Document:

Exhibit 10.67

 

ASSET PURCHASE AGREEMENT

 

dated as of April 25, 2008

 

Among

 

SANMINA-SCI USA, INC.,
SANMINA-SCI SYSTEMS SERVICES DE MEXICO S.A. DE C.V. and SANMINA-SCI SYSTEMS DE
MEXICO S.A. DE C.V. as Sellers

 

and

 

LENOVO
(SINGAPORE) PTE. LTD and LENOVO CENTRO TECNOLOGICO, SdeRL
DE CV, as Buyer

 

 

ASSET PURCHASE
AGREEMENT

 

This Asset Purchase Agreement is entered into
as of April 25, 2008 by and among SANMINA-SCI
USA, INC., SANMINA-SCI SYSTEMS SERVICES DE MEXICO S.A. DE C.V. and SANMINA-SCI
SYSTEMS DE MEXICO S.A. DE C.V. (collectively, the “Sellers”), LENOVO (SINGAPORE) PTE. LTD and LENOVO CENTRO TECNOLOGICO,
SdeRL DE CV., or
their assigns (collectively the “Buyer”).  Buyer and Sellers shall be referred to herein
individually as a “Party” and
collectively, as the “Parties”.

 

This Agreement contemplates a transaction in
which the Buyer will purchase (or lease with the option to purchase) the
Acquired Assets, without assuming any of the liabilities other than the Assumed
Liabilities.

 

Capitalized terms used in this Agreement and
not otherwise defined herein shall have the meanings ascribed to them in ARTICLE IX.

 

In consideration of the representations,
warranties and covenants herein contained, the Parties agree as follows.

 

ARTICLE I

 

THE ASSET
PURCHASE

 

1.1           Purchase and Sale of
Assets.

 

(a)           Upon and subject to the
terms and conditions of this Agreement for the consideration specified in this ARTICLE I, Buyer shall purchase from
Sellers (or lease from Sellers with the option to purchase), and Sellers shall
lease, transfer, convey, assign and deliver to the Buyer, as of the Closing,
all right, title and interest in, to and under the Acquired Assets.

 

(b)           Notwithstanding the
provisions of Section 1.1(a),
the Acquired Assets shall not include the Excluded Assets.

 

1.2           Assumption of Sellers’s Liabilities from
Buyer.

 

(a)           Upon and subject to the
terms and conditions of this Agreement, the only liability that Buyer shall
assume and become responsible for, from and after the Closing are the Assumed
Liabilities.

 

(b)           Buyer shall not assume
or become responsible for, and the Sellers shall remain liable for, all the
other liabilities that the Sellers or its affiliates have with respect to their
handling of the Acquired Business.

 

 

1.3           Purchase Price.

 

(a)           The Purchase Price to
be paid to the Sellers by the Buyer for the Acquired Assets shall be [*]
Dollars (US$[*]) (the “Base Purchase Price”)
plus the Inventory Value, subject to adjustment pursuant to Section 1.7 below.

 

(b)           On the Closing Date,
Buyer shall pay Seller the following (“Initial Purchase Price”):

 

(i)            the Base Purchase
Price; and

 

(ii)           the Estimated Inventory
Value.

 

1.4           The Closing.

 

(a)           The Closing shall take
place at Monterey, Mexico, commencing at 9:00 a.m. local time on the
Closing Date.  All transactions at the
Closing shall be deemed to take place simultaneously effective as of the
Effective Time), and no transaction shall be deemed to have been completed and
no documents or certificates shall be deemed to have been delivered until all
other transactions are completed and all other documents and certificates are
delivered.

 

(b)           At the Closing:

 

(i)            the Sellers shall
deliver to the Buyer the various certificates, instruments and documents
referred to in Section 5.2;

 

(ii)           the Buyer shall deliver
to the Sellers the various certificates, instruments and documents referred to
in Section 5.3;

 

(iii)          the Sellers shall
execute and deliver to the Buyer the corresponding invoices in substantially
the form attached hereto as Exhibits A-1 and A-2
and such other instruments of conveyance as the Buyer may reasonably request in
order to effect the sale, transfer, 
conveyance and assignment to the Buyer of valid ownership/lessorship of
the Acquired Assets;

 

(iv)          Buyer shall execute and
deliver to Sellers an instrument of assumption in substantially the form
attached hereto as Exhibit B,
and such other instruments as the Sellers may reasonably request in order to
effect the assumption by the Buyer of the Assumed Liabilities;

 

(v)           the Buyer shall pay, by
wire transfer or other delivery of immediately available funds to an account
designated by Sellers, the Initial Purchase Price as set forth in Section 1.3(b);

 

(vi)          Sellers shall deliver to
the Buyer, or otherwise put the Buyer in possession and control of, all of the
Acquired Assets of a tangible nature;

 

* Information omitted
pursuant to a request for confidential treatment and filed separately with the
Securities and Exchange Commission.

 

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(vii)         the Buyer and the Sellers
shall execute and deliver a modification to that certain contract by and
between the parties or their affiliates pursuant to which Sellers sells and
Buyer purchases certain products manufactured by Sellers (the “Manufacturing
Agreement”); and

 

(viii)        the Buyer and the Sellers shall execute and deliver cross-receipts
evidencing the transactions referred to above.

 

1.5           Allocation.  The Buyer and the Sellers agree to
allocate the Purchase Price (and all other capitalizable costs) among the
Acquired Assets for all purposes (including financial accounting and tax
purposes) in accordance with the allocation schedule attached hereto as Schedule 1.5

 

1.6           Further Assurances.  At any time and from time to time
after the Closing, at the request of the Buyer and without further
consideration, the Sellers shall execute and deliver such other instruments of
sale, transfer, conveyance and assignment and take such actions as the Buyer
may reasonably request to more effectively transfer, convey and assign to the Buyer,
and to confirm the Buyer’s rights to, title in and ownership of, the Acquired
Assets (other than to the Fixed Assets, which are leased) and to place the
Buyer in actual possession and operating control thereof and to ensure that the
Acquired Business continues to operate as a going concern and without
interruption.

 

1.7           Inventory
Valuation and Payment.

 

(a)           On or before April 30, 2008, Sellers shall prepare for Buyer its
standard package (the “Final Excess Package”) setting forth the Inventory on
hand as of March 31, 2008 which Sellers believes is excess and/or obsolete
and for which Sellers believes Buyer is liable in accordance with the
Manufacturing Services Agreement.  On or
before May 15, 2008, Buyer shall advise Sellers of any item in the Package
for which it disputes liability.  Any
item which has not been disputed by Buyer shall be conclusively presumed to
have been purchased in accordance with the Manufacturing Services Agreement,
and Buyer shall be required to pay for such items.  The Parties shall use their respective best
efforts to resolve any dispute on or before the Closing.  In the event either Party believes the
dispute to be material, it shall have the right to postpone Closing until the
dispute is resolved.

 

(b)           Commencing on April 5, 2008, Sellers shall provide Buyer with periodic
Inventory Listings, together with a good faith Estimated Inventory Value.  The purpose is so that Buyer can become
comfortable with Sellers’s format and contents of the Inventory Listing.  Buyer shall review the Inventory Listing, and
advise Sellers in the event it questions the calculations set forth
therein.  On or before May 15, 2008,
Buyer shall advise Sellers whether it has any material concerns as to any
Inventory Listing and/or Estimated Inventory Value.  The parties acknowledge that the contents of
these items will vary weekly as Inventory is procured and product is
shipped.  However, Buyer shall be
required to review these documents and advise Sellers of any material issues.

 

(c)           Not later than ten days prior to the Closing Date, the Sellers shall
prepare an Inventory Listing, together with a good faith Estimated Inventory
Value as of the date on 

 

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which it is
prepared, which shall provide sufficient detail as is reasonably necessary to
confirm the calculations therein (the “Preliminary Closing Inventory Listing”).  Among other things, the
Preliminary Closing Inventory Listing shall take into consideration any
comments or adjustments identified by Buyer to Sellers resulting from Buyer’s
due diligence review of the Inventory and Sellers’s inventory records as well
as Buyer’s review of the previous Inventory Listings. In order to prepare the
Inventory Listing Sellers shall have taken into consideration the fact that
Inventory means all the materials primarily used or held for use by Sellers’s
Monterrey business consistent with past practice, excepting those created by
Sellers’s failure to execute its responsibilities and including liabilities for
VMI, open purchase orders and other similar items, as needed to support the
adequate ongoing operations of the Acquired Business.

 

(d)           Immediately prior to the Closing, Buyer shall  complete a physical inventory review of the Inventory to its
reasonable satisfaction (the “Buyer’s
Physical Inventory Review”), and shall update the Preliminary
Closing Inventory Listing (the “Updated
Inventory Listing”) and prepare a calculation of the Inventory Value
to reflect the results of the Buyer’s Physical Inventory Review.  Buyer shall provide a copy of the Updated
Inventory Listing to Sellers.  Buyer
acknowledges that the quantities of Inventory set forth in the Preliminary
Closing Inventory List will differ from the quantities of Inventory counted
during Buyer’s Physical Inventory Review (e.g., because of receipts and
shipments).  Buyer shall have the
obligation to purchase all Inventory at the Facility other than (i) Inventory
which is damaged or otherwise not of saleable quality or (ii) Inventory
which was not procured in accordance with the Agreement; (iii) Inventory
which is not used on Buyer programs. 
Buyer shall not have the right to refuse to pay for any inventory
contained in the Final Excess Package unless Buyer disputed the procurement of
such Inventory under Section 1.7(a).

 

(e)           Upon completion of the Buyer’s Physical Inventory Review and receipt of
Buyer’s Updated Inventory Listing, the parties shall, to the extent possible,
agree on a revised Preliminary Estimated Inventory Value and, if the parties so
agree, the Preliminary Estimated Inventory Value shall be revised In the event
the Parties do not so agree, the Preliminary Estimated Inventory Value shall be
the total value of the Inventory on hand at the Facility as of May 31,
2008 as set forth in Seller’s database, and the parties shall resolve the
difference in accordance with Section 1.7(f).

