY.







(vi) All obligations and amounts payable with respect to the Content and each item thereof or with respect to the production, distribution and exploitation thereof, including, but not limited to, all salaries, royalties, license fees, laboratory charges, union obligations and the like, have been and shall be fully paid and satisfied by CONTENT PROVIDER or third parties. COMPANY shall have no obligation for past, current or future salaries, royalties, laboratory charges, or similar payments with respect to the Content and each item thereof.







(vii) The Content and each item thereof are not in the public domain and are validly copyrighted in the territories in which CONTENT PROVIDER has licensed COMPANY rights in the Content. The Content and each item thereof will not fall into the public domain anywhere in the territories in which CONTENT PROVIDER has licensed COMPANY rights in the Content prior to the expiration of the Term as it might be extended. Each Program, as delivered, will contain all proper copyright notices required or permitted under any applicable statute, act or treaty.







(viii) Each CONTENT PROVIDER understands that the Preferred Shares being acquired by each CONTENT PROVIDER hereunder and any underlying securities (collectively referred to herein as the Securities), have not been registered under the Securities Act of 1933, as amended (the Act), and are being issued under an exemption from registration provided by Section 4(2) of the Act. The Securities are being acquired by each CONTENT PROVIDER solely for its own account, for investment purposes only, and have not been acquired with a view to, or in connection with, any resale, distribution, subdivision or fractionalization thereof. Each CONTENT PROVIDER has no agreement or other arrangement, formal or informal, with any person to sell, transfer or pledge any part of the Securities. Each CONTENT PROVIDER understands that CONTENT PROVIDER must bear the economic risk of the investment for an indefinite period of time because the Securities cannot be resold or otherwise transferred unless they are subsequently registered under the Act or an exemption from such registration is available.



              Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008







(ix) CONTENT PROVIDER'S warranties, representations and agreements are of the essence of this Agreement and shall survive for the full Term as it might be extended. None of CONTENT PROVIDER'S representations, warranties or agreements shall in any way be limited by reason of any investigation made by COMPANY of any documents, agreements or other materials submitted to COMPANY by CONTENT PROVIDER hereunder.



                13. INDEMNIFICATION



A. CONTENT PROVIDER shall, at its sole cost and expense, indemnify, save and hold harmless COMPANY and its successors, subdistributors, sublicensees, assigns, agents, representatives and affiliates from and against any and all claims, demands, causes of action, liability, loss, damage, cost and expense (including reasonable attorney's fees and court costs) incurred or sustained by reason of or arising out of any breach or alleged breach of any of the warranties, representations or agreements herein made by CONTENT PROVIDER, or by reason of any action, claim or proceeding related to or arising out of such breach or alleged breach by CONTENT PROVIDER. In the event that any person or entity shall make any claim or institute any suit or proceeding, COMPANY shall notify CONTENT PROVIDER in writing, and CONTENT PROVIDER must assume, at it own cost and expense, the defense thereof; provided, however, that COMPANY'S failure to provide such notice shall not affect this indemnity unless CONTENT PROVIDER has been materially prejudiced by such failure. COMPANY may, at its sole discretion, engage its own counsel in connection with any such suit, claim or proceeding, and the cost thereof (including reasonable fees and expenses) shall be borne by CONTENT PROVIDER provided that CONTENT PROVIDER shall in any event fulfill its obligation to undertake COMPANY'S defense. The final control and disposition of any claim, whether by settlement, compromise or otherwise, shall remain with COMPANY pursuant to the terms of this indemnification paragraph. In the event that CONTENT PROVIDER fails to promptly make any required payment to COMPANY, COMPANY shall have the right to withhold for its own account any royalties or other monies payable to CONTENT PROVIDER by COMPANY pursuant to this Agreement or any other agreement between CONTENT PROVIDER and COMPANY.







B. COMPANY shall, at its sole cost and expense, indemnify, save and hold harmless CONTENT PROVIDER and its successors, subdistributors, sublicensees, assigns, agents, representatives and affiliates from and against any and all claims, demands, causes of action, liability, loss, damage, cost and expense (including reasonable attorney's fees and court costs) incurred or sustained by reason of or arising out of any breach or alleged breach of any of the warranties, representations or agreements herein made by COMPANY, or by reason of any action, claim or proceeding related to or arising out of such breach or alleged breach by COMPANY. In the event that any person or entity shall make any claim or institute any suit or proceeding, CONTENT PROVIDER shall notify COMPANY in writing, and COMPANY must assume, at it own cost and expense, the defense thereof; provided, however, that CONTENT PROVIDER'S failure to provide such notice shall not affect this indemnity unless COMPANY has been materially prejudiced by such failure. CONTENT PROVIDER may, at its sole discretion, engage its own counsel in connection with any such suit, claim or proceeding, and the cost thereof (including reasonable fees and expenses) shall be borne by COMPANY provided that COMANY shall in any event fulfill its obligation to undertake CONTENT PROVIDER'S defense. The final control and disposition of any claim, whether by settlement, compromise or otherwise, shall remain with CONTENT PROVIDER pursuant to the terms of this indemnification paragraph. In the event that COMPANY fails to promptly make any required payment to CONTENT PROVIDER, CONTENT PROVIDER shall have the right to withhold for its own account any royalties or other monies payable to COMPANY by CONTENT PROVIDER pursuant to this Agreement or any other agreement between COMPANY and CONTENT PROVIDER.







