Document:

Exhibit 10.41

Williams Scotsman International, Inc.

8,687,646 Shares(1)

Common Stock

($0.01 par value)

Underwriting Agreement

New York, New York

May 10, 2006

Citigroup Global Markets Inc.

CIBC World Markets Corp.

Lehman Brothers Inc.

Robert W. Baird & Co.

Deutsche Bank Securities Inc.,

As Representatives of the several Underwriters,

c/o Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Ladies and Gentlemen:

Williams Scotsman International, Inc., a corporation
organized under the laws of the State of Delaware (the “Company”), proposes to
sell to the several underwriters named in Schedule I hereto (the “Underwriters”),
for whom you (the “Representatives”) are acting as representatives,
2,101,724 shares of Common Stock, $0.01 par value (“Common Stock”) of the
Company, and the persons named in Schedule II hereto (the “Selling Stockholders”)
propose to sell to the several Underwriters 6,585,922 shares of Common Stock
(said shares to be issued and sold by the Company and shares to be sold by the
Selling Stockholders collectively being hereinafter called the “Underwritten
Securities”).  The Selling Stockholders
also propose to grant to the Underwriters an option to purchase up to 1,303,147
additional shares of Common Stock to cover over-allotments (the “Option
Securities”; the Option Securities, together with the Underwritten Securities,
being hereinafter called the “Securities”). 
To the extent there are no additional Underwriters listed on Schedule I
other than you, the term Representatives as used herein shall mean you, as
Underwriters, and the terms Representatives and Underwriters shall mean either
the singular or plural as the context requires. 
In addition, to the extent that there is not more than one Selling
Stockholder named in Schedule II, the term Selling Stockholder shall mean
either the singular or plural.  The use
of the neuter in this Agreement shall include the feminine and masculine
wherever appropriate.  Certain terms used
herein are defined in Section 21 hereof. 
Any reference herein to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to General Instruction VII
of Form S-1.

(1)           Plus an option to purchase from the
Selling Stockholders, up to 1,303,147 additional Securities to cover
over-allotments.

 

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1.             Representations
and Warranties.

(i)        The Company represents
and warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.

(a)           The
Company has prepared and filed with the Commission a registration statement
(file number 333-133222) on Form S-1, including a related preliminary
prospectus, for registration under the Act of the offering and sale of the
Securities.  Such Registration Statement,
including any amendments thereto filed prior to the Execution Time, has become
effective. The Company may have filed one or more amendments thereto, including
a related preliminary prospectus, each of which has previously been furnished
to you.  The Company will file with the
Commission a Prospectus in accordance with Rule 424(b).  As filed, such Prospectus shall contain all
information required by the Act and the rules thereunder and, except to the
extent the Representatives shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that contained
in the latest Preliminary Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.

(b)           On
the Effective Date, the Registration Statement did, and when the Prospectus is
first filed in accordance with Rule 424(b) and on the Closing Date (as
defined herein) and on any date on which Option Securities are purchased, if
such date is not the Closing Date (a “settlement date”), the Prospectus (and
any supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the rules thereunder; on the Effective
Date and at the Execution Time, the Registration Statement did not and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date and any settlement date, the
Prospectus (together with any supplement thereto) will not include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information contained
in or omitted from the Registration Statement, or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion in the Registration Statement or
the Prospectus (or any supplement thereto), it being understood and agreed that
the only such information furnished by any Underwriter consists of the
information described as such in Section 8(c) hereof.

(c)           As
of the Execution Time, (i) the Disclosure Package and the price to the public,
the number of Underwritten Securities and the number of Option Securities to be
included on the cover page of the Prospectus, when taken together as a whole,
and (ii) each electronic roadshow when taken together as a whole with the
Disclosure Package, and the price to the public, the number of Underwritten Securities
and the number of Option Securities to be included on the cover page of the
Prospectus, do not contain any

 

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untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  The preceding sentence does not apply to
statements in or omissions from the Disclosure Package based upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 8(c)
hereof.

(d)           (i)
At the time of filing the Registration Statement and (ii) as of the Execution
Time (with such date being used as the determination date for purposes of this
clause (ii)), the Company was not and is not an Ineligible Issuer (as defined
in Rule 405), without taking account of any determination by the Commission
pursuant to Rule 405 that it is not necessary that the Company be considered an
Ineligible Issuer.

(e)           Each
Issuer Free Writing Prospectus does not and will not include any information
that conflicts in any material respect with the information contained in the
Registration Statement, including any document incorporated by reference
therein that has not been superseded or modified.  The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus based upon
and in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 8(c)
hereof.

(f)            Each
of the Company and its subsidiaries Williams Scotsman, Inc., Willscot
Equipment, LLC, Space Master International, Inc., Evergreen Mobile Company,
Truck and Trailer Sales, Inc. and Williams Scotsman of Canada, Inc. (“Subsidiaries”)
has been duly incorporated or organized and is validly existing as a
corporation or limited liability company in good standing under the laws of the
jurisdiction in which it is chartered or organized with full corporate or
limited liability company power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in the
Disclosure Package and the Prospectus, and is duly qualified to do business as
a foreign corporation or other entity and is in good standing under the laws of
each jurisdiction which requires such qualification, except where the failure
of any Subsidiary of the Company to be so incorporated or organized, existing
and in good standing would not have a Material Adverse Effect.

(g)           All
the outstanding shares of capital stock of each Subsidiary have been duly and
validly authorized and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the Disclosure Package and the Prospectus, all
outstanding shares of capital stock of the Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and clear of
any perfected security interest or any other security interests, claims, liens
or encumbrances other than the security interests under (i) the Company’s
Amended and Restated Credit Facility, entered into on June 28, 2005, as
amended as of April 12, 2006, as described in the Disclosure Package and the
Prospectus, and (ii) the Indenture, dated as of August 18, 2003, among Williams

 

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Scotsman, Inc., the guarantors named therein, the subordinated
guarantor named therein and U.S. Bank National Association, as trustee,
relating to the 10% Senior Secured Notes due 2008 of Williams Scotsman, Inc.,
as amended and supplemented from time to time.

(h)           The
Company’s authorized equity capitalization is as set forth in the Disclosure
Package and the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Disclosure
Package and the Prospectus; the outstanding shares of Common Stock have been
duly and validly authorized and issued and are fully paid and nonassessable;
the Securities (other than outstanding shares of Common Stock) have been duly
and validly authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and nonassessable;
the Securities are duly quoted, and admitted and authorized for trading,
subject to official notice of issuance and evidence of satisfactory
distribution, on the Nasdaq National Market; the certificates for the
Securities are in valid and sufficient form; the holders of outstanding shares
of capital stock of the Company are not entitled to preemptive or other rights
to subscribe for the Securities; and, except as set forth in the Disclosure
Package and the Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.

(i)            There
is no franchise, contract or other document of a character required to be
described in the Registration Statement, the Preliminary Prospectus or
Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required; and the statements in the Preliminary Prospectus and the
Prospectus under the heading “U.S. Federal Tax Considerations for Non-U.S.
Holders” fairly summarize the matters therein described.

(j)            This
Agreement has been duly authorized, executed and delivered by the Company.

(k)           The
Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Disclosure Package and the Prospectus, will not be an “investment company” as
defined in the Investment Company Act of 1940, as amended.

(l)            The
Company is not required to obtain any consent, approval, authorization, filing
with or order of any court or governmental agency or body required in
connection with the transactions contemplated herein, except such as have been
obtained under the Act and the Exchange Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner contemplated
herein and in the Disclosure Package and the Prospectus or such as the failure
to obtain would not have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated hereby.

 

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(m)          Neither
the issue and sale of the Securities nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of, or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to, (i) the charter or by-laws of the Company or any
of its Subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or any of
its Subsidiaries is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its Subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its Subsidiaries or
any of its or their properties, except with respect to clauses (ii) and (iii),
such conflict, breach or violation or imposition would not have a material
adverse effect on the performance of this Agreement or the consummation of any
of the transactions contemplated hereby.

(n)           No
holders of securities of the Company have rights to the registration of such
securities under the Registration Statement, other than those rights to
registration that are disclosed in the Disclosure Package and the Prospectus
and that have been waived by such holders.

(o)           The
consolidated historical financial statements and schedules of the Company and
its consolidated subsidiaries included in the Preliminary Prospectus, the
Prospectus and the Registration Statement present fairly in all material
respects the financial condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated, comply as to form in all
material respects with the applicable accounting requirements of the Act and
have been prepared, in all material respects, in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as otherwise noted therein).  The selected financial data incorporated by
reference into the Preliminary Prospectus, the Prospectus and the Registration
Statement from Item 6 of the Company’s annual report on Form 10-K for the year
ended December 31, 2005 fairly present in all material respects, on the basis
stated in the Preliminary Prospectus, the Prospectus and the Registration
Statement, the information included therein. 
The pro forma financial information included in the Preliminary
Prospectus, the Prospectus and the Registration Statement include assumptions
that provide a reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the related pro
forma adjustments give appropriate effect in all material respects to those
assumptions, and the pro forma adjustments reflect in all material respects the
proper application of those adjustments to the historical financial statement
amounts in the pro forma financial information included in the Preliminary
Prospectus, the Prospectus and the Registration Statement.  The pro forma financial information included
in the Preliminary Prospectus, the Prospectus and the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of Regulation S-X under the Act and the pro forma adjustments have
been properly applied in all material respects to the historical amounts in the
compilation of those statements.

 

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(p)           No
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
Subsidiaries or its or their property is pending or, to the knowledge of the
Company, threatened that (i) could reasonably be expected to have a
material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii) could
reasonably be expected to have a Material Adverse Effect.

(q)           Each
of the Company and each of its Subsidiaries owns or leases all such properties
as are necessary to the conduct of its operations as presently conducted except
as otherwise would not have a Material Adverse Effect.

(r)            Neither
the Company nor any Subsidiary is in violation or default of (i) any
provision of its charter or bylaws, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject, or (iii) any statute,
law, rule, regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such Subsidiary or any of its properties, as
applicable, except for such violations or defaults as would not have a Material
Adverse Effect.

(s)           Ernst
& Young LLP, who have certified certain financial statements of the Company
and its consolidated subsidiaries and delivered their report with respect to
the audited consolidated financial statements and schedules included in the
Preliminary Prospectus and the Prospectus, are the independent registered
public accounting firm with respect to the Company within the meaning of the
Act and the applicable published rules and regulations thereunder.

(t)            There
are no transfer taxes or other similar fees or charges under Federal law or the
laws of any state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the issuance by
the Company or sale by the Company of the Securities, except for such taxes,
fees or charges as would not have a material adverse effect on this Agreement
and the transactions contemplated hereby.

(u)           The
Company has filed all foreign, federal, state and local tax returns that are
required to be filed or has requested extensions thereof (except in any case in
which the failure so to file would not have a Material Adverse Effect) and has
paid all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently
being contested in good faith or as would not have a Material Adverse Effect.

(v)           No
labor problem or dispute with the employees of the Company or any of its
Subsidiaries exists or to the knowledge of the Company, is threatened or
imminent, except as otherwise would not have a Material Adverse Effect, and the
Company is not

 

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aware of any existing or imminent labor disturbance by the employees of
any of its or its Subsidiaries’ principal suppliers, contractors or customers,
that would have a Material Adverse Effect.

(w)          Except
as otherwise would not have a Material Adverse Effect, the Company and each of
its Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; except as otherwise would not have
a Material Adverse Effect, all policies of insurance and fidelity or surety
bonds insuring the Company or any of its Subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force and
effect; the Company and its Subsidiaries are in compliance with the terms of
such policies and instruments except as would not have a Material Adverse
Effect; and there are no claims by the Company or any of its Subsidiaries under
any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause, except as would
not have a Material Adverse Effect; and except as would not otherwise have a
Material Adverse Effect, neither the Company nor any such Subsidiary has been
refused any insurance coverage sought or applied for; neither the Company nor
any such Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.

(x)            Except
as otherwise would not have a Material Adverse Effect, no Subsidiary of the
Company is currently subject to any material direct or indirect prohibition on
paying any dividends to the Company, on making any other distribution on such
Subsidiary’s capital stock, on repaying to the Company any loans or advances to
such Subsidiary from the Company or on transferring any of such Subsidiary’s
property or assets to the Company or any other Subsidiary of the Company,
except as described in or contemplated by the Disclosure Package and the
Prospectus (exclusive of any supplement thereto).

(y)           The
Company and its Subsidiaries possess all licenses, certificates, permits and
other authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, except
as would not singly or in the aggregate result in a Material Adverse Effect,
and neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, would have a
Material Adverse Effect.

(z)            The
Company and each of its Subsidiaries maintain a system of internal accounting
controls, except where the failure to maintain such a system would not have a
Material Adverse Effect, sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s

 

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general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

(aa)         The
Company has not taken, directly or indirectly, any action designed to or that
would constitute or that might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Securities.

(bb)         The
Company and its Subsidiaries are (i) in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii)
have received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses, (iii) have not received notice of any actual or
potential liability under any Environmental Law and (iv) except as set forth in
the Prospectus, neither the Company nor any of the Subsidiaries has been named
as a “potentially responsible party” under the Comprehensive Environmental
Response Compensation, and Liability Act of 1980, as amended, except where such
non-compliance with Environmental Laws, failure to receive required permits,
licenses or other approvals, liability, or “potentially responsible party”
status would not, individually or in the aggregate, have a Material Adverse Effect.

(cc)         In
the ordinary course of its business, the Company periodically reviews the
effect of Environmental Laws on the business, operations and properties of the
Company and its Subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties).  On the basis of such
review, the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a Material Adverse
Effect.

(dd)         The
minimum funding standard under Section 302 of the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (“ERISA”), has been satisfied by each “pension plan”
(as defined in Section 3(2) of ERISA) which has been established or maintained
by the Company and/or one or more of its Subsidiaries, and each such plan which
is intended to be qualified under Section 401 of the Code has received a
determination letter or an advisory opinion letter from the Internal Revenue
Service stating that it is so qualified and its related trust is exempt from
taxation under Section 501(a) of the Code and nothing has occurred to the
knowledge of the Company since the date of such determination that would
adversely affect such qualification or such exempt status; each of the Company
and its Subsidiaries has fulfilled its obligations, if any, under Section 515
of ERISA, except as otherwise would not have a Material Adverse Effect; neither
the Company nor any of its Subsidiaries maintains or is required to contribute
to a “welfare plan” (as defined in Section 3(1) of ERISA) which provides
retiree or other post-employment

 

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welfare benefits or insurance coverage (other than “continuation
coverage” (as defined in Section 602 of ERISA)), except that for executive
officers of the Company with employment agreements, the Company will pay the
cost of their COBRA premiums under Section 602 of ERISA for the period they are
entitled to severance under their employment agreements, but only if they are
terminated without cause or quit for good reason in the 12 month period
following a change in control of the Company; each pension plan and welfare
plan established or maintained by the Company and/or one or more of its
Subsidiaries is in compliance with the currently applicable provisions of
ERISA, except as otherwise would not have a Material Adverse Effect; and
neither the Company nor any of its Subsidiaries has incurred or could
reasonably be expected to incur any withdrawal liability under Section 4201 of
ERISA,  any liability under Section 4062,
4063, or 4064 of ERISA, or any other liability under Title IV of ERISA, except
as otherwise would not have a Material Adverse Effect.

(ee)         There
is and has been no failure on the part of the Company and any of the Company’s
directors or officers, in their capacities as such, to comply with any
provision of the Sarbanes Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes Oxley Act”), including
Section 402 related to loans and Sections 302 and 906 related to
certifications, except where such failure would not reasonably be expected to
result in a Material Adverse Effect.

(ff)           Neither
the Company nor any of its Subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”), including, without limitation, making use
of the mails or any means or instrumentality of interstate commerce corruptly
in furtherance of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or authorization
of the giving of anything of value to any “foreign official” (as such term is
defined in the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA, except
for such action or violations as would not have, individually or in the
aggregate, a Material Adverse Effect. 
The Company and its Subsidiaries have conducted their businesses in
compliance with the FCPA, and have instituted and maintained policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith, except where failure to do so would not
have a Material Adverse Effect.

(gg)         The
Company and its Subsidiaries own, possess, license or have other rights to use,
on reasonable terms, all patents, patent applications, trade and service marks,
trade and service mark registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, know-how and other intellectual property
(collectively, the “Intellectual Property”) necessary for the conduct of the
Company’s business as now conducted or as proposed in the Disclosure Package
and the Prospectus to be conducted, except where the failure to own, possess,
license or have rights to use would not have a Material Adverse Effect.  Except as set forth in the Disclosure Package
and the Prospectus, to the knowledge of the Company (a) there are no
rights of third parties to any such Intellectual Property, except where such rights
would not have a Material

 

9

 

Adverse Effect; (b) there is no material infringement by third
parties of any such Intellectual Property, except where the infringement would
not have a Material Adverse Effect; (c) there is no pending or threatened
action, suit, proceeding or claim by others challenging the Company’s rights in
or to any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim, except where such
pending or threatened action, suit, proceeding or claim by others would not
have a Material Adverse Effect; (d) there is no pending or threatened
action, suit, proceeding or claim by others challenging the validity or scope
of any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim, except where such
pending or threatened action, suit, proceeding or claim by others would not
have a Material Adverse Effect; (e) there is no pending or threatened
action, suit, proceeding or claim by others that the Company infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any other fact
which would form a reasonable basis for any such claim, except where such
pending or threatened action, suit, proceeding or claim by others would not
have a Material Adverse Effect; (f) there is no U.S. patent or published
U.S. patent application which contains claims that dominate or may dominate any
Intellectual Property described in the Prospectus as being owned by or licensed
to the Company or that interferes with the issued or pending claims of any such
Intellectual Property, except as would not have a Material Adverse Effect; and
(g) there is no prior art of which the Company is aware that may render
any U.S. patent held by the Company invalid or any U.S. patent application held
by the Company unpatentable which has not been disclosed to the U.S. Patent and
Trademark Office, except as would not have a Material Adverse Effect.

Any certificate signed by any officer of the Company
and delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Company, as to matters covered thereby, to each
Underwriter.

(ii)           Each Selling Stockholder represents
and warrants to, and agrees with, each Underwriter that:

(a)           Such
Selling Stockholder is or, on or prior to the Closing Date, will be the record
and beneficial owner of the Securities to be sold by it hereunder free and
clear of all liens, encumbrances, equities and claims and has or, on or prior
to the Closing Date, will have duly endorsed such Securities in blank, and,
assuming that each Underwriter acquires its interest in the Securities it has
purchased from such Selling Stockholder without notice of any adverse claim
(within the meaning of Section 8-105 of the New York Uniform Commercial Code (“UCC”)),
each Underwriter that has purchased such Securities delivered on the Closing
Date to The Depository Trust Company or other securities intermediary by making
payment therefor as provided herein, and that has had such Securities credited
to the securities account or accounts of such Underwriters maintained with The
Depository Trust Company or such other securities intermediary will have
acquired a security entitlement (within the meaning of Section 8-l02(a)(l7) of
the UCC) to such Securities purchased by such Underwriter, and no action based
on an

 

10

 

adverse claim (within the meaning of Section 8-105 of the UCC) may be
asserted against such Underwriter with respect to such Securities.

(b)           In
the case of a Selling Stockholder that is not a natural person, this Agreement
has been duly authorized, executed and delivered by such Selling Stockholder.

(c)           Such
Selling Stockholder has not taken, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities.

(d)           Certificates
in negotiable form for such Selling Stockholder’s Securities have been or, on
or prior to the Closing Date, will be placed in custody, for delivery pursuant
to the terms of this Agreement, under a Custody Agreement and Power of Attorney
duly authorized (if applicable), executed and delivered by such Selling Stockholder,
in the form heretofore furnished to you (the “Custody Agreement”) with the
Company, as Custodian (the “Custodian”); to the extent that any Selling
Stockholder has not placed certificates for such Selling Stockholder’s
Underwritten Securities in custody at the Execution Time pursuant to the
preceding clause, such Selling Stockholder has duly executed and delivered a
notice of option exercise with respect to such Underwritten Securities which
has become irrevocable as of the Execution Time; to the extent that any Selling
Stockholder has not placed certificates for such Selling Stockholder’s Option
Securities in custody at the Execution Time pursuant to the first clause in
this Section 1(ii)(d), such Selling Stockholder has duly executed and delivered
a notice of option exercise with respect to such Option Securities which will
become irrevocable upon the exercise by the Underwriters of their option to
purchase Option Securities pursuant to Section 2(b) hereof and which may not be
removed from the custody of the Custodian prior to the expiration of the
Underwriters’ option and will expire upon the expiration of the Underwriters’
option; the Securities represented by the certificates so held in custody for
each Selling Stockholder are subject to the interests hereunder of the
Underwriters; the arrangements for custody and delivery of such certificates,
made by such Selling Stockholder hereunder and under the Custody Agreement, are
not subject to termination by any acts of such Selling Stockholder, or by operation
of law, whether by the death or incapacity of such Selling Stockholder or the
occurrence of any other event; and if any such death, incapacity or any other
such event shall occur before the delivery of such Securities hereunder,
certificates for the Securities will be delivered by the Custodian in
accordance with the terms and conditions of this Agreement and the Custody
Agreement as if such death, incapacity or other event had not occurred,
regardless of whether or not the Custodian shall have received notice of such
death, incapacity or other event.

(e)           No
consent, approval, authorization or order of any court or governmental agency
or body is required for the consummation by such Selling Stockholder of the
transactions contemplated herein, except (i) such as may have been obtained
under the Act, (ii) such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Securities
by the Underwriters and such other approvals as have been obtained or (iii)
where the failure to obtain such 

 

11

 

consents, approvals, authorizations or orders would not have a material
adverse effect on this Agreement and the transactions contemplated hereby.

(f)            Neither
the sale of the Securities being sold by such Selling Stockholder nor the
consummation of any other of the transactions herein contemplated by such
Selling Stockholder or the fulfillment of the terms hereof by such Selling
Stockholder will conflict with, result in a breach or violation of, or
constitute a default under any law or the charter or by-laws or organizational
documents of such Selling Stockholder, if applicable, or the terms of any
agreement or instrument to which such Selling Stockholder is a party or bound,
or any judgment, order or decree applicable to such Selling Stockholder of any
court, regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over such Selling Stockholder, except where such conflict,
breach, violation or default would not have a material adverse effect on this
Agreement and the transactions contemplated hereby.

(g)           The
sale of Securities by such Selling Stockholder pursuant hereto is not prompted
by any material information concerning the Company or any of its subsidiaries
that is not set forth in the Disclosure Package and the Prospectus or any
supplement thereto.

(h)           In
respect of any statements in or omissions from the Registration Statement, the
Prospectus, any Preliminary Prospectus or any Free Writing Prospectus or any
amendment or supplement thereto used by the Company or any Underwriter, as the
case may be, made in reliance upon and in conformity with information furnished
in writing to the Company by any Selling Stockholder specifically for use in
connection with the preparation thereof, such Selling Stockholder hereby makes
the same representations and warranties to each Underwriter as the Company
makes to such Underwriter under paragraphs (i)(b) and (i)(c) of this
Section.

(iii)          Gerard E. Holthaus further represents
and warrants to, and agrees with, each Underwriter that he has no reason to
believe that the representations and warranties of the Company contained in
this Section 1 are not true and correct, is familiar with the Disclosure Package
and the Registration Statement and has no knowledge of any fact, condition or
information not disclosed in Disclosure Package and the Prospectus or any
supplement thereto which has materially adversely affected or may materially
adversely affect the business of the Company and its Subsidiaries, taken as a
whole.

Any certificate signed by any Selling Stockholder and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by such Selling Stockholder, as to matters covered thereby, to each
Underwriter.

2.             Purchase and
Sale.  (a) Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Company and the Selling Stockholders agree, severally and not
jointly, to sell to each Underwriter, and each Underwriter agrees, severally
and not jointly, to purchase from the Company and the Selling Stockholders, at

 

12

 

a purchase price
of $24.8719 per share, the amount of the Underwritten Securities set forth
opposite such Underwriter’s name in Schedule I hereto.

(b)           Subject
to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Selling Stockholders hereby grant an option to
the several Underwriters to purchase, severally and not jointly, up to
1,303,147 Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities.  Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the
Underwriters.  Said option may be
exercised in whole or in part at any time on or before the 30th day after the
date of the Prospectus upon written or telegraphic notice by the
Representatives to the Company setting forth the number of shares of the Option
Securities as to which the several Underwriters are exercising the option and
the settlement date.  The maximum number
of Option Securities which each Selling Stockholder agrees to sell is set forth
in Schedule II hereto.  In the event
that the Underwriters exercise less than their full over-allotment option, the
number of Option Securities to be sold by each Selling Stockholder listed on
Schedule II shall be, as nearly as practicable, in the same proportion as
the maximum number of Option Securities to be sold by each Selling Stockholder
and the number of Option Securities to be sold. The number of Option Securities
to be purchased by each Underwriter shall be the same percentage of the total
number of shares of the Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten Securities,
subject to such adjustments as you in your absolute discretion shall make to
eliminate any fractional shares.

3.             Delivery and
Payment.  Delivery of and payment for
the Underwritten Securities and the
Option Securities (if the option provided for in Section 2(b) hereof shall
have been exercised on or before the third Business Day prior to the Closing
Date) shall be made at 10:00 AM, New York City time, on May 16, 2006, or
at such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement among the Representatives, the Company and the
Selling Stockholders or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein called the “Closing
Date”).  Delivery of the Securities shall
be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the respective aggregate purchase prices of the Securities
being sold by the Company and each of the Selling Stockholders to or upon the
order of the Company and the Selling Stockholders by wire transfer payable in
same-day funds to the accounts specified by the Company and the Selling
Stockholders.  Delivery of the Underwritten
Securities and the Option Securities shall be made through the facilities of
The Depository Trust Company unless the Representatives shall otherwise
instruct.

Each Selling Stockholder
will pay all applicable state transfer taxes, if any, involved in the transfer
to the several Underwriters of the Securities to be purchased by them from such
Selling Stockholder and the respective Underwriters will pay any additional
stock transfer taxes involved in further transfers.

 

13

 

If the option provided for in Section 2(b) hereof
is exercised after the third Business Day prior to the Closing Date, the
Selling Stockholders will deliver the Option Securities (at the expense of the
Company) to the Representatives, at 388 Greenwich St., New York, New York on
the date specified by the Representatives (which shall be within three Business
Days after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Selling Stockholders by wire transfer payable in same-day funds to the account
specified by the Selling Stockholders. 
If settlement for the Option Securities occurs after the Closing Date,
the Selling Stockholders will deliver to the Representatives on the settlement
date for the Option Securities, and the obligation of the Underwriters to
purchase the Option Securities shall be conditioned upon receipt of, supplemental
opinions, certificates and letters confirming as of such date the opinions,
certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.

4.             Offering by
Underwriters.  It is understood that
the several Underwriters propose to offer the Securities for sale to the public
as set forth in the Prospectus.

 

14

 

5.             Agreements.

(i)            The Company agrees with the several
Underwriters that:

(a)           Prior
to the termination of the offering of the Securities, the Company will not file
any amendment of the Registration Statement or supplement to the Prospectus or
any Rule 462(b) Registration Statement unless the Company has furnished
you a copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object in a timely manner. The
Company will cause the Prospectus, properly completed, and any supplement
thereto to be filed in a form approved by the Representatives with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence reasonably satisfactory to the
Representatives of such timely filing. 
The Company will promptly advise the Representatives (1) when the
Prospectus, and any supplement thereto, shall have been filed (if required)
with the Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission,
(2) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (3) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional
information, (4) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution
or threatening of any proceeding for that purpose and (5) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the institution
or threatening of any proceeding for such purpose.  The Company will use its best efforts to
prevent the issuance of any such stop order or the occurrence of any such
suspension of the Registration Statement and, upon such issuance or occurrence,
to obtain as soon as possible the withdrawal of such stop order or relief from
such occurrence, including, if necessary, by filing an amendment to the
Registration Statement or a new registration statement and using its best
efforts to have such amendment or new registration statement declared effective
as soon as practicable.

(b)           If,
at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any
event occurs as a result of which the Disclosure Package would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made at such time not misleading, the Company will (i)
notify promptly the Representatives so that any use of the Disclosure Package
may cease until it is amended or supplemented; (ii) amend or supplement the
Disclosure Package to correct such statement or omission; and (iii) supply any
amendment or supplement to you in such quantities as you may reasonably
request.