 

(f)            In the event either
party believes that the Preliminary Estimated Inventory Value is different from
the Inventory for which Buyer is responsible under the Manufacturing Services
Agreement, such party shall advise the other party within 30 days after the
Closing Date.  The parties shall work
together in good faith to resolve the dispute within 30 days, failing which the
dispute shall be decided through arbitration in accordance with Section 7.3(b)(iv).  
In the event the parties are able to resolve the dispute themselves,
they shall jointly prepare an Inventory Listing as of the Closing Date (the “Closing
Inventory Listing”) which sets forth the agreed upon inventory value (the “Final
Closing Inventory Value”).  In the event
the parties fail to agree, the decision of the arbitrator shall become the
Closing Inventory Listing and Final Closing Inventory Value.

 

(g)           In the event that the Preliminary Estimated Inventory Value exceeds the
Final Closing Inventory Value, then, within 3 business days, Sellers shall pay
the difference to 

 

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Buyer by wire
transfer of immediately available funds to such account as Buyer may reasonably
direct by written notice delivered to Sellers.

 

(h)           In the event that the Final Closing Inventory Value exceeds the Preliminary
Estimated Inventory Value then, within 3 business days, Buyer shall pay the
difference to Sellers by wire transfer of immediately available funds to such
account as Sellers may reasonably direct by written notice delivered to Buyer.

 

1.8           Singapore Export.   For the avoidance of doubt, all Inventory and Parts need to be virtually exported
to Buyer on the Closing Date in accordance with all IMMEX and applicable
customs regulations.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

 

The Sellers hereby
represents and warrants to the Buyer that, except as set forth in the Disclosure Schedule, the statements
contained in this ARTICLE II are
true and correct as of the date of this Agreement and will be true and correct
as of the Closing Date as though made as of the Closing Date, except to the
extent such representations and warranties are specifically made as of a
particular date (in which case such representations and warranties will be true
and correct as of such date).  The Disclosure Schedule shall be arranged
in sections and subsections corresponding to the numbered and lettered sections
and subsections contained in this ARTICLE II.  The disclosures in any section or subsection
of the Disclosure Schedule
shall qualify other sections and subsections in this ARTICLE II only to the extent it is clear from a reading of
the disclosure that such disclosure is applicable to such other sections and
subsections.

 

2.1           Organization,
Qualification and Corporate Power.  Sanmina-SCI USA, Inc. is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware.  Sanmina-SCI Systems de Mexico,
S.A. de C.V. a corporation duly organized, validly existing and in good
standing under the laws of Mexico. 
Sanmina-SCI Systems Services de Mexico, S.A. de C.V. is a corporation
duly organized, validly existing and in good standing under the laws of
Mexico.  Each Seller is qualified to
conduct business and is in good standing under the laws of the foregoing
jurisdictions.  Each Seller has all
requisite corporate power and authority to carry on the businesses in which it
is engaged and to own and use the properties owned and used by it.  Each Seller has furnished, or prior to
the Closing will furnish, to the Buyer complete
and accurate copies of its Certificate of Incorporation and Bylaws.  Each Seller is not in default under or in
violation of any provision of its Certificate of Incorporation or Bylaws.

 

2.2           Authorization of Transaction.  Each Seller
has all requisite power and authority to execute and deliver this Agreement and
the Ancillary Agreements and to perform its obligations hereunder and
thereunder.  The execution and delivery by
each Seller of this Agreement and the performance by each Seller of this
Agreement and the Ancillary Agreements and the consummation by each Seller of
the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of such Seller.  This Agreement has been duly and validly
executed and delivered by each Seller and constitutes, and each of the
Ancillary Agreements, upon its execution and delivery by such Seller, will
constitute, 

 

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a valid and binding
obligation of such Seller, enforceable against the Seller in accordance with
its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and other laws of general
application affecting enforcement of creditors’ rights generally, or (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.

 

2.3           Noncontravention.  Except as set forth in Section 2.3 of the Disclosure Schedule,
neither the execution and delivery by the Sellers of this Agreement or the
Ancillary Agreements, nor the consummation by the Sellers of the transactions
contemplated hereby or thereby, will (a) conflict with or violate any
provision of the Certificate of Incorporation or Bylaws of the Sellers, (b) require
on the part of the Sellers any notice to or filing with, or any permit,
authorization, consent or approval of, any Governmental Entity, (c) conflict
with, result in a breach of, constitute (with or without due notice or lapse of
time or both) a default under, result in the acceleration of obligations under,
create in any party the right to terminate, modify or cancel, or require any
notice, consent or waiver under, any contract or instrument to which any Seller
is a party or by which any Seller is bound or to which any of its respective
assets is subject, (d) result in the imposition of any Security Interest
upon any assets of the Sellers or (e) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Sellers or any of
their respective properties or assets.

 

2.4           Ownership.  As of the Closing Date, other than Sellers
and their stockholders, solely through their interest in the Sellers, no entity
or person has any right, title or interest in the Fixed Assets and Inventory.

 

2.5           Financial Statements.  The Sellers
have provided to the Buyer the Financial Statements relating to the Acquired
Business.  The Financial Statements have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby, fairly present the consolidated financial
condition, results of operations and cash flows of the Sellers as of the
respective dates thereof and for the periods referred to therein and are
consistent with the books and records of the Sellers; provided, however, that the
Financial Statements are subject to normal recurring year-end adjustments
(which will not be material) and do not include footnotes.

 

2.6           Absence of Certain Changes.  Except as
set forth in Section 2.6 of the Disclosure Schedule, since the Most
Recent Balance Sheet Date, (a) there has occurred no event or development
that, individually or in the aggregate, has had, or could reasonably be
expected to have in the future, a Material Adverse Effect, and (b) the
Sellers have not taken any of the actions set forth in any of the subsections
of Section 4.4.  Since December 29, 2007, the Sellers
have not paid any obligation or liability relating, directly or indirectly, to
the Acquired Business other than in the Ordinary Course of Business.

 

2.7           Undisclosed Liabilities.  To Sellers’
knowledge, the Sellers have no liabilities (whether absolute or contingent,
whether liquidated or unliquidated and whether due or to become due) relating,
directly or indirectly, to the Acquired Business which liability would
materially affect the Financial Statements, except for (a) liabilities
shown on the Most Recent 

 

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Balance Sheet and (b) liabilities
which have arisen since the Most Recent Balance Sheet Date in the Ordinary
Course of Business.

 

2.8           Tax Matters.  Each Seller has filed on a timely
basis all Tax Returns relating to the Acquired Business that it was required to
file, and all such Tax Returns were complete and accurate in all material
respects.  Each Seller has paid on a
timely basis all Taxes that were due and payable relating to the Acquired
Business.  Other than Taxes not yet due
and owing, the Acquired Assets are not encumbered by any Liens arising out of
any unpaid Taxes.

 

2.9           Ownership
and Condition of Assets.

 

(a)           The Sellers are the true and lawful owner, and has
good title to, all of the Acquired Assets, free and clear of all Security Interests,
except as set forth in Section 2.9(a) of
the Disclosure Schedule.
Upon execution and delivery by the Sellers to the Buyer of the instruments of
conveyance referred to in Section 1.4(b)(iii),
the Buyer will become the true and lawful lessor of, the Fixed Assets, and, in
the event Buyer exercises the option set forth in Section 6.10, Buyer will
receive good title to, the Fixed Assets, free and clear of all Security
Interests other than those set forth in Section 2.9(a) of
the Disclosure Schedule.

 

(b)           Except as set forth in the Disclosure Schedule, the
Acquired Assets constitute all of the assets which are sufficient for the
conduct of the Acquired Business as presently conducted by Sellers.  Each tangible Acquired Asset is free from
material defects, has been maintained in accordance with normal industry
practice, is in good operating condition and repair (subject to normal wear and
tear) and is suitable for the purposes for which it presently is used.

 

(c)           Section 2.9(c) of the Disclosure
Schedule lists individually (i) all Fixed Assets),
indicating the cost, accumulated book depreciation (if any) and the net book
value of each such Fixed Asset as of the Most Recent Balance Sheet Date

 

(d)           Each item of equipment, motor vehicle and other asset
that is being leased to the Buyer as part of the Acquired Assets and that the
Sellers has possession of pursuant to a lease agreement or other contractual
arrangement is in such condition that, upon its return to its lessor or owner
under the applicable lease or contract, the obligations of the Sellers to such
lessor or owner will have been discharged in full.

 

2.10         Real Property.  The representations and warranties set forth in the Facility Lease
Agreement are hereby incorporated by reference.

 

7

 

2.11         Intellectual
Property.

 

(a)           Section 2.11 of the Disclosure
Schedule identifies each item Intellectual Property that is
owned by a party other than the Sellers which are necessary to run the Acquired
Business as currently being conducted (excluding off-the-shelf software
programs licensed by the Seller pursuant to “shrink wrap” licenses pursuant to “shrink
wrap” licenses).  Except as set forth in Section 2.11 of the Disclosure Schedule, to Sellers’s
knowledge, the Sellers owns or has the right to use all Intellectual Property
necessary or otherwise used to operate the Internal Systems as currently used
today.  Except as set forth in Section 2.11 of the Disclosure Schedule, upon execution and delivery by the
Sellers to the Buyer of this Agreement and all agreements and
instruments delivered pursuant hereto (including
the Transitional Services Agreement), each item of Intellectual Property used
by the Sellers in connection with the Acquired Business will be available for
use by the Buyer immediately following the Closing on substantially identical
terms and conditions as it was immediately prior to the Closing, either
directly or indirectly.