C. IN NO EVENT WILL CONTENT PROVIDER BE LIABLE TO COMPANY NOR WILL COMPANY BE LIABLE TO CONTENT PROVIDER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. TH  LIABILITY OF CONTENT PROVIDER FOR DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT



Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008





OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND SHALL NOT EXCEED $31,200.00.                 14. NOTICE AND PAYMENT



All notices, requests and other communications hereunder shall be in writing and shall be delivered by courier or other means of personal service (including by means of a nationally recognized courier service or professional messenger service), or sent by telex or telecopy or mailed first class, postage prepaid, by certified mail, return receipt requested, in all cases, addressed as indicated in the introductory recital of this Agreement. All notices, requests and other communications shall be deemed given on the date of actual receipt or delivery as evidenced by written receipt, acknowledgment or other evidence of actual receipt or delivery to the address specified above. In case of service by telecopy, a copy of such notice shall be personally delivered or sent by registered or certified mail, in the manner set forth above, within three (3) business days thereafter. Any party hereto may from time to time by notice in writing served as set forth above designate a different address or a different or additional Person to which all such notices or communications thereafter are to be given.



                15. GOVERNING LAW AND VENUE



This Agreement is to be governed by and construed in accordance with the Laws of the State of California applicable to contracts made and to be performed wholly within such State, and without regard to the conflicts of laws principles thereof. Any suit brought hereon, whether in contract, tort, equity or otherwise, shall be brought in the state or federal courts sitting in Los Angeles County, California, the parties hereto hereby waiving any claim or defense that such forum is not convenient or proper. Each party hereby agrees that any such court shall have in personam jurisdiction over it, consents to service of process in any manner prescribed or authorized by California Law, and agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner specified by Law.



                16. ARBITRATION



Any controversy or claim arising out of or relating to this Agreement, or any agreements or instruments relating hereto or delivered in connection herewith or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicablility of this agreement to arbitrate, will at the request of any party be determined by arbitration in Los Angeles, California before three (3) arbitrators under the rules of the JAMS. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief in pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration.



                17. ATTORNEYS' FEES

    In any suit, action, arbitration or other proceeding to interpret or enforce this Agreement, the prevailing party therein shall, in addition to any other award of damage or other remedy, be entitled to recover its reasonable attorneys' fees and costs.

                18. AGREEMENT BINDING ON SUCCESSORS

    The provisions of this Agreement shall be binding upon and shall inure to the benefit of the Parties hereto,their heirs, administrators, successors and assigns.

                19. WAIVER

Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008





    No waiver by either party of any default shall be deemed as a waiver of prior or subsequent default of thesame of other provisions of this Agreement.

                20. SEVERABILITY

    If any term, clause or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause o provision and such invalid term, clause or provision shall be deemed severed from this Agreement.

                21. FURTHER ACTION

    Each of COMPANY and CONTENT PROVIDER agrees to execute and deliver such other documents or agreements and take such other action as may be reasonably necessary or desirable for the implementation of this Agreement and the consummation of the transactions contemplated hereby.

                22. INTEGRATION



This Agreement constitutes the entire understanding of the Parties, and revokes and supersedes all prior agreements between the Parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in writing signed by the Parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents which may conflict with this Agreement.





  IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have each caused to beaffixed hereto his or its hand the day indicated.



  CONTENT PROVIDER   COMPANY               New China Media, LLC   Digicorp, Inc.               By /s/ Dennis Pelino   By /s/ Jay Rifkin     Name: Dennis Pelino   Name: Jay Rifkin     Title: Chairman   Title: CEO                         CONTENT PROVIDER:                   YGP, LLC                   By /s/ Dennis Pelino         Name: Dennis Pelino         Title: Managing Partner                             CONTENT PROVIDER:                   TWK Holdings, LLC

Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008





  By /s/ Beh Chong Wah         Name: Beh Chong Wah         Title: Managing Member





EXHIBIT A TO CONTENT LICENSE AGREEMENT BY AND AMONG DIGICORP, INC. AND NEW CHINA MEDIA, LLC; YGP, LLC and TWK HOLDINGS, LLC DATED June 2, 2008



            DESCRIPTION OF CONTENT

  Supply Agreement for Content dated May 31, 2008 among Yes Television (Hong Kong) Limited, New ChinaMedia Limited and Youth Media HKG Limited, a copy of which is annexed hereto.

            Content derived from AVP, Inc. and other film content on a non-exclusive basis

Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008
answer:

Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.