(c)           If,
at any time when a prospectus relating to the Securities is required to be
delivered under the Act (including in circumstances where such requirement may
be satisfied pursuant to Rule 172), any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state

 

15

 

any material fact necessary to make the statements therein in the light
of the circumstances under which they were made at such time not misleading, or
if it shall be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the rules thereunder, the Company promptly
will (i) notify the Representatives of any such event; (ii) prepare and
file with the Commission, subject to the second sentence of paragraph (a)
of this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance; and (iii) supply any
supplemented Prospectus to you in such quantities as you may reasonably
request.

(d)           As
soon as practicable, the Company will make generally available to its security
holders and to the Representatives an earnings statement or statements of the
Company and its Subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158.

(e)           The
Company will furnish to the Representatives and counsel for the Underwriters
signed original or facsimile copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a prospectus
by an Underwriter or dealer may be required 
by the Act (including in circumstances where such requirement may be
satisfied pursuant to Rule 172), as many copies of each Preliminary Prospectus,
the Prospectus and each Issuer Free Writing Prospectus and any supplement
thereto as the Representatives may reasonably request.

(f)            The
Company will arrange, if necessary, for the qualification of the Securities for
sale under the laws of such jurisdictions as the Representatives may designate
and will maintain such qualifications in effect so long as required for the
distribution of the Securities; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process in
suits, other than those arising out of the offering or sale of the Securities,
or subject it to taxation, in any jurisdiction where it is not now so subject.

(g)           The
Company will not, without the prior written consent of Citigroup Global Markets
Inc., CIBC World Markets Corp. and Lehman Brothers Inc., offer, sell, contract
to sell, pledge, or otherwise dispose of, (or enter into any transaction which
is designed to, or might reasonably be expected to, result in the disposition
of (whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any Subsidiary of the Company,
directly or indirectly, including the filing (or participation in the filing)
of a registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act, any other shares
of Common Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock; or publicly announce an intention to
effect any such transaction for a period of 90 days following the
Execution Time (the “Lock-up Period”). 
The foregoing sentence will not apply to (i) the Securities to be sold
hereunder, (ii) any shares of Common Stock issued or options to purchase Common
Stock or other Common Stock-based awards granted pursuant to any stock award
plan, stock purchase

 

16

 

plan, stock ownership plan or dividend reinvestment plan of the Company
in effect at the Execution Time, (iii) issuances of Common Stock pursuant to
the conversion or exchange of convertible or exchangeable securities or the
exercise of warrants or options, in each case outstanding on the Execution
Date, (iv) any shares of capital stock of the Company or securities convertible
into or exercisable or exchangeable for such capital stock as payment of any
part of the purchase price for the acquisition by the Company of a business or
assets (“Acquisition Securities”); provided that, (A) in the aggregate, such
Acquisition Securities shall not exceed 10% of the outstanding capital stock of
the Company immediately prior to such acquisition and (B) the recipient of any
such Acquisition Securities shall agree in writing to be bound by the terms of
the letter substantially in the form of Exhibit A hereto, and (v) the filing of
any registration statement with the Commission on Form S-8 (or any successor
form) with respect to any stock incentive plan, stock ownership plan or
dividend reinvestment plan.

(h)           For
so long as a prospectus relating to the Securities is required to be delivered
under the Act, the Company will comply in all material respects with all
applicable securities and other laws, rules and regulations, including, without
limitation, the Sarbanes Oxley Act, and use reasonable efforts to cause the
Company’s directors and officers, in their capacities as such, to comply with
such laws, rules and regulations, including, without limitation, the provisions
of the Sarbanes Oxley Act.

(i)            The
Company will not take, directly or indirectly, any action designed to or that
would constitute or that might reasonably be expected to cause or result in, under
the Exchange Act or otherwise, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Securities.

(j)            The
Company agrees to pay the costs and expenses relating to the following
matters:  (i) the preparation, printing
or reproduction and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), each Preliminary
Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and each
amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Preliminary
Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and all
amendments or supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the Securities;
(iii) the preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (iv) the
printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (v) the
registration of the Securities under the Exchange Act and the listing of the
Securities on the Nasdaq National Market; (vi) any registration or
qualification of the Securities for offer and sale under the securities or blue
sky laws of the several states (including filing fees and the reasonable fees
and expenses of one firm of counsel for the Underwriters relating to such registration
and qualification); (vii) any filings required to be made with the National
Association of Securities Dealers, Inc. (including filing fees and the
reasonable fees and

 

17

 

expenses of counsel for the Underwriters relating to such filings);
(viii) the transportation  and other
expenses incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities, excluding such
expenses incurred by the Underwriters (other than air transportation services
expenses described in (ix) below); (ix)  one half of the cost of any air
transportation services arranged by the Underwriters with the consent of the
Company and incurred in connection with presentations to prospective purchasers
of the Securities; (x) the fees and expenses of the Company’s accountants and
the fees and expenses of counsel (including local and special counsel) for the
Company and the Selling Stockholders; and (xi) all other costs and expenses
incident to the performance by the Company and the Selling Stockholders of
their obligations hereunder.  In
connection with presentations to prospective purchasers of the Securities, the
Underwriters agree to pay for one half of the cost of any air transportation
services arranged by the Underwriters with the consent of the Company.

(k)           The
Company agrees that, unless it has obtained or will obtain the prior written
consent of the Representatives, and each Underwriter, severally and not
jointly, agrees with the Company that, unless it has obtained or will obtain,
as the case may be, the prior written consent of the Company, it has not made
and will not make any offer relating to the Securities that would constitute
(i) an Issuer Free Writing Prospectus or (ii) that would otherwise constitute a
“free writing prospectus” (as defined in Rule 405) required to be filed by the
Company with the Commission or retained by the Company under Rule 433; provided
that the prior written consent of the parties hereto shall be deemed to have
been given in respect of the Free Writing Prospectuses included in Schedule III
hereto, the Free Writing Prospectus dated May 3, 2006 and any electronic road
show.  With respect of any other “free
writing prospectus” that is not included in clauses (i) or (ii) of the
preceding sentence, such “free writing prospectus” shall be provided to Company
prior to the use thereof.  Any such free
writing prospectus consented to by the Representatives or the Company is
hereinafter referred to as a “Permitted Free Writing Prospectus.”  The Company agrees that (x) it has treated
and will treat, as the case may be, each Permitted Free Writing Prospectus as
an Issuer Free Writing Prospectus and (y) it has complied and will comply, as
the case may be, with the requirements of Rules 164 and 433 applicable to any
Permitted Free Writing Prospectus, including in respect of timely filing with
the Commission, legending and record keeping.

(ii)           Gerard
E. Holthaus, William E. LeBuhn and Joseph F. Donegan agree with the several
Underwriters that:

(a)           Such
Selling Stockholder will not take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities.

(b)           Such
Selling Stockholder will advise you promptly, and if requested by you, will
confirm such advice in writing, so long as delivery of a prospectus relating to
the Securities by an underwriter or dealer may be required under the Act, of
(i) any material change in the Company’s condition (financial or otherwise),
prospects, earnings, business or properties, which comes to the attention of such
Selling Stockholder (ii) any

 

18

 

change in information in the Registration Statement, the Prospectus any
Preliminary Prospectus or any Free Writing Prospectus or any amendment or
supplement thereto relating to such Selling Stockholder or (iii) any new
material information relating to the Company or relating to any matter stated
in the Prospectus or any Free Writing Prospectus which comes to the attention
of such Selling Stockholder.

(c)           Such
Selling Stockholder represents that it has not prepared or had prepared on its
behalf or used or referred to, and agrees that it will not prepare or have
prepared on its behalf or use or refer to, any Free Writing Prospectus, and has
not distributed and will not distribute any written materials in connection
with the offer or sale of the Securities.

(iii) Cypress Merchant Banking Partners L.P., Cypress
Offshore Partners L.P. and Scotsman Partners, L.P.  agree, severally and not jointly, with the
several Underwriters that:

(a)           Such
Selling Stockholder will not take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities.

(b)           Such
Selling Stockholder will advise you promptly, and if requested by you, will
confirm such advice in writing, so long as delivery of a prospectus relating to
the Securities by an underwriter or dealer may be required under the Act, any
change in information in the Registration Statement, the Prospectus any
Preliminary Prospectus or any Free Writing Prospectus or any amendment or
supplement thereto relating to such Selling Stockholder.

(c)           Such
Selling Stockholder represents that it has not prepared or had prepared on its
behalf or used or referred to, and agrees that it will not prepare or have
prepared on its behalf or use or refer to, any Free Writing Prospectus, and has
not distributed and will not distribute any written materials in connection
with the offer or sale of the Securities.

6.             Conditions to
the Obligations of the Underwriters. 
The obligations of the Underwriters to purchase the Underwritten
Securities and the Option Securities, as the case may be, shall be subject to
the accuracy of the representations and warranties on the part of the Company
and the Selling Stockholders contained herein as of the Execution Time, the
Closing Date and any settlement date pursuant to Section 3 hereof, to the
accuracy of the statements of the Company and the Selling Stockholders made in
any certificates pursuant to the provisions hereof, to the performance by the
Company and the Selling Stockholders of their respective obligations hereunder
and to the following additional conditions:

(a)           The
Prospectus, and any supplement thereto, have been filed in the manner and
within the time period required by Rule 424(b); any other material
required to be filed by the Company pursuant to Rule 433(d) under the Act shall
have been filed with the Commission within the applicable time periods
prescribed for such filings by Rule 433; and no stop order suspending the
effectiveness of the Registration Statement

 

19

 

shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.

(b)           The
Company shall have requested and caused Paul, Weiss, Rifkind, Wharton &
Garrison LLP, counsel for the Company and the Selling Stockholders, to have
furnished to the Representatives their opinions, dated the Closing Date and
addressed to the Representatives, in substantially the form set forth in
Exhibits B and C hereto.

(c)           The
Company shall have requested and caused Whiteford, Taylor & Preston L.L.P.,
Maryland counsel for the Company to have furnished to the Representatives their
opinion, dated the Closing Date and addressed to the Representatives, in
substantially the form set forth in Exhibit D hereto.

(d)           Scotsman
Partners, L.P. shall have requested and caused Kelly Hart & Hallman LLP,
its Texas counsel to have furnished to the Representatives their opinion, dated
the Closing Date and addressed to the Representatives, in substantially the
form set forth in Exhibit E hereto.

(e)           Cypress
Offshore Partners L.P. shall have requested and caused Walkers, its Cayman
Islands counsel to have furnished to the Representatives their opinion, dated
the Closing Date and addressed to the Representatives, in substantially the
form set forth in Exhibit F hereto.

(f)            The
Company shall have requested and caused John B. Ross, General Counsel for the
Company to have furnished to the Representatives his opinion, dated the Closing
Date and addressed to the Representatives, in substantially the form set forth
in Exhibit G hereto.

(g)           The
Representatives shall have received from Cleary Gottlieb Steen & Hamilton
LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing
Date and addressed to the Representatives, with respect to the issuance and
sale of the Securities, the Registration Statement, the Disclosure Package and
the Prospectus (together with any supplement thereto) and other related matters
as the Representatives may reasonably require, and the Company and each Selling
Stockholder shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.

(h)           The
Company shall have furnished to the Representatives a certificate of the
Company, signed by the Chairman of the Board and the principal financial or
accounting officer of the Company, dated the Closing Date, to the effect that
the signers of such certificate have carefully examined the Registration
Statement, the Prospectus, the Disclosure Package and any amendment or
supplement thereto, as well as each electronic roadshow used in connection with
the offering of the Securities, and this Agreement and that:

(i)            the
representations and warranties of the Company in this Agreement are true and
correct on and as of the Closing Date with the same effect

 

20

 

as if made on the Closing Date and the Company has complied with all
the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;

(ii)           no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or, to the
Company’s knowledge, threatened; and

(iii)          since
the date of the most recent financial statements included in the Prospectus
(exclusive of any supplement thereto), there has been no material adverse
effect on the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Disclosure Package and the Prospectus
(exclusive of any supplement thereto).

(i)            Each
Selling Stockholder shall have furnished to the Representatives a certificate,
signed by such Selling Stockholder, dated the Closing Date, to the effect that
the signer of such certificate has carefully examined the Registration
Statement, the Prospectus, the Disclosure Package and any amendment or
supplement thereto, and this Agreement, that the representations and warranties
of such Selling Stockholder in this Agreement are true and correct in all
material respects on and as of the Closing Date with the same effect as if made
on the Closing Date and that such Selling Stockholder has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date.

(j)            The
Company shall have requested and caused Ernst & Young LLP to deliver
to the Underwriters a customary “comfort letter” substantially in the form set
forth in Exhibit H hereto and dated as of the Execution Time (the “initial
letter”), and the Company shall have caused and requested Ernest & Young
LLP to furnish to the Underwriters a letter or letters (the “bring-down letter”)
of such accountants, addressed to the Underwriters and dated as of the Closing
Date (i) confirming that they are the independent registered
accounting firm with respect to the Company within the meaning of the
Securities Act and the Rules and Regulations, (ii) stating, as of the date of the bring-down
letter(s) (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given in
the Prospectus or the Disclosure Package, as of a date not more than three days
prior to the date of the bring-down letter(s)), the conclusions and findings of
such firm with respect to the financial information and other matters covered
by the initial letter(s)  and (iii)
confirming in all material respects the conclusions and findings set forth in
the initial comfort letter(s).

(k)           Subsequent
to the Execution Time or, if earlier, the dates as of which information is
given in the Registration Statement (exclusive of any amendment thereof) and
the Prospectus (exclusive of any supplement thereto), there shall not have been
(i) any change or decrease specified in the letter or letters referred to
in paragraph (h) of this Section 6 or (ii) any change, or any
development involving a prospective change, in

 

21

 

or affecting the condition (financial or otherwise), earnings, business
or properties of the Company and its subsidiaries taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Disclosure Package and the Prospectus
(exclusive of any supplement thereto) the effect of which, in any case referred
to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof), the Disclosure Package and the Prospectus (exclusive of any
supplement thereto).

(l)            Prior
to the Closing Date, the Company and the Selling Stockholders shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.

(m)          The
Securities shall have been quoted and admitted and authorized for trading on
the Nasdaq National Market, and satisfactory evidence of such actions shall
have been provided to the Representatives.

(n)           At
the Execution Time, the Company and the Selling Stockholders shall have
furnished to the Representatives a letter substantially in the form of Exhibit
A hereto from the Selling Stockholders, each executive officer and director and
director nominee of the Company addressed to the Representatives.

(o)           Subsequent
to the Execution Time, there shall not have been any decrease in the rating of
any of the Company’s debt securities by any “nationally recognized statistical
rating organization” (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such rating or of
a possible change in any such rating that does not indicate the direction of
the possible change.

If any of the conditions specified in this
Section 6 shall not have been fulfilled when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives.  Notice of such cancellation shall be given to
the Company and each Selling Stockholder in writing or by telephone or
facsimile confirmed in writing.

The documents required to be delivered by this
Section 6 shall be delivered at the offices of Paul, Weiss, Rifkind,
Wharton & Garrison LLP, counsel for the Company, at approximately 9:00
A.M., on the Closing Date.

7.             Reimbursement of
Underwriters’ Expenses.  If the sale
of the Securities provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth in Section 6 hereof is
not satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company or any
Selling Stockholder to perform any agreement herein or comply with any
provision hereof other than by reason of a default by any of the Underwriters,
the Company will reimburse the

 

22

 

Underwriters
severally through Citigroup Global Markets Inc. on demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities.

8.             Indemnification
and Contribution.  (a) The Company
agrees to indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several,
to which they or any of them may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in any
amendment thereof, or in any Preliminary Prospectus, the Prospectus or any
Issuer Free Writing Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein.  This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.

(b)           Each
Selling Stockholder severally agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration
Statement, each Underwriter, the directors, officers, employees and agents of
each Underwriter and each person who controls the Company or any Underwriter
within the meaning of either the Act or the Exchange Act and each other Selling
Stockholder, if any,  to the same extent
as the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for inclusion in the documents referred
to in the foregoing indemnity.  This
indemnity agreement will be in addition to any liability which any Selling
Stockholder may otherwise have.

(c)           Each
Underwriter severally and not jointly agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration
Statement, and each person who controls the Company within the meaning of
either the Act or the Exchange Act and each Selling Stockholder, to the same
extent as the foregoing indemnity to each Underwriter, but only with reference
to written information relating to such Underwriter furnished to the Company by
or on behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity.  This indemnity agreement will be in addition
to any liability which any Underwriter may otherwise have.  The Company and each Selling Stockholder
acknowledge that the statements set forth in the last paragraph of the cover

 

23

 

page regarding delivery of the Securities and, under the heading “Underwriting”,
(i) the list of Underwriters and their respective participation in the
sale of the Securities, (ii) the sentences related to concessions and
reallowances and (iii) the paragraph related to stabilization, syndicate
covering transactions and penalty bids in any Preliminary Prospectus, the
Prospectus and any Issuer Free Writing Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters
for inclusion in any Preliminary Prospectus, the Prospectus or any Issuer Free
Writing Prospectus.

(d)           Promptly
after receipt by an indemnified party under this Section 8 of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a), (b) or (c) above unless and to
the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a), (b) or (c) above.  The indemnifying party shall be entitled to
appoint one counsel in each jurisdiction of the indemnifying party’s choice at
the indemnifying party’s expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party.  Notwithstanding the indemnifying party’s
election to appoint counsel to represent the indemnified party in an action,
the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party.  An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.  No indemnifying
party shall be liable for any settlement or compromise of, or consent to, the
entry of judgment with respect to any such claim, action, suit or proceeding
effected without its consent.

 

24

 

(e)           In
the event that the indemnity provided in paragraph (a), (b) or (c) of this
Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Stockholders and the
Underwriters agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively “Losses”) to
which the Company, one or more of the Selling Stockholders and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company, by the Selling Stockholders and
by the Underwriters from the offering of the Securities; provided, however,
that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder.  If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company, the Selling
Stockholders and the Underwriters shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company, of the Selling Stockholders and of the Underwriters in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations.  Benefits received by the Company and by each
Selling Stockholder shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses) received by each of them, and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company, by each Selling Stockholder or
by the Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission.  The Company, the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable
considerations referred to above. 
Notwithstanding the provisions of this paragraph (e), no person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.  For purposes of this Section 8, each
person who controls an Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an Underwriter
shall have the same rights to contribution as such Underwriter, and each person
who controls the Company within the meaning of either the Act or the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (e).

(f)            The
liability of each Selling Stockholder under such Selling Stockholder’s
representations and warranties contained in Section 1 hereof and under the
indemnity and contribution agreements contained in this Section 8 shall be
(i) several and not joint and (ii) limited to an amount equal to the initial
public offering price of the Securities sold by such Selling Stockholder to the
Underwriters. The Company and the Selling Stockholders

 

25

 

may agree, as among themselves and without limiting the rights of the
Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.

9.             Default by an
Underwriter.  If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase
shall constitute a default in the performance of its or their obligations under
this Agreement, the remaining Underwriters shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Securities
set forth opposite their names in Schedule I hereto bears to the aggregate
amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter, the Selling Stockholders or
the Company.  In the event of a default
by any Underwriter as set forth in this Section 9, the Closing Date shall
be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected.  Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company, the Selling Stockholders and any
nondefaulting Underwriter for damages occasioned by its default hereunder.

10.           Termination.  This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company’s Common Stock shall
have been suspended by the Commission or the Nasdaq National Market or trading
in securities generally on the New York Stock Exchange or Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or the Nasdaq National Market, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or
war, or other calamity or crisis the effect of which on financial markets is
such as to make it, in the sole judgment of the Representatives, impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Preliminary Prospectus or the Prospectus (exclusive of any
supplement thereto).

11.           Representations
and Indemnities to Survive.  The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers, of each Selling Stockholder and of
the Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter, any Selling Stockholder or the Company or any of the officers,
directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the
Securities.  The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of
this Agreement.

 

26

 

12.           Notices.  All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Representatives,
will be mailed, delivered or telefaxed to the Citigroup Global Markets Inc.
General Counsel (fax no.: (212) 816-7912) and confirmed to the General Counsel,
Citigroup Global Markets Inc., at 388 Greenwich Street, New York, New
York, 10013, Attention:  General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
(410) 931-6117 and confirmed to it at 8211 Town Center Drive, Baltimore,
Maryland 21236, attention of the Legal Department; or if sent to any Selling
Stockholder, will be mailed, delivered or telefaxed and confirmed to it at the
address set forth in Schedule II hereto.

13.           Successors.  This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.

14.           No fiduciary duty.
The Company and the Selling Stockholders hereby acknowledge that (a) the
purchase and sale of the Securities pursuant to this Agreement is an arm’s-length
commercial transaction between the Company and the Selling Stockholders, on the
one hand, and the Underwriters and any affiliate through which it may be
acting, on the other, (b) the Underwriters are acting as principal and not as
an agent or fiduciary of the Company or the Selling Stockholders and (c) the
engagement of the Underwriters by the Company and the Selling Stockholders in
connection with the offering and the process leading up to the offering is as
independent contractors and not in any other capacity. Furthermore, the Company
and the Selling Stockholders agree that it is solely responsible for making its
own judgments in connection with the offering (irrespective of whether any of
the Underwriters has advised or is currently advising the Company on related or
other matters).  The Company and the
Selling Stockholders agree that it will not claim that the Underwriters have
rendered advisory services of any nature or respect, or owe an agency, fiduciary
or similar duty to the Company or the Selling Stockholders, in connection with
such transaction or the process leading thereto.

15.           Integration.
This Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Company and the Underwriters, or any of them, with
respect to the subject matter hereof.

16.           Applicable Law.  This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.

17.           Waiver of Jury
Trial. The Company and the Representatives hereby irrevocably waive, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.

18.           Canada.   Each of the Underwriters hereby covenants
and agrees that it will not distribute the Securities in such a manner as to
require the filing of a prospectus or similar document (excluding a private
placement offering memorandum) with respect to the Securities under the laws of
any Province or Territory in Canada.

 

27

 

19.           Counterparts.  This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.

20.           Headings.  The section headings used herein are for
convenience only and shall not affect the construction hereof.

21.           Definitions.  The terms that follow, when used in this
Agreement, shall have the meanings indicated.

“Act” shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated
thereunder.

“Business Day” shall mean any day other than a
Saturday, a Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York City.

“Commission” shall mean the Securities and Exchange
Commission.

“Disclosure Package” shall mean (i) the Statutory
Prospectus, (ii) the Issuer Free Writing Prospectuses, if any, identified in
Schedule III hereto, and (iii) any other Free Writing Prospectus that the
parties hereto shall hereafter expressly agree in writing to treat as part of the
Disclosure Package.

“Effective Date” shall mean each date and time that
the Registration Statement, any post-effective amendment or amendments thereto
and any Rule 462(b) Registration Statement became or become effective.

“Exchange Act” shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.

“Execution Time” shall mean the date and time that
this Agreement is executed and delivered by the parties hereto.

“Free Writing Prospectus” shall mean a free writing
prospectus, as defined in Rule 405.

“Issuer Free Writing Prospectus” shall mean an issuer
free writing prospectus, as defined in Rule 433.

“Material Adverse Effect” shall mean a material
adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).

 

28

 

“Preliminary Prospectus” shall mean any preliminary
prospectus referred to in paragraph 1(a) above and any preliminary
prospectus included in the Registration Statement at the Effective Date that
omits Rule 430A Information.

“Prospectus” shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the Execution
Time.

“Registration Statement” shall mean the registration
statement referred to in paragraph 1(a) above, including exhibits and
financial statements and any prospectus supplement relating to the Securities
that is filed with the Commission pursuant to Rule 424(b) and deemed part of
such registration statement pursuant to Rule 430A, as amended at the Execution
Time and, in the event any post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be.

“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule
405”, “Rule 415”, “Rule 424”, “Rule 430B” and “Rule 433” refer to such rules
under the Act.

“Rule 430A Information” shall mean information
with respect to the Securities and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective pursuant to
Rule 430A.

“Rule 462(b) Registration Statement” shall mean a
registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the registration statement
referred to in Section 1(a) hereof.

“Statutory Prospectus”
shall mean the preliminary prospectus relating to the Securities that is
included in the registration statement relating to the Securities immediately
prior to the Execution Time, including any document that is incorporated by
reference therein.

 

 

29

 

If the foregoing
is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the Company, the Selling
Stockholders and the several Underwriters.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  Williams Scotsman
  International, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Ross

  
	
   

  	
   

  	
  Name:

  	
  John B. Ross

  
	
   

  	
   

  	
  Title:

  	
  Secretary and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  Cypress Merchant Banking Partners L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Stern

  
	
   

  	
   

  	
  Name:

  	
  James A. Stern

  
	
   

  	
   

  	
  Title:

  	
  Member of The Cypress
  Group

  LLC, General Partner of Cypress

  Associates L.P., its General

  Partner

  
	
   

  	
   

  
	
   

  	
  Cypress Offshore Partners
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Stern

  
	
   

  	
   

  	
  Name:

  	
  James A. Stern

  
	
   

  	
   

  	
  Title:

  	
  Member of the Cypress
  Group

  LLC, General Partner of Cypress

  Associates L.P., its General

  Partner

  
	
   

  	
   

  
	
   

  	
  Scotsman Partners, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin Levy

  
	
   

  	
   

  	
  Name:

  	
  Kevin Levy

  
	
   

  	
   

  	
  Title:

  	
  Vice President of Group
  31, Inc.,

  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Gerard E. Holthaus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Ross

  
	
   

  	
   

  	
  Name:

  	
  John B. Ross

  
	
   

  	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  William C. Lebuhn

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Ross

  
	
   

  	
   

  	
  Name:

  	
  John B. Ross

  
	
   

  	
   

  	
  Title:

  	
  Attorney-in-Fact

  

 

30

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Joseph F. Donegan

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Ross

  
	
   

  	
   

  	
  Name:

  	
  John B. Ross

  
	
   

  	
   

  	
  Title:

  	
  Attorney-in-Fact

  

 

31

The foregoing Agreement
is hereby

confirmed and accepted as of the

date first above written.

	
  Citigroup Global Markets Inc.

  
	
  CIBC World Markets Corp.

  
	
  Lehman Brothers Inc.

  
	
  Robert W. Baird & Co.

  
	
  Deutsche Bank Securities Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Citigroup Global Markets Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Randall Shaw

  
	
   

  	
  Name:

  	
  Randall Shaw

  
	
   

  	
  Title:

  	
  Vice President

  

For themselves and the other
several 

Underwriters named in Schedule I

to the foregoing Agreement.

 

32

 

SCHEDULE I

	
  Underwriters

  	
   

  	
  Number of Underwritten

  Securities to be

  Purchased

  	
   

  
	
  Citigroup Global Markets Inc.

  	
   

  	
  2,389,103

  	
   

  
	
  CIBC World Markets Corp

  	
   

  	
  2,389,103

  	
   

  
	
  Lehman Brothers Inc.

  	
   

  	
  1,303,147

  	
   

  
	
  Robert W. Baird & Co.

  	
   

  	
  1,303,147

  	
   

  
	
  Deutsche Bank Securities Inc.

  	
   

  	
  1,303,146

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  8,687,646

  	
   

  

 

 

S-I

 

 

 

SCHEDULE II

 

	
  Selling Stockholders:

  	
   

  	
  Number of Underwritten

  Securities to be Sold

  	
   

  	
  Number of Option

  Securities to be Sold

  	
   

  
	
  Cypress Merchant Banking

  Partners L.P.(1)(2)

  c/o The Cypress Group L.L.C.

  65 East 55th Street

  New York, NY 10022

   

  	
   

  	
  2,980,486

  	
   

  	
  589,162

  	
   

  
	
  Cypress Offshore Partners L.P.

  c/o The Cypress Group L.L.C.

  65 East 55th Street

  New York, NY 10022

   

  	
   

  	
  154,372

  	
   

  	
  30,515

  	
   

  
	
  Scotsman Partners, L.P.(4)(5)

  201 Main Street

  Fort Worth, TX 76102

   

  	
   

  	
  3,134,858

  	
   

  	
  619,676

  	
   

  
	
  Gerard E. Holthaus

  c/o Williams Scotsman

  International, Inc.

  8211 Town Center Drive

  Baltimore, MD 21236

   

  	
   

  	
  250,090

  	
   

  	
  49,910

  	
   

  
	
  William C. Lebhun

  c/o Williams Scotsman

  International, Inc.

  8211 Town Center Drive

  Baltimore, MD 21236

   

  	
   

  	
  33,058

  	
   

  	
  6,942

  	
   

  
	
  Joseph F. Donegan

  c/o Williams Scotsman

  International, Inc.