 

(b)           To Sellers’s knowledge, except as set forth in Section 2.11 of the Sellers Disclosure
Schedule, none of the Internal Systems, or the use thereof,
infringes or violates, or constitutes a misappropriation of, any Intellectual
Property rights of any person or entity. 
Section 2.11 of the Disclosure Schedule lists any
complaint, claim or notice, or written threat thereof, received by the Sellers
alleging any such infringement, violation or misappropriation.  conducted (excluding off-the-shelf software
programs licensed by the Sellers

 

2.12         Contracts.

 

(a)           Section 2.12 of the Disclosure
Schedule sets forth the following information:

 

(i)            All list of current component vendors and a list of
any negotiated agreements (excluding purchase order and other preprinted
agreements) with those vendors which relate to the Acquired Business;

 

(ii)           A list of any agreements with any local services provided to the Acquired
Business (e.g., transportation, temporary agencies, cafeteria, car and forklift
leases), other than any such agreements negotiated at Sellers’ “corporate level”;

 

(iii)          Any agreement concerning the establishment or operation of a partnership,
joint venture or limited liability company that to the best of Sellers’s
knowledge may affect or impair Buyer from continuing the Acquired Business as
an adequate going concern;

 

(iv)          Any agreement for the disposition of any significant portion of the
Acquired Business or any significant part thereto;

 

(v)           Any employment or consulting agreement related to the Acquired Business;

 

8

 

(vi)          Any nondisclosure or noncompete agreement with any vendor which relates to
the Acquired Business;

 

(vii)         A list of all open purchase orders relating to the Acquired Business

 

(b)           The Sellers have delivered to the Buyer a complete
and accurate copy of each agreement listed in Section 2.12
of the Disclosure Schedule (other than any agreement to which Buyer is
already a party).  Unless set
forth in Section 2.12(b) the Disclosure Schedule, with respect to the
Assumed Contracts: (i) to the best of Sellers’ knowledge, the agreement is
legal, valid, binding and enforceable and in full force and effect; (ii), the
agreement is assignable by the Sellers to the Buyer; and (iii) neither the
Sellers nor, to the best knowledge of the Sellers, any other party, is in
breach or violation of, or default under, any such agreement, and no event has
occurred, is pending or, to the knowledge of the Sellers, is threatened, which,
after the giving of notice, with lapse of time, or otherwise, would constitute
a breach or default by the Sellers or, to the knowledge of the Sellers, any
other party under such agreement.

 

2.13         Litigation.  Except as set forth in Section 2.13 of the Disclosure Schedule, there is no Legal
Proceeding which is pending or has been threatened in writing against the
Sellers that to the best of Sellers’ knowledge may affect or impair Buyer from
continuing the Acquired Business as an adequate going concern.  There are no judgments, orders or decrees
outstanding against the Sellers which relate to the Acquired Business.

 

2.14         Employees.

 

(a)           Section 2.14 of the Disclosure
Schedule contains a list of all employees of Sellers who are
employed, either full-time or part-time, in connection with the Acquired
Business as of the date on which this Agreement is executed (the “Business Employees”), along with such Employee’s
position, date of hire/seniority, and annual rate of compensation.  To the knowledge of the Sellers, no Business
Employee has any plans to terminate employment with the Sellers (other than for
the purpose of accepting employment with the Buyer following the Closing) or
not to accept employment with the Buyer.

 

(b)           Section 2.14 of the Disclosure
Schedule sets forth a complete and correct list of every collective bargaining
agreement covering the Business Employees, and all amendments thereto (individually
a “Union Contract” and, collectively, the “Union Contracts”).  Sellers have provided Buyer with true,
complete and correct copies of each Union Contract and all amendments and
modifications thereto.  There is no
strike, labor dispute, slowdown, stoppage or other material interference
with or impairment by labor of the Acquired Business pending or threatened
against Sellers.  Each Union Contract
shall be amended by Sellers at its own cost and responsibility, as of Closing,
enabling the Buyer to execute and register its own collective bargaining
agreement. The parties understand that it will be necessary to assign a new
interior space within the Facility as the address of Seller for the purposes of
the Union Contract, which will only represent its own employees and shall not
represent employees retained by Buyer. 
If it is not possible to assign an interior space within the Facility by
the Closing, Sellers will use a provisional address outside the Facility while
the interior space is approved by the local authorities as a new address.
Neither the Sellers nor, to the best knowledge of the Sellers, any other party,
is in breach or violation of, or default under, any such agreement, and no
event has 

 

9

 

occurred, is pending or, to the
knowledge of the Sellers, is threatened, which, after the giving of notice,
with lapse of time, or otherwise, would constitute a breach or default by the
Sellers or, to the knowledge of the Sellers, any other party under such Union
Contract.  Buyer shall be the only party
responsible before its obligations with the labor union or unions with which it
enters into agreements on the understanding that such union or unions will only
represent employees of Buyer and under no circumstances will they represent any
employee of Sellers.  Upon termination of
the Facilities Lease Agreement, Buyer shall terminate any agreements with
unions or amend them to exclude the Facilities and provide a 30 day advance
notice to Sellers prior to vacating the Premises.

 

(c)           Section 2.14 of the Disclosure
Schedule sets forth a complete and correct list of every agreement pursuant to
which Sellers obtains the services of contract labor for use in the Acquired
Business and all amendments thereto (individually a “Contract Labor Agreement”
and, collectively, the “Contract Labor Agreements”).  Sellers have provided Buyer with true,
complete and correct copies of each Contract Labor Agreement and all amendments
and modifications thereto.  Section 2.14 of the Disclosure
Schedule contains a list of all workers performing services in connection with
the Acquired Business pursuant to a Contract Labor Agreement (the “Contract
Workers”), along with such Contract Worker’s position and fees payable with
respect to his services.  Each Contract
Labor Agreement shall be amended with respect to the Facility by Sellers at its
own cost and responsibilities, effective as of Closing, enabling Buyer to
execute its own contract labor agreements with the agency Buyer elects. Neither
the Sellers nor, to the best knowledge of the Sellers, any other party, is in
breach or violation of, or default under, any such agreement, and no event has
occurred, is pending or, to the knowledge of the Sellers, is threatened, which,
after the giving of notice, with lapse of time, or otherwise, would constitute
a breach or default by the Sellers or, to the knowledge of the Sellers, any
other party under such Contract Labor Agreement.

 

2.15         Employee
Benefits.

 

(a)           Section 2.15(a) of the Disclosure
Schedule contains a complete and accurate list of all Seller
Plans.  Complete and accurate copies of (i) all
Seller Plans which have been reduced to writing, (ii) written summaries of
all unwritten Seller Plans, (iii) all related trust agreements, insurance
contracts and summary plan descriptions, and (iv) all reports filed
with applicable Governmental Entities, and (for
all funded plans) all plan financial statements for the last five plan years
for Each Seller Plan, have been delivered to the Buyer.

 

(b)           To Sellers’ knowledge, each Seller Plan has been
administered in all material respects in accordance with its terms and each of
the Sellers and its Affiliates has in
all material respects met its obligations with respect to Each Seller Plan and
has made all required contributions thereto. 
To Sellers’ knowledge, the Sellers and each Seller Plan are in
compliance in all material respects with the currently applicable provisions of
applicable law, rule or regulation.  To Sellers’ knowledge, all filings and
reports as to each Seller Plan required to have been submitted to any
Governmental Entity have been duly
submitted.  With the exception of any
stock options or Stock purchase plan, no Seller Plan has assets that include
securities issued by the Sellers.

 

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(c)           Section 2.15(c) of the Disclosure
Schedule sets forth the policy of the Sellers with respect to
accrued vacation, accrued sick time and earned time off and the amount of such
liabilities as of the Most Recent Balance Sheet Date.

 

2.16         Environmental Matters.

 

(a)           To Sellers’s knowledge, the Sellers have complied
with all applicable Environmental Laws relating to the Acquired Business.  To Sellers’s knowledge, there is no pending
or, to the knowledge of the Sellers, threatened civil or criminal litigation,
written notice of violation, formal administrative proceeding, or
investigation, inquiry or information request by any Governmental Entity,
relating to any Environmental Law involving the Sellers which relates to the
Acquired Business.

 

(b)           To Sellers’s knowledge, there is no material
environmental liability of any solid or hazardous waste transporter or
treatment, storage or disposal facility that has been used by the Sellers
relating to the Acquired Business.

 

2.17         Legal Compliance.  To each Sellers knowledge, each
Sellers is currently conducting, and has at all times since its incorporation
conducted, the Acquired Business in compliance with each applicable law
(including rules and regulations thereunder) of any federal, state, local
or foreign government, or any Governmental Entity, except for any violations or
defaults that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect over the operation of
the Acquired Business.  The Sellers have
not received any notice or communication from any Governmental Entity alleging
noncompliance with any applicable material law, rule or regulation which
relates to the Acquired Business.

 

2.18         Suppliers.  Except as set forth in Section 2.18 of the Disclosure Schedule, to Sellers’s
knowledge, no such supplier to the Acquired Business has indicated within the
past year that it will stop, or decrease the rate of, buying products or
services or supplying products, as applicable, to the Sellers.

 

2.19         Permits.  Section 2.19
of the Disclosure Schedule
sets forth a list of all Permits issued to or held by the Sellers for the
conduct of, or relate, directly or indirectly, to the Acquired Business.  To Sellers’ knowledge, such listed Permits
are the only Permits that are required for the Sellers to conduct the Acquired
Business as presently conducted, except for those the absence of which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect. 
Each such Permit is in full force and effect; to Sellers knowledge, the
Sellers are in material compliance with the terms of each such Permit; and, to
the best knowledge of the Sellers, no suspension or cancellation of such Permit
is threatened and there is no basis for believing that such Permit will not be
renewable upon expiration.  The parties
acknowledge that no permits shall be assigned to Buyer hereunder.

 

2.20         Brokers’ Fees.  With the exception of any fees
required to be paid to Deutsche Bank (and for which the Sellers shall be
responsible), the Sellers have no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.

 

11

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF
THE BUYER

 

The Buyer represents and
warrants to the Sellers that the statements contained in this ARTICLE III are true and correct as of the
date of this Agreement and will be true and correct as to the Closing and the
Closing Date as though made as of the Closing, except to the extent that such
representations and warranties are specifically made as of a particular date
(in which case such representations and warranties will be true and correct as
of such date).

 

3.1           Organization and Corporate Power.  The Buyer is
a corporation duly organized, validly existing and in good standing under the
laws of Singapore.