  8211 Town Center Drive

  Baltimore, MD 21236

  	
   

  	
  33,058

  	
   

  	
  6,942

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  6,585,922

  	
   

  	
  1,303,147

  	
   

  

 

 

 

S-II

 

SCHEDULE
III

Schedule of Free Writing Prospectuses included in the
Disclosure Package

1.  None

 

S-III

 

[Form
of Lock-Up Agreement]                                                                                                                     EXHIBIT A

[Letterhead of
officer, director or major shareholder of

Williams Scotsman International, Inc.]

Williams Scotsman International, Inc.

Public Offering of Common Stock

, 2006

Citigroup Global Markets Inc.

CIBC World Markets Corp.

Lehman Brothers Inc.

Robert W. Baird & Co.

Deutsche Bank Securities Inc.,

As Representatives of the several Underwriters,

c/o Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Ladies and Gentlemen:

This letter is being delivered to you in connection
with the proposed Underwriting Agreement (the “Underwriting Agreement”),
between Williams Scotsman International, Inc., a Delaware corporation (the “Company”),
and each of you as representatives of a group of Underwriters named therein,
relating to an underwritten public offering (the “Public Offering”) of Common
Stock, $0.01 par value (the “Common Stock”), of the Company.

In order to induce you and the other Underwriters to
enter into the Underwriting Agreement, the undersigned will not, without the
prior written consent of Citigroup Global Markets Inc., CIBC World Markets
Corp. and Lehman Brothers Inc. (collectively, the “Lead Representatives”)
offer, sell, contract to sell, pledge or otherwise dispose of, or enter into
any transaction which is designed to, or might reasonably be expected to, result
in the disposition of (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the undersigned, directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission (the “Commission”)
in respect of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission promulgated thereunder with respect to, any shares of capital
stock of the Company or any securities convertible into, or exercisable or
exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, during the period commencing on the date
hereof and ending 90 days after the date of the Underwriting Agreement (the “Lock-up
Period”), other than shares of Common Stock disposed of as bona fide gifts
approved by the Lead Representatives and sales of Common Stock in the Public
Offering.

 

A-1

 

Notwithstanding the
foregoing, and subject to the conditions below, the undersigned may transfer
the Lock-Up Securities in the transactions described in clauses (i) through
(iii) below without the prior written consent of the Lead Representatives,
provided that in the case of a transaction described in clauses (i) and (ii)
below, the Lead Representatives shall have received a duplicate form of this
lock-up letter executed and delivered by the transferee:

(i)            to any beneficiary of the undersigned pursuant to a will
or other testamentary document or applicable laws of descent;

(ii)           to any “affiliate” (as such term is defined in Rule 144(a)(1)
under the Securities Act of 1933, as amended) of the undersigned, provided that
any such transfers are not voluntarily reported or required to be reported to
the Commission by any party under the Securities Exchange Act of 1934;

(iii)          the exercise of stock options pursuant to employee stock
plans, provided that any such exercise does not result in the sale of any
capital stock of the Company by the Company or the exercising option holder
(other than in the Public Offering); or

(iv)          the sale of shares of Common Stock by directors or
executive officers under existing plans or agreement entered into prior to the
date hereof that establish plans meeting the requirements of Rule 10b5-1 under
the Securities Exchange Act of  1934.

In addition, any sales of any
shares of Common Stock acquired by the undersigned in the open market will not
be subject to the restrictions imposed by this letter, provided that any such
sales are not voluntarily reported or required to be reported to the Commission
by any party under the Securities Exchange Act of 1934.

Notwithstanding anything herein to the contrary, the
undersigned may enter into written trading plans established pursuant to Rule
10b5-1 of the Securities Exchange Act of 1934, as amended, during the Lock-Up
Period, provided that no direct or indirect offers, sales, agreements to offer
or sell, solicitations of offers to purchase, swaps, or other disposals of, or
transactions in, any Lock-up Securities may be effected pursuant to such plans
during the Lock-Up Period; provided, however, that in any such case it shall be
a condition to entering into such trading plans that no filing by any party
(transferee or transferor ) under Section 16(a) of or Regulation  13D-G under the Exchange Act shall be
required or shall be made voluntarily in connection with entering into such
trading plans.

This lock-up agreement shall automatically terminate
upon the earliest to occur, if any, of (i) termination of the Underwriting
Agreement prior to the Closing Date (as such term is defined in the
Underwriting Agreement) in accordance with its terms, (ii) the Company’s
withdrawal of the registration statement (No. 333-133222) or (iii) May 30,
2006, if the Public Offering has not been consummated by such date.

The Lead Representatives shall not agree to any
amendment, release or waiver with respect to any such lock-up agreement without
the prior approval of a majority of the Company’s Board of Directors.

Yours very truly,

 

A-2

[Signature
of officer, director or major stockholder]

[Name and
address of officer, director or major stockholder]

 

A-3

[Form of
Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP]                                              EXHIBIT
B

 

 

(1)           each of the Company and its material
subsidiaries (individually a “Subsidiary” and collectively the “Subsidiaries”)
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business as
described in the Disclosure Package and the Prospectus, and is duly qualified
to do business as a foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification;

 

(2)           all the outstanding shares of capital
stock of each Subsidiary have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set forth in the
Disclosure Package and the Prospectus, all outstanding shares of capital stock
of the Subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest and, to
the knowledge of such counsel, after due inquiry, any other security interest,
claim, lien or encumbrance;

 

(3)           the Company’s authorized equity
capitalization is as set forth in the Disclosure Package and the Prospectus;
the capital stock of the Company conforms in all material respects to the
description thereof contained in the Disclosure Package and the Prospectus; the
outstanding shares of Common Stock have been duly and validly authorized and
issued and are fully paid and nonassessable; the Securities have been duly and
validly authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and nonassessable;
the Securities are duly listed, and admitted and authorized for trading, subject
to official notice of issuance and evidence of satisfactory distribution, on
the Stock Exchange; the certificates for the Securities are in valid and
sufficient form; the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Disclosure Package and the
Prospectus, no options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership interests
in the Company are outstanding;

 

(4)           there is no pending or, to the knowledge
of such counsel, threatened action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property of a character
required to be disclosed in the Registration Statement which is not adequately
disclosed in the Preliminary Prospectus and the Prospectus, and there is no
franchise, contract or other document of a character required to be described
in the Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required; and the
statements included in the Preliminary Prospectus and the Prospectus under the
headings “Tax Matters,” insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings;

 

(5)           the Registration Statement has become
effective under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in

 

 

B-1

 

the manner and within the time period required by Rule 424(b); to
the knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement or any notice objecting to its use has been issued,
no proceedings for that purpose have been instituted or threatened and the
Registration Statement and the Prospectus (other than the financial statements
and other financial and statistical information contained therein, as to which
such counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the
rules thereunder; and such counsel has no reason to believe that on the
Effective Date the Registration Statement contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus
as of its date and on the Closing Date included or includes any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements and other financial and statistical information contained therein, as to which such
counsel need express no opinion);

 

(6)           such counsel has no reason to believe
that the documents specified in a schedule to such counsel’s letter,
consisting of those included in the Disclosure Package and the price to the
public, the number of Underwritten Securities and the number of Option
Securities to be included on the cover page of the Prospectus, when taken
together as a whole, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein, in the light of circumstances under which they were made, not
misleading;

 

(7)           this Agreement has been duly authorized,
executed and delivered by the Company;

 

(8)           the Company is not and, after giving
effect to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be, an “investment
company” as defined in the Investment Company Act of 1940, as amended;

 

(9)           no consent, approval, authorization,
filing with or order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated in this Agreement and
in the Preliminary Prospectus and the Prospectus and such other approvals
(specified in such opinion) as have been obtained;

 

(10)         neither the issue and sale of the
Securities, nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will conflict with, result
in a breach or violation of, or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or its subsidiaries pursuant to,
(i) the charter or by-laws of the Company or its subsidiaries, 
(ii) the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or its subsidiaries is a party or
bound or to which its or their

 

B-2

 

property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or its subsidiaries of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or its subsidiaries or any
of its or their properties; and

 

(11)         no holders of securities of the Company
have rights to the registration of such securities under the Registration
Statement.

 

B-3

 

[Form of
Selling Stockholder Opinion of                                                                                                  EXHIBIT
C

Paul,
Weiss, Rifkind, Wharton & Garrison LLP]

 

(a)           The Selling Stockholder is a [limited liability
company][corporation] validly existing and in good standing under the laws of
[JURISDICTION], with [limited liability company][corporate] power to conduct
its business;

 

(b)           The Underwriting Agreement and the Custody Agreement
and Power of Attorney have been duly authorized, executed and delivered by the
Selling Stockholder, the Custody Agreement is valid and binding on the Selling
Stockholder and the Selling Stockholder has full legal right and authority to
sell, transfer and deliver in the manner provided in the Underwriting Agreement
and the Custody Agreement the Securities being sold by the Selling Stockholder
under the Underwriting Agreement;

 

(c)           assuming that each Underwriter acquires its interest
in the Securities it has purchased from the Selling Stockholder without notice
of any adverse claim (within the meaning of Section 8-105 of the UCC),
each Underwriter that has purchased such Securities delivered on the Closing
Date to The Depository Trust Company or other securities intermediary by making
payment therefor as provided herein, and that has had such Securities credited
to the securities account or accounts of such Underwriters maintained with The
Depository Trust Company or such other securities intermediary will have
acquired a security entitlement (within the meaning of
Section 8-102(a)(17) of the UCC) to such Securities purchased by such
Underwriter, and no action based on an adverse claim (within the meaning of
Section 8-105 of the UCC) may be asserted against such Underwriter
with respect to such Securities;

 

(d)           no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation by the
Selling Stockholder of the transactions contemplated in the Underwriting
Agreement, except such as may have been obtained under the Act and such as
may be required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters and such
other approvals (specified in such opinion) as have been obtained; and

 

(e)           neither the sale of the Securities being sold by the
Selling Stockholder nor the consummation of any other of the transactions
contemplated by the Underwriting Agreement by the Selling Stockholder or the
fulfillment of the terms hereof by the Selling Stockholder will conflict with,
result in a breach or violation of, or constitute a default under any law or
the charter or By-laws of the Selling Stockholder or the terms of any indenture
or other agreement or instrument known to such counsel and to which the Selling
Stockholder or any of its subsidiaries is a party or bound, or any judgment,
order or decree known to such counsel to be applicable to the Selling
Stockholder or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction over
the Selling Stockholder or any of its subsidiaries.

 

 

C-1

 

[Form of
Opinion of Maryland counsel to the Company]                                                                         EXHIBIT
D

 

 

See Exhibit B.

 

 

D-1

 

[Form of
Opinion of Kelly Hart & Hallman LLP,                                                                                      EXHIBIT
E

Texas
counsel  to Scotsman Partners, L.P.]

 

 

See Exhibit C.

 

 

E-1

 

[Form of
Opinion of Walkers, Cayman Islands counsel to                                                                     EXHIBIT
F

Cypress
Offshore Partners L.P.]

 

 

See Exhibit C.

 

 

F-1

 

[Form of
Opinion of John B. Ross, General Counsel for the Company]                                              EXHIBIT
G

 

 

See
Exhibit B.

 

 

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Exhibit 10.49    
    

	[*]
	Confidential
Treatment Requested. Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk to denote where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission. 

 
 

ASSET PURCHASE AND SALE AGREEMENT    
    

(Dated as of January 31, 2006)  

          

by and among  

SANMINA-SCI CORPORATION,  

 and  

 SANMINA -SCI USA, INC.  

 and  

 SANMINA-SCI SYSTEMS SINGAPORE PTE. LTD.  

 and  

 ADAPTEC, INC.  

 and  

 ADAPTEC MANUFACTURING (S) PTE. LTD  

           

  

 
 

TABLE OF CONTENTS    
    

	 
	 
	 	Page(s)

	ARTICLE I	DEFINITIONS	 	1
	

 	

1.1        Certain Definitions	
 	

1
	

ARTICLE II	

PURCHASE AND SALE OF ASSETS	
 	

8
	

 	

2.1        Purchase and Sale of Assets	
 	

8
	

 	

2.2        Assumption of Liabilities	
 	

10
	

 	

2.3        Closing	
 	

12
	

 	

2.4        Post-Closing Purchase Price Adjustments	
 	

13
	

 	

2.5        Prorations	
 	

15
	

 	

2.6        Taxes	
 	

15
	

 	

2.7        Exemptions	
 	

16
	

 	

2.8        Nontransferable Assets	
 	

16
	

 	

2.9        Taking of Necessary Action; Further Action	
 	

17
	

 	

2.10        Allocation of Purchase Price Consideration	
 	

17
	

 	

2.11        Earn-Out Consideration	
 	

17
	

ARTICLE III	

REPRESENTATIONS AND WARRANTIES OF SELLER	
 	

20
	

 	

3.1        Organization, Qualification, and Corporate Power	
 	

21
	

 	

3.2        Authorization	
 	

21
	

 	

3.3        No Conflicts	
 	

21
	

 	

3.4        Consents	
 	

21
	

 	

3.5        Business Unit Financial Data	
 	

21
	

 	

3.6        Legal Compliance	
 	

22
	

 	

3.7        Tax Matters	
 	

22
	

 	

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

22
	

 	

3.9        Intellectual Property	
 	

23
	

 	

3.10        Contracts	
 	

25
	

 	

3.11        Insurance	
 	

26
	

 	

3.12        Litigation	
 	

26
	

 	

3.13        Restrictions on Business Activities	
 	

26
	

 	

3.14        Product Warranty	
 	

26
	

 	

3.15        Employees	
 	

26
	

 	

3.16        Employee Matters and Benefit Plans	
 	

26
	 	 	 	 

i

 

	

 	

3.17        Labor Matters	
 	

27
	

 	

3.18        Environment, Health and Safety	
 	

27
	

 	

3.19        Real Estate Representations	
 	

28
	

 	

3.20        Fees	
 	

29
	

 	

3.21        Sufficiency of Purchased Assets	
 	

29
	

 	

3.22        Operations Permits	
 	

29
	

 	

3.23        Non-Governmental Certifications	
 	

29
	

 	

3.24        Customers	
 	

30
	

 	

3.25        Suppliers	
 	

30
	

 	

3.26        No Adverse Developments	
 	

30
	

 	

3.27        Inventories	
 	

30
	

ARTICLE IV	

REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER	
 	

30
	

 	

4.1        Organization, Qualification, and Corporate Power	
 	

30
	

 	

4.2        Authorization	
 	

31
	

 	

4.3        No Conflicts	
 	

31
	

 	

4.4        Consents	
 	

31
	

 	

4.5        Payment of Purchase Price	
 	

31
	

ARTICLE V	

PRE-CLOSING COVENANTS	
 	

32
	

 	

5.1        Operation of Business	
 	

32
	

 	

5.2        Access to Information	
 	

33
	

 	

5.3        Notice of Developments	
 	

34
	

 	

5.4        No Solicitation	
 	

34
	

 	

5.5        Reasonable Efforts	
 	

34
	

 	

5.6        Notices and Consents	
 	

34
	

 	

5.7        Employee Matters	
 	

35
	

ARTICLE VI	

OTHER AGREEMENTS AND COVENANTS	
 	

36
	

 	

6.1        Confidentiality	
 	

36
	

 	

6.2        Additional Documents and Further Assurances	
 	

36
	

 	

6.3        Covenant Not to Compete	
 	

36
	

 	

6.4        Covenants Regarding Books and Records and Retained Materials	
 	

38
	

 	

6.5        Amendment to Singapore Transaction Inventory Put	
 	

39
	

ARTICLE VII	

CONDITIONS TO THE CLOSING	
 	

39
	

 	

7.1        Conditions to Parent's and Buyer's Obligation to Close	
 	

39
	 	 	 	 

ii

 

	

 	

7.2        Conditions to Seller's Obligations to Close	
 	

41
	

ARTICLE VIII	

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS	
 	

42
	

 	

8.1        Representations, Warranties and Covenants	
 	

42
	

ARTICLE IX	

INDEMNIFICATION	
 	

42
	

 	

9.1        Indemnification by Seller	
 	

42
	

 	

9.2        Indemnification by Buyer and Parent	
 	

43
	

 	

9.3        Notice and Opportunity to Defend	
 	

43
	

 	

9.4        Remedies	
 	

44
	

 	

9.5        Certain Limitations	
 	

44
	

ARTICLE X	

TERMINATION	
 	

46
	

 	

10.1        Termination of the Agreement	
 	

46
	

 	

10.2        Effect of Termination	
 	

46
	

ARTICLE XI	

MISCELLANEOUS	
 	

47
	

 	

11.1        Press Releases and Public Announcements	
 	

47
	

 	

11.2        No Third Party Beneficiaries	
 	

47
	

 	

11.3        Entire Agreement and Modification	
 	

47
	

 	

11.4        Amendment	
 	

47
	

 	

11.5        Waivers	
 	

47
	

 	

11.6        Successors and Assigns	
 	

47
	

 	

11.7        Counterparts	
 	

48
	

 	

11.8        Headings	
 	

48
	

 	

11.9        Notices	
 	

48
	

 	

11.10        Governing Law	
 	

48
	

 	

11.11        Severability	
 	

49
	

 	

11.12        Expenses	
 	

49
	

 	

11.13        Construction	
 	

49
	

 	

11.14        Seller Disclosure Letter	
 	

49
	

 	

11.15        Attorneys' Fees	
 	

49
	

 	

11.16        Further Assurances	
 	

49
	

 	

11.17        Time of Essence	
 	

49
	

 	

11.18        Consent to Jurisdiction	
 	

49
	

 	

11.19        Schedules and Exhibits	
 	

50
	

 	

11.20        Guarantee by Parent	
 	

50

iii

 
 
 

EXHIBITS    
    

	Exhibit A	—	 	Form of Buyer Supply Agreement
	Exhibit B	—	 	Form of Lease Assumption Agreement
	Exhibit C	—	 	Form of License Agreement
	Exhibit D	—	 	Form of Transition Services Agreement

SCHEDULES  

	Schedule 1.1(k)	 	Business Designs
	Schedule 1.1(l)	 	Business Intellectual Property
	Schedule 1.1(m)	 	Business Software
	Schedule 1.1(o)	 	Capitalized Fixed Assets
	Schedule 1.1(v)	 	Employees
	Schedule 1.1(cc)	 	Expensed Fixed Assets
	Schedule 1.1(ee)	 	Finished Goods Inventory
	Schedule 1.1(yy)	 	Qualified Products
	Schedule 1.1(mmm)	 	Transferred Trademarks and Domain Names
	Schedule 2.1(b)(iii)(A)	 	Tangible Property Leases (Seller as Lessor)
	Schedule 2.1(b)(iii)(B)	 	Tangible Property Leases (Seller as Lessee)
	Schedule 2.1(b)(iv)	 	Real Property Leases
	Schedule 2.1(b)(vii)	 	Assigned Contracts
	Schedule 2.1(b)(viii)	 	Assigned Permits
	Schedule 2.1(b)(ix)	 	Prepaid Expenses
	Schedule 2.1(c)(xv)	 	Excluded Assets
	Schedule 2.2(b)(vii)	 	Outstanding Purchase Orders
	Schedule 2.10	 	Purchase Price Allocation
	Schedule 2.11(b)(ii)	 	Qualified Business Customers
	Schedule 2.11(d)	 	Payment Schedule
	Schedule 5.7(a)	 	Offered Employees
	Schedule 5.7(b)	 	Employee Retention Bonus Reserve
	Schedule 6.3(c)	 	Jupiter Products
	Schedule 6.5	 	Singapore Business Products Inventories
	Schedule 7.1(e)	 	Required Third-Party Notices and Consents
	Schedule 7.1(f)(ii)	 	Conveyance Documents
	Schedule 7.1(f)(v)	 	Liens
	Schedule 7.1(j)	 	Requisite Transferred Employee Base

iv

  

 
 

ASSET PURCHASE AND SALE AGREEMENT    
    

        THIS ASSET PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as of January 31, 2006,
by and among Sanmina-SCI Corporation, a Delaware corporation ("Parent"), and Sanmina-SCI USA, Inc., a Delaware
corporation and a wholly-owned subsidiary of Parent ("Buyer") and Sanmina-SCI Systems Singapore Pte. Ltd., a wholly-owned subsidiary
of Parent ("Sanmina-Singapore"), on the one hand, and on the other hand, Adaptec, Inc., a Delaware corporation
("Seller") and Adaptec Manufacturing (S) Pte. Ltd., a Singapore corporation and a wholly-owned subsidiary of Seller
("Adaptec-Singapore"). Parent, Buyer, Seller and Adaptec-Singapore are sometimes referred to herein individually as a
"Party" and collectively as the "Parties." 

 
 

RECITALS    
    

        A.    Seller
is engaged in the Business (as hereinafter defined) at the Facility (as hereinafter defined), which is located in Colorado Springs, Colorado. 

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

        C.    Seller,
Adaptec Singapore, Buyer and Sanmina-Singapore intend to amend and modify the Singapore Supply Agreement (as defined below) pursuant to Section 6.5 hereof. 

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

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

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

 
 

ARTICLE I    
    
    DEFINITIONS    
    

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

        (a)   "Actions or Proceeding" means any action, suit, proceeding or arbitration. 

        (b)   "Affiliate" means any Person that directly or indirectly, through one or more intermediaries, controls or is controlled
by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management
and policies of such Person whether by voting power, Contract or otherwise and, in any event and without limitation of the previous sentence, any Person owning ten percent (10%) or more of the voting
securities of another Person shall be deemed to control that Person. 

        (c)   "Ancillary Agreements" shall have the meaning given to such term in Section 2.3(e). 

1

 

        (d)   "Assets" of any Person means all assets and properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, owned by such Person,
including without limitation, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory and goods. 

        (e)   "Assumed Employment Liabilities" means, and is limited to, the Employment Liabilities with respect to the Transferred
Employees for accrued vacation time that is accrued on the books and records of Seller as of the Closing Date for periods prior to the Closing Date and which has not been paid or satisfied by Seller
by the Closing Date ("Accrued Vacation"), but, with respect to each Transferred Employee, not in excess of such Transferred Employee's Maximum Assumed
Accrued Vacation (as defined below). For purposes of this definition, an individual Transferred Employee's "Maximum Assumed Accrued Vacation" is an
amount equal to the lesser of (i) forty (40) hours of such Transferred Employee's Accrued Vacation or (ii) such Transferred Employee's actual Accrued Vacation as of the Closing
Date. 

        (f)    "Assumed Liabilities" shall have the meaning given to such term in Section 2.2(b). 

        (g)   "Benefit Plan" means any Retirement Plan and any plan, program, policy, contract, agreement or other arrangement
providing for compensation, loans (other than travel allowances and relocation packages), severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe
benefits, health, sickness, dental, vision, life, disability, sabbatical, or accidental death and dismemberment benefits, or other employee benefits or remuneration of any kind, whether written or
unwritten, funded or unfunded, including, without limitation, each "employee benefit plan," within the meaning of Section 3(3) of ERISA, which is or has been maintained, contributed to, or
required to be contributed to, by the Seller or its ERISA Affiliates for the benefit of any Transferred Employee, or with respect to which the Seller or its ERISA Affiliates have or may have any
liability or obligation to any Transferred Employee. 

        (h)   "Books and Records" of any Person means, with respect to a particular line of business conducted by such Person, all
files, documents, instruments, papers, books and records relating to such line of business and its operations, condition (financial or other), results of operations and the Assets of such Person used
in such line of business, including without limitation, statements of operations, budgets, reliability and cost data, pricing guidelines, ledgers, journals, deeds, title policies, copies of Contracts,
copies of Permits, customer lists, operational data and plans and environmental studies and plans relating to such line of business. 

        (i)    "Business" means Seller's operations to develop, design, supply, manufacture and market block-based storage solutions,
which consist of the integration and development of RAID (redundant array of independent disks) controllers and external storage enclosures; provided
that the Business does not include the business of developing, designing, supplying or manufacturing RAID controllers, the business of marketing RAID controllers as standalone products, or the
business of developing or marketing software or other components of RAID controllers as standalone products. 

        (j)    "Business Day" shall mean a day other than Saturday and Sunday or any day on which banks located in the State of New York
or the State of California are authorized or obligated to close. 

        (k)   "Business Designs" means the specifications, architecture, and design documents for the storage enclosure products listed
in Schedule 1.1(k). 

        (l)    "Business Intellectual Property" shall mean Intellectual Property owned by Seller and used primarily in the conduct of
the Business in the manner conducted by Seller as of the date hereof and the Closing Date. The Business Intellectual Property includes the Seller Registered 

2

 

Business
Intellectual Property (as defined below) which is listed in Section 3.9(a)(i) of the Seller Disclosure Letter and the patents, patent applications and invention disclosures
listed on Schedule 1.1(l). 

        (m)  "Business Software" means the software listed in Schedule 1.1(m). 

        (n)   "Buyer Supply Agreement" means that certain Storage System Product Supply Agreement substantially in the form set forth
in Exhibit A hereto to be entered into by Buyer and Seller (and Parent, for the purposes of having Parent guarantee the performance of Buyer's
obligations thereunder). 

        (o)   "Capitalized Fixed Assets" means all items of plant, equipment, machinery, tools, furniture and furnishings and other
tangible assets listed on Schedule 1.1(o), provided, however, that as defined herein, Capitalized Fixed Assets shall not
include: (i) the Expensed Finished Assets, (ii) the Finished Goods Inventory, (iii) any of the Excluded Assets, (iv) the Facility, (v) any leasehold improvements or
fixtures, any buildings or other structures, or (vi) any information technology systems or custom equipment. 

        (p)   "Closing Date" means the date which is two (2) Business Days following the satisfaction or, if permitted pursuant
to the terms of Article VII hereof, waiver of the conditions to Closing set forth in Article VII hereof, or at such other date as the parties hereto shall mutually agree. 

        (q)   "Closing Net Asset Value" shall mean an amount equivalent to the Net Asset Value as set forth in the Closing Net Asset
Value Statement. 

        (r)   "Closing Net Asset Value Statement" shall have the meaning given to such term in Section 2.4(a). 

        (s)   "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. 

        (t)    "Contract" means any written or legally binding oral agreement, contract, understanding, license, instrument, note,
guaranty, indemnity, representation, warranty, deed, assignment, power of attorney, certificate, purchase order, work order, insurance policy, benefit plan, commitment, covenant, assurance or
undertaking of any nature. 

        (u)   "Definitive Agreements" means, collectively, this Agreement and the Ancillary Agreements. 

        (v)   "Employees" means the current employees (including without limitation, the Transferred Employees), of Seller or any
Subsidiary of Seller listed in Schedule 1.1(v), each of whom is employed in connection with the Business. 

        (w)  "Employee Retention Bonus Reserve" means a reserve to fund payment of certain bonuses (the
"Employee Retention Bonuses") Buyer and Seller have agreed will be paid to certain of the Transferred Employees. The Transferred Employees eligible to
receive Employee Retention Bonuses and the amount of the Employee Retention Bonus each such Transferred Employee is eligible to receive is set forth on  Schedule 5.7(b) hereto. The Employee
Retention Bonuses Reserve will equal the sum of such Employee Retention Bonuses. 

        (x)   "Employment Agreement" shall mean each management, employment, severance, consulting, relocation, repatriation,
expatriation, visa or work permit between Seller or any Subsidiary and any Employee. 

        (y)   "Employment Liabilities" shall mean any and all claims, debts, liabilities, commitments and obligations, whether fixed,
contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, however arising, including all costs and 

3

 

expenses
relating thereto arising under law, rule, regulation, permit, action or proceeding before any governmental authority, order or consent decree or any award of any arbitrator of any kind
payable to any Benefit Plan, Employment Agreement relating to an Employee and arising from such Employee's employment with Seller or any ERISA Affiliate prior to the Closing Date, including, without
limitation, any Termination Liabilities. 

        (z)   "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. 

        (aa)    "ERISA Affiliate" shall mean each majority-owned subsidiary of Seller and any Person under common control with each
Seller or any of Seller's majority-owned Subsidiaries within the meaning of Section 414(b), (c), (m) or (o) of the Code and the regulations issued thereunder. 

        (bb)    "Excluded Liabilities" shall have the meaning given to such term in Section 2.2(c). 

        (cc)    "Expensed Fixed Assets" means all items of computers and computer supplies, office materials and supplies and other
tangible assets listed on Schedule 1.1(cc), provided, however, that as defined herein, Expensed
Fixed Assets shall not include: (i) the Capitalized Fixed Assets, (ii) the Finished Goods Inventory, (iii) any of the Excluded Assets, (iv) the Facility and (v) any
leasehold improvements or fixtures, any buildings or other structures, or (vi) any information technology systems or custom equipment. 

        (dd)    The
"Facility" means the office facility used in the operation of the Business and located at Suite 100 of the Research
Park Five Building, 5385 Mark Dabling Boulevard, Colorado Springs, Colorado 80918. 