 

3.2           Authorization of the Transaction.  The Buyer
has all requisite power and authority to execute and deliver this Agreement and
the Ancillary Agreements and to perform its obligations hereunder and
thereunder.  The execution and delivery
by the Buyer of this Agreement and the Ancillary Agreements, and the consummation
by the Buyer of the transactions contemplated hereby and thereby, have been
duly and validly authorized by all necessary corporate action on the part of
the Buyer.  This Agreement has been duly
and validly executed and delivered by the Buyer and constitutes a valid and
binding obligation of the Buyer, enforceable against it in accordance with its
terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and other laws of general
application affecting enforcement of creditors’ rights generally, or (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.

 

3.3           Noncontravention.   Neither the execution and
delivery by the Buyer of this Agreement or the Ancillary Agreements, nor the
consummation by the Buyer of the transactions contemplated hereby or thereby,
will (a) conflict with or violate any provision of the Certificate of
Incorporation or Bylaws of the Buyer, (b) require on the part of the Buyer
any filing with, or permit, authorization, consent or approval of, any
Governmental Entity, (c) conflict with, result in breach of, constitute
(with or without due notice or lapse of time or both) a default under, result
in the acceleration of obligations under, create in any party any right to
terminate, modify or cancel, or require any notice, consent or waiver under,
any contract or instrument to which the Buyer is a party or by which it is
bound or to which any of its assets is subject, except for (i) any
conflict, breach, default, acceleration, termination, modification or
cancellation which would not adversely affect the consummation of the
transactions contemplated hereby or (ii) any notice, consent or waiver the
absence of which would not adversely affect the consummation of the
transactions contemplated hereby, or (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Buyer or
any of its properties or assets.

 

3.4           Litigation.  There is no Legal Proceeding which
is pending or, to the best knowledge of Buyer, threatened in writing against
the Buyer.  There are no judgments,
orders or decrees outstanding against the Buyer.

 

12

 

3.5           Brokers’ Fees.  The Buyer has no liability or
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.

 

3.6           Maquiladora.  Buyer’s Mexican Affiliate currently has (and
at the time on which the actions referenced in Section 1.8 will take place
will have) a duly qualified IMMEX program in place.

 

ARTICLE IV

 

PRE-CLOSING COVENANTS

 

4.1           Closing Efforts.  Each of the Parties shall use its
Reasonable Best Efforts to take all actions and to do all things necessary,
proper or advisable to consummate the transactions contemplated by this
Agreement, including using its Reasonable Best Efforts to ensure that (i) its
representations and warranties remain true and correct in all material respects
through the Closing Date and (ii) the conditions to the obligations of the
other Party to consummate the transactions contemplated by this Agreement are
satisfied. For these purposes, Sellers hereby authorizes Buyer to interview the
Business Employees, review financial statements and all financial and
accounting data (but only to the extent it is related to the operation of the
Acquired Business and specifically excluding any profit-related data) and in
general terms, prepare the Facility for an adequate and smooth take over of the
operations; provided that these activities are done in a manner not to
interfere with the Acquired Business.

 

4.2           Consents.   Each Party shall use its Reasonable Best
Efforts to obtain all third party consents required for closing.

 

4.3           Requisite
Approval.  The Sellers shall use their Reasonable Best
Efforts to obtain, as promptly as practicable, the Requisite Approval, either
at a special meeting of stockholders, or pursuant to a written stockholder
consent, all in accordance with the applicable requirements of the law of its
incorporation.

 

4.4           Operation of Business.  Except as
contemplated by this Agreement, during the period from the date of this
Agreement to the Closing, the Sellers shall conduct the Acquired Business in
the Ordinary Course of Business and in compliance with all applicable laws and
regulations and, to the extent consistent therewith, use their Reasonable Best
Efforts to preserve intact its current business organization, keep its physical
assets in good working condition, keep available the services of its current
officers and employees and preserve its relationships with customers, suppliers
and others having business dealings with it. 
Without limiting the generality of the foregoing, prior to the Closing,
the Sellers shall not, without the written consent of the Buyer:

 

(a)           (i) enter into, adopt or amend any Employee Benefit Plan (except as
required by law) or (ii) except in the Ordinary Course of Business,
increase in any manner the 

 

13

 

compensation
or fringe benefits of, or materially modify the employment terms of or pay any
bonus or other benefit to, any Business Employee;

 

(b)           with respect to the Acquired Business, acquire, sell,
lease, license or dispose of any  Fixed
Assets, other than purchases and sales of assets in the Ordinary Course of
Business;

 

(c)           amend its Certificate of Incorporation, Bylaws or
other organizational documents in a manner that could have an adverse effect on
the transactions contemplated by this Agreement;

 

(d)           make any new elections, or changes to any current
elections, with respect to Taxes that affect the Acquired Assets;

 

(e)           modify, waive any right under, amend in any material
respect, take or omit to take any action that would constitute a violation or
default under, or terminate, the Assumed Contracts;

 

(f)            enter into any material contract or commitment
affecting the Acquired Business except for the normal sale of its products and
services, or the purchase of materials, supplies and services useable in the
Ordinary Course of Business;

 

(g)           modify, terminate or allow to lapse any insurance
policy relating to the Acquired Business other than in the Ordinary Course of
Business;

 

(h)           institute or settle any Legal Proceeding;

 

(i)            take any action or fail to take any action permitted
by this Agreement with the knowledge that such action or failure to take action
would result in (i) any of the representations and warranties of the
Sellers set forth in this Agreement becoming untrue or (ii) any of the
conditions to the Closing set forth in ARTICLE
V not being satisfied; or

 

(j)            agree in writing or otherwise to take any of the
foregoing actions.

 

In addition to the foregoing,
Sellers agree that, in the event a Business Employee resigns or is terminated
prior to the Closing Date, it will confer with Buyer prior to solicit Buyer’s
input prior to making any offer to any candidate for replacement.  Nothing herein shall prevent Seller from
making any offer; the intent is solely to require Seller to obtain Buyer’s
input prior to making such a decision. 
This requirement shall not apply to any temporary employee.

 

4.5           Replacement Purchase Orders.  The Buyer
shall replace all outstanding purchase orders (the “Replacement Purchase Orders”)
with Sellers’s component suppliers with Buyer’s own purchase orders such that
Sellers is released from all liabilities in connection with these orders.

 

4.6           Access to Information.  The Sellers
shall permit representatives of the Buyer to have full access (at all reasonable
times, and in a manner so as not to interfere with the normal 

 

14

 

business operations
of the Sellers) to all premises, properties, financial, tax and accounting records, contracts,
business data, inventory records, other records and documents, and personnel,
of or pertaining to the Sellers and relating to the Acquired Business (but
specifically excluding any profit-related data) for the purpose of performing
such inspections and tests as the Buyer deems necessary or appropriate.

 

4.7           Notice of Breaches.  From the date of this Agreement
until the Closing, each Party shall promptly deliver to the other Party
supplemental information concerning events or circumstances occurring
subsequent to the date hereof which would render any representation, warranty
or statement in this Agreement or any Disclosure
Schedule inaccurate or incomplete at any time after the date of
this Agreement until the Closing.  No
such supplemental information shall be deemed to avoid or cure any
misrepresentation or breach of warranty or constitute an amendment of any
representation, warranty or statement in this Agreement or any Disclosure Schedule.

 

4.8           Exclusivity.

 

(a)           Up to and including the Closing Date or at such time
that this Agreement is terminated pursuant to ARTICLE
VIII hereof, the Sellers shall not, and the Sellers shall require
each of their Affiliates, officers, directors, employees, representatives and
agents not to, directly or indirectly, (i) initiate, solicit, encourage or
otherwise facilitate any inquiry, proposal, offer or discussion with any party
(other than the Buyer) concerning any merger, reorganization, consolidation,
recapitalization, business combination, liquidation, dissolution, share
exchange, sale of stock, sale of the Acquired Business, (ii) except as
required by law, furnish any non-public information concerning the Acquired
Business to any party (other than the Buyer) or (iii) engage in
discussions or negotiations with any party (other than the Buyer) concerning
any transaction involving the Acquired Business, the Acquired Assets or the
Assumed Liabilities.

 

(b)           The Sellers shall immediately notify any party with which discussions or
negotiations of the nature described in paragraph (a) above were pending that the Sellers
is terminating such discussions or negotiations.  If the Sellers receive any inquiry, proposal
or offer of the nature described in paragraph (a) above, the Sellers
shall, within one business day after such receipt, notify the Buyer of such
inquiry, proposal or offer, including the identity of the other party and the
terms of such inquiry, proposal or offer.

 

4.9           Delivery of Information.  The Sellers
shall use their Reasonable Best Efforts to prepare and deliver to Buyer or its
designated agent all due diligence information reasonably requested by the
Buyer on a timely basis, but in any event not later than 15 business days prior
to the Closing Date and to prepare and deliver to the Buyer the final Disclosure Schedule no later than 4 business
days prior to the Closing Date.  Buyer
agrees to use Reasonable Best Efforts to ensure that all due diligence requests
are reasonable considering the scope of this transaction.

 

4.10         Employees.  Provided that Buyer first obtains the
approval of Seller’s plant manager or human resources manager, the Buyer shall
be permitted to contact Business Employees to advise any Business Employee of
its intent to make an offer to him or her.

 

15

 

4.11         Solicitation and
Hiring.  Prior to the Closing Date,
neither party shall (i) either directly or indirectly (including through
an Affiliate), solicit or attempt to induce any Business Employee to terminate
his or her employment with the Sellers or (ii) through an Affiliate hire
or attempt to hire any Business Employee or transfer or induce to transfer the
employment of any Business Employee to an Affiliate, in each case without the
other party’s prior written consent; provided, however, that nothing shall
prevent a party from advertising for open positions in forums of general
circulation or hiring an Business Employee who responds to that advertisement.

 

ARTICLE V

 

CONDITIONS TO CLOSING

 

5.1           Conditions
to Obligations of Each Party.  The respective obligations of each Party to
consummate the transactions contemplated by this Agreement to be consummated at
the Closing are subject to the satisfaction of the following conditions that
shall be met on the Closing Date (unless waived in writing by the Parties):

 

(a)           the execution of the Agreement by Sellers shall have
received all the necessary corporate approvals;

 

(b)           The execution of the Agreement by Buyer shall have
been approved by the Board of Directors of the Buyer; and

 

(c)           The parties’ dispute regarding the Inventory for
which Sellers accepts responsibility shall not exceed $500,000.