        (ee)    "Finished Goods Inventory" means the items of finished goods inventory of the Business listed and described in  Schedule 1.1(ee) and "Consigned Finished Goods Inventory" means any Finished Goods Inventory
which is located at a consigned customer site as specified in Schedule 1.1(ee). 

        (ff)    "Governmental Body" means any applicable: (i) nation, province, state, county, city, town, village, district, or
other jurisdiction of any nature; (ii) federal, provincial, state, local, municipal, foreign, or other government; (iii) governmental or quasi governmental authority of any nature
(including any
governmental agency, branch, department, official, or entity and any court or other tribunal); or (iv) body exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature. 

        (gg)    "Indebtedness" of any Person means all monetary obligations of such Person (i) for borrowed money,
(ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the
ordinary course of business), (iv) under capital leases or (v) in the nature of guarantees of the obligations described in clauses (i) through (iv) above of any other
Person. 

        (hh)    "Intellectual Property" means any or all of the following and all worldwide common law and statutory rights in, arising
out of, or associated therewith: (i) United States and foreign patents and utility models and applications therefor and all reissues, divisions, reexaminations, renewals, extensions,
provisionals, continuations and continuations in-part thereof ("Patents"); (ii) inventions (whether patentable or not), improvements,
trade secrets, proprietary information, know-how, and any rights in technology, invention disclosures, technical data and customer lists, and all documentation relating to any of the
foregoing; (iii) copyrights, copyright registrations and applications therefor, and all other rights corresponding thereto throughout the world; (iv) domain names, uniform resource
locators ("URLs"), other names and locators associated with the Internet, and applications or registrations therefor ("Domain
Names"); (v) industrial designs and any registrations and applications therefor; (vi) trade names, logos, common law trademarks and service marks, trademark and
service mark registrations, related goodwill and applications therefor 

4

 

throughout
the world ("Trademarks"); (vii) all rights in databases and data collections; (viii) all moral and economic rights of authors
and inventors, however denominated; and (ix) any similar or equivalent rights to any of the foregoing (as applicable). 

        (ii)    "Intellectual Property Contracts" shall have the meaning given to such term in Section 3.9(a)(ii). 

        (jj)    "Law" means any applicable law, statute, rule, regulation, ordinance, extension order, or other pronouncement having the
effect of law of the United States, any foreign country or any U.S. or foreign state, county, city or other political subdivision or of any Governmental Body. 

        (kk)    "Lease Assumption Agreement" shall mean that certain Assignment, Assumption and Consent to Assignment Agreement
substantially in the form attached as Exhibit B hereto between Buyer and Parent and the lessor of the Facility, pursuant to which Buyer and
Parent shall assume Seller's obligation under the Real Property Lease for the Facility. 

        (ll)    "Liability" means any Indebtedness, obligation or other liability of a Person (whether absolute, accrued, contingent,
fixed or otherwise, or whether due or to become due). 

        (mm)    "License Agreement" means that certain License Agreement substantially in the form attached as  Exhibit C hereto between Seller and Buyer. 

        (nn)    "Lien" means any mortgage, pledge, lien, charge, claim, security interest, adverse claims of ownership or use,
restrictions on transfer, defect of title or other encumbrance of any sort, other than (a) mechanic's, materialmen's, and similar liens that arise by operation of law and relate to amounts not
yet due and payable, and (b) customary liens for Taxes not yet due and payable. 

        (oo)    "Material Adverse Effect" means with respect to (i) Parent or Buyer, any material adverse change in the business,
operations, assets (including intangible assets), liabilities (contingent or otherwise), results of operations or financial performance, condition (financial or otherwise) of such Party, which is
material to Parent and Buyer, taken as a whole, and (ii) with respect to Seller, any material adverse change in the business, operations, assets (including intangible assets), liabilities
(contingent or otherwise), results of operations or financial performance or condition (financial or otherwise) of Seller which is material to the Business taken as a whole;  provided, however, that in
determining whether or not a Material Adverse Effect has occurred, any effect to the extent attributable to the following
shall not be considered: (a) changes in laws, rules or regulations of general applicability or interpretations thereof by governmental entities, (b) changes affecting the computing and
storage segments of the electronics industry, provided that such changes do not affect such Person in a substantially disproportionate manner than the effect of such changes on such industry segments
as a whole; and (c) any effect resulting from the announcement of this Agreement in accordance with this Agreement. 

        (pp)    "Multiemployer Plan" shall mean any "Pension Plan" which is a "multiemployer plan," as defined in Section 3(37)
of ERISA. 

        (qq)    "Net Asset Value" shall mean an amount equivalent to: (i) the sum of (A) the net book value of the
Capitalized Fixed Assets on the books of Seller on the Closing Date, plus (B) the fair market value of the Expensed Fixed Assets on the books of Seller on the Closing Date, plus (C) for
each unit of Finished Goods Inventory (other than Consigned Finished Goods Inventory) that does not incorporate a disk drive, an amount equal to [*] of the Bill of Material
Cost (as defined below) for such unit of Finished Goods Inventory on the Closing Date plus (D) for each unit of Consigned Finished Goods Inventory that does not incorporate a disk drive, an
amount equivalent to [*] of the Bill of Material Cost for such unit of Consigned Finished Goods Inventory on the Closing Date plus the actual historical freight costs incurred
by Seller to ship such unit of 

5

 

Consigned
Finished Goods Inventory to the applicable customer's site, plus (E) for each unit of Finished Goods Inventory (other than Consigned Finished Goods Inventory) into which a disk drive
is incorporated, an amount equal to the Baseline Material Costs (as defined in the Singapore Supply Agreement) for such unit of Finished Goods Inventory plus (1) [*] for
all components of such unit other than disk drives and (2) [*] for disk drives in such unit, plus (F) for each unit of Consigned Finished Goods Inventory into
which a disk drive is incorporated, an amount equal to the Baseline Material Costs (as defined in the Singapore Supply Agreement) for such unit plus (1) [*] for all
components of such unit other than disk drives and (2) [*] for disk drives in such unit and (3) the actual historical freight costs incurred by Seller to ship
such unit of Consigned Finished Goods Inventory to the applicable customer's site: minus (ii) the sum of (A) the amount of the Assumed
Employment Liabilities plus (B) the amount of the Employee Retention Bonus Reserve. As used in this definition, the term "Bill of Material Cost"
shall, with respect to a unit of Finished Goods Inventory, mean the actual cost to Seller of the materials and components incorporated into such unit. 

        (rr)    "Order" means any writ, judgment, decree, injunction, administrative order, directive or similar order or directive of
any Governmental Body (in each such case whether preliminary or final). 

        (ss)    "Pension Plan" shall mean each Employee Plan which is an "employee pension benefit plan," within the meaning of
Section 3(2) of ERISA. 

        (tt)    "Permit" shall mean a license, permit, authorization, registration, certificate, variance, approval, consent and
franchise and similar right obtained from governments and any Governmental Body, and any pending applications relating to any of the foregoing. 

        (uu)    "Person" means any individual, corporation (including any non profit corporation), company, general or limited
partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, Governmental Body or other entity. 

        (vv)    "Preliminary Net Asset Value" shall have the meaning given to such term in Section 2.3(c) 

        (ww)    "Preliminary Net Asset Value Statement" shall have the meaning givento such term in Section 2.3(c). 

        (xx)    "Purchase Price" means an amount equal to (i) the Preliminary Net Asset Value (as adjusted pursuant to
Section 2.4) plus an amount equal to $8,450,000 (such sum, the "Closing Purchase Price"), plus (ii) the right to receive the
Earn-Out Consideration pursuant to Section 2.11 hereof. 

        (yy)    "Qualified Products" means the products listed on  Schedule 1.1(yy). 

        (zz)    "Registered Intellectual Property" means all United States, international and foreign: (i) patents, including
applications therefor; (ii) registered trademarks, applications to register trademarks, including intent-to-use applications, or other registrations or applications
related to trademarks; (iii) copyright registrations and applications to register copyrights; (iv) registered mask works and applications to register mask works; (v) domain name
registrations; and (vi) any other Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued by, filed with, or recorded by, any
private, state, government or other public or quasi-public legal authority at any time. 

        (aaa)    "Representatives" means, with respect to a Person, that Person's officers, directors, employees, accountants, counsel,
investment bankers, financial advisors, agents and other representatives. 

6

 

        (bbb)    "Retained Manufacturing Materials" means all materials, technical information and documentation existing as of the
Closing Date that are necessary to build, manufacture, test, operate, maintain or support the Qualified Products, as the Qualified Products were manufactured on the Closing Date. 

        (ccc)    "Retained Software" means the software or firmware, in source code and executable (binary) code forms that is
incorporated into the Qualified Products, as the Qualified Products were distributed or otherwise made commercially available by Seller prior to the Closing Date. 

        (ddd)    "Retirement Benefit Rights" means any pension, lump sum, gratuity or any right or benefit of a financial nature or
value, provided or generally intended to be provided to (or in respect of) an Employee upon termination of such Employee's employment, due to resignation, dismissal, retirement or on death, and
excluding payments required to be made as compensation for breach of the employment relationship by the employer. Post-retirement health benefits are deemed to be
"Retirement Benefit Rights"; provided, however, that benefits provided under an arrangement the sole
purpose of which is to provide benefits upon injury or death by accident occurring while an individual is a service provider to the Seller or its ERISA Affiliates are not Retirement Benefit Rights. 

        (eee)    "Retirement Plan" means a written arrangement for the provision of Retirement Benefit Rights to Employees (and, if
applicable, beneficiaries thereof). 

        (fff)    "Seller Contract" means any Contract: (a) to which Seller or any Subsidiary of Seller is a party; (b) by
which Seller or any Subsidiary of Seller or any of its assets is or may become bound or under which Seller or any Subsidiary of Seller has, or may become subject to, any obligation; or
(c) under which Seller or any Subsidiary of Seller has or may acquire any right or interest. 

        (ggg)    "Seller Registered Intellectual Property" shall mean all of the Business Intellectual Property that is Registered
Intellectual Property. 

        (hhh)    "Seller's Retained Environmental Liabilities" means any liability, obligation, judgment, penalty, fine, cost or
expense, (including reasonable attorneys' fees and environmental consultant costs) of any kind or nature, or the duty to indemnify, defend or reimburse any Person with respect to: (i) the
presence on or before the Closing Date of any Hazardous Material in the soil, groundwater, surface water, air or building materials of the Facility as of the Closing Date
("Pre-Existing Contamination"); (ii) the migration at any time prior to or after the Closing Date of Pre-Existing
Contamination to any other real property, or the soil, groundwater, surface water, air or building materials thereof; (iii) the exposure of any Person to Pre-Existing Contamination
or to Hazardous Materials in the course of or as a consequence of any activities of the Business at the Facility prior to the Closing, without regard to whether any health effect of the exposure has
been manifested as of the Closing Date; (iv) the violation of any Environmental Laws by the Seller or its agents, employees, predecessors in interest, contractors, invitees or licensees prior
to the Closing Date or in connection with Seller's operation of the Business prior to the Closing Date; and (v) any actions or proceedings brought or threatened by any third party with respect
to any of the foregoing that existed as of the Closing Date. The foregoing notwithstanding, the Liabilities of the type described above in this paragraph shall not be considered to be Seller's
Retained Environmental Liabilities to the extent that it arises from the negligence of Parent, Buyer or any of their Subsidiaries or Affiliates. 

        (iii)    "Singapore Supply Agreement" means that certain Manufacturing Services and Supply Agreement dated as of
January 9, 2006 between Seller and Parent. 

        (jjj)    "Singapore Transaction" means the purchase and sale of certain assets of Adaptec Singapore pursuant to an Asset
Purchase and Sale Agreement dated as of December 23, 2005 (the "Singapore APA") among Adaptec Singapore, Parent and Sanmina-Singapore. 

7

  

        (kkk)    "Standard Form Agreement" means the standard form of the following Contracts currently used by Seller or any Subsidiary
of Seller in connection with the Business: (i) development agreement; (ii) distributor or reseller agreement; (iii) employee agreement containing any assignment or license of
Intellectual Property or Intellectual Property rights or any confidentiality provision; (iv) consulting or independent contractor agreement containing any assignment or license of Intellectual
Property or Intellectual Property rights or any confidentiality provision; (v) confidentiality or nondisclosure agreement; or (vi) purchase orders and sales orders in the ordinary course
of business. 

        (lll)    "Subsidiary" of a Person means any corporation, partnership, joint venture, association and other entity controlled by
such Person directly or indirectly through one or more intermediaries where, for purposes of this definition, "control" means ownership of outstanding stock or other voting securities of an entity
possessing more than fifty percent (50%) of the voting power of all outstanding voting securities of such entity. 

        (mmm)    "Transferred Trademarks and Domain Names" means the trademarks and domain names owned by Seller and used by Seller in
the conduct of the Business and set forth on Schedule 1.1(mmm). 

        (nnn)    "Transferred Employee" means any Employee currently providing services to Seller who will become an employee of Buyer
upon the Closing as a result of consummation of the Transactions. 

        (ooo)    "Transactions" means the transactions which are the subject matter of (i) this Agreement for the sale and
acquisition of the Purchased Assets and the assumption of the Assumed Liabilities of the business and (ii) the Ancillary Agreements. 

        (ppp)    "Transition Services Agreement" means that certain Transition Services Agreement substantially in the form attached as  Exhibit D hereto among Parent, Buyer
and Seller. 

 
 

ARTICLE II    
    
    PURCHASE AND SALE OF ASSETS    
    

        2.1    Purchase and Sale of Assets.    

        (a)    Purchase and Sale.    Upon the terms and subject to the conditions set forth herein, at the Closing (as defined
in Section 2.3(a) hereof), (i) Buyer and Sanmina-Singapore shall purchase from Seller and Adaptec-Singapore, and Seller and Adaptec-Singapore shall irrevocably sell, convey, transfer,
assign and deliver to Buyer and Sanmina-Singapore, the Purchased Assets (as defined in Section 2.1(b) hereof), free and clear of all Liens (other than Permitted Liens). All references in this
Agreement to payments or amounts of cash refer to, and are stated in, U.S. Dollars. 

        (b)    Definition of Purchased Assets.    For all purposes of and under this Agreement, the term
"Purchased Assets" shall mean, refer to and include, all of Seller's and Adaptec-Singapore's right, title and interest in and to all of the following
tangible and intangible assets, properties and rights to the extent owned by and used for or held for use by Seller and/or Adaptec-Singapore at the Closing (but specifically excluding the Excluded
Assets (as defined in Section 2.1(c) hereof)): 

        (i)    the
Capitalized Fixed Assets, the Expensed Fixed Assets, the Finished Goods Inventory (including the Consigned Finished Goods Inventory) and the Inventories
(collectively, the "Tangible Personal Property"); 

        (ii)   the
Business Designs and all Business Intellectual Property associated therewith and the Business Software and all Business Intellectual Property associated therewith; 

8

 

        (iii)  all
rights of Seller in, to or under (A) the leases or subleases of tangible personal property listed in  Schedule 2.1(b)(iii)(A) as to which Seller is the lessor or sublessor, and
(B) the leases of tangible personal property described in  Schedule 2.1(b)(iii)(B) as to which a Seller is the lessee or sublessee, together with
any options to purchase the underlying property (the leases and subleases described in subclauses (A) and (B) hereof, the "Personal Property
Leases"); 

        (iv)  all
rights of Seller in, to our under the lease or leases of real property listed in Schedule 2.1(b)(iv) as to
which Seller is the lessee or sublessee, excluding any right to the any return or refund of any security deposit provided to the landlord under any such
Real Property Lease (the "Real Property Leases"); 

        (v)   the
Transferred Trademarks and Domain Names; 

        (vi)  all
Books and Records of Seller solely relating to the Purchased Assets or necessary for the conduct of the Business at the Closing, other than Books and Records of
Seller concerning trade secrets or other confidential information of Seller, privileged information or information subject to attorney work-product protection or records and files of
Employees relating to any time periods prior to the Closing or relating to any other human resource matters (the "Business Records"), subject to
Seller's right to retain copies of all Business Records as provided in Section 6.4 hereof; 

        (vii) all
rights under the Contracts to which Seller is a party that are set forth on Schedule 2.1(b)(vii), other than
the Excluded Agreements (the "Assigned Contracts"); 

        (viii) all
Permits (including applications therefor) held by Seller and used the conduct of the Business and set forth on  Schedule 2.1(b)(viii), in each case to the extent transferable (the
"Assigned Permits"); 

        (ix)  all
prepaid expenses listed in Schedule 2.1(b)(ix) (the "Prepaid
Expenses"); and 

        (x)   the
goodwill associated exclusively with the Business. 

        (c)    Definition of Excluded Assets.    Notwithstanding anything to the contrary set forth in this Section 2.1
or elsewhere in this Agreement, the term "Excluded Assets" shall mean (and the term "Purchased Assets"
shall not mean, refer to or include) any assets or properties of Seller that are not expressly defined herein as "Purchased Assets," including, but not
limited to, the following, to the extent owned, used or held for use by Seller as of the Closing: 

        (i)    Cash,
cash equivalents, investments in cash, securities or otherwise, and all bank accounts or similar deposit accounts, and all Seller brokerage or securities accounts
of any kind owned or held by Seller or any of its Subsidiaries or Affiliates; 

        (ii)   all
refunds of Taxes (or rights thereto) with respect to Taxes paid or accrued by Seller and not reimbursed or paid by Buyer; 

        (iii)  all
claims, actions, deposits, prepayments, refunds, causes of action, choses in action, rights of recovery, rights of set off, and rights of recoupment of any kind or
nature (including any such item relating to Taxes) to the extent attributable to the Excluded Agreements, Retained Contracts, Excluded Assets or the Excluded Liabilities; 

        (iv)  all
rights of Seller under this Agreement and any Ancillary Agreement to which Seller is a party or under any agreement, certificate, instrument, or other document
executed and delivered by Seller in connection with the Transactions or any written side agreement between Seller and Buyer entered into on or after the date hereof relating to the Transactions; 

9

 

        (v)   all
Books and Records of Seller which are not Business Records, including, without limitation, those that relate to the Taxes, Excluded Agreements, Retained Contracts or
Excluded Assets and all Books and Records relating to the Employees or any other employees of Seller or to any human resource matters; provided,
however, that Seller agrees that, for purposes reasonably related to Buyer's conduct of the Business, Seller shall provide Buyer with copies of (at Buyer's expense), or
reasonable access to, such books and records to the extent that any such books and records relate to the Business, the Purchased Assets or Assumed Liabilities and do not contain trade secrets or other
confidential information of Seller, privileged information, information subject to attorney work-product protection or records and files of or relating to any employees relating to any
time periods prior to the Closing or relating to any other human resource matters; 

        (vi)  all
accounts receivable and all notes, bonds and other evidences of Indebtedness of and rights to receive payments arising out of any sales occurring in the conduct of
the Business or otherwise prior to the Closing Date, and all security agreements related thereto, including any rights with respect to any third party collection procedures or any other Actions or
Proceedings which have been commenced in connection therewith; 

        (vii) all
insurance policies, and refunds paid or payable in connection with the cancellation or discontinuance of any such insurance policies following the Closing related
to or connected with the Business or the Purchased Assets prior to the Closing Date; 

        (viii) all
Contracts to which any Seller is a party other than Assigned Contracts ("Retained Contracts") and any and all
rights of Seller under such Retained Contracts; 

        (ix)  all
Intellectual Property of Seller and its Affiliates and Subsidiaries, other than (A) the Business Intellectual Property, including the Business Intellectual
Property embodied in and/or related to the Business Designs and the Business Software, and (B) the Transferred Trademarks and Domain Names; 

        (x)   all
tangible personal property of Seller other than the Tangible Personal Property; 

        (xi)  all
real property of Seller; 

        (xii) all
Permits of Seller other than the Assigned Permits; 

        (xiii) all
prepaid expenses of Seller other than the Prepaid Expenses; 

        (xiv) all
security deposits of Seller (including but not limited to any right to the any return or refund of any security deposit provided to the landlord under any Real
Property Lease or any Personal Property Lease); and 

        (xv) the
assets, property and rights set forth in Schedule 2.1(c)(xv). 

        2.2    Assumption of Liabilities.    

        (a)    Assumption.    Upon the terms and subject to the conditions set forth herein, at the Closing, Buyer shall
assume from Seller (and in the case of Section 2.2(b)(vi), Adaptec Singapore), and Seller shall irrevocably convey, transfer and assign to Buyer, all of the Assumed Liabilities (as defined in
Section 2.2(b) hereof). Buyer shall not assume any liabilities of Seller or Adaptec Singapore pursuant hereto, other than the Assumed Liabilities. Parent hereby agrees to guarantee to Seller
the Buyer's timely payment, performance and satisfaction in full of all Assumed Liabilities. 

        (b)    Definition of Assumed Liabilities.    For all purposes of and under this Agreement, the term
"Assumed Liabilities" shall mean, refer to and include the following liabilities of Seller (or, 

10

 

as
provided in clause (vi) below, of Adaptec Singapore) (but specifically excluding the Excluded Liabilities (as defined in Section 2.2(c) hereof)): 

        (i)    all
Liabilities under Permits of Seller arising after the Closing Date; 

        (ii)   all
Liabilities related to the Purchased Assets or the operation of the Business (including, but not limited to, all Liabilities under the Personal Property Leases, the
Real Property Leases and the Assigned Contracts) to the extent arising from or related to any facts or circumstances occurring after the Closing Date and including but not limited to any Liabilities
arising from (A) the conduct of the Business after the Closing or (B) the manufacture, use or sale of any Qualified Product or component thereof (or any derivative or modification or
modified version of any Qualified Product or component thereof) after the Closing; 

        (iii)  all
Liabilities relating to Transferred Employees for any action or omission of Buyer, Parent or their Affiliates (including without limitation all Employment
Liabilities accruing or arising after the date of hire of such Transferred Employees by Buyer, Parent or either of their Affiliates) or other event that, in each such case, occurs after the date of
hire of such Transferred Employees by Buyer, Parent or their Affiliates; 

        (iv)  all
Assumed Employment Liabilities; 

        (v)   the
obligations, duties and Liabilities of Adaptec Singapore under Section 6.3 of the Singapore APA to repurchase and pay for those "Repurchased Assets" that are
related to the Business; provided, however that this clause (v) shall not affect the obligations of Adaptec Singapore or Adaptec under Section 6.3 of the Singapore APA with respect to
any other business unit of Adaptec; 

        (vi)  all
outstanding purchase orders of the Business outstanding at the Closing Date that are listed in  Schedule 2.2(b)(vii) (the "Purchase Orders");
and 

        (vii) all
Transfer Taxes (as defined in Section 2.6) that would be payable by Seller or Adaptec Singapore but which Buyer and Parent have agreed to pay pursuant to
Section 2.6 hereof. 

        (c)    Definition of Excluded Liabilities.    Notwithstanding anything to the contrary set forth in this
Section 2.2 or elsewhere in this Agreement, the term "Assumed Liabilities" shall not mean, refer to or include the following (collectively,
"Excluded Liabilities"): 

        (i)    all
Liabilities relating to any Contracts to which Seller is a party that are not assumed by Buyer (the "Excluded
Agreements"); 

        (ii)   any
and all Liabilities or obligations of Seller arising from the breach by Seller of any term, covenant or provisions of any of the Assigned Contracts prior to the
Closing Date; 

        (iii)  subject
to Buyer's and Parent's obligations under Section 2.6, all Liabilities for Taxes, prepaid expenses or Taxes attributable to the ownership or operation
of the Purchased Assets for any taxable period (or portion of any period) ending on or prior to the Closing Date and, including, without limitation, all liabilities for Taxes attributable to the
Transactions, except as provided for in Section 2.6 hereof; 

        (iv)  all
Liabilities to stockholders of Seller or any Affiliate of Seller in their capacity as such; 

        (v)   all
Liabilities of Seller under the Definitive Agreements or any other certificate, instrument or other agreement entered into in connection with the Transactions
(including liabilities for Seller's breach thereof); 

11

 

        (vi)  all
Employment Liabilities other than the Assumed Employment Liabilities; 

        (vii) Seller's
Retained Environmental Liabilities; 

        (viii) all
Liabilities for legal, accounting, audit and investment banking fees, brokerage commissions, and any other expenses incurred by Seller in connection with the
Transactions; 

        (ix)  all
Liabilities for or related to Indebtedness of Seller, on its own behalf or on behalf of other Persons, to banks, financial institutions or other Persons with
respect to borrowed money, and including any accrued interest payable in respect thereof; 

        (x)   all
Liabilities that are attributable to any of the Excluded Assets and not otherwise specified to be Assumed Liabilities hereunder; 

        (xi)  all
Liabilities of Seller arising on or before the Closing Date in connection with the provision of products or services to customers of the Business, including all
warranty liabilities; 

        (xii) all
Liabilities of any Seller with respect to accounts payable, other than obligations of Seller under Assigned Contracts or the Purchase Orders; 

        (xiii) all
Liabilities of Seller for injury to or death of persons (including, without limitation, workers' compensation claims) or damages to or destruction of properties
or assets, arising from the sale or distribution of products distributed by Seller, or business services provided by Seller, on or before the Closing Date, whether or not any such liability arises
before or after the Closing Date, including, without limitation, liability for consequential and punitive damages in connection with the foregoing; 

        (xiv) any
and all Liabilities, commitments and obligations of Seller resulting from any litigation, claim, dispute, arbitration, investigation, other proceeding or threat
thereof, and all other Liabilities, commitments and obligations of Seller or its Affiliates arising in connection with all actions, suits, claims, disputes, arbitrations, investigations, proceedings
or threat thereof pending on the Closing Date or arising after the Closing with respect to events occurring before the Closing, including, without limitation, the Artesyn matter and the Fujitsu
Siemens matter as described in the Seller Disclosure Letter; 

        (xv) all
Liabilities of Seller arising out of or in any way related to the infringement of Intellectual Property rights of third parties arising out of the conduct of the
Business by the Seller before the Closing Date, including, without limitation, liabilities associated with the Crossroads matter described in the Seller Disclosure Letter and liability for trebled,
consequential and punitive damages in connection with any of the foregoing; and 

        (xiv) all
Liabilities of Seller or Adaptec-Singapore other than Assumed Liabilities. 

        2.3    Closing.    

        (a)    Closing Time.    The consummation of the purchase and sale of the Purchased Assets and the assumption of the
Assumed Liabilities (the "Closing") shall take place at such place as Buyer and Seller mutually agree, at 10:00 A.M. local time, on the Closing
Date unless otherwise mutually agreed by Buyer and Seller. The Closing shall be deemed to be effective as of 12:01 A.M., Pacific standard time, on the Closing Date (the
"Closing Time"). 

        (b)    Cooperation.    As soon as practicable following the date hereof and at all times until the purchase by Buyer
of all of the Purchased Assets and the assumption of the Assumed Liabilities, Buyer and Seller shall cooperate in good faith to formulate and effect a plan and closing schedule for the transfer of the
Purchased Assets and the assumption of the Assumed Liabilities to or by Buyer pursuant to this Agreement. 

12

 

        (c)    Preliminary Net Asset Value Statement.    At least five (5) Business Days prior to the Closing Date,
Seller shall furnish to Buyer an unaudited statement indicating the preliminary determination of the Net Asset Value as of such date (the "Preliminary Net Asset Value
Statement," and the amount of the Net Asset Value as determined and set forth in such Preliminary Net Asset Value Statement is referred to herein as the
"Preliminary Net Asset Value"). Buyer shall have been given full access to the relevant records and working papers used by Seller to prepare the
Preliminary Net Asset Value Statement. The Preliminary Net Asset Value Statement shall be reasonably acceptable to Buyer; provided, however, that the
Preliminary Net Asset Value Statement shall be deemed to be reasonably acceptable to Buyer if prepared in accordance with normal and customary business practices for determining net book value. 

        (d)    Closing Payment.    At the Closing, on the terms and subject to the conditions set forth in this Agreement, as
payment for the transfer of the Purchased Assets by Seller to Buyer, Buyer shall pay to Seller, in cash, an amount equal to the sum of (i) the Preliminary Net Asset Value plus (ii) the
sum of $8,450,000.00 (such payment, the "Closing Payment"). The Closing Payment shall be paid by Buyer to Seller at the Closing by wire transfer of
immediately available funds in United States dollars to such account or accounts as Seller may direct by written notice delivered to Buyer by Seller at least two (2) Business Days prior to the
Closing Date. 

        (e)    Ancillary Agreements.    At the Closing, and simultaneously with the payment in full to Seller of the Closing
Payment pursuant to Section 2.3(d), (i) Seller and Adaptec Singapore shall assign and transfer to Buyer good and valid title in and to the Purchased Assets (free and clear of all Liens,
other than Permitted Liens) by delivery of (A) a General Assignment and Bill of Sale in form and substance reasonably acceptable to Buyer, Sanmina-Singapore, Adaptec-Singapore and Seller (the
"General Assignment"), duly executed by Buyer and Seller; and (B) such other instruments of conveyance, assignment and transfer as Buyer and
Sanmina-Singapore shall reasonably request, in form and substance reasonably acceptable to Buyer, Sanmina-Singapore, Adaptec-Singapore and Seller, as shall be effective to vest in Sanmina-Singapore
good and valid title to the Business Designs, the Business Software, the Business Intellectual Property and the Tangible Personal Property, consisting of Finished
Good Inventories, owned by Adaptec-Singapore, and to vest in Buyer good and valid title to all of the other Purchased Assets (the General Assignment and the other instruments being collectively
referred to herein as the "Assignment Instruments"), (ii) Buyer and Seller (and where applicable, Parent and Sanmina-Singapore) shall duly
execute and deliver the Buyer Supply Agreement, the License Agreement, and the Transition Services Agreement; and (iii) Buyer shall assume from Seller the due payment, performance and discharge
of the Assumed Liabilities by delivery of (A) an Assumption Agreement in form and substance reasonably acceptable to Seller and Buyer (the "Assumption
Agreement"), duly executed by Buyer, (B) the Lease Assumption Agreement in form and substance reasonably acceptable by Buyer and Seller and the lessor of the Facility
and (C) such other instruments of assumption as Seller shall reasonably request, in form and substance reasonably acceptable to Seller and Buyer, as shall be effective to cause Buyer to assume
the Assumed Liabilities as and to the extent provided in Section 2.2(b) (the Assumption Agreement, the Lease Assumption Agreement and such other instruments referred to in clause (ii)(C)
being collectively referred to herein as the "Assumption Instruments"). At the Closing, there shall also be delivered to Seller and Buyer the
certificates and other contracts, documents and instruments required to be delivered pursuant to Article VII hereof. As used herein, the "Ancillary
Agreements" mean, collectively, the Assignment Instruments, the Buyer Supply Agreement, the License Agreement, the Transition Services Agreement and the Assumption Instruments. 

        2.4    Post-Closing Purchase Price Adjustments.    

        (a)    Preparation of Closing Net Asset Value Statement.    As soon as reasonably practicable after the Closing Date
(within thirty (30) days after the Closing Date if commercially reasonable, but in 

13

 

any
event, no later than forty (40) days after the Closing Date), Seller shall prepare and deliver to Buyer, at Seller's expense, an unaudited statement indicating the Net Asset Value as of the
Closing Date (the "Closing Net Asset Value Statement"). Buyer shall reasonably cooperate with Seller to enable the preparation of the Closing Net Asset
Value Statement. 

        (b)    Verification.    As soon as reasonably practicable after the Closing Date (but not later than thirty
(30) days after receipt of the Closing Net Asset Value Statement), Buyer shall verify: (i) that the Tangible Personal Property stated in the Preliminary Net Asset Value Statement and the
statement of the Preliminary Net Asset Value therein accurately reflect the Tangible Personal Property delivered to Buyer as part of the Purchased Assets at the Closing and (ii) that the Net
Asset Value is accurately reflected on the Closing Net Asset Value Statement (the "Verification"). Seller shall reasonably cooperate with Buyer in order
to enable Buyer to perform the Verification. 

        (c)    Review.    Buyer shall be given full access, during regular business hours, to the relevant records and working
papers used by Seller to prepare the Closing Net Asset Value Statement. If as a result of the Verification, Buyer in good faith believes that any changes are required to be made to the amount of the
Closing Net Asset Value as set forth in the Closing Net Asset Value Statement (including but not limited to changes based on differences between the amount of the Closing Net Asset Value Statement
and the results of the Verification) (a "Material Uncertainty"), Buyer shall, within the later of sixty-one (61) days following the
Closing Date or thirty (30) days following the receipt by it of the Closing Net Asset Value Statement (the "Dispute Period"), give written notice
to Seller (a "Dispute Notice") of any such proposed change or Material Uncertainty, describing the change or Material Uncertainty and the basis for the
change or Material Uncertainty in reasonable detail. The Closing Net Asset Value Statement shall be binding and conclusive upon, and deemed accepted by, Buyer unless Buyer shall have timely delivered
a Dispute Notice to Seller during the Dispute Period. 

        (d)    Disputes.    Disputes between Buyer and Seller relating to the Closing Net Asset Value Statement that cannot be
resolved by them within thirty (30) days after receipt by Seller of a Dispute Notice in respect of the Closing Net Asset Value Statement shall be referred to an independent accounting firm
reasonably agreed upon by Buyer and Seller for arbitration (the "Independent Accountant") with respect to the Dispute Notice. The Independent Accountant
will be instructed to select, in its discretion, the individuals within its organization who will have primary responsibility for this matter and to reach a determination of the Net Asset Value as of
the Closing Date within forty-five (45) days from the date of referral. The Independent Accountant's determinations hereunder shall be limited to determining the Net Asset Value as
of the Closing Date and the Independent Accountant will not have authority to alter or vary this Agreement. The expenses of the Independent Accountant shall be paid one-half by Seller and
one-half by Parent. The Closing Net Asset Value Statement, as it may be adjusted by the Independent Accountant in accordance with this Section 2.4(d) in determining the Net Asset
Value as of the Closing Date, shall be final and binding on the Parties and the statement of the Net Asset Value as of the Closing Date as determined in good faith by the Independent Accountant shall
be deemed to be the Closing Net Asset Value. It is understood and agreed that the decision of the Independent Accountant shall not be subject to judicial review by any court or tribunal under any
circumstances whatsoever and the Parties hereby expressly waive any right to appeal or otherwise seek judicial review of any decision of the Independent Accountant under this Section 2.4(d). 

        (e)    Final Closing Net Asset Value Statement.    The Closing Net Asset Value Statement shall become final with
respect to all or any portion thereof, and binding upon Buyer and Seller upon the earlier of (i) the failure by Buyer to object to all or any portion thereof by giving Seller a Dispute Notice
within the Dispute Period, (ii) an agreement between Buyer and Seller with respect thereto, or (iii) the decision by the Independent Accountant with respect to any disputed matters 

14

 

pursuant
to Section 2.4(d) and such Independent Accountant's determination in good faith of the Closing Net Asset Value pursuant to Section 2.4(d). The Net Asset Value as of the Closing
Date, as set forth in the Closing Net Asset Value Statement, as finally determined under this Section 2.4, shall be referred to herein as the "Final Closing Net Asset
Value." 

        (f)    Adjustment to the Closing Net Asset Value.    The Preliminary Net Asset Value Amount paid at the Closing shall
be subject to adjustment pursuant to the following provisions of this Section 2.4(f): (i) if the Final Closing Net Asset Value is less than the Preliminary Net Asset Value, then the
amount by which the Preliminary Net Asset Value exceeds the Final Closing Net Asset Value shall be payable from Seller to Buyer in cash in immediately available funds pursuant to
Section 2.4(g); and (ii) if the Final
Closing Net Asset Value is greater than the Preliminary Net Asset Value, then the amount by which the Final Closing Net Asset Value exceeds the Preliminary Net Asset Value shall be payable by Buyer to
Seller in cash in immediately available funds pursuant to Section 2.4(g). 

        (g)    Payments of Adjustment Amount.    As soon as practicable (but not more than five (5) Business Days)
after all or any portion of the Closing Net Asset Value shall become final and binding pursuant to Section 2.4(e) hereof, Buyer or Seller, as the case may be, shall make the payment
contemplated by Section 2.4(f) in respect of all or such portion of such Closing Net Asset Value that has become final and binding. 

        2.5    Prorations.    The following prorations relating to the Purchased Assets and the ownership and conduct of the
Business shall be made as of the Closing Date for any such obligations which are billed or accrue, with respect to any time period that begins prior to the Closing Date and ends after the Closing
Date, with Seller liable to the extent such items relate to any such time period up to and including the Closing Time, and Buyer liable to the extent such items relate to periods beginning immediately
after the Closing Time: 

        (a)   municipal
rates, assessments and bonds on or with respect to the Purchased Assets; 

        (b)   rents,
additional rents, operating expense pass throughs, and other items payable by Seller (other than taxes) under any real property leases and personal property
leases; and 

        (c)   the
amount of rents, issues and profits from each of any Personal Property and charges for sewer, water, telephone, electricity and other utilities relating to any real
property subject to any real property leases assumed by Buyer hereunder. 

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

        2.6    Taxes.    

        (a)    Transfer Taxes.    Buyer and Parent shall bear, and shall indemnify and hold Seller and Adaptec-Singapore
harmless from, any and all sales, use, value-added, gross receipts, excise, registration, stamp duty or other similar taxes or governmental fees arising out of the transfer of the Purchased Assets to
Buyer and Sanmina-Singapore pursuant hereto ("Transfer Taxes"). To the extent permitted by applicable law, Parent, Buyer, Adaptec-Singapore and Seller
shall cooperate in legitimately minimizing Transfer Taxes. 

        (b)    Straddle Period Taxes.    In the case of any real or personal property taxes or any similar ad valorem taxes
attributable to the Purchased Assets for which Taxes cover a period commencing before the Closing and ending thereafter (a "Straddle Period Tax"), any
such Straddle Period Taxes shall be prorated between Buyer and Seller (as a group) on a per diem basis. The Party required by law to file a Tax Return with respect to Straddle Period Taxes
shall do so within the time period prescribed by law. 

15

 

        (c)    Tax Returns.    To the extent relevant to the Business or the Purchased Assets, each Party shall
(i) provide the other with such assistance as may reasonably be required in connection with the preparation of any Tax Return and the conduct of any audit or other examination by any
Governmental Body or in connection with judicial or administrative proceedings relating to any liability for Taxes and (ii) retain and provide the other with all records or other information
that may be relevant to the preparation of any Tax Returns, or the conduct of any audit or examination, or other proceeding related to Taxes. 

        2.7    Exemptions.    Parent, Buyer, Seller and Adaptec-Singapore shall utilize, to the fullest extent reasonably
permitted by applicable law, any and all exemptions from tax for any occasional sale or similar exemption that may apply to the Transactions to legitimately eliminate or minimize any Taxes. 

        2.8    Nontransferable Assets.    

        (a)   To
the extent that any Purchased Asset or Assumed Liability to be sold, conveyed, assigned, transferred, delivered or assumed to or by Buyer pursuant hereto, or any
claim, right or benefit arising thereunder or resulting therefrom, is not capable of being sold, conveyed, assigned, transferred or delivered without the approval, consent or waiver of the issuer
thereof or the other party thereto, or any third person (including a Governmental Body) or if such sale, conveyance, assignment, transfer or delivery or attempted sale, conveyance, assignment,
transfer or delivery would constitute a breach or trigger a termination right thereof or a violation of any law, decree or Order, except as expressly otherwise provided herein, this Agreement shall
not constitute a sale, conveyance, assignment, transfer or delivery thereof, or an attempted sale, conveyance, assignment, transfer or delivery thereof absent such approvals, consents or waivers. If
any such approval, consent or waiver shall not be obtained, or if an attempted assignment of any such Purchased Asset or the assumption of any Assumed Liability by Buyer would be ineffective so that
Buyer would not in fact receive all such Purchased Assets or assume all such Assumed Liabilities pursuant hereto, then Seller, Buyer, Parent and Adaptec-Singapore shall cooperate in a mutually
agreeable arrangement and use reasonably diligent efforts to provide Buyer (to the extent permitted by applicable Law and not in breach or violation of the terms of any agreement binding on such
Parties) with the benefits and assume the obligations of such Purchased Assets and Assumed Liabilities in accordance with this Agreement; provided
however, that in no event shall Seller be required to (i) make a cash payment to a third party (other than as required under any agreement with such third party) or to
Buyer or Parent in connection with its obligations under this Section 2.8; or
(ii) sublicense or provide any software or Intellectual Property licensed or otherwise provided by a third party. Buyer and Parent agree to reasonably cooperate with Seller and
Adaptec-Singapore supply relevant information to such party or parties or such third-party as contemplated by this Section 2.8. 

        (b)   Notwithstanding
the provisions of Section 2.8(a), with respect to the OEM Agreement between Fujitsu Siemens Computers GmbH ("Fujitsu
Siemens") and Eurologic Systems Ltd. Dated March 21, 2002 (the "FS Agreement"), the parties hereby agree that,
until such time as the FS Agreement is duly and validly assigned to Parent or its Affiliates, Parent and its Affiliates will supply to Seller, pursuant to the terms and conditions of the Buyer Supply
Agreement, the products set forth on Schedule A-1 of the Buyer Supply Agreement that are ordered by Fujitsu Siemens pursuant to the FS Agreement. 

        (c)   Notwithstanding
the provisions of Section 2.8(a), with respect to the contract between Seller and NWE Technology, Inc. dated May 10, 2004 (the
"Foxconn Agreement"), the parties hereby agree that, until such time as the Foxconn Agreement is duly and validly assigned to Parent or its Affiliates,
Seller and its Affiliates will, pursuant to a letter agreement to be entered into prior to the Closing, permit Parent and its Affiliates to purchase components under the Foxconn 

16

 

Agreement
under the same terms and conditions, including pricing, as are available to Seller and its Affiliates under such Foxconn Agreement. 

        2.9    Taking of Necessary Action; Further Action.    From time to time after the Closing Date, at the reasonable
request of any Party hereto and at the expense of such Party, the Parties hereto (and, to the extent applicable, Seller and Adaptec-Singapore) shall execute and deliver such other instruments of sale,
transfer, conveyance, assignment and confirmation and take such action as a Party may reasonably determine is necessary to transfer, convey and assign to Buyer, and to confirm Buyer's title to,
obligation under or interest in the Purchased Assets pursuant to this Agreement or the assumption of the Assumed Liabilities, to put Buyer in actual possession and operating control of such Purchased
Assets as contemplated by this Agreement and to assist Buyer in exercising all rights with respect thereto. 

        2.10    Allocation of Purchase Price Consideration.    The sum of the Purchase Price and the Assumed Liabilities
(except to the extent that such Assumed Liabilities are not required to be capitalized for income tax purposes) shall be allocated among the Purchased Assets and the covenant not to compete in
Section 6.3 hereof as of the Closing Date in accordance with Schedule 2.10. Any subsequent adjustments to the sum of the Purchase Price
and Assumed Liabilities (except to the extent that such Assumed Liabilities are not required to be capitalized for income tax purposes) shall be reflected by Buyer in the allocation hereunder in a
manner consistent with Section 1060 of the Code and the regulations thereunder. For all Tax purposes, Buyer, Seller and Adaptec-Singapore agree to report the transactions contemplated in this
Agreement in a manner consistent with the terms of this Agreement, including the allocation under Schedule 2.10, as agreed to by Buyer, Seller
and Adaptec-Singapore, and
that none of them will take any position inconsistent therewith in any Tax Return, in any refund claim, in any litigation, or otherwise. 

        2.11    Earn-Out Consideration.    

        (a)    Amount of Earn-Out Consideration.    Subject to the terms and conditions of this
Section 2.11, Parent shall pay to Seller Earn-Out Consideration as follows: (i) an aggregate amount equal to [*] multiplied by the Business Revenue
from sales to Qualified Business Customers and an aggregate amount equal to [*] multiplied by the Business Revenue from sales to Other Business Customers earned during each
Measurement Period or fraction thereof until the First Earn-out Cap (as defined below) is reached; (ii) after the First Earn-out Cap is reached, an aggregate amount
equal to [*] multiplied by the Business Revenue from sales to Qualified Business Customers and an aggregate amount equal to [*] multiplied by the
Business Revenue from sales to Other Business Customers earned during each Measurement Period or fraction thereof until the Second Earn-out Cap (as defined below) is reached. The
"First Earn-out Cap" shall be reached at such time as aggregate Earn-Out Consideration equals $[*]. The
"Second Earn-out Cap" shall be reached at such time as aggregate Earn-Out Consideration equals $[*]
(including the $[*] under the First Earn-out Cap). Notwithstanding the foregoing, in the event that the aggregate Earn-Out Consideration that would be
payable to Seller for the First Measurement Period under the preceding provisions of this paragraph without regard to this sentence (the "Unadjusted Period 1
Earn-Out Consideration") is less than $[*], then an amount equal to $[*] minus such Unadjusted Period 1
Earn-Out Consideration (such amount, the "Period 1 Shortfall") shall be paid to Seller as Earn-Out Consideration in
addition to the Unadjusted Period 1 Earn-Out Consideration, such that the aggregate Earn-Out Consideration for the First Measurement Period shall equal
$[*]. Notwithstanding the foregoing, in the event that the aggregate Earn-Out Consideration for the Second Measurement Period that would be payable to Seller under
the preceding provisions of this paragraph without regard to this sentence (the "Unadjusted Period 2 Earn-Out Consideration") is less
than $[*], then an amount equal to $[*] minus such Unadjusted Period 2 Earn-Out Consideration (such amount, the
"Period 2 Shortfall") shall be paid to Seller as Earn-Out Consideration such that the aggregate Earn-Out Consideration
for the Second Measurement 

17

 

Period
shall equal $[*]. In the event any Period 1 Shortfall is paid to Seller and the Unadjusted Period 2 Earn-Out Consideration for the Second
Measurement Period exceeds $[*], then the Unadjusted Period 2 Earn-Out Consideration shall be reduced by an amount equal to the lesser of (i) the
amount of the Period 1 Shortfall actually paid to Seller or (ii) the amount by which the Unadjusted Period 2 Earn-Out Consideration exceeds
$[*]. The amount of the Earn-Out Consideration for the Third Measurement Period shall be reduced, but not below zero, by the amount of any previously unrecouped
Period 1 Shortfall and any Period 2 Shortfall actually paid to Seller. 

        (b)    Earn-Out Definitions.    

        (i)    "Business Revenue" means revenue recorded by Parent in accordance with U.S. generally accepted accounting principles
("GAAP") as consistently applied by Parent in the preparation of its annual and quarterly financial statements with respect to sales of Business
Products to Business Customers during a Measurement Period. For the avoidance of doubt, but subject to the provisions of this Section 2.11(b)(i), Business Revenue shall not include any revenue
recorded by Parent from products or services that are not Business Products. In the event that one or more units of a Business Product is/are sold in combination (bundled) with one or more units of
one or more other products or services that are not Business Products for a single price, then for purposes of this Section 2.11, the amount of revenue from such sale that shall be Business
Revenue will be the product obtained by multiplying (1) the total GAAP revenue from such sale multiplied by (2) a fraction (x) whose numerator is the amount obtained by
multiplying each unit of a Business Product included in such sale by Buyer's then-effective per unit list price for such Business Product and adding together each of the products resulting from such
multiplication (the "Aggregate Business Products List Price") and (y) whose denominator is the sum of (i) the Aggregate Business Products
List Price plus (ii) the amount obtained by multiplying each unit of a non-Business Product included in such sale by, as applicable, Buyer's then-effective per unit list
price for such non-Business Product or (if such non-Business product is not a Buyer product, the manufacturer's then-effective per unit list price for such
non-Business Product) and adding together each of the products resulting from such multiplication. The following example illustrates the operation of this Section 2.11(b)(i). Assume
that Buyer sells for a single price of $[*]: (i) one (1) unit of a Business Product with a then-effective per unit list price of
$[*]; (ii) one (1) unit of another Business Product with a then-effective per unit list price of $[*]; and (iii) two
(2) units of a product that is not a Business Product which has a then-effective per unit list price of $[*]. In this case the Business Revenue derived from
such sale would be $[*], which is the amount obtained by multiplying $[*] by a fraction whose numerator is $[*]
($[*] + $[*]) and whose denominator is $[*]
($[*] + $[*] + $[*]). If Business Products are sold in combination (bundled) with other services
that are not Business Products for a single price, then a similar methodology to that described in the third sentences of this subsection 2.11(b)(i) shall be used to compute the amount of
revenue from such transaction that is Business Revenue. Notwithstanding the foregoing, Business Revenue shall not include revenue recorded by Parent arising from the sale of disk drives and drive
carriers to Adaptec, its Affiliates or any successor to or acquirer of any business unit of Adaptec or its Affiliates. 

        (ii)   "Qualified Business Customers" means the customers of the Business set forth on  Schedule 2.11(b)(ii). "Other Business
Customers" shall mean customers for Business Products that
are not Qualified Business Customers. "Business Customers" shall mean Qualified Business Customers and Other Business Customers, collectively. 

        (iii)  "Business Products" means: (a) the Qualified Products listed on  Schedule 1.1(yy), which shall include only those types of products manufactured or sold
by the Business and delivered to Business Customers prior
to the Closing Date; (b) the ENZO family of products 

18

 

being
transferred by Seller to Buyer pursuant to this Agreement, to the extent such products are being marketed or sold or are under development by Seller as of the Closing Date and are subsequently
marketed or sold, (c) any version, release, modification or enhanced or modified version of a product described in clause (a) or clause (b) of this subsection (iii) that
ships as a "general availability" product at any time on or before April 1, 2006; or (d) any new version or revision of a product described in clause (a), (b) or (c) above,  provided that
the product changes incorporated into such new version or revision include only minor product enhancements or revisions that do not change
the function of the product (i.e. the product still provides either JBOD or RBOD functions while not incorporating significant additional new functions) and do not require significant changes to the
form or design of enclosures. For purposes of clarification, significant changes to the form or design of an enclosure or significant changes in product function (e.g. incorporation of server
functions into a product) shall not be deemed to be minor product enhancements or revisions that do not change the function of the product, and products undergoing such changes shall thereafter no
longer be considered Business Products for purposes hereof. 

        (iv)  "Measurement Period" has the meaning given to it in Section 2.11(d). 

        (c)    Determination of Contingent Consideration; Dispute Resolution.    Prior to paying a payment of
Earn-Out Consideration to Seller under this Section 2.11, Parent shall deliver to Seller, by no later than fifteen (15) days prior to the applicable Earn-Out
Consideration Payment Date, a schedule setting forth the computation of the Earn-Out Consideration payable with respect to the Measurement Period in respect of which such payment of
Earn-Out Consideration is due and a copy of the financial information used in making such computation (such schedule being hereinafter after referred to as an
"Earn-Out Payment Notice." Parent and Buyer shall provide Seller and Seller's independent accountant with reasonable access to the officers,
employees, contacts, books and records of Parent and Buyer as Seller or Seller's independent accountant may reasonably request in order to verify any amounts or information set forth or required to be
set forth in the Earn-Out Payment Notice. Subject to the provisions of Section 2.11(g) below, Parent's computation of any payment under this Section 2.11(c) shall be
conclusive and binding upon the parties hereto unless, within sixty (60) days following Seller's receipt of the applicable Earn-Out Payment Notice, Seller give Parent a written
notice (an "Earn-Out Dispute Notice") that it disagrees with Parent's computation of the Earn-Out Consideration due to Seller as
set forth in the Earn-Out Payment Notice. Such Earn-Out Dispute Notice shall include a schedule setting forth Seller's computation of the Earn-Out Consideration
payable to Seller together with a copy of any information, other than that previously provided by Parent, used in making such computation. If Parent disagrees with Seller's computation contained in
the Earn-Out Dispute Notice, the parties shall attempt in good faith to reach a resolution of such disagreement. If such disagreement is not resolved within thirty (30) days after
delivery of Seller's Earn-Out Dispute Notice to Parent, then independent accountants agreed to by Parent and Seller shall be directed to compute the amount of the Earn-Out
Consideration payable to Seller as promptly as practicable and such computation shall be binding upon the parties
hereto, subject to the provisions of Section 2.11(g). The expenses of such independent accountants in connection with the calculation of the Earn-Out Consideration payable to Seller
shall be borne equally by Parent and Seller (which amount to be paid by Seller shall be subtracted from the Earn-Out Consideration otherwise payable to Seller). 

        (d)    Payment Schedule.    Parent will pay to Seller the Earn-Out Consideration, if any, on such date
(each, an "Earn-Out Consideration Payment Date") within thirty (30) days following the publication by Parent of Parent's results of
operations for Parent's fiscal quarter ending on the ending date of each applicable "Measurement Period" as set forth below: 

        (i)    The
First Measurement Period will begin on the Closing Date and end on the Parent fiscal quarter end nearest December 31, 2006 (the "First
Measurement Period"); 

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        (ii)   The
Second Measurement Period will begin on the day following the end of the First Measurement Period and end on the Parent fiscal quarter end nearest
December 31, 2007 (the "Second Measurement Period"); and 

        (iii)  The
Third Measurement Period will begin on the day following the end of the Second Measurement Period and end on the Parent fiscal quarter end nearest
December 31, 2008 (the "Third Measurement Period"). 

        All
payments of Earn-Out Consideration shall be paid to Seller by wire transfer of immediately available United States funds to the account set forth in  Schedule 2.11(d) of this Agreement, until
Seller gives written notice to Parent that payment should be made to a different account. 

        (e)    Sale of the Business.    If Parent or Buyer shall (i) sell the Business or the Purchased Assets or
otherwise dispose of assets and properties necessary to enable them to actively engage in the sale, marketing and distribution of Business Products or (ii) be merged or consolidated with or
into another entity, then Parent and Buyer shall, as a condition of such sale, merger or consolidation, cause the purchaser or surviving entity or such surviving entity's parent entity, if applicable
(the "Business Buyer") to assume all of Parent or Buyer's obligations under this Agreement (a transaction described in either clause (i) or
clause (ii) of this Section 2.11(e) being referred to herein as a "Sale of the Business"). 

        (f)    Audit Rights.    Parent agrees to allow an independent accountant selected by Seller (the
"Accountant") to audit Parent's books and records during Purchaser's normal business hours, at times reasonably agreed upon by Purchaser and Seller, and
not more often than once per calendar year in order to determine the accuracy of the payments and reports made to Seller under this Section 2.11. The Accountant will be chosen by Seller and
approved by Purchaser, whose approval shall not be unreasonably withheld or delayed. If the audit reveals that one or more of Parent's payments of Earn-Out Consideration or reports under
this Section 2.11 are incorrect and that additional amounts of Earn-Out Consideration are due and payable to Seller hereunder, then Parent will promptly pay to Seller in full all
such additional Earn-Out Consideration. If the additional amount of Earn-Out Consideration due to Seller in respect of a particular time period being audited exceeds ten
percent (10%) of the amount of Earn-Out Consideration actually reported and paid to Seller by Parent during such time period, then in addition to promptly paying such late payments, Parent
will promptly pay to Seller all reasonable costs and expenses of the audit, which otherwise shall be borne by Seller. The Accountant will be instructed to keep all non-public information
regarding the audit confidential, except to the extent necessary to permit Seller to enforce this Agreement. 

 
 

ARTICLE III    
    
    REPRESENTATIONS AND WARRANTIES OF SELLER    
    

        Subject to such exceptions as are specifically disclosed in the disclosure letter supplied by Seller to Parent, Sanmina-Singapore and Buyer (the
"Seller Disclosure Letter") and the provisions of Section 11.4, Seller hereby represents and warrants to Parent and Buyer that the statements
contained in this Article III are true and correct as of the date of this Agreement; provided, that the representations and warranties contained
in this Article III that are made as of a specified date are only represented as being true and correct as of such date, and provided, further
that, as used in this Article III, the "knowledge" of Seller refers to and means the actual knowledge of (i) any executive officer of
Seller as of the date of this Agreement or (ii) any Employee of Seller who is responsible for managing any principal function of the Business. The names of such persons, and their titles and
principal employment responsibilities, shall be set forth in the preamble to the Seller Disclosure Letter. 

20

 

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

        3.2    Authorization.    The execution and delivery of this Agreement by Seller and the execution and delivery by
Seller of each Ancillary Agreement to which Seller is a party, the performance by Seller of its obligations hereunder and its obligations under any Ancillary Agreement to which it is a party and the
consummation by Seller of the transactions contemplated to be consummated by this Agreement and by any Ancillary Agreement to which it is a party have been duly authorized by all requisite corporate
action on the part of Seller and no other corporate proceedings on the part of Seller are necessary to authorize Seller to enter into this Agreement or any of the Ancillary Agreements to which it is a
party, or to consummate the transactions contemplated to be consummated by such Seller under this Agreement and under any Ancillary Agreement to which Seller is a party. This Agreement and the
Ancillary Agreements to which Seller is a party have been duly and validly executed by Seller and, assuming the due authorization, execution and delivery thereof by Parent and Buyer, constitute the
valid and legally binding obligations of Seller, enforceable against Seller in accordance with their respective terms and conditions, except as such enforceability may be limited by principles of
public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other
equitable remedies. 