 

(d)   The consents to the transfer or assignment of the Assumed Contracts set
forth in Schedule 1.1(a) shall have been obtained.

 

5.2           Conditions to Obligations of the Buyer.  The
obligation of the Buyer to consummate the transactions contemplated by this
Agreement to be consummated at the Closing is subject to the satisfaction of
the following additional conditions (unless waived in writing by the Buyer):

 

(a)           the representations and warranties of the Sellers set
forth in this Agreement shall be true and correct in all material respects, in
each case as of the date of this Agreement and as of the Closing Date as though
made as of the Closing Date, except to the extent such representations and
warranties are specifically made as of a particular date (in which case such
representations and warranties shall be true and correct as of such date);

 

(b)           the Sellers shall have performed or complied in all
material respects with its agreements and covenants required to be performed or
complied with under this Agreement as of or prior to the Closing;

 

(c)           no Legal Proceeding affecting the Acquired Business
shall be pending or threatened wherein an unfavorable judgment, order, decree,
stipulation or injunction would 

 

16

 

(i) prevent
consummation of the transactions contemplated by this Agreement, (ii) cause
the transactions contemplated by this Agreement to be rescinded following
consummation or (iii) affect adversely the right of the Buyer to own/lease
(as appropriate), operate or control any of the Acquired Assets, or to conduct
the Acquired Business as currently conducted, following the Closing, and no
such judgment, order, decree, stipulation or injunction shall be in effect;

 

(d)           Sellers shall have
modified each Union Contract in a manner acceptable to Buyer, enabling Buyer to
sign and register its own union contract;

 

(e)           the Sellers shall have delivered to the Buyer the Sellers Certificate;

 

(f)            the Sellers shall have delivered to the Buyer an
update, as of the Closing Date, of each list contained in the Disclosure Schedule that lists or
describes Acquired Assets;

 

(g)           the Sellers shall have delivered to the Buyer documents evidencing the
release or termination of all Security Interests on the Acquired Assets, and
copies of any documentation filed or recorded on the public record
terminating such Security Interests, if any;

 

(h)           each person listed on Schedule 5.2(i) hereto shall have evidenced such person’s acceptance of the employment
offer of Buyer by countersigning and delivering an employment offer letter in
form and substance satisfactory to the Buyer or Seller shall have replaced such
person with an person reasonably acceptable to Buyer (Buyer cannot unreasonably
refuse to accept such replacement);

 

(i)            the Sellers shall have executed and delivered to the
Buyer the Transition Services Agreement substantially in the form attached
hereto as Exhibit D-1
(the “Transition Services Agreement”);

 

(j)            the Sellers shall have
executed and delivered the modification to the Manufacturing Agreement, which
shall terminate the Manufacturing Agreement with respect to Mexican Operations
and transfer to Foxconn the Manufacturing Agreement with respect to the Hungarian
Operations;

 

(k)           Eighty-five percent
(85%) of the individuals to whom Buyer extends an offer of employment shall
have accepted such offer.

 

(l)            the Buyer (or its
Affiliate) shall have received all of the appropriate approvals and
documentation evidencing that, as of the Closing, Buyer’s Affiliate it may
operate under an IMMEX Program; and

 

(m)          the Buyer shall have received such other certificates and instruments
(including certificates of good standing of the Sellers in its jurisdiction of
organization and the various foreign jurisdictions in which it is qualified,
certified organizational documents, certificates as to the incumbency of
officers and the adoption of authorizing resolutions, NAFTA certificates
of origin with respect to the Inventory) as it
shall reasonably request in connection with the Closing.

 

17

 

5.3           Conditions to Obligations of the Sellers.  The
obligation of the Sellers to consummate the transactions contemplated by this
Agreement to be consummated at the Closing is subject to the satisfaction of
the following additional conditions (unless waived in writing by the Sellers):

 

(a)           the representations and warranties of the Buyer set
forth in this Agreement shall be true and correct in all material respects, in
each case as of the date of this Agreement and as of the Closing Date as though
made as of the Closing Date, except to the extent such representations and
warranties are specifically made as of a particular date (in which case such
representations and warranties shall be true and correct as of such date);

 

(b)           the Buyer shall have performed or complied in all
material respects with its agreements and covenants required to be performed or
complied with under this Agreement as of or prior to the Closing;

 

(c)           no Legal
Proceeding shall be pending or threatened wherein an unfavorable judgment, order,
decree, stipulation or injunction would (i) prevent consummation of the
transactions contemplated by this Agreement or (ii) cause the transactions
contemplated by this Agreement to be rescinded following consummation, and no
such judgment, order, decree, stipulation or injunction shall be in effect;

 

(d)           a sufficient number of employees have executed an
employment contract with Buyer such that Sellers’s anticipated liability for
severance is less than $250,000.

 

(e)           the Buyer shall have delivered to the Sellers the
Buyer Certificate;

 

(f)            the Buyer shall have executed and delivered to the
Sellers the First Amendment to the Lease Agreement, if necessary;

 

(g)           the Buyer shall have executed and delivered to the
Sellers the Transition Services Agreement substantially in the form attached
hereto as Exhibit D-1;

 

(h)           the Buyer shall have executed and delivered
the modification to the Manufacturing Agreement;

 

(i)            the Sellers
shall have received such other certificates and instruments (including
certificates of good standing of the Buyer in its jurisdiction of organization
and the various foreign jurisdictions in which it is qualified, certified
organizational documents, certificates as to the incumbency of officers and the
adoption of authorizing resolutions) as it shall reasonably request in
connection with the Closing;

 

(j)            the Sellers
shall have closed the Foxconn Transaction;

 

(k)           the Buyer shall have issued Replacement Purchase
Orders by the Closing Date;

 

18

 

(l)            the Seller shall have secured the
rights from the third party licensors to provide the transitional services to
Buyer required in the Transitional Services
Agreement, and Foxteq Holdings Inc. Cayman (“Foxteq”) or an Affiliate of
Foxteq, shall have agreed to provide the transitional services to Buyer upon
the closing of the Foxconn Transaction.

 

ARTICLE VI

 

POST-CLOSING COVENANTS

 

6.1           Proprietary Information.  From and
after the Closing, the Sellers shall not disclose to any third party other than
Foxteq Holdings, Inc. (or any subsidiary thereof) or make use of (except
to pursue its rights, under this Agreement or the Ancillary Agreements, or as
required by law), and shall use its Reasonable Best Efforts to cause all of its
Affiliates not to disclose or make use of, any knowledge, information or
documents of a confidential nature or not generally known to the public with
respect to Acquired Assets, the Acquired Business or the Buyer or its business
(including the financial information, technical information or data relating to
the Sellers’s products and names of customers of the Sellers), as well as
filings and testimony (if any) presented in the course of any arbitration of a
Dispute pursuant to Section 7.3
and the arbitral award and the Arbitrator’s reasons therefor relating to the
same), except to the extent that such knowledge, information or documents shall
have become public knowledge other than through improper disclosure by the
Sellers or an Affiliate.

 

6.2           Solicitation and Hiring.  For a period
of two (2) years after the Closing Date, the Sellers shall not, either
directly or indirectly (including through an Affiliate), (1) solicit or
attempt to induce any Business Employee to terminate his employment with the
Buyer or any subsidiary of the Buyer or (2) hire or attempt to hire any
Business Employee without Buyer’s written consent, which shall not be
unreasonably withheld, delayed or conditioned, provided  that this clause (2) shall not
apply to (a) any individual whose employment with the Buyer or a
subsidiary of the Buyer has been terminated for a period of six months or
longer or (b) any individual who responded to a general advertisement by
Sellers for open positions in forums of general circulation not
specifically targeted to such individual.  In addition, for a period of one (1) year
after the Closing Date, Sellers shall not hire or attempt to hire any Business
Employee set forth on Schedule 6.2,
even in response to a general advertisement, without Buyer’s written
permission; provided however that this obligation will be limited to the extent
that it does not constitute discrimination or violates third parties’ rights or
any applicable laws..

 

6.3           Special Solicitation and Hiring. Should any Sellers employee decide not to transfer
to Buyer, neither Sellers nor Buyer will hire him or her for the same period
determined in Section 6.2.

 

6.4           Tax Matters.  All transfer taxes, deed excise
stamps and similar charges related to the sale or lease of the Acquired Assets
contemplated by this Agreement shall be paid by the party designated as the
responsible taxpayer under applicable law.

 

19

 

6.5           Sharing of Data.

 

(a)           For a period of ten years after the Closing Date (the
“Retention Period”), Sellers shall be required to maintain the records
ordinarily maintained on its IT Systems or physically maintained in locations
other than the Facility (the “Seller Retained Records”).  During the Retention Period, Buyer shall be
required to maintain the records physically maintained at the Facility (with
the exception of employment and payroll records which shall be kept by the
Seller for a period of five years rather than ten years) or located in the
computers of the Hired Employees (the “Buyer Retained Records”).  During the Retention Period, each party shall
have the right  to have reasonable access
to such books, records and accounts, including financial and tax information,
correspondence, production records, employment records and other records that
are held by the other party pursuant to the terms of this Section for the
limited purposes of concluding its involvement in the business conducted by the
other party prior to/after the Closing Date (as applicable) and for complying
with its obligations under applicable securities, tax, environmental, customs,
employment or other laws and regulations. Any
Party accessing information of the other Party pursuant to this Section 6.5 will take all reasonable precautions to protect the
confidentiality of any information obtained. 
Neither the Buyer nor the Sellers shall destroy any such books, records
or accounts retained by it during the Retention Period without first providing
the other Party with the opportunity to obtain or copy such books, records, or
accounts at such other Party’s expense.

 

(b)           Promptly upon written request by the Buyer made at
any time following the Closing Date, the Sellers shall authorize the release to
the Buyer of all files directly pertaining to the Sellers relating principally
to the Acquired Business (other than records relating to the profitability of
the Acquired Business) or the Acquired Assets held by any federal, state,
county or local authorities, agencies or instrumentalities, provided  that the Sellers shall
have the opportunity to reasonably redact irrelevant information

 

(c)           Promptly upon written request by the Sellers made at any time following the
Closing Date, the Buyer shall authorize the release to the Sellers of all files
relating principally to the Retained Liabilities or Excluded Assets.

 

6.6           Cooperation in Litigation.  From and
after the Closing Date, each Party shall fully cooperate with the other in the
defense or prosecution of any litigation or proceeding already instituted or
which may be instituted hereafter against or by such other Party relating to or
arising out of the conduct of the Acquired Business of the Sellers or the Buyer
prior to or after the Closing Date (other than litigation among the Parties
and/or their Affiliates arising out the transactions contemplated by this
Agreement), including, without limitation, by retaining and producing
any and all documentation relevant to any such litigation or proceeding.  The Party
requesting such cooperation shall pay the reasonable out-of-pocket expenses
incurred in providing such cooperation (including reasonable legal fees and
disbursements) by the Party providing such cooperation and by its officers,
directors, employees and agents, but shall not be responsible for reimbursing
such Party or its officers, directors, employees and agents, for their time
spent in such cooperation.

 

20

 

6.7           Employees.

 

(i)            Contemporaneously with the Closing, the Sellers shall
terminate the employment of each Business Employee who accepts any offer of
employment from Buyer pursuant to Section 6.7(ii) (each,
a “Hired Employee”).  The Sellers hereby consents to the hiring of
any such Hired Employees by the Buyer and waives, with respect to the
employment by the Buyer of such Hired Employees, any claims or rights the
Sellers may have against the Buyer or any such Hired Employee under any
non-competition, or employment agreement; provided, however, that the Hired
Employees shall be required to observe any nondisclosure obligations set forth
therein.  Except as expressly otherwise
provided in subsections (b) or (c) hereof, in no event shall Buyer or
any of its Affiliates be liable for any wages (including vacation time, sick
time, paid-time-off, commissions or bonuses), pension, unemployment,
retirement, disability or other benefits or obligations (i) which is owed
to any employee of the Sellers who does not become a Hired Employee or (ii) which
is earned by any Hired Employee on or prior to the Closing.  In no event shall Sellers or any of its
Affiliates be liable for any wages (including vacation time, sick time,
paid-time-off, commissions or bonuses), pension, unemployment, retirement,
disability or other benefits or obligations (i) owed to any employee of
the Sellers who becomes a Hired Employee and (ii) which is earned by any
Hired Employee after the Closing. Immediately after the Closing and effective
as of the Effective Time, Sellers shall obtain from every Business Employee to
which Buyer has made an offer, a resignation letter and shall pay all amounts
due (“proporcionales” or prorated vacation, Christmas bonus, profit sharing and
all pursuant to the law as per a termination of the employment), with the
exception of severance since Buyer will hire those Hired Employees with their
seniority.

 

(ii)           As of the Closing Date,
Buyer anticipates offering substantially all the Business Employees the
opportunity to become employees of Buyer or an Affiliate, on similar terms and
conditions of employment as were applicable to such employees immediately prior
to the Closing Date, and shall afford to each of such employees credit for
years of service of such employees with Sellers for the purpose of eligibility
to participate and vesting under any employee plans or benefit programs
maintained by Buyer for similarly situated employees and all obligations under
any accrued or unused vacation and/or paid time off.  In the event Buyer chooses not to offer
employment to any Business Employees, Sellers shall be responsible for any severance
payment to such Business Employees, up to a maximum of $150,000; Buyer shall be
responsible for any severance payment to such Business Employees in excess of
$150,000.   In the event Buyer offers
employment to a Business Employee and the Business Employee does not accept the
offer, Sellers shall be responsible for any severance payment to such Business
Employee; provided, however, that Sellers shall retain its right not to close
the transaction set forth under Section 5.3  Sellers will take all action necessary to pay
any and all, vacation, paid time off or other sums that may be due to employees
of Sellers in connection with their termination of employment with Sellers, if
any, or otherwise pursuant to the terms of any Seller Plan.

 

(iii)          Lenovo represents and
warrants that the terms and conditions of the offers made to the Business
Employees under Section 6.7(ii) will be the same as the terms and
conditions currently provided to the Business Employees except as follows: (i) Buyer
will not offer the Business Employees a guaranteed profit sharing plan to the
same extent as that which is currently in place, but intends to substitute a
portion of the profit sharing plan with a contingent performance bonus; and (ii) Buyer
will make minor changes to the cafeteria and 

 

21

 

transportation currently offered by Seller.
Buyer shall indemnify, defend and hold Sellers harmless from any liability,
claim or expense (including reasonable attorneys’ fees) related to any claim
made by any Business Employee that (i) the changes Buyer made to the
profit sharing plan (set forth in (i) above) constitutes a “material
change in employment conditions” and/or a constructive termination which
requires the payment of severance; and (ii) any breach of the foregoing
representation.  In addition, Buyer shall
defend Seller (but not indemnify or hold Seller harmless) against any claim
that the changes to the cafeteria and transportation currently offered by
Seller constitutes a “material change in employment conditions” and/or a
constructive termination which requires the payment of severance.

 

(iv)          Sellers shall be solely
responsible for any liability, claim or expense (including reasonable attorneys’
fees) related to compensation or employee benefits incurred by Buyer as the result
of any claims against Buyer or its Affiliates that are made by any Business
Employees or former employees of Sellers who are made offers of employment with
Seller but who choose not to accept the offer (the parties having acknowledged
that Seller retains the remedy set forth in Section 5.3(d).

 

(v)           The parties shall use
their Reasonable Best Efforts to cooperate on employee-related issues.

 

6.8           Procedures for Assets Not Transferable.  If any
Contract, Permit, or any other property or right included in the Assumed
Liabilities or the Acquired Assets is not assignable or transferable without
the consent of a third party, and such consent has not been obtained prior to
the Closing Date, this Agreement and the related instruments of transfer shall
not constitute an assignment or transfer thereof, and Buyer shall not assume
Sellers’s obligations with respect thereto, but Sellers shall diligently use
its reasonable efforts to obtain such consent as soon as possible after the
Closing Date; provided, however, that Seller shall not be required to pay any
sums to any third party to obtain such consent. 
With respect to each such Contract, property or right for which a
necessary consent has not been obtained (excluding nontransferable governmental
Permits), Sellers shall use all commercially reasonable efforts to otherwise
obtain for Buyer, at no additional cost to Buyer or Sellers, the benefits of
such Contract, property or right until such consent is obtained.

 

6.9           Licensia del Uso del
Suelo.  Seller acknowledges that it
is unable to locate its Licensia del Uso del Suelo, and agrees to assist Buyer
in resolving any issues with the Mexican authorities as a result of its
inability to locate the Licensia del Uso del Suelo.

 

6.10         Option to Purchase
Fixed Assets.  Upon the expiration of
the Facility Lease Agreement, Buyer shall have the option to purchase all or
any of the Fixed Assets at their fair market value.

 

22

 

ARTICLE VII

 

INDEMNIFICATION

 

7.1                   Indemnification by the Sellers.  The Sellers
shall indemnify the Buyer in respect of, and hold the Buyer harmless against,
Damages incurred or suffered by the Buyer or any Affiliate thereof resulting
from, relating to or constituting:

 

(a)           any breach, as of the date of this Agreement or as of the Closing Date, of
any representation or warranty of the Sellers contained in this Agreement, any
Ancillary Agreement or any other agreement or instrument furnished by the
Sellers to the Buyer pursuant to this Agreement;

 

(b)           any failure to perform any covenant or agreement of the Sellers contained
in this Agreement, any Ancillary Agreement or any agreement or instrument
furnished by the Sellers to the Buyer pursuant to this Agreement;

 

(c)           any Retained Liabilities;

 

(d)           Liabilities of Seller
arising from or relating to the ownership or actions or inactions of Sellers or
the conduct of the Acquired Business prior to the Closing Date; and

 

(e)         any and all Damages
suffered or incurred by Buyer 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 Acquired Business prior to the Closing Date.

 

7.2           Indemnification by the Buyer.  The Buyer
shall indemnify the Sellers in respect of, and hold them harmless against, any
and all Damages incurred or suffered by the Sellers or any Affiliate thereof
resulting from, relating to or constituting:

 

(a)           any breach, as of the date of this Agreement or as of the Closing Date, of
any representation or warranty of the Buyer contained in this Agreement, any
Ancillary Agreement or any other agreement or instrument furnished by the Buyer
to the Sellers pursuant to this Agreement;

 

(b)           any failure to perform any covenant or agreement of the Buyer contained in
this Agreement, any Ancillary Agreement or any other agreement or instrument
furnished by the Buyer to the Sellers pursuant to this Agreement;

 

(c)           any Assumed Liabilities;

 

(d)           liabilities of Buyer
arising from or relating to the ownership or actions or inactions of Buyer or
the conduct of the Acquired Business on or after the Closing Date; and

 

(e)           any and all Damages
suffered or incurred by a Seller 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 Acquired Business on or after the Closing.