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

        3.4    Consents.    Except as set forth in Section 3.4 of the Seller Disclosure Letter, no consent, waiver,
approval, order, license, permit, certificates, filing or authorization of, or registration, declaration or filing with, any Governmental Body or any third party is required by or with respect to any
Seller in connection with the execution and delivery of this Agreement or the consummation of the Transactions. 

        3.5    Business Unit Financial Data.    Seller has delivered to Buyer (i) the unaudited pro forma statement of
revenues and expenses of the Business for the year ended March 31, 2005, (ii) the unaudited pro forma statement of revenues and expenses of the Business for the six months ended
September 30, 2005; and (iii) the unaudited list of fixed assets of the Business as of September 30, 2005 (the financial information referred to in clauses "(i)," "(ii)" and
"(iii)" of this sentence being collectively referred to as the "Business Unit Financial Data"). The revenues, direct expenses and fixed assets included
in the Business Unit Financial Data was derived from Seller's books and records related to the Business and does not contain all line items required by GAAP. The Business Unit Financial Data does not
contain footnotes and does not reflect any year-end or other audit adjustments. The 

21

 

Business
Unit Financial Data has been prepared with due care in accordance with the Seller's books and records related to the Business. The Business Unit Financial Data presents fairly in all material
respects the revenues, direct expenses and fixed assets of the Business for the relevant periods referred to above. 

        3.6    Legal Compliance.    The Business as being conducted by Seller has been and at the Closing will be in material
compliance with all applicable Laws (including without limitation rules, regulations, codes, plans, injunctions, judgments, orders, extension orders, decrees, rulings, and charges thereunder). No
Action or Proceeding, or to the knowledge of Seller, investigation, charge, complaint, claim, demand, notice or inquiry is pending, or to the knowledge of Seller, is threatened against Seller by any
Governmental Body alleging any failure to so comply in any material respect. Seller has all material Permits that are necessary to operate the Business and hold the Purchased Assets as of the Closing. 

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

        (a)   Except
to the extent not relevant to the Purchased Assets or the Business, Seller has timely filed all returns, estimates, information statements and reports with
respect to any material Taxes ("Tax Returns") that it was required to file. All such Tax Returns are correct and complete in all material respects and
have been completed in accordance with applicable law. All Taxes owed by Seller (whether or not shown on any Tax Return) were paid in full when due. 

        (b)   Seller
has timely withheld or paid with respect to its Employees or other third parties and timely paid over any withheld amounts to the appropriate Taxing authority all
U.S. federal, state income taxes, Federal Insurance Contribution Act, Federal Unemployment Tax Act and any other Taxes required to be withheld or paid by Seller. 

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

        (a)   All
current leases that are used solely for the conduct of the Business and that are included in the Purchased Assets are in full force and effect and are valid and
effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default (or event which with notice or lapse of time, or
both, would constitute a material default) on the part of Seller and, to the knowledge of Seller, on the part of any other party thereto. 

        (b)   Seller
has good and valid title to, or, in the case of leased properties and assets valid leasehold interests in, all of the Purchased Assets, free and clear of any
Liens, except (i) as reflected in the Seller Disclosure Letter, (ii) Liens arising with respect to zoning or environmental restrictions, licenses, reservations, covenants, building
restrictions and other similar charges, restrictions or encumbrances on the use of real property which do not materially interfere with the ordinary use or occupancy of the real property subject
thereto or with the ordinary conduct of the Business; and (iii) such imperfections of title and encumbrances, if any, which do not detract from 

22

 

the
value in any material respect or interfere with the present use of, in any material respect, assets subject thereto (the "Permitted Liens"). Seller
is a party to and enjoys the right to the benefits of, all Assigned Contracts. 

        (c)   Seller
has caused the Purchased Assets to be maintained in accordance with good business practice in all material respects, and all of the Purchased Assets that are in
the form of Tangible Personal Property are in good operating condition and repair (normal wear and tear excepted) in all material respects and are suitable for the purposes for which they are
currently used. 

        (d)   Seller
has the complete power and right to sell, assign, transfer, convey and deliver the Purchased Assets to Buyer pursuant to this Agreement. Following the
consummation of the Transactions and the execution of the instruments of transfer contemplated by this Agreement and the Ancillary Agreements, Buyer will own with good and valid title to, or otherwise
acquire the interests of Seller in, the Purchased Assets, free and clear of any Liens, other than the Permitted Liens. 

        3.9    Intellectual Property.    

        (a)    Business Intellectual Property.    

        (i)    Registered Intellectual Property.    Section 3.9(a)(i)
of the Seller Disclosure Letter contains a complete and accurate list of the Seller Registered Intellectual Property that are used primarily in the conduct of the Business, and any proceedings or
actions currently pending before any court, tribunal (including the United States Patent and Trademark Office or equivalent authority anywhere in the world) related to such Seller Registered
Intellectual Property. Such disclosures also set forth any actions that must be taken within 150 days after the Closing Date for the purposes of obtaining, maintaining, perfecting or preserving or
renewing any Seller Registered Intellectual Property, including the payment of any registration, maintenance or renewal fees or the filing of any responses to office actions, documents, applications
or certificates. 

        (ii)    Intellectual Property Contracts.    Section 3.9(a)(ii)
of the Seller Disclosure Letter contains a complete and accurate list of the Assigned Contracts to which Seller is a party: (A) under which Business Intellectual Property is licensed by Seller
to any third party (other than licenses or support and maintenance agreements entered into in the ordinary course of business and in substantially the form set forth in  Section 3.9(a)(ii) of
the Seller Disclosure Letter), or (B) pursuant to which a third party has licensed to Seller any Intellectual
Property used in the conduct of the Business ("Intellectual Property Contracts"). 

        (iii)    Intellectual Property
Indemnities.    Section 3.9(a)(iii) of the Seller Disclosure Letter contains a complete and accurate list of
all Assigned Contracts whereby Seller or any of its direct or indirect Subsidiaries has agreed to, or assumed, any obligation or duty to indemnify, reimburse, hold harmless, defend or otherwise assume
or incur any obligation or liability with respect to the infringement or misappropriation of any Intellectual Property rights that are used in the conduct of the Business. 

        (b)    Validity.    Each item of U.S. Seller Registered Intellectual Property is valid and subsisting, all necessary
registration, maintenance and renewal fees currently due in connection with such U.S. Seller Registered Intellectual Property have been made and all necessary documents, recordations and certificates
in connection with such U.S. Seller Registered Intellectual Property required to be filed to avoid forfeiture or loss of the right to obtain registration of such U.S. Seller Registered Intellectual
Property with the relevant patent, copyright, trademark or other authorities in the United States have been filed, for the purposes of prosecuting and maintaining the rights in such Seller Registered
Intellectual Property that accrue upon or as a result of such registration. Seller 

23

 

has
no knowledge of any information, materials, facts, or circumstances, including any information or fact that would constitute prior art that would render any Seller Registered Intellectual
Property, as used in the conduct of the Business, invalid or unenforceable, or would materially and adversely affect any pending application for any such Seller Registered Intellectual Property, and
Seller has not knowingly misrepresented, or knowingly failed to disclose, any facts or circumstances in any application to register any such Seller Registered Intellectual Property with the relevant
patent, copyright, trademark or other authorities in the United States that would constitute fraud or a misrepresentation under applicable law with respect to such application or that would otherwise
materially and adversely affect the validity or enforceability of any such Seller Registered Intellectual Property. 

        (c)    Ownership.    

        (i)    No
Business Intellectual Property is subject to any pending proceeding or outstanding decree, Order, judgment, or stipulation or Contract restricting in any material
manner, the use, transfer, or licensing thereof by Seller, or which may materially affect the validity, use or enforceability of such Business Intellectual Property. 

        (ii)   Except
for the Assigned Contracts and except to the extent payment is required in connection with the recordation of the transfer of Seller Registered Intellectual
Property, all Business Intellectual Property will be fully transferable, alienable or licensable by Buyer or Parent without restriction and without payment of any kind to any person. 

        (iii)  Seller
owns, and has good and exclusive title to, each item of Business Intellectual Property free and clear of any Lien, other than Permitted Liens and other than the
licenses described in Section 3.9(a)(ii). 

        (iv)  No
person other than Seller has ownership rights or license rights granted by Seller to improvements made by or for Seller in any Business Intellectual Property. 

        (v)   Seller
has not (i) transferred ownership of, or granted any exclusive license of, or exclusive right to use, or authorized the retention of any exclusive rights
to use or joint ownership of, Business Intellectual Property to any other Person, or (ii) knowingly permitted Seller's rights in any Business Intellectual Property to lapse or enter the public
domain, except to the extent such failure would not materially and adversely affect the Business. 

        (d)    Non-Infringement.    

        (i)    The
operation of the Business as it currently is conducted by Seller does not, and will not, infringe or misappropriate any Intellectual Property of any third party or
constitute unfair competition or trade practices under the laws of any applicable jurisdiction. Seller has not received written notice from any third party alleging any such infringement,
misappropriation, unfair competition or trade practices. 

        (ii)   All
Business Intellectual Property was developed solely by either (i) employees of Seller or a Subsidiary of Seller acting within the scope of their employment
or (ii) by third parties who have validly and irrevocably assigned all of their rights, including all Intellectual Property rights therein, to Seller or its Subsidiaries. 

        (e)    Intellectual Property Contracts.    

        (i)    All
Intellectual Property Contracts are in full force and effect. 

        (ii)   Seller
is not in material breach of any of the Intellectual Property Contracts, and, to Seller's knowledge, no other party to any Intellectual Property Contract has
materially breached such Intellectual Property Contract or failed to perform its obligations thereunder. 

24

 

        (f)    Sufficiency of Intellectual Property Rights.    Buyer agrees and acknowledges that it will need to obtain the
Intellectual Property rights from third parties (and not from Seller), as described in Section 3.9(f) of the Seller Disclosure Letter, in order
to continue the conduct of the Business after the Closing ("Third Party Rights"). The Third Party Rights and the Purchased Assets will be sufficient for
the Buyer to operate the Business following the Closing in substantially the same manner in which the Business was operated by Seller during the one (1) year period immediately prior to the
Closing Date. 

        (g)    Government Rights.    No government funding, facilities of a university, college, other educational institution
or research center or funding from third parties was used in the development of any Business Intellectual Property. To the knowledge of Seller no current or former employee, consultant or independent
contractor of Seller, who was involved in, or who contributed to, the creation or development of any Business Intellectual Property, has performed services for the government, university, college, or
other educational institution or research center during a period of time during which such employee, consultant or independent contractor was also performing services for Seller. 

        (h)    Third-Party Infringement.    To the knowledge of Seller: (i) no Person has infringed or misappropriated,
or is infringing or misappropriating, any Business Intellectual Property, and (ii) no Person has infringed or misappropriated, or is infringing or misappropriating, any Business Intellectual
Property in a manner that would materially adversely affect the Business. 

        (i)    Trade Secret Protection.    Seller has taken reasonable steps to protect its rights in Seller's confidential
information and trade secrets used solely in the conduct of the Business, and any trade secrets or confidential information of third parties provided to Seller under an obligation of confidentiality,
and, without limiting the foregoing, Seller has required each employee and contractor performing work primarily as part of the conduct of the Business to execute a proprietary
information/confidentiality agreement in substantially the form set forth in Section 3.9(i) of the Seller Disclosure Letter and all current and
former employees and contractors of Seller who are performing or have performed work primarily as part of the conduct of the Business have executed such an agreement or an alternative form of
agreement containing substantially similar provisions. 

        3.10    Contracts.    Section 3.10 of the Seller Disclosure
Letter identifies each of the following Seller Contracts relating to the Business or the Purchased Assets: (i) each such Seller Contract with any current customer who has purchased, is entitled
to receive, or otherwise has been provided with any Business Product (other than any Seller Contract that is currently in effect and does not materially deviate from the corresponding Standard Form
Agreement); (ii) each such Seller Contract that is currently in effect and relates to maintenance or similar services with respect to any Business Product (other than any Seller Contract that
is currently in effect and does not materially deviate from the corresponding Standard Form Agreement); (iii) each partnership, joint venture or similar Contract to which Seller is a party;
(iv) each such Seller Contract relating to the acquisition by Seller or any Subsidiary of Seller of the rights to, or the manufacture or distribution of, any Business Product; and
(v) each Seller Contract relating to the acquisition, transfer, use, development, sharing or license of any services, Intellectual Property or Intellectual Property right that is used in the
development or provision of any Business Product (other than: (A) software license agreements for any third-party software that is generally available to the public on standard terms at a cost
of less than $5,000; and (B) nondisclosure agreements entered into by Seller or any Subsidiary of Seller in the ordinary course of business) (collectively, the "Business
Contracts"). Seller has made available to Parent a correct and complete copy of each written Business Contract, each written modification, amendment or additional terms to each
Business Contract, a written summary setting forth the terms and conditions of any oral modification, amendment or additional terms to the Business Contracts, and a written summary setting forth the
terms and conditions of each oral Business Contract. With respect to each Business Contract: 

25

 

(A) the
Business Contract, with respect to Seller and, to Seller's knowledge, all other parties thereto, is legal, valid, binding, enforceable, and in full force and effect in all material
respects; (B) neither Seller nor, to Seller's knowledge, any other party is in breach or default, and no event has occurred, which with notice or lapse of time would constitute a breach or
default, or permit termination, a material modification, or acceleration, under the Business Contract; and (C) Seller has not received written notice that any party has repudiated any provision
of the Business Contract. Following the Closing, Buyer will be permitted to exercise all of Seller's rights under such Assigned Contracts to the same extent Seller would have been able to had the
Transactions not occurred. 

        3.11    Insurance.    Seller has in effect, with respect to the Business and the Purchased Assets, such property,
casualty, general liability and other insurance policies as are usual and customary for businesses in similar industries and markets and of similar size and scope. Such insurance will remain in effect
through the Closing. 

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

        3.13    Restrictions on Business Activities.    Except as set forth in  Section 3.13 of the Seller Disclosure Letter and
such restrictions, if any, contained in the Assigned Contracts, there is no agreement (not to
compete or otherwise), commitment, judgment, injunction, order or decree to which Seller is a party or which is otherwise binding upon Seller which has the effect of prohibiting or restricting, in any
material respect, Buyer's operation of the Business after the Closing Date or any acquisition of property (tangible or intangible) by Buyer in the operation of the Business after the Closing Date as
currently conducted. 

        3.14    Product Warranty.    The technologies or products licensed, sold, leased, and delivered and all services
provided by Seller solely in the conduct of the Business have conformed in all material respects with all applicable specifications for such products, all applicable contractual commitments made to
customers with respect to the sale of products and services, and all express and implied warranties. To the knowledge of Seller, Seller has no liability for replacement or modification thereof or
other damages including, without limitation injury to Persons or property in connection therewith. 

        3.15    Employees.    Section 3.15 of the Seller Disclosure
Letter contains a complete and accurate list of all current Employees as of the date hereof, showing for each such Employee: (i) employee's name, position held, annual base salary, target
incentive cash compensation; (ii) net credited service date; (iii) vacation eligibility for calendar year 2005; (iv) visa status; (v) leave status (including type of leave,
expected return date for non-disability related leaves and expiration dates for disability leaves); and (vi) the name of any union, collective bargaining agreement or other similar
labor agreement covering such Employee. All of the Employees are located in the State of Colorado, U.S.A. or in the locations set forth in Section 3.15 of the Seller Disclosure Schedule. 

        3.16    Employee Matters and Benefit Plans.    

        (a)    Benefit Plan Compliance.    (i) Seller and each of its ERISA Affiliates have performed in all material
respects all obligations required to be performed by them under, are not in default or violation of, and have no knowledge of any default or violation by any other party to each Benefit Plan that
would reasonably likely to result in a Material Adverse Effect on the Business after the Closing Date, and each Benefit Plan has been established and maintained in all material respects in accordance
with its terms and in material compliance with all applicable Laws, including but not 

26

 

limited
to ERISA and the Code, except as would not be reasonably likely to result in a Material Adverse Effect on the Business after the Closing Date. 

        (b)    No Pension Plans.    With respect to current Employees, neither Seller nor any ERISA Affiliate has ever
maintained, established, sponsored, participated in, or contributed to, any (i) Pension Plan which is subject to Title IV of ERISA or Section 412 of the Code, or
(ii) Multiemployer Plan. 

        (c)    No Continuation Coverage.    No Benefit Plan provides, or reflects or represents any Liability to provide
retiree health to any Employee for any reason, except as may be required by COBRA or other applicable statute, and neither Seller nor any of its ERISA Affiliates has represented, promised or
contracted (whether in oral or written form) to any Employee (either individually or to Employees as a group) or any other individual that such Employee(s) or other individual would be provided with
retiree health, except to the extent required by statute. 

        3.17    Labor Matters.    No Transferred Employee has advised any officer of Seller in writing that he or she plans to
terminate employment with Seller or within the twelve (12) months after the date of the Closing. Seller is not a party to any special collective bargaining agreement and no collective
bargaining agreement is being negotiated with respect to the Business. There is no material unfair labor practice, charge or complaint pending against Seller with respect to the Business, nor is there
any material labor strike, work stoppage, grievance or other labor dispute pending or, to the knowledge of Seller, threatened in writing against Seller with respect to the Business. Seller is in
compliance in all material respects with (i) all applicable Laws respecting employment and wage and hours, and with all terms and conditions of employment, agreements with third parties, codes
of conduct, visas, work permits, in each case, with respect to the Transferred Employees; and (ii) is not liable for any payment to any Governmental Body, any trust or other fund governed by or
maintained by or on behalf of any Governmental Body, with respect to unemployment compensation benefits, social security or other similar, legally mandated benefits or obligations for the Transferred
Employees (other than routine payments to be made in the normal course of business and consistent with past practice). There are no pending, or to the knowledge of Seller threatened claims or actions
against the Seller under any employment policy or disability policy with respect to the Transferred Employees. Except as set forth on Section 3.17 of the Seller Disclosure Letter, no event has
occurred for which any material liability may be incurred by Seller in relation to the Transferred Employees for breach of any contract of services or for services or for any other liability accruing
from the termination of employment or for services whether under Law or otherwise. 

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

        (a)    Definitions.    

        (i)    "Hazardous Material" is any material, chemical, substance or waste that has been designated by any Governmental Body to
be radioactive, toxic, hazardous or otherwise a danger to health, reproduction or the environment or the disposal, treatment, transfer, storage or manufacture of which is regulated in any manner by a
Governmental Body. 

        (ii)   "Environmental Laws" are all applicable laws, rules, regulations, orders, treaties, statutes, and codes promulgated by
any Governmental Body which prohibit, regulate or control any Hazardous Material or any Hazardous Material Activity, including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, the Resource Recovery and Conservation Act of 1976, the Federal Water Pollution Control Act, the Clean Air Act, the Hazardous Materials Transportation Act, the
Occupational Safety and Health Act, the Clean Water Act, comparable laws, rules, regulations, ordinances, orders, treaties, statutes, and codes of other Governmental Bodies, the regulations 

27

 

promulgated
to any of the foregoing, and all amendments and modifications of any of the foregoing. 

        (iii)  "Hazardous Materials Activity" is the transportation, transfer, recycling, storage, use, treatment, manufacture,
removal, remediation, release (or threat of release), exposure of others to, sale, or distribution of any Hazardous Material or any product containing a Hazardous Material. 

        (iv)  "Environmental Permit" is any approval, permit, license or consent required to be obtained from any private person or
any Governmental Body with respect to a Hazardous Materials Activity which is or was conducted by the Seller. 

        (b)    Condition of Property.    As of the Closing, except in compliance with Environmental Laws or in a manner that
could not reasonably be expected to result in material liability to Seller, no Hazardous Materials are present, as a result of actions of Seller with respect to the operation of the Business, or, to
the knowledge of Seller, as a result of any actions of any third party or otherwise, on the Facility. Except in compliance with Environmental Laws or in a manner that could not reasonably to result in
a material liability to Seller, there are, to the knowledge of Seller, no underground storage tanks, asbestos which is friable or likely to become friable or PCBs present on the Facility. 

        (c)    Hazardous Materials Activities.    Seller has conducted all Hazardous Material Activities relating to the
Business in compliance in all material respects with all applicable Environmental Laws. To the knowledge of Seller, the Hazardous Materials Activities of Seller prior to the Closing relating to the
Business have not resulted in the exposure of any person to a Hazardous Material in a manner which has caused an adverse health effect to any such person. 

        (d)    Permits.    Seller holds all Environmental Permits which are in all material respects necessary for the conduct
of the Business as currently being conducted by Seller. 

        (e)    Environmental Litigation.    No action, proceeding, revocation proceeding, amendment procedure, writ,
injunction or claim is pending, or to the knowledge of Seller, threatened, concerning or relating to any
Environmental Permit or any Hazardous Materials Activity of Seller relating to the Business or the Facility. 

        (f)    Reports and Records.    Seller has made available to Buyer or made available for inspection by Buyer or its
agents, representatives or employees all material records in Seller's possession concerning the Hazardous Materials Activities of Seller relating to the Business and all environmental audits and
environmental assessments of the Facility conducted at the request of, or otherwise in the possession of, Seller. Seller has complied, in all material respects, with all environmental disclosure
obligations imposed on Seller by applicable law with respect to the Transactions. 

        3.19    Real Estate Representations.    

        (a)   Section 3.19 of the Seller Disclosure Letter sets forth a list of the real property currently leased or subleased
by or from Seller, or otherwise occupied by Seller, primarily in connection with the Business including the name of the lessor, master lessor, lessee and/or sublessee, as the case may be, and the date
of the lease or sublease (collectively, "Leases") and each amendment thereto and with respect to any current Lease, the aggregate annual rental and/or
other fees payable under any such Lease (the "Leased Real Property"). Each of the Leases that is included in the Purchased Assets is in full force and
effect and is valid and effective in accordance with its terms in all material respects. 

        (b)   Except
as otherwise described in Section 3.19(b) of the Seller Disclosure Letter: (i) to the knowledge of Seller, there are no structural, electrical,
mechanical, plumbing, roof, paving or other 

28

 

defects
in any improvements located at the Facility as would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the use, development, occupancy or
operation of the Facility in the operation of the Business as currently conducted; (ii) to the knowledge of Seller, there are no natural or artificial conditions affecting the Facility or any
other facts or conditions that would reasonably likely have a Material Adverse Effect on Seller's ability to occupy the Facility or to operate the Business in the Facility as currently conducted by
Seller; (iii) Seller has not received any written notice from any insurance company of any defects or inadequacies in the Facility or any part thereof that would reasonably be expected to have
a Material Adverse Effect on the insurability of such property or the premiums for the insurance thereof, nor has any written notice been given by any insurer of the Facility requesting the
performance of any repairs, alterations or other work with respect to the Facility with which compliance has not been made, except for the failure to make such repairs, alterations or other work that
would not reasonably likely have a Material Adverse Effect on the insurability of the Facility; (iv) other than Seller, there are no parties in possession of any portion of the Facility leased
by Seller, whether as subtenants, trespassers or otherwise, that would materially interfere with the use of the Facility; (v) there are no service, operating or management agreements or
arrangements regarding the Facility to which Seller is a party that cannot be terminated on thirty (30) days' notice without material penalty or surcharge; and (vi) to the knowledge of
Seller, there currently exists water, sewer, gas or electrical, telephone and telecommunication lines and surface drainage systems serving the Facility that are sufficient to service the operations of
the Facility when fully occupied and operational. Except as set forth in the "Work Letter" attached to the lease for the Facility, there are no tenant improvements to the Facility, and the
improvements set forth in the Work Letter are the property of the landlord and restoration of the Facility to its state prior to these improvements is not required upon termination of the lease for
the Facility. 

        (c)   To
Seller's knowledge, no condemnation, environmental, zoning, land-use or other regulatory proceedings or rule making procedures have been instituted or
planned to be instituted with respect to the Facility prior to expiration of the term of Seller's current lease for the Facility, nor has Seller received written notice of any proceedings to impose
any new taxes or operating restrictions upon the Facility. 

        3.20    Fees.    Except as set forth in Section 3.20 of the Seller Disclosure Letter, Seller has no liability
or obligation to pay any brokerage or finders' fees or agents' commissions or any similar charges with respect to the Transactions. 

        3.21    Sufficiency of Purchased Assets.    Except as set forth on  Section 3.21 of the Seller Disclosure Letter, other
than the Employees, and subject to Seller's performance of its obligations under the
Ancillary Agreements, the Purchased Assets collectively constitute, and will collectively constitute as of the Closing Date, all of the Assets necessary to operate the Business, as currently conducted
by Seller. 

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

        (a)   Seller
is not in material default (or with the giving of notice or lapse of time, or both, would be in material default) under, or violation in any material respect of,
any Business Permit. 

        (b)   To
the knowledge of Seller, the Assigned Permits are sufficient to enable Buyer to conduct the Business as currently conducted by Seller in compliance in all material
respects with all applicable Laws. 

        3.23    Non-Governmental
Certifications.    Section 3.23 of the Seller Disclosure Letter contains a complete and accurate list of all
customer, supplier and other non-governmental entities that have issued certifications or quality assurance criteria regarding the Qualified Products. 

29

  

        3.24    Customers.    Listed in Section 3.24 of the
Seller
Disclosure Letter are the names and addresses of each of the ten (10) most significant customers (by revenue) of the Business for the twelve-month period ended September 30, 2005 and the
amount for which each such customer was invoiced during such period with respect to the Business. Seller has not received any written notice that any such significant customer has ceased, or will
cease, to use the products, equipment, goods or services of the Business or has substantially reduced, or will substantially reduce, the use of such products, equipment, goods or services of the
Business. 

        3.25    Suppliers.    Listed in Section 3.25 of the Seller
Disclosure Letter are the names and addresses of each of the ten (10) most significant suppliers of raw materials, supplies, merchandise and other goods for the Business for the twelve-month
period ended September 30, 2005 and the amount for which each such supplier invoiced Seller during such period with respect to the Business. Seller has not received any written notice that any
such supplier will not sell raw materials, supplies, merchandise and other goods to Buyer at any time after the Closing Date on terms and conditions substantially similar to those imposed on current
sales to the Business, subject only to general price increases and existing agreements with such suppliers. 

        3.26    No Adverse Developments.    Since September 30, 2005, there has not been any effect in or change to the
Purchased Assets or the Business that has had, or is reasonably likely to have or result in, a Material Adverse Effect on the Purchased Assets or the Business. 

        3.27    Inventories.    The Finished Goods Inventory is useable and saleable in the ordinary course of the Business as
currently conducted. The Finished Goods Inventory does not consist of items that are obsolete or damaged. Seller is not under any obligation or liability with respect to accepting returns of items of
Consigned Finished Goods Inventory in the possession of its customers other than in the ordinary course of the Business consistent with past practice. All of the Finished Goods Inventory, including
the Consigned Finished Goods Inventory, are located at the location(s) set forth on Schedule 1.1(ee). 

 
 

ARTICLE IV    
    
    REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER    
    

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

        4.1    Organization, Qualification, and Corporate Power.    Parent is a corporation duly organized, validly existing,
and in good standing under the laws of Delaware. Buyer is a corporation duly organized, validly existing, and in good standing under the laws of Delaware and is a wholly-owned Subsidiary of Parent.
Sanmina-Singapore is a corporation duly organized and validly existing under the laws of the Republic of Singapore and is an indirect, wholly-owned subsidiary of Parent. Each of Parent, Buyer and
Sanmina-Singapore has all necessary corporate power and authority to enter into this Agreement, each of the Ancillary Agreements to which it is a party and all other agreements and instruments
executed and delivered by it pursuant to this Agreement, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. Each of Parent, Buyer
and Sanmina-Singapore is duly authorized to conduct its business and is in good standing under the laws of each other jurisdiction where such qualification is required and in which the failure to so
qualify is reasonably likely to (i) in the aggregate have a Material Adverse Effect on Parent or Buyer, taken as a whole, or (ii) adversely affect the ability of Parent or Buyer to
execute and 

30

 

deliver
this Agreement and the Ancillary Agreements, to consummate the Transactions or to carry out its respective obligations under this Agreement or any Ancillary Agreement to which it is a party. 