 

7.3           Indemnification Claims.

 

(a)           Third Party Actions.  An Indemnified Party shall give
written notification (and, if applicable, a copy of the related summons and
complaint) to the Indemnifying Party of 

 

23

 

the
commencement of any Third Party Action. 
Such notification shall be given within 20 days after receipt by the
Indemnified Party of notice of such Third Party Action and shall describe in
reasonable detail (to the extent known by the Indemnified Party) the facts
constituting the basis for such Third Party Action and the amount of the
claimed damages; provided, however,
that no delay or failure on the part of the Indemnified Party in so notifying
the Indemnifying Party shall relieve the Indemnifying Party of any liability or
obligation hereunder except to the extent of any damage or liability caused by
or arising out of such failure.  Within
20 days after delivery of such notification, the Indemnifying Party may, upon
written notice thereof to the Indemnified Party, assume control of the defense
of such Third Party Action with counsel reasonably satisfactory to the
Indemnified Party; provided  that
(i) the Indemnifying Party may only assume control of such defense if (A) it
acknowledges in writing to the Indemnified Party that any Damages, fines, costs
or other liabilities that may be assessed against the Indemnified Party in
connection with such Third Party Action constitute Damages for which the
Indemnified Party shall be indemnified pursuant to this ARTICLE VII and (B) the ad damnum is less than or equal to the
amount of Damages for which the Indemnifying Party is liable under this ARTICLE VII and (ii) the Indemnifying
Party may not assume control of the defense of Third Party Action involving
criminal liability or in which equitable relief is sought against the
Indemnified Party.  If the Indemnifying
Party does not, or is not permitted under the terms hereof to, to assume control
of the defense of a Third Party Action, the Indemnified Party shall control
such defense.  The Non-controlling Party
may participate in such defense at its own expense.  The Controlling Party shall keep the
Non-controlling Party advised of the status of such Third Party Action and the
defense thereof and shall consider in good faith recommendations made by the
Non-controlling Party with respect thereto. 
The Non-controlling Party shall furnish the Controlling Party with such
information as it may have with respect to such Third Party Action (including
copies of any summons, complaint or other pleading which may have been served
on such party and any written claim, demand, invoice, billing or other document
evidencing or asserting the same) and shall otherwise cooperate with and assist
the Controlling Party in the defense of such Third Party Action.  The reasonable fees and expenses of counsel
to the Indemnified Party with respect to a Third Party Action shall be
considered Damages for purposes of this Agreement if (i) the Indemnified
Party controls the defense of such Third Party Action pursuant to the terms of
this Section 7.3(a) or (ii) the
Indemnifying Party assumes control of such defense and the Indemnified Party
reasonably concludes that the Indemnifying Party and the Indemnified Party have
conflicting interests or different defenses available with respect to such
Third Party Action.  The Indemnifying
Party shall not agree to any settlement of, or the entry of any judgment
arising from, any Third Party Action without the prior written consent of the
Indemnified Party, which shall not be unreasonably withheld, conditioned or
delayed.  The Indemnified Party shall not
agree to any settlement of, or the entry of any judgment arising from, any such
Third Party Action without the prior written consent of the Indemnifying Party,
which shall not be unreasonably withheld, conditioned or delayed.

 

(b)           Indemnification Claims.

 

(i)            In order to seek indemnification under this ARTICLE VII, an Indemnified Party shall
deliver a Claim Notice to the Indemnifying Party.

 

24

 

(ii)           Within 20 days after delivery of a Claim Notice, the Indemnifying Party
shall deliver to the Indemnified Party a Response, in which the Indemnifying
Party shall:  (A) agree that the
Indemnified Party is entitled to receive all of the Claimed Amount (in which
case the Response shall be accompanied by a payment by the Indemnifying Party
to the Indemnified Party of the Claimed Amount, by check or by wire transfer); (B) agree
that the Indemnified Party is entitled to receive the Agreed Amount (in which
case the Response shall be accompanied by a payment by the Indemnifying Party
to the Indemnified Party of the Agreed Amount, by check or by wire transfer),
or (C) dispute that the Indemnified Party is entitled to receive any of
the Claimed Amount.

 

(iii)          During the 30 day period following the delivery of a Response that reflects
a Dispute, the Indemnifying Party and the Indemnified Party shall use good
faith efforts to resolve the Dispute.  If
the Dispute is not resolved within such 30 day period, the Indemnifying Party
and the Indemnified Party shall discuss in good faith the submission of the
Dispute to binding arbitration, and if the Indemnifying Party and the
Indemnified Party agree in writing to submit the Dispute to such arbitration,
then the provisions of Section 7.3(b)(iv) shall
become effective with respect to such Dispute. 
The provisions of this Section 7.3(b)(iii) shall
not obligate the Indemnifying Party and the Indemnified Party to submit to
arbitration or any other alternative dispute resolution procedure with respect
to any Dispute, and in the absence of an agreement by the Indemnifying Party
and the Indemnified Party to arbitrate any Dispute, such Dispute shall be
resolved in a court sitting in Mexico DF, in accordance with Section 10.12.  The parties waive the right to have the
dispute heard in any other court.

 

(iv)          If, as set forth in Section 7.3(b)(iii),
the Indemnified Party and the Indemnifying Party agree to submit any Dispute to
binding arbitration, such Dispute shall be resolved by final and binding
arbitration in Mexico DF, administered by the American Arbitration Association
applying the Arbitration Rules.  The
arbitration shall be conducted by a single arbitrator selected by the parties
from a list of arbitrators provided by the American Arbitration Association of
Mexican active or retired attorneys, law professors or judicial officers with
at least 10 years experience in general commercial matters (the “Arbitrator).

 

(A)          In the event of any conflict between the Arbitration Rules in
effect from time to time and the provisions of this Agreement, the provisions
of this Agreement shall prevail and be controlling.

 

(B)           The parties shall commence the arbitration by jointly
filing a written submission with the office of the American Arbitration
Association in Mexico DF, in accordance with the Arbitration Rules.  If within 10 days after the expiration of the
30-day period in Section 7.3(b)(iii) the
parties do not jointly submit such written submission to the American
Arbitration Association, then either party may commence a legal action in the
appropriate court in accordance with Section 10.8
hereof.

 

(C)           Any depositions or other discovery shall be conducted
in connection with the arbitration in accordance with the Arbitration Rules.

 

(D)          Not later than 30 days after the conclusion of the
arbitration hearing, the Arbitrator shall prepare and distribute to the parties
a writing setting forth the 

 

25

 

arbitral
award and the Arbitrator’s reasons therefor. 
Any award rendered by the Arbitrator shall be final, conclusive and
binding upon the parties, and judgment thereon may be entered and enforced in
any court of competent jurisdiction (subject to Section 10.12), provided
that the Arbitrator shall have no power or authority to grant
injunctive relief, specific performance or other equitable relief.

 

(E)           The Arbitrator shall have no power or authority,
under the Arbitration Rules or otherwise, to (x) modify or disregard
any provision of this Agreement, including the provisions of this Section 7.3(b)(iv), or (y) address
or resolve any issue not submitted by the parties.

 

(F)           In connection with any arbitration proceeding
pursuant to this Agreement, each party shall bear its own costs and expenses
(including such party’s own respective legal fees and related disbursements),
except that the fees and costs of the Arbitrator, the costs and expenses of
obtaining the facility where the arbitration hearing is held, and such other
costs and expenses as the Arbitrator may determine to be directly related to
the conduct of the arbitration and appropriately borne jointly by the parties
(which shall not include any party’s attorneys’ fees or costs, witness fees (if
any), costs of investigation and similar expenses) shall be shared equally by
the Indemnified Party and the Indemnifying Party.

 

(v)           Notwithstanding the other provisions of this Section 7.3, if a third party asserts (other than by
means of a lawsuit) that an Indemnified Party is liable to such third party for
a monetary or other obligation which may constitute or result in Damages for
which such Indemnified Party may be entitled to indemnification pursuant to
this ARTICLE VII, and such
Indemnified Party reasonably determines that it has a valid business reason to
fulfill such obligation, then (i) such Indemnified Party shall be entitled
to satisfy such obligation, provided
that in such event that
the Indemnified party provides the Indemnifying Party with at least 15 business
days notice thereof and that such Indemnifying Party consents in writing to the
Indemnified Party’s fulfillment of such obligation which consent shall not be
unreasonably withheld, delayed or conditioned, (ii) such Indemnified Party
may subsequently make a claim for indemnification in accordance with the
provisions of this ARTICLE VII,
and (iii) such Indemnified Party shall be reimbursed, in accordance with
the provisions of this ARTICLE VII,
for any such Damages for which it is entitled to indemnification pursuant to
this ARTICLE VII (subject to the
right of the Indemnifying Party to dispute the Indemnified Party’s entitlement
to indemnification, or the amount for which it is entitled to indemnification,
under the terms of this ARTICLE VII).  Failing such notice the Indemnified Party
shall remain liable for such Damages.

 

7.4           Survival of Representations and Warranties.  All
representations and warranties that are covered by the indemnification
agreements in Section 7.1(a) and
Section 7.2(a) shall (a) survive
the Closing and (b) shall expire on the date eighteen months following the
Closing Date, except that (i) the representations and warranties set forth
in Sections 2.1, 2.3, 3.1 and 3.2 shall survive the Closing without
limitation; and (ii) the representations and warranties set forth in Sections 2.8 and 2.16 shall survive until 30 days following expiration of all
statutes of limitation applicable to the matters referred to therein.  If an Indemnified Party delivers to an
Indemnifying Party, before expiration of a representation or warranty, either a
Claim Notice based upon a 

 

26

 

breach of such
representation or warranty, or an Expected Claim Notice based upon a breach of
such representation or warranty, then the applicable representation or warranty
shall survive until, but only for purposes of, the resolution of the matter
covered by such notice.  If the legal
proceeding or written claim with respect to which an Expected Claim Notice has been
given is definitively withdrawn or resolved in favor of the Indemnified Party,
the Indemnified Party shall promptly so notify the Indemnifying Party.  The rights to indemnification set forth in
this ARTICLE VII shall not be
affected by (i) any investigation conducted by or on behalf of an
Indemnified Party or any knowledge acquired (or capable of being acquired) by
an Indemnified Party, whether before or after the date of this Agreement or the
Closing Date (including through supplements to the Disclosure Schedule permitted by Section 4.6), with respect to the
inaccuracy or noncompliance with any representation, warranty, covenant or
obligation which is the subject of indemnification hereunder or (ii) any
waiver by an Indemnified Party of any closing condition relating to the
accuracy of any representations and warranties or the performance of or
compliance with agreements and covenants.

 

7.5           Limitations.

 

(a)           Notwithstanding anything to the contrary herein
(other than as specifically provided in the following sentence), the aggregate
liability of the Sellers under this Agreement, whether a claim is made in tort,
contract or otherwise, shall not exceed the Base Purchase Price set forth in Section 1.3(a).  The cap in the previous sentence shall not
apply to the extent the following two conditions are met: (i) the
Inventory is damaged; and (ii) the damage was caused by Sellers rather
than the supplier (e.g., Sellers is not warranting the Inventory, but only its
storing and handling of the Inventory)

 

(b)           To the extent a party recovers for any claim under any Ancillary Agreement,
such party shall be prohibited from recovering for the same or similar claims
under this Agreement.