        4.2    Authorization.    Each of Parent, Buyer and Sanmina-Singapore has full power and authority to enter into,
execute and deliver this Agreement and each of the Ancillary Agreements to which it is a party, and to consummate the Transactions and to perform its obligations hereunder and thereunder, and the
execution and delivery of this Agreement and the Ancillary Agreements by each of Parent, Buyer and Sanmina-Singapore, the performance by each of Parent, Buyer and Sanmina-Singapore of its obligations
hereunder and thereunder and the consummation by each of Parent, Buyer and Sanmina-Singapore of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate
action on the part of each of Parent, Buyer and Sanmina-Singapore and no other proceedings on the part of either Parent, Buyer or Sanmina-Singapore are necessary to authorize the execution, delivery
and performance by Parent, Buyer and Sanmina-Singapore of this Agreement and the Ancillary Agreements. This Agreement and the Ancillary Agreements to which either Parent, Sanmina-Singapore and/or
Buyer is a party constitute the valid and legally binding obligations of each of Parent,
Sanmina-Singapore or Buyer, enforceable against each of Parent, Sanmina-Singapore or Buyer in accordance with their respective terms and conditions, except as such enforceability may be
limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies. 

        4.3    No Conflicts.    Neither the execution and the delivery of this Agreement and the Ancillary Agreements by
Parent, Buyer and Sanmina-Singapore nor the consummation of the Transactions, nor the conduct of the Business by Parent and/or Buyer following the Closing will (A) violate any material
constitution, Law, injunction, judgment, order, decree, ruling, charge, or other restriction of any Governmental Body, or court to which Parent or Buyer is subject, (B) violate or conflict with
any provision of the charters, bylaws or organizational documents of Parent or Buyer, or (C) conflict with, result in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under, any agreement, contract, lease, license, instrument, or other arrangement to which Parent or
Buyer is a party or by which either is bound or to which any of their assets is subject, other than any of the foregoing which would not in the aggregate (i) have a Material Adverse Effect on
Parent, Buyer or Sanmina-Singapore, taken as a whole, or (ii) adversely affect the ability of Parent, Buyer or Sanmina-Singapore to execute and deliver this Agreement and the Ancillary
Agreements, to consummate the Transactions or to perform their respective obligations hereunder and thereunder. 

        4.4    Consents.    No consent, waiver, approval, order, license, permit, certificates, filing or authorization of, or
registration, declaration or filing with, any Governmental Body or any third party, including a party to any agreement with Parent, Buyer or Sanmina-Singapore, is required by or with respect to
Parent, Buyer or Sanmina-Singapore in connection with the execution and delivery of this Agreement or any of the Ancillary Agreements or the consummation of the Transactions, except for
(i) such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable federal and state securities laws, (ii) any
applicable filings required under applicable antitrust laws, and (iv) such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings in which the failure of
which to obtain would not in the aggregate (i) have a Material Adverse Effect on Parent, Buyer or Sanmina-Singapore, or (ii) affect the ability of Parent, Buyer or Sanmina-Singapore to
execute and deliver this Agreement and the Ancillary Agreements to which each is a party, to consummate the Transactions or to perform their respective obligations under this Agreement or any such
Ancillary Agreement. 

        4.5    Payment of Purchase Price.    As of the Closing Date, Buyer will have sufficient funds to pay the Closing
Purchase Price and the Earn-Out Consideration. 

31

 

 
 

ARTICLE V    
    
    PRE-CLOSING COVENANTS    
    

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

        5.1    Operation of Business.    

        (a)   Seller
agrees that, during the Pre-Closing Period, except as contemplated by this Agreement, any Ancillary Agreement or the Transactions, or as otherwise
consented to or approved in advance by Parent or Buyer, Seller shall: 

        (i)    use
all commercially reasonable efforts to (i) preserve intact the present business organization, reputation, contractual and other arrangements of the Business
then under the control of Seller, (ii) keep available (subject to dismissals and retirements and resignations in the ordinary course of business consistent with past practice) the services of
the present Employees of the Business, (iii) maintain the Purchased Assets in good working order and condition, ordinary wear and tear excepted, (iv) maintain the goodwill of customers,
suppliers and distributors of the Business and other Persons with whom Seller otherwise has significant business relationships in connection with the Business, and (v) continue all current
sales, service, marketing, promotional, product development and other activities relating to the Business substantially consistent with Seller's past practices during the twelve (12) month
period immediately preceding the date of this Agreement; 

        (ii)   except
to the extent required by applicable Law and consistent with past practice, (i) cause the Books and Records of the Business to be maintained in the usual,
regular and ordinary manner, and (ii) not permit any change in any pricing, investment, accounting, financial reporting, inventory, credit, allowance or Tax practice, policy or election of
Seller that would materially and adversely affect the Business, the Purchased Assets or materially increase the Assumed Liabilities; 

        (iii)  use
all commercially reasonable efforts to continue in full force and effect all material insurance policies (or comparable insurance policies) insuring the Business
and the Purchased Assets; and 

        (iv)  comply
in all material respects with all Laws and Orders applicable to the Business, and promptly following receipt thereof deliver to Buyer copies of any written
notice received from any Governmental Body or other Person alleging any violation of any such Law or Order. 

        (b)   Seller
agrees that, during the Pre-Closing Period, except as contemplated by this Agreement, the Ancillary Agreements or the Transactions or as otherwise
consented to or approved in advance by Parent or Buyer, Seller shall not: 

        (i)    make
any representation or promise, oral or written, to any Employee of the Business concerning any employee benefit plan of Parent or Buyer, except for statements as to
the rights or accrued benefits of any Employee of the Business under the terms of any employee benefit plan or agreements or as otherwise required by Law; 

        (ii)   make
any increase in the salary, wages or other compensation (cash, equity or otherwise) of any Employee whose annual salary is or, after giving effect to such change,
would be the equivalent of $50,000 or more, and in the aggregate in excess of $100,000; 

        (iii)  establish
or materially modify any (i) targets, goals, pools or similar provisions in respect of any fiscal year under any Benefit Plan, any employment-related
contract or other 

32

 

compensation
arrangement with or for Employees or (ii) salary ranges, increase guidelines or similar provisions in respect of any Benefit Plan, any employment-related contract or other
compensation arrangement with or for Employees, except, in each case, in the ordinary course of business consistent with past practice; 

        (iv)  terminate
the employment of any Transferred Employee, except for cause and in such case to provide notice to Parent or Buyer prior to any such termination to the extent
reasonably feasible in the circumstances; or 

        (v)   enter
into any Contract to do or engage in any of the foregoing items set forth in this Section 5.1(b). 

        (c)   Seller
agrees that, during the Pre-Closing Period, except as permitted by this Agreement, the Ancillary Agreements or the Transactions or as otherwise
consented to or approved in advance by Parent or Buyer, Seller shall not: 

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

        (ii)   enter
into, amend, modify, terminate (partially or completely), grant any waiver under or give any consent with respect to any Assigned Contract or any Assumed License
or Permit, in each case other than in the ordinary course of business consistent with past practice; 

        (iii)  violate,
breach or default in any material respect under, or take or fail to take any action that (with or without notice or lapse of time or both) would constitute a
material violation or breach of, or material default under, any term or provision of any Assigned Contract or Assigned Permit; 

        (iv)  make
any material changes in the conduct of the Business, except as specifically contemplated or permitted by this Agreement, any Ancillary Agreement or the
Transactions; 

        (v)   enter
into any Contract with any Person related to any merger, consolidation or other business combination that would interfere with or adversely affect the Business or
the ability of Seller to consummate the transactions (including but not limited to the purchase and sale of the Purchased Assets) contemplated hereby and pursuant to the Ancillary Agreements, unless
such Person agrees in writing that such merger, consolidation or other business combination is subject to the terms and conditions of this Agreement and the Ancillary Agreements; or 

        (vi)  enter
into any Contract to do or engage in any of the foregoing items set forth in this Section 5.1(c). 

        5.2    Access to Information.    Subject to Parent's and Buyer's compliance with the provisions of Section 6.1,
Seller shall permit Buyer and its representatives during the Pre-Closing Period to have reasonable access during normal business hours, upon reasonable advance notice, to the Books and
Records of the Business, the Employees and the Purchased Assets then under the control of Seller (including the testing and investigation of the Facility as Buyer reasonably deems necessary prior to
the Closing) for the purposes of, among other things, identifying and verifying the value of the Purchased Assets to be purchased at the Closing provided,
however, that such access shall be conducted by Buyer and its representatives in such a manner as not to interfere unreasonably with the businesses or operations of Seller or
the Business and as is not in violation of Seller's lease for the Facility. 

33

 

        5.3    Notice of Developments.    During the Pre-Closing Period, Seller shall give prompt notice to Buyer
of (i) the occurrence or non occurrence of any event of which Seller has knowledge, the occurrence or non occurrence of which is reasonably likely to cause any representation or warranty of
Seller contained in this Agreement to be untrue or inaccurate in any material respect at or prior to the Closing and (ii) any failure of Seller to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 5.3
shall not limit or otherwise affect any remedies available to the Party receiving such notice. No disclosure by either party pursuant to this Section 5.3 shall be deemed to amend or supplement
the representations and warranties of such parties made hereunder or prevent or cure any misrepresentations, breach of warranty or breach of covenant without the written consent of the other parties
hereto. 

        5.4    No Solicitation.    During the Pre-Closing Period, neither Seller nor any Subsidiary of Seller
shall (nor shall it permit its Representatives to) directly or indirectly take any of the following actions with any Person other than Parent, Buyer and their designees: (a) solicit, initiate,
consider, encourage or accept any proposals or offers from, or conduct discussions with or engage in negotiations with, any Person relating to any possible Acquisition Proposal with Seller or any of
its Subsidiaries (whether such Subsidiaries are in existence on the date hereof or are hereafter organized); (b) provide information with respect to Seller to any Person, other than Parent or
Buyer, relating to, or otherwise cooperate with, facilitate or encourage any effort or attempt by any such Person with regard to, any possible Acquisition Proposal with Seller or any Subsidiary of
Seller (whether such Subsidiary is in existence on the date hereof or is hereafter organized), except as required by Law; (c) enter into a contract or agreement (whether oral or written) with
any Person, other than Parent or Buyer, providing for an Acquisition Proposal with Seller or any Subsidiary of Seller (whether such Subsidiary is in existence on the date hereof or is hereafter
organized); or (d) make or authorize any statement, recommendation or solicitation in support of any possible Acquisition Proposal with Seller or any Subsidiary of Seller (whether such
Subsidiary is in existence on the date hereof or is hereafter organized) other than by Parent or Buyer. Seller shall, and shall cause its Representatives to, immediately cease and cause to be
terminated any such contacts or negotiations with any Person relating to any Acquisition Proposal. As used in this Section 5.4, "Acquisition
Proposal" shall mean a proposal or offer for (i) a merger, consolidation or other business combination involving an acquisition of the Business or the Purchased Assets
or (ii) any extraordinary business transaction involving or otherwise relating to the Business or Purchased Assets; provided however, that the
term "Acquisition Proposal" shall not include any proposal or offer for any business combination or similar transaction involving Seller or any of its Subsidiaries or any assets of Seller or any of
its Subsidiaries (other than the Purchased Assets) that does not disturb, interfere with or adversely effect Parent's or Buyer's rights under this Agreement and the Ancillary Agreements, the
availability of the Purchased Assets for purchase and delivery to Parent and Buyer as provided in this Agreement or Seller's ability to perform and comply with its obligations under this Agreement or
any of the Ancillary Agreements. 

        5.5    Reasonable Efforts.    During the Pre-Closing Period, each of the Parties will use their reasonable
efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but
not waiver, of the closing conditions set forth in Article VII below). 

        5.6    Notices and Consents.    During the Pre-Closing Period, Seller will give any notices to third
parties and use reasonable commercial efforts to obtain any third party consents that are listed in Schedule 7.1(e) to the Seller Disclosure
Letter. During the Pre-Closing Period, except as may be otherwise agreed by the Parties, each of the Parties will give any notices to, make any filings with, and use its commercially
reasonable efforts to obtain any authorizations, consents, and approvals of, Governmental Bodies in connection with the matters identified in Sections 3.3 and 3.4 of Seller 

34

 

Disclosure
Letter or as otherwise reasonably required in connection with the transactions contemplated by this Agreement. 

        5.7    Employee Matters.    

        (a)    Offers of Employment.    Prior to the Closing, Buyer shall offer employment, contingent on the Closing, to each
of the Employees identified by Buyer on Schedule 5.7(a) (such Schedule 5.7(a) may be
updated by Buyer at any time prior to the date three (3) days prior to the Closing) and who are still employed by Seller or a Subsidiary of Seller on the day immediately preceding the Closing
Date, such employment to commence on the Closing Date on terms that will provide such Employees salaries not less than their current base salaries with Seller and that will include customary medical
insurance, health and other benefits customarily provided by Parent to its employees generally on a non-discriminatory basis. With respect to certain Employees identified on  Schedule 5.7(a),
such offer of employment will include vacation eligibility on the terms identified for such Employee on  Schedule 5.7(a), rather than on Buyer's standard terms for similarly situated
personnel. Seller shall, and shall cause its officers, to cooperate
with Parent and Buyer in connection with their good faith efforts to hire the Employees listed on Schedule 5.7(a), including, without limitation,
allowing representatives of Parent and Buyer reasonable access during normal business hours to meet with and distribute to such Employees such forms and other documents relating to their proposed
employment with Parent or Buyer, provided such access does not unreasonably interfere with Seller's conduct of the Business. Immediately prior to the Closing Date, Seller shall transfer or terminate
all Employees employed at the Facility who have not been identified on Schedule 5.7(a) or otherwise hired by Parent or Buyer. Seller shall be solely liable for all (i) Employment
Liabilities and other Liabilities, if any, of Seller to any and all Employees who do not accept employment with Buyer and (iii) all Liabilities for severance and other costs, including without
limitation, employment-related Liabilities and other obligations related to transfers and terminations of Employees who are not listed on  Schedule 5.7(a) or have not otherwise been hired by
Parent or Buyer (the "Termination
Liabilities"); provided, however, that Buyer shall be liable for the Termination Liabilities with respect to Transferred
Employees but only to the extent such Termination Liabilities are not Assumed Employment Liabilities. 

        (b)   Buyer
and Seller shall use commercially reasonable efforts to achieve an orderly transfer of the Transferred Employees to the employment of Parent or Buyer effective
upon the Closing as contemplated by this Agreement. Upon satisfaction of the conditions to the payment of the Employee Retention Bonuses, Buyer shall pay to the eligible Transferred Employees, as set
forth on Schedule 5.7(b), their respective Employee Retention Bonuses. 

        (c)   Prior
to Closing, Seller and its Subsidiaries shall not take any actions: (i) to offer alternate employment within the Seller's or any of its Subsidiaries'
operations to any Employees listed on Schedule 5.7(a), except as otherwise agreed to by Parent or Buyer, or (ii) to actively and willfully
discourage or prevent any Employee listed on Schedule 5.7(a) from becoming an employee of Parent or Buyer on or after the Closing Date. 

35

  

 
 

ARTICLE VI    
    
    OTHER AGREEMENTS AND COVENANTS    
    

        6.1    Confidentiality.    All Book and Records of Seller, and other confidential and/or proprietary information of a
party to this Agreement are hereinafter referred to as "Confidential Information." A party who owns and discloses its Confidential Information is
referred to below as a "Disclosing Party" and a party who receives or is given access to a Disclosing Party's Confidential Information is referred to
below as a "Receiving Party." Each party hereto agrees that all Confidential Information of another party that is disclosed to such party in the course
of negotiating the Transactions contemplated by this Agreement or conducting due diligence in connection herewith will be held in confidence, and will not be used or disclosed by the Receiving Party
except for the purposes relating to or permitted by this Agreement for which such Confidential Information was disclosed, and in the event of termination of this Agreement prior to completion of the
Transactions, will be promptly destroyed by the Receiving Party or returned to the Disclosing Party, upon the Disclosing Party's written request. It is agreed that Confidential Information will not
include information that: (i) was rightfully known to such Receiving Party before receipt of such information from the Disclosing Party; (ii) is or becomes generally known to the public
through no breach of this Section or any act or omission on the part of the Receiving Party; (iii) was or is disclosed by a third party having the legal right to disclose such information with
no obligation of confidence to the Disclosing Party, or is required to be disclosed as a result of court order or similar process; or (iv) is independently developed by the Receiving Party
without use of any of the Disclosing Party's Confidential Information (as evidenced by a contemporaneous writing). 

        6.2    Additional Documents and Further Assurances.    Each Party hereto, at the reasonable request of another Party
hereto, shall execute and deliver such other instruments and do and perform such other acts and things as may be reasonably necessary or desirable for effecting completely the consummation of the
Transactions (provided that the foregoing will not require any Party to make any payment of consideration to any other Person). 

        6.3    Covenant Not to Compete.    

        (a)    Covenant.    Subject to the provisions of Section 6.3(f) below, in partial consideration of the payment
of the Purchase Price, Seller covenants and agrees that, if the sale and purchase of the Purchased Assets hereunder is consummated and closed, then during the Restricted Period (as defined below),
Seller and its Subsidiaries shall not, directly or indirectly, (i) engage in, carry on, manage, operate, perform or control the management or operation of any Restricted Business (as defined
below) in any portion of the territory (the "Restricted Territory") consisting of the world, or (ii) own any equity interest in any Person that,
as a principal part of its business, is engaged in, carries on, manages, operates, performs or controls the management or operations of any Restricted Business in the Restricted Territory, provided
however, that the covenant set forth in clause (a)(ii) above will not prohibit Seller from (i) owning up to 10% of the outstanding voting securities of a publicly-held
or privately-held company as long as no employee or other representative of Seller serves in a managerial or advisory capacity with respect to such company or (ii) investing in
venture capital or other investment funds having investments in companies engaged in the Restricted Business as long as Seller does not exercise any managerial or operational control over or provide
services to any such portfolio company engaged in the Restricted Business. 

        (b)    Restricted Period.    Subject to the provisions of Section 6.3(f) below, as used herein, the term
"Restricted Period" means that period of time beginning immediately after the completion of the Closing on the Closing Date and ending on that date
which is the earliest to occur of: (i) four (4) years after the Closing Date; or (ii) the failure by Buyer to pay Seller in full any Earn-Out Consideration (including
but not limited to the Period 1 Shortfall or the Period 2 Shortfall) when 

36

 

such
payment is due to Seller hereunder, which failure remains uncured within ten (10) business days after notice after notice of default on such payment is received by Parent or Buyer. 

        (c)    Restricted Business; OEM Customer.    For purposes of this Section 6.3, the term
"Restricted Business" means each of the following: (i) the design, manufacture, distribution or sale of Business Products or products
substantially similar to Business Products to Qualified Business Customers or OEM Customers (as defined below), and (ii) the design, manufacture, distribution or sale of Business Products or
external storage system products to Qualified Business Customers or OEM Customers. For purposes of this Section 6.3, the term "OEM Customers"
means companies (i) that are engaged in the design, development, manufacture and sale or distribution of electronics systems and products under such companies' brand names and (ii) that
purchase Business Products or external storage system products directly from Parent or its Affiliates. Notwithstanding the foregoing, none of the following activities (whether considered separately or
collectively) shall constitute a Restricted Business for purposes hereof and accordingly Seller and its Affiliates, successors and assigns shall be entitled to engage in each of the following
activities at any time without any breach or violation of Section 6.3 of this Agreement: (i) the development, marketing, sale and distribution of products substantially similar to or
having the same or substantially similar functionality as Business Products by Seller or its Affiliates to customers under any Seller-owned brand; (ii) the development, marketing, sale and
distribution of Seller's Jupiter family of products as set forth on Schedule 6.3(c) (the "Jupiter
Products") to International Business Machines Corporation and its Affiliates; (iii) the performance of the FS Agreement as contemplated by Section 2.8(b) of this
Agreement until such time as the FS Agreement is duly and validly assigned to Parent or its Affiliates; and (iv) the development, marketing, sale and distribution of storage software or
software for RAID controllers or other similar products not
involving (x) the development of external system storage hardware products or (y) the development, marketing, sale or distribution of JBODs or RBODs. 

        (d)    Other.    Parent and Seller acknowledge and agree that compliance with the covenants contained in this
Section 6.3 is necessary to protect Parent and Buyer and that a breach of any such covenant would result in irreparable and continuing damage for which there would be no adequate remedy at Law.
Seller agrees that in the event of any breach of such covenant, Parent or Buyer shall be entitled to seek a preliminary and permanent injunctive relief and to such other and further relief as is
proper under the circumstances without the posting of any bond by Parent or Buyer. Seller agrees that these covenants shall be deemed to be a series of separate covenants not to compete for each year
within the applicable periods of non-competition and separate covenants not to compete for each state within the United States and each country in the world. If any court of competent
jurisdiction determines any of the foregoing covenants to be unenforceable with respect to the term thereof or the scope of the subject matter or geography covered thereby, then such covenant shall
nonetheless be enforceable by such court against Seller or other relevant Person upon such shorter term or within such lesser scope as may be determined by the court to be reasonable and enforceable.
In the event Seller or any of its Subsidiaries is in violation of the aforementioned restrictive covenants, then the time limitation thereof shall be extended for a period of time during which such
breach or breaches shall occur, unless a court of competent jurisdiction renders a final non-appealable judgment to the effect that such extension is illegal or unenforceable. 

        (e)    Non-Solicitation.    Subject to the provisions of Section 6.3(g) below, Seller further
covenants and agrees that, without the prior written consent of the Parent, Seller and its Subsidiaries will not, (i) for a period of one (1) year following the Closing Date hire as an
employee officer, agent, consultant or advisor of Seller, or in any other capacity whatsoever, any Transferred Employee engaged in the operation of the Business whose employment has not been
terminated by Parent, Buyer or an Affiliate of Parent and (ii) for a period of two (2) years 

37

 

following
the Closing Date, solicit for employment as an employee, officer, agent, consultant or advisor of Seller, or in any other capacity whatsoever, any Transferred Employee engaged in the
operation of the Business whose employment has not been terminated by Parent, Buyer or an Affiliate of Parent. As used herein, "solicit" means to
affirmatively contact or communicate in any manner whatsoever, including, but not limited to, contacts or communications by or through intermediaries, agents, contractors, representatives, or other
parties, provided that nothing herein shall be construed to prohibit Seller or any of its Subsidiaries from (i) placing advertisements for employment, requests for inquiry about employment or
the availability of employment that are generally available or accessible by significant segments of the public, such as, without limitation, in any newspaper, trade magazine, other periodical,
website or publication, or (ii) responding to any unsolicited inquiry by any Transferred Employee concerning employment. 

        (f)    Effect of Change of Control.    Except as provided below in this Section 6.3(f), this Section 6.3
shall be binding upon any successor to or assignee of all or substantially all the assets of business of Seller, and Seller will cause any such successor or assignee to acknowledge and agree to be
bound by this Section 6.3 for the benefit of Parent and Buyer as a condition precedent to making such entity its
successor or assignee to all or substantially all of Seller's assets or business; provided, however that: (i) if Seller consummates a Seller Change of Control (as defined below) in which the
acquiring entity, or any of its Affiliates, is, immediately prior to such Seller Change of Control transaction, engaged in the Restricted Business then this Section 6.3 shall not thereafter be
binding on such acquiring entity or its Affiliates (with respect to their Restricted Business activities); (ii) if Seller consummates a Seller Change of Control in which the acquiring entity
is, immediately prior to such Seller Change of Control transaction, not engaged in any aspect of the Restricted Business, then this Section 6.3 shall not prevent, prohibit or restrict such
acquiring entity or its Affiliates from engaging in any aspect of the Restricted Business except that the acquiring entity and its Affiliates may not make any use of Business Intellectual Property in
connection with their conduct of any Restricted Business activities for so long as the covenant set forth in this Section 6.3 remains in effect on Seller; and (iv) if the Restricted
Period has not previously terminated in accordance with the provisions of this Section 6.3(b), the Restricted Period and this Section 6.3 shall each terminate in its entirety upon the
consummation of any Seller Change of Control following the third (3rd) anniversary of the Closing Date or upon such third (3rd) anniversary of the Closing Date, in the
event a Seller Change of Control is consummated on or prior thereto. As used herein, the term "Seller Change of Control" of Seller shall mean:
(i) the sale or other disposition of all or substantially all of Seller's assets; (ii) the issuance of voting securities of Seller to a single acquiror or a group of affiliated acquirors
in a single transaction or series of related transactions, if the voting securities so issued represent fifty percent (50%) or more of the voting power of all Seller's then outstanding securities as
of immediately after their issuance; or (iii) the consummation of any consolidation, merger, tender offer or similar transaction involving Seller or a subsidiary of Seller (each such
transaction, a "reorganization") which results in the stockholders of Seller immediately prior to such reorganization owning, immediately after
consummation of such reorganization, either (A) voting securities of Seller or the surviving entity of such reorganization or such surviving entity's parent entity which represent fifty percent
(50%)) or less of the voting securities of Seller, or such surviving entity or such surviving entity's parent entity that are outstanding immediately after consummation of such reorganization or
(B) fifty percent (50%) or less of the voting power of all voting securities of Seller or such surviving entity or such surviving entity's parent entity that are outstanding immediately after
consummation of such reorganization. 

        6.4    Covenants Regarding Books and Records and Retained Materials.    

        (a)   In
order to facilitate the resolution of any claims made by or against or incurred by a Party after the Closing or for any other reasonable purpose, for a period of
three (3) years 

38

 

following
the Closing Date, each Party shall (i) retain all books and records relevant to the Transactions, that are in such party's possession immediately prior to the Closing (except that
Seller need not retain any records that are transferred to Buyer or Parent pursuant to this Agreement) and which relate to the Business for periods prior to the Closing and (in the case of Seller)
which shall not otherwise have been delivered to Parent or Buyer and (ii) upon reasonable notice, afford the officers, employees and authorized agents and representatives of the other Party,
reasonable access (including the right to make photocopies at such other Party's expense), during normal business hours, to such books and records. Parent and Buyer also agree with Seller that Seller
shall be entitled to possess and retain copies of all Business Records for Seller's internal use (including preparation of financial statements and tax returns), provided that no use of such records
that would violate this Agreement or any Ancillary Agreement may be made. 

        (b)   Seller
shall retain the Retained Manufacturing Materials and Retained Software as contemplated by, and for use pursuant to, Section 3.3 of the Buyer Supply
Agreement. 

        6.5    Amendment to Singapore Transaction Inventory Put.    The inventory put provisions of Section 6.2 of the
Singapore APA are hereby modified to with respect to the inventories purchased by Sanmina-Singapore pursuant to the Singapore APA that are used in manufacturing Business Products (the
"Singapore Business Products Inventories") (which Singapore Business Product Inventories shall be identified on a  Schedule 6.5 to be prepared
by the Parties in connection with the post-closing purchase price adjustment process provided for in the
Singapore APA) as follows: 

        (a)   The
First Exercise Period and Put Right associated therewith shall not be applicable to the Singapore Business Products Inventories. 

        (b)   The
Second Exercise Period with respect to the Singapore Business Products Inventories shall commence on the twelve (12) month anniversary of the closing date
under the Singapore APA and continue for a period of thirty (30) days thereafter. 

        (c)   Prior
to exercising a Put Right during the Second Exercise Period with respect to any of the Singapore Business Products Inventories, Sanmina-Singapore shall have, with
respect to the Singapore Business Products Inventories proposed to be included in such exercise of a Put Right, used commercially reasonable efforts to reduce its exposure with respect to such
Singapore Business Products Inventories including attempting to use such material elsewhere within its or Parent's operations and taking such other actions as Parent and Buyer would customarily take
in the ordinary course of business to reduce exposure related to excess and obsolete material. 

All
other provisions of Section 6.2 of the Singapore APA shall remain in full force and effect, and the exercise of a Put Right by Sanmina-Singapore with respect to the Singapore Business
Products Inventories shall be governed by Section 6.2 of the Singapore APA as amended hereby. All parties hereto that are parties to the Singapore APA are agreeing to the provisions of this
Section 6.5 with the intent that this Section 6.5 serve as an amendment to the Singapore APA on the terms set forth above. 

 
 

ARTICLE VII    
    
    CONDITIONS TO THE CLOSING    
    

        7.1    Conditions to Parent's and Buyer's Obligation to Close.    The obligations of Parent and Buyer hereunder are
subject to the fulfillment or satisfaction on, and as of the Closing, of each of the following conditions (any one or more of which may be waived by Parent, but only in a writing signed by Parent): 

        (a)    Representations and Warranties.    The representations and warranties of Seller set forth in Article III
that are qualified as to materiality or Material Adverse Effect, or in Sections 3.1, 3.2 or 3.3 shall be true and correct, and those that are not so qualified shall be true and correct in all 

39

 

material
respects, in each case as of the date of this Agreement, and as of the Closing with the same force and effect as if made on and as of the Closing (except to the extent expressly made as of a
particular date, in which case as of such date). 

        (b)    Covenants.    Seller shall have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by Seller on or prior to the Closing. 

        (c)    No Actions.    No action, suit, or proceeding shall be threatened or pending before any court or quasi-
judicial or administrative agency of any non-U.S. or any U.S. federal, state or local jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would, if successful, (A) prevent consummation of any of the transactions contemplated by this Agreement, or (B) result in a Material Adverse Effect on the Business or
the Purchased Assets. 

        (d)    Closing Certificate.    Seller shall have delivered to Parent an officer's certificate to the effect that each
of the conditions specified above in Section 7.1(a) through 7.1(c) (inclusive) is satisfied in all respects. 

        (e)    Third Party Consents.    All consents (or waivers in lieu thereof) to the performance by Parent, Buyer and
Seller of their respective obligations under this Agreement and the Ancillary Agreements or to the
consummation of the Transactions listed in Schedule 7.1(e) to the Seller Disclosure Letter (i) shall have been obtained, (ii) shall
be in form and substance reasonably satisfactory to Parent, and (iii) shall be in full force and effect. 

        (f)    Delivery of Documents.    Seller will have executed and delivered to Buyer and Sanmina-Singapore the following
documents: 

        (i)    each
of the Ancillary Agreements to which Seller is a party, executed by Seller; 

        (ii)   all
documents listed on Schedule 7.1(f)(ii) that are reasonably necessary to effect the transfer of the Purchased
Assets and the Assumed Liabilities; 

        (iii)  the
Business Records of Seller; 

        (iv)  assignment
instruments with regard to the Assigned Contracts and the Assigned Permits, to the extent required and not included among the Ancillary Agreements; and 

        (v)   consents
from all Persons to discharge any Lien (other than Permitted Liens) existing as of the Closing on the Purchased Assets, the Business or the Facility and set
forth in Schedule 7.1(f)(v) to the Seller Disclosure Letter. 

        (g)    Board of Directors.    Buyer shall have received a certified copy of the resolutions of the board of directors
of Seller (executed by an officer of Seller) approving this Agreement, the sale and transfer of the Purchased Assets to Buyer pursuant to this Agreement and the Ancillary Agreements. 

        (h)    Preliminary Net Asset Value Statement.    Seller shall have executed and delivered to Buyer the Preliminary Net
Asset Value Statement. 

        (i)    Governmental Authorizations.    The Parties shall have received all necessary material authorizations, consents
and approvals of Governmental Bodies. 

        (j)    Employees.    Parent shall have received an executed offer letter (including Parent or Buyer's standard form of
employee proprietary information and inventions agreement), effective as of the Closing Date, from the Requisite Transferred Employee base (as defined below) and none of such Employees shall have
notified the Parent, Buyer or Seller of such Employee's intention not to continue his or her employment with the Parent or Buyer after the Closing or questioned the 

40

 

validity
of any of such letters or agreement. The "Requisite Transferred Employee Base shall mean (i) all Tier 1 Transferred Employees, (ii) at least 5 of 6 Tier II Transferred Employees
and (iii) at least 14 of 18 Tier III Transferred Employees. The classification of the Transferred Employees into tiers I, II and III is as set forth on  Schedule 7.1(j). 

        7.2    Conditions to Seller's Obligations to Close.    The obligations of Seller hereunder are subject to the
fulfillment or satisfaction on, and as of the Closing, of each of the following conditions (any one or more of which may be waived by Seller, but only in a writing signed by Seller): 

        (a)    Representations and Warranties.    The representations and warranties of Parent and Buyer set forth in
Article IV that are qualified as to materiality or Material Adverse Effect, or in Sections 4.1, 4.2 or 4.3 shall be true and correct, and those that are not so qualified shall be true
and correct in all material respects, in each case as of the date of this Agreement, and as of the Closing with the same force and effect as if made on and as of the Closing (except to the extent
expressly made as of a particular date, in which case as of such date). 

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

        (c)    No Actions.    No action, suit, or proceeding shall be threatened or pending before any court or
quasi-judicial or administrative agency of any non-U.S. or any U.S. federal, state or local jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would, if successful, (A) prevent consummation of any of the Transactions, or (B) result in a Material Adverse Effect on the Business or the Purchased
Assets. 

        (d)    Closing Certificate.    Parent shall have delivered to Seller an officer's certificate to the effect that each
of the conditions specified above in Section 7.2(a) through 7.2(c) (inclusive) is satisfied in all respects. 

        (e)    Third Party Consents.    All consents (or waivers in lieu thereof) to the performance by Parent, Buyer and
Seller of their respective obligations under this Agreement and the Ancillary Agreements or to the consummation of the Transactions listed in  Schedule 7.1(e) to the Seller Disclosure Letter
(i) shall have
been obtained, (ii) shall be in form and substance reasonably satisfactory to Seller, and (iii) shall be in full force and effect. 

        (f)    Delivery of Documents.    Parent and Buyer will have executed and delivered to Seller the following documents: 

        (i)    each
of the Ancillary Agreements to which Buyer or Parent is a party, as applicable; and 

        (ii)   assumption
instruments with regard to the Assigned Contracts and the Assumed Permits to the extent not included in the Ancillary Agreements. 

        (g)    Board of Directors.    Seller shall have received a certified copy of the resolutions of each of the board of
directors of Buyer and Parent executed by an officer of Buyer or Parent, as applicable, approving this Agreement, the purchase of the Purchased Assets by Buyer, and the Ancillary Agreements. 

        (h)    Governmental Authorizations.    The Parties shall have received all necessary material authorizations, consents
and approvals of Governmental Bodies. 

41

 

 
 

ARTICLE VIII    
    
    SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS    
    

        8.1    Representations, Warranties and Covenants.    The covenants contained in this Agreement shall survive the
Closing Date in accordance with their terms. The representations and warranties contained in this Agreement and the Ancillary Agreements shall survive the Closing Date for a period of twelve
(12) months after the Closing Date (such date upon which they expire being referred to herein as the "Survival Date") and shall thereafter
expire; provided, however, that notwithstanding the foregoing the representations and warranties of Seller contained in Section 3.7 (Tax Matters)
and Section 3.17 (Environment, Health and Safety) shall survive the Closing Date for a period of
twenty-four (24) months after the Closing Date. Buyer's or Parent's (or any Buyer Indemnitee's) right to make a claim for indemnification under Section 9.1, and Seller's (or
any Seller Indemnitee's) right to make a claim for indemnification under Section 9.2, shall expire with respect to any such claims which are not made on or prior to the date, if any, on which
the survival period for such representation or warranty expires. In addition to the foregoing provisions, any claims under Article IX must be asserted in writing with reasonable particularity
by the party making such claim, including identifying the basis and material factual circumstances of the claim and estimate of the potential Damages sought to be recovered thereby. 

 
 

ARTICLE IX    
    
    INDEMNIFICATION    
    

        9.1    Indemnification by Seller.    Subject to this Article IX, Seller agrees to defend, indemnify and hold
harmless Parent and Buyer and their respective successors, assigns and Affiliates (individually, a "Buyer Indemnitee", and collectively, the
"Buyer Indemnitees") from and against and in respect of any and all losses, damages, deficiencies, liabilities, assessments, judgments, costs and
expenses, including attorneys' fees (both those incurred in connection with the defense or prosecution of the indemnifiable claim and those incurred in connection with the enforcement of this
provision) net of insurance proceeds received by the Buyer Indemnitee with respect thereto (collectively, "Damages") suffered or incurred by any Buyer
Indemnitee which is caused by, resulting from or arising out of: 

        (a)   any
breach of any representation, warranty or covenant of Seller contained in this Agreement or in any Ancillary Agreement, or other agreement, certificate, instrument
or other document entered into or delivered by Seller at the Closing in connection herewith (it being understood and agreed that solely for purposes of determining the amount of Damages for purposes
of the indemnification obligations set forth in this Article IX, all qualifications as to "materiality," and all "Material Adverse Effect" and "knowledge" qualifications, contained in such
representations and warranties shall be disregarded and have no force or effect); 

        (b)   Claims
that the manufacturing, marketing, distribution, sale or use of any of the Business Products by Buyer or its Affiliates from and after the Closing Date infringe
any Intellectual Property Rights of third parties to the extent such alleged infringement is caused by a design or product configuration that existed as of the Closing Date, including, without
limitation, liability for trebled, consequential and punitive damages in connection with the foregoing; 

        (c)   any
Excluded Liabilities; 

        (d)   Taxes
of Seller, other than Taxes related to the transactions contemplated hereby which Buyer has agreed to pay pursuant to Section 2.6; 

42

 

        (e)   Liabilities
of Seller, whether arising before or after the Closing, arising from or relating to the ownership of the Purchased Assets or the conduct of the Business
prior to the Closing Date (other than the Assumed Liabilities); 

        (f)    any
and all Damages suffered or incurred by Buyer Indemnitee by reason of or in connection with any claim or cause of action of any third party to the extent arising out
the operation of the Business prior to the Closing (other than any of the Assumed Liabilities); 

        Subject
to the limitations set forth in Section 9.5 and elsewhere in this Article IX, to the extent that Seller's undertakings set forth in this Section 9.1 may be
unenforceable, Seller shall contribute the maximum amount that it is permitted to contribute under applicable Law to the payment and satisfaction of all Damages incurred by Buyer Indemnitee. 

        9.2    Indemnification by Buyer and Parent.    Subject to this Article IX, the Buyer and Parent each joint and
severally agrees to defend, indemnify and hold harmless the Seller and its respective successors, assigns and Affiliates (individually, a "Seller
Indemnitee", and collectively, the "Seller Indemnitees") from and against and in respect of any and all Damages suffered or
incurred by any Seller Indemnitee which is caused by, resulting from or arising out of: 

        (a)   any
breach of any representation, warranty or covenant of Buyer or Parent contained in this Agreement, or in any Ancillary Agreement, or other agreement, certificate,
instrument or other document entered into or delivered by any Buyer at the Closing in connection herewith (it being understood and agreed that solely for purposes of determining the amount of Damages
for purposes of the indemnification obligations set forth in this Article IX, all qualifications as to "materiality," and all "Material Adverse Effect" and "knowledge" qualifications, contained
in such representations and warranties shall be disregarded and have no force or effect); and 

        (b)   any
Assumed Liabilities; 

        (c)   any
of the Assigned Contracts with respect to any facts or circumstances arising or occurring after the Closing; 

        (d)   Taxes
of Buyer and of Seller and Adaptec-Singapore to the extent provided in Section 2.6; 

        (e)   Liabilities
(other than Excluded Liabilities) of Buyer or Parent arising from or relating to the ownership of the Purchased Assets, actions or inactions of Buyer or
Parent or the conduct of the Business on or after the Closing; and 

        (f)    any
and all Damages suffered or incurred by a Seller Indemnitee by reason of or in connection with any claim or cause of action of any third party to the extent arising
out of the operation of the Business on or after the Closing (except any of the foregoing that constitute or relate to Excluded Liabilities). 

        Subject
to the limitations set forth in Section 9.5 and elsewhere in this Article IX, to the extent that Buyer's or Parent's undertakings set forth in this
Section 9.2 may be unenforceable, Buyer and/or Parent shall contribute the maximum amount that it is permitted to contribute under applicable Law to the payment and satisfaction of all Damages
incurred by Seller Indemnitees. 

        9.3    Notice and Opportunity to Defend.    If any action, proceeding, claim, liability, demand or assessment shall be
asserted against any Buyer Indemnitee or any Seller Indemnitee (the "Indemnitee") in respect of which such Indemnitee proposes to demand
indemnification, such Indemnitee shall notify the party obligated to provide indemnification pursuant to Section 9.1 or Section 9.2 (the "Indemnifying
Party") thereof within a reasonably prompt period of time after assertion thereof; provided, however, that the failure to so
notify the Indemnifying Party shall only affect the Indemnitee's right to indemnification hereunder to the extent that the Indemnifying Party's interests are actually and materially prejudiced
thereby. Subject to rights of or duties to any insurer or other third Person having 

43

 

liability
therefor, the Indemnifying Party shall have the right, within ten (10) days after receipt of such notice, to assume the control of the defense, compromise or settlement of any such
action, suit, proceeding, claim, liability, demand or assessment, and to retain counsel in connection therewith; provided, however, that if the
Indemnifying Party shall exercise its right to assume such control: 

        (a)   the
Indemnitee may, in its sole discretion and at its own expense, employ separate counsel to represent it in any such matter, and in such event counsel selected by the
Indemnifying Party shall be required to cooperate with such counsel of the Indemnitee in such defense, compromise or settlement for the purpose of informing and sharing information with such
Indemnitee; 

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

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

        (d)   in
the event that any action, suit, proceeding, claim, liability or assessment (or the compromise or settlement thereof) involves a claim by a Buyer Indemnitee for
(i) injunctive relief that affects or would reasonably be expected to affect the Business in any material respect, or (ii) a claim for damages (or a claim that results, or would
reasonably be expected to result in damages) in excess of limitations set forth in Section 9.5(c), Parent shall have the right to control the defense and settlement thereof, at its sole cost
and expense (subject to the limitations set forth in Article IX; provided, however, that Parent shall not compromise or settle any such action,
suit, proceeding, claim, liability or assessment without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed. 

        9.4    Remedies.    Except for the right to seek to specifically enforce the covenants hereunder, and except as
specifically provided in this Agreement (including, without limitation, the immediately succeeding sentence), following the Closing Date, in the absence of fraud or intentional misrepresentation (a
"Fraud Claim"), the sole and exclusive remedy of both Buyer and Seller with respect to any breach of any representation or warranty contained in this
Agreement, in any Ancillary Agreement or in any agreement, certificate, instrument or other document entered into in connection herewith at the Closing or any covenant or agreement in this Agreement,
shall be restricted to the indemnification rights set forth in this Article IX. Nothing contained in this Article IX or elsewhere in this Agreement shall limit the liability of a Party
under this Agreement if this Agreement is terminated in accordance with Article X hereof due to a material breach of this Agreement by such Party. 

        9.5    Certain Limitations.    The liability of the Seller, Parent or the Buyer, as applicable, for claims under this
Agreement shall be limited by the following: 

        (a)    No Claims for Breaches of Representations and Warranties After Survival Date.    At any time after the
applicable Survival Date for a representation and warranty, (i) the Seller shall have no further obligations under this Article IX for breaches of such representations and warranties of
the Seller, except for Damages with respect to which the Buyer Indemnitee has timely given the Seller written notice prior to such Survival Date in accordance with Sections 8.1 and 9.3 and
(ii) the Buyer and Parent shall have no further obligations under this Article IX for breaches of such representations and warranties of the Buyer or Parent, except for Damages with
respect to 

44

 

which
the Seller Indemnitee has given the Buyer or Parent written notice prior to such Survival Date in accordance with Sections 8.1 and 9.3. 

        (b)    Seller Indemnification Threshold.    Notwithstanding anything to the contrary herein, except with respect to
Fraud Claims, any claim by a Buyer Indemnitee against Seller pursuant to Section 9.1(a) shall be payable by Seller only in the event that the accumulated amount of Damages in respect of
Seller's obligations to indemnify the Buyer Indemnitees under this Agreement shall exceed $100,000 in the aggregate (the "Seller Indemnification
Threshold"); provided, however, that at such time as the aggregate amount of Damages in respect of the indemnity obligations of
Seller shall exceed the Seller Indemnification Threshold, Seller shall thereafter be liable for all Damages suffered or incurred by the Buyer Indemnitees in excess of such initial $100,000 of Damages. 

        (c)    Limitation on Seller Indemnification Liability.    Notwithstanding anything to the contrary herein, in the
absence of fraud or willful breach of this Agreement except with respect to Fraud Claims (for which there shall be no limitation), (i) in no event shall the maximum aggregate liability of
Seller in respect of any claims by the Buyer Indemnitees against Seller pursuant to Section 9.1(a) for Damages suffered or incurred by any Buyer Indemnitees exceed $1,800,000 and (ii) in
no event shall the maximum aggregate liability of Seller in respect of any claims by the Buyer Indemnitees against Seller pursuant to Section 9.1(b) for Damages suffered or incurred by any
Buyer Indemnitees exceed $1,800,000. The foregoing liability maximums shall represent separate liability limitations. 

        (d)    Mitigation of Damages.    Parent and Buyer covenant that they will use commercially reasonable efforts to
mitigate potential liability for intellectual property infringement claims indemnifiable pursuant to Section 9.1(b). Seller shall not be liable to indemnify Buyer Indemnitees for Damages
pursuant to Section 9.1(b) to the extent that such Damages are caused by the failure of Parent or Buyer to comply with this Section 9.5(d). This Section shall not limit any obligation
arising under applicable law that any Parent Indemnitee or Buyer Indemnitee may otherwise have to mitigate Damages with respect to matters for which such Indemnitee is entitled to indemnification
hereunder. 

        (e)    Exceptions.    Notwithstanding anything to the contrary herein, the limitations contained in this
Section 9.5 shall not apply to claims for indemnification by Buyer Indemnitees against Seller pursuant to Sections 9.1(c), 9.1(d), 9.1(e) and 9.1(f). Except for Fraud Claims, Buyer's or
Parent's (or any Buyer Indemnitee's) right to make a claim for indemnification under Sections 9.1(c), 9.1(d), 9.1(e), and 9.1(f) shall expire with respect to such claims which are not made on
or prior to the date five (5) years
following the Closing Date. Notwithstanding anything to the contrary herein, the limitations contained in this Section 9.5 shall not apply to claims for indemnification by Seller Indemnitees
against Parent or Buyer pursuant to Sections 9.2(b), 9.2(c), 9.1(d), 9.2(e) and 9.1(f). Except for Fraud Claims, Seller's (or any Seller Indemnitee's) right to make a claim for indemnification
under Sections 9.2(b), 9.2(c), 9.2(d), 9.2(e) and 9.2(f) shall expire with respect to such claims which are not made on or prior to the date five (5) years following the Closing Date. 

        (f)    No Double Recovery.    A party who is entitled to indemnification under this Article IX may make only a
single recovery for Damages suffered or incurred by such party for which such party is entitled to indemnification under this Article IX. 

45

  

 
 

ARTICLE X    
    
    TERMINATION    
    

        10.1    Termination of the Agreement.    The Parties may terminate this Agreement as provided below: 

        (a)   Parent
and Seller may terminate this Agreement as to all Parties by mutual written consent at any time prior to the Closing; 

        (b)   Parent
or Seller may terminate this Agreement by written notice if: (i) the Closing has not occurred by February 15, 2006;  provided, however, that the right to terminate this Agreement under this
Section 10.1(b) shall not be available to any Party whose action or
failure to act has been a principal cause of or resulted in the failure of the Closing to occur on or before such date and such action or failure to act constitutes a material breach of this
Agreement; 

        (c)   Parent
or Seller may terminate this Agreement by written notice to the other if: (i) there shall be a final nonappealable order of a court of competent
jurisdiction in effect preventing consummation of the transactions contemplated by this Agreement or (ii) there shall be any Law or Order enacted, promulgated or issued or deemed applicable to
the transactions contemplated by this Agreement by any Governmental Body that would make consummation of the transactions contemplated by this Agreement illegal; 

        (d)   Parent
or Seller may terminate this Agreement by written notice if there shall be any action taken, or any Law or Order enacted, promulgated or issued or deemed
applicable to the transactions contemplated by this Agreement by any Governmental Body, which would (i) prohibit Parent's or Buyer's ownership or operation of all or a material portion of the
Business or the Purchased Assets or (ii) compel Parent or Buyer to dispose of or hold separate all or a material portion of the business or assets of Parent or Seller as a result of the
transactions contemplated by this Agreement; 

        (e)   Parent
may terminate this Agreement by written notice if it is not in material breach of its obligations under this Agreement and there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on the part of Seller and such material breach has not been cured within thirty (30) calendar days after written
notice to Seller; provided, however, that, no cure period shall be required for a breach which by its nature cannot be cured; 

        (f)    Seller
may terminate this Agreement by written notice if it is not in material breach of its obligations under this Agreement and there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on the part of Parent or Buyer and such material breach has not been cured within thirty (30) calendar days after
written notice to Parent; provided, however, that no cure period shall be required for a breach which by its nature cannot be cured; and 

        (g)   Parent
may terminate this Agreement by written notice delivered to Seller if an event having a Material Adverse Effect on, or that would reasonably be expected to have a
Material Adverse Effect on, the Business or on the Purchased Assets shall have occurred after the date of this Agreement. 

        10.2    Effect of Termination.    If any Party terminates this Agreement in accordance with the provisions of
Section 10.1 above, then effective upon such termination all rights and obligations of the Parties hereunder shall terminate without any liability of any Party to any other Party; provided that
each Party shall remain liable for any material breaches of this Agreement by such Party that occurred 

46

 

prior
to the termination of this Agreement; and provided, further, that the provisions contained in Section 6.1 (confidentiality) and
Article XI (miscellaneous) shall survive termination. 

 
 

ARTICLE XI    
    
    MISCELLANEOUS    
    

        11.1    Press Releases and Public Announcements.    No Party shall issue any press release or make any public
announcement relating to the subject matter of this Agreement without the prior written approval of the other Party; provided, however, that
(a) either Seller or Parent may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly traded securities
(in which case Seller or Parent, as applicable, will use its reasonable efforts to
advise the other Parties prior to making the disclosure) and (b) Seller may correspond with third parties in writings in form and substance reasonably satisfactory to Parent with respect to
obtaining consents from such parties pursuant to Sections 5.6 or 7.1(f). 

        11.2    No Third Party Beneficiaries.    Except as provided in Article IX with respect to indemnification of
Seller Indemnitees and Buyer Indemnitees, this Agreement shall not confer any rights or remedies upon any Person other than the Parties, and their respective successors and permitted assigns, other
than as specifically set forth herein. 

        11.3    Entire Agreement and Modification.    This Agreement and the Ancillary Agreements (including the exhibits and
schedules hereto and thereto) constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede any prior understandings, agreements, warranties or
representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof. The express terms in this Agreement and the Ancillary Agreement control and
supersede any course of performance or usage of the trade inconsistent with any of the terms hereof and thereof. 

        11.4    Amendment.    This Agreement may be amended by the Parties hereto at any time by execution of an instrument in
writing signed by Parent and Seller. 

        11.5    Waivers.    The rights and remedies of the Parties to this Agreement are cumulative and not alternative.
Neither the failure nor any delay by any Party in exercising any right, power or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law, (i) no claim or right of a party hereto arising out of this Agreement, any Ancillary Agreement or the other
documents referred to in this Agreement can be waived or renounced except by a writing to that effect signed by such party; (ii) no waiver that may be given by a Party will be applicable except
in the specific instance for which it is given; and (iii) no notice to or demand on one Party will be deemed to be a waiver of any obligation of such Party or of the right of the Party giving
such notice or demand to take further action without notice or demand as provided in this Agreement. 

        11.6    Successors and Assigns.    This Agreement shall be binding upon and inure to the benefit of the Parties named
herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of
the other Parties; provided, however, that so long as Parent remains liable for all obligations of Parent, Buyer or any of their respective Affiliates
under this Agreement and each Ancillary Agreement, Parent may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates and (ii) designate one or more
of its Affiliates to perform its obligations hereunder. 

47

 

        11.7    Counterparts.    This Agreement may be executed in counterparts, each of which shall be deemed an original but
all of which together will constitute one and the same instrument. 

        11.8    Headings.    The section headings contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement. 

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

        If
to Parent, Buyer or Sanmina-Singapore: 

Sanmina-SCI
Corporation

2700 North First Street

San Jose, CA 95134

Attention: Robin Walker, Senior Vice President, Corporate Development

                  Steven Jackman, Vice President and Corporate Counsel

Telephone No.: (408) 964-3500

Facsimile No.: (408) 964-3636 

        With
copy to: 

Wilson
Sonsini Goodrich & Rosati, Professional Corporation

650 Page Mill Road

Palo Alto, California 94304

Attention: Christopher D. Mitchell, Esq.

Facsimile No: (650) 493-6811 

        If
to Seller or Adaptec-Singapore: 

Adaptec, Inc.

691 South Milpitas Boulevard

Milpitas, CA, 95035

Attention: Marshall Mohr, Chief Financial Officer

Facsimile No: (408) 957-1682 

        With
copy to: 

Fenwick &
West LLP

801 California Street

Mountain View, CA, 94041

Attention: Dennis DeBroeck, Esq.

Facsimile No.: (650) 938-5200 

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

        11.10    Governing Law.    This Agreement shall be governed in all respects solely by the substantive internal laws of
the State of California, without regard to conflicts of laws or the choice of law principles of any jurisdiction, including the State of California, and without the need of any Party to establish the
reasonableness of the relationship between the laws of the State of California and the 

48

 

subject
matter of this Agreement, and all questions concerning the validity and construction hereof shall be determined in accordance with the laws of the State of California. 

        11.11    Severability.    Any term or provision of this Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. 

        11.12    Expenses.    Subject to the provisions of this Agreement, each Party will bear its own costs and expenses
(including legal and accounting fees and expenses) incurred in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby. 

        11.13    Construction.    

        (a)   The
Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean including without limitation. 

        (b)   Unless
the context requires otherwise, all words used in this Agreement in the singular number shall extend to and include the plural, all words in the plural number
shall extend to and include the singular, and all words in any gender shall extend to and include all genders. 

        11.14    Seller Disclosure Letter.    

        (a)   The
disclosures in Seller Disclosure Letter, and those in any supplement thereto, must relate only to (i) the representations and warranties in the section of the
Agreement to which they expressly relate and (ii) any other representation or warranties in this Agreement to the extent it is reasonably apparent
from the text of any such disclosure that such disclosure relates to, modifies or qualifies such other representations and warranties. 

        (b)   Except
to the extent otherwise expressly provided in the text of the Seller Disclosure Letter, statements contained within the Seller Disclosure Letter shall be deemed
to be representations and warranties under this Agreement. 

        11.15    Attorneys' Fees.    If any legal proceeding or other action relating to this Agreement is brought or
otherwise initiated, the prevailing Party shall be entitled to recover reasonable attorneys' fees, costs and disbursements (in addition to any other relief to which the prevailing Party may be
entitled). 

        11.16    Further Assurances.    The Parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other Party may reasonably request for the purpose of
carrying out the intent of this Agreement and the documents referred to in this Agreement. 

        11.17    Time of Essence.    With regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence. 

        11.18    Consent to Jurisdiction.    Subject to Section 11.2 above, the competent court in Santa Clara County,
California (the "Competent Court") (and not any other court in any state or country) shall have exclusive jurisdiction in connection with this
Agreement. Subject to Section 11.2 above, each Party hereby irrevocably submits to the exclusive jurisdiction of the Competent Court in any action or proceeding arising out of or relating to
this Agreement and irrevocably waives any objection such 

49

 

person
may now or hereafter have as to the venue of any such suit, action or proceeding brought in the Competent Court or that the Competent Court is an inconvenient forum. 

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

        11.20    Guarantee by Parent.    As a material inducement and consideration for Seller to enter into this Agreement,
Parent hereby agrees to unconditionally and promptly guarantee, pay and perform all obligations and duties (including but not limited to financial and non-financial obligations and duties)
of Buyer under this Agreement to the extent the same are not paid or performed when required to be paid or performed under this Agreement. 

[Remainder of Page Intentionally Left Blank]

[Signature page follows]

50

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

	        Parent:	 	SANMINA-SCI CORPORATION
	

 	
 	

By:	

    

	 	 	Name:	    

	 	 	Title:	    

	

        Buyer:	
 	

SANMINA-SCI SYSTEMS SINGAPORE PTE. LTD.
	

 	
 	

By:	

    

	 	 	Name:	    

	 	 	Title:	    

	

        Sanmina-Singapore	
 	

SANMINA-SCI USA, INC.
	

 	
 	

By:	

    

	 	 	Name:	    

	 	 	Title:	    

	

        Seller:	
 	

ADAPTEC, INC.
	

 	
 	

By:	

    

	 	 	Name:	    

	 	 	Title:	    

	

        Adaptec-Singapore	
 	

ADAPTEC MANUFACTURING (S) PTE. LTD.
	

 	
 	

By:	

    

	 	 	Name:	    

	 	 	Title:	    

   

[Signature Page to Asset Purchase Agreement]

	[*]
	Confidential
Treatment Requested. Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk to denote where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission. 

QuickLinks

Exhibit 10.49

ASSET PURCHASE AND SALE AGREEMENT

TABLE OF CONTENTS

EXHIBITS

ASSET PURCHASE AND SALE AGREEMENT

RECITALS

ARTICLE I DEFINITIONS

ARTICLE II PURCHASE AND SALE OF ASSETS

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER

ARTICLE V PRE-CLOSING COVENANTS

ARTICLE VI OTHER AGREEMENTS AND COVENANTS

ARTICLE VII CONDITIONS TO THE CLOSING

ARTICLE VIII SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

ARTICLE IX INDEMNIFICATION

ARTICLE X TERMINATION

ARTICLE XI MISCELLANEOUS

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