 

(c)   Notwithstanding anything to the contrary herein, (i) the aggregate
liability of the Sellers for Damages under Section 7.1(a) shall
not exceed US$500,000, and (ii) the Sellers shall not be liable under Section 7.1(a) unless and until
the aggregate Damages for which they would otherwise be liable under Section 7.1(a) exceed US $50,000
(at which point the Sellers shall become liable for the amount of Damages under
Section 7.1(a), in excess of
US $50,000); provided  that
the limitations set forth in this sentence shall not apply to a claim pursuant
to Section 7.1(a) relating
to a breach of the representations and warranties set forth in Sections 2.1 or 2.3.

 

(d)           Notwithstanding anything to the contrary herein, (i) the
aggregate liability of the Buyer for Damages under Section 7.2(a) shall not exceed US$ 500,000, and (ii) 
the Buyer shall not be liable under this Section 7.2(a) unless
and until the aggregate Damages for which it would otherwise be liable under Section 7.2(a) exceed US$ 50,000
(at which point the Buyer shall become liable for the aggregate Damages under Section 7.2(a) in excess of US$
50,000); provided  that
the limitation set forth in this sentence shall not apply to a claim pursuant
to Section 7.2(a) relating
to a breach of the representations and warranties set forth in Sections 3.1 or 3.2.

 

27

 

(e)           Notwithstanding anything to the contrary herein, Seller’s liability for a
breach of the representation made in Section 2.9(a) shall
be limited to the fair market value of the particular Acquired Asset from which
the breach results.

 

(f)    Except  with  respect  to  claims  based  on  fraud,  after  the  Closing  Date,  the  remedies  provided  in  this  ARTICLE  VII  shall  be  the  sole  and  exclusive  remedies  of  any  Party  with  respect  to  claims  arising  out  of  or  relating  to  this  Agreement.

 

7.6           Treatment of Indemnity Payments.  Any payments
made to an Indemnified Party pursuant to this ARTICLE
VII shall be treated as an adjustment to the Purchase Price for tax
purposes.

 

7.7           Right of Set-off.  Each Party shall have the right to
set off against any amount owed by such party to the other party any amounts
due to such party under this Agreement.

 

ARTICLE VIII

 

TERMINATION

 

8.1           Termination
of Agreement.  The Parties may terminate this Agreement
prior to the Closing (whether before or after Requisite Approval), as provided
below:

 

(a)           the Parties may terminate this Agreement by mutual written consent;

 

(b)           the Buyer may terminate this Agreement by giving written notice to the
Sellers in the event the Sellers is in breach of any representation, warranty
or covenant contained in this Agreement, and such breach, individually or in
combination with any other such breach, (i) would cause the conditions set
forth in clauses (b) or (c) of Section 5.2
not to be satisfied and (ii) is not cured within 20 days following
delivery by the Buyer to the Sellers of written notice of such breach;

 

(c)           the Sellers may terminate this Agreement by giving written notice to the
Buyer in the event the Buyer is in breach of any representation, warranty or
covenant contained in this Agreement, and such breach, individually or in
combination with any other such breach, (i) would cause the conditions set
forth in clauses (b) or (c) of Section 5.3
not to be satisfied and (ii) is not cured within 20 days following
delivery by the Sellers to the Buyer of written notice of such breach;

 

(d)           the Buyer may terminate this Agreement by giving written notice to the
Sellers at any time after the stockholders of the Sellers have voted on whether
to approve the sale/lease of the Acquired Assets contemplated by this Agreement
in the event such matter failed to receive the Requisite Approval;

 

(e)           the Buyer may terminate this Agreement by giving written notice to the
Sellers on or before April 23, 2008 that it is not reasonably satisfied
with the outcome of its due diligence.

 

28

 

(f)            the Buyer may terminate this Agreement by giving
written notice to the Sellers if the Closing shall not have occurred on or
before July 1st, 2008 by reason of the failure of any condition
precedent under Section 5.1
or 5.2 (unless the failure results
primarily from a breach by the Buyer of any representation, warranty or
covenant contained in this Agreement)

 

(g)           the Sellers may terminate this Agreement by giving
written notice to the Buyer if the Closing shall not have occurred on or before
July 1st, 2008 by reason of the failure of any condition
precedent under Section 5.1
or 5.3 (unless the failure results
primarily from a breach by the Sellers of any representation, warranty or
covenant contained in this Agreement).

 

8.2           Effect of Termination.  If either
Party terminates this Agreement pursuant to Section 8.1,
all obligations of the Parties hereunder shall terminate without any liability
of either Party to the other Party (except for any liability of a Party for
breaches of this Agreement).

 

ARTICLE IX

 

DEFINITIONS

 

For purposes of this
Agreement, each of the following terms shall have the meaning set forth below.

 

“Acquired Assets” shall mean all of Sellers’ right, title and
interest in and to all of the following tangible and intangible assets,
properties and rights to the extent owned, used or held for use by Sellers as
of the Closing (but specifically excluding the Excluded Assets):

 

(a)           all rights under any Assumed Contract;

 

(b)           a leasehold interest in the Fixed Assets throughout the term of the
Facility Lease and an option to purchase the Fixed Assets after the expiration
of the Facility Lease in accordance with Section 6.10;

 

(c)           the services of all Hired Employees;

 

(d)           all Inventory; and

 

(e)           the Buyer Retained Records as detailed in Section 6.5 (provided,
however, that to the extent they relate principally to the Seller Retained
Liabilities, Buyer shall retain them for the benefit of the Seller), lists
(including customer and prospect lists), sales and promotional materials
relating principally to the Acquired Business, studies, reports and other
printed or written materials that, in each case, relate to the Acquired Assets.

 

“Acquired Business” shall mean the Sellers’s manufacturing
center located in Monterrey, Mexico, including the manufacturing, logistics,
testing and delivery services undertaken and technologies utilized by Sellers in connection
with the operations undertaken at such
Facility.

 

“Affiliate” shall mean, with respect to any entity: any
corporation, partnership, limited liability company or partnership,
association, trust or other organization which, directly or 

 

29

 

indirectly,
controls, is controlled by, or is under common control with, such entity.  For purposes of the preceding sentence, “control”
(including, with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any entity or organization,
shall mean the possession, directly or indirectly, of the power (i) to
vote more than 50% or more of the securities having ordinary voting power for
the election of directors of the controlled entity or organization, or (ii) to
direct or cause the direction of the management and policies of the controlled
entity or organization,  whether through
the ownership of voting securities or by contract or otherwise.

 

“Agreed Amount” shall mean part, but not all, of the Claimed
Amount.

 

“Ancillary Agreements” shall mean the, the Lease Agreement,
the Transition Services Agreement, the Manufacturing Agreement, the bill of
sale and other instruments of conveyance referred to in Section 1.4(b)(iii), and the
instrument of assumption and other instruments referred to in Section 1.4(b)(iv).

 

“Arbitration Rules” shall mean the Commercial Arbitration Rules of
the American Arbitration Association.

 

“Arbitrator” shall have the meaning set forth in Section 7.3(b)(iv).

 

“Assumed Contracts” shall mean the contracts, agreements or
instruments to which any of the Sellers is a party and which are expressly set
forth on Schedule 1.1(a).

 

“Assumed Liabilities” shall mean the following liabilities:

 

(a)           liabilities
under the Assumed Contracts;

 

(b)           liabilities
under the Replacement Purchase Orders;

 

(c)           liabilities
specifically assumed elsewhere under this Agreement (e.g., those assumed under Section 6.7
and Article 7); and

 

(d)           seniority
of the Hired Employees.

 

 “Beneficiary” means the person(s) designated by a
Business Employee or former employee of Sellers, by operation of law or
otherwise, as entitled to compensation, benefits, insurance coverage, payments
or any other goods or services under a Seller Plan.

 

“Business Employee” shall have the meaning set forth in Section 2.15.

 

“Buyer”
shall have the meaning set forth in the first paragraph of this Agreement, and
for all representations and warranties relating to the IMMEX program and/or
employment matters, shall be deemed to include Buyer’s Mexican Affiliate.

 

“Buyer’s Mexican Affiliate”
shall mean Lenovo Centro Technologio, S.A. de C.V.

 

30

 

“Buyer
Certificate” shall mean a certificate to the effect that each of the
conditions specified in clauses (a) through (c) (insofar as clause (c) relates
to Legal Proceedings involving the Buyer) of Section 5.3
is satisfied in all respects.

 

 “Claimed
Amount” shall mean the amount of any Damages incurred or reasonably
expected to be incurred by the Indemnified Party.

 

“Claim Notice” shall mean written notification which contains
(i) a description of the Damages incurred or reasonably expected to be
incurred by the Indemnified Party and the Claimed Amount of such Damages, to
the extent then known, (ii) a statement that the Indemnified Party is
entitled to indemnification under ARTICLE VII
for such Damages and a reasonable explanation of the basis therefor, and (iii) a
demand for payment in the amount of such Damages.

 

“Closing” shall mean the closing of the transactions
contemplated by this Agreement (and specifically the session at which signature
pages are exchanged, and the Initial Purchase Price is paid).

 

“Closing Date” shall mean June 4, 2008, or such other
date as may be mutually agreeable to the Parties.

 

 “Controlling
Party” shall mean the party controlling the defense of any Third
Party Action.

 

“Damages” shall mean any and all debts, obligations and other
actual and direct (but not indirect or consequential) liabilities, monetary
damages, fines, fees, penalties, interest obligations, deficiencies, losses and
expenses (including amounts paid in settlement, interest, court costs, costs of
investigators, fees and expenses of attorneys, accountants, financial advisors
and other experts, and other expenses of litigation), other than those costs
and expenses of arbitration of a Dispute which are to be shared equally by the
Indemnified Party and the Indemnifying Party as set forth in Section 7.3(b)(iv)(F).

 

“Disclosure Schedule” shall mean the disclosure schedule
provided by the Sellers to the Buyer on the date hereof and accepted in writing
by the Buyer.

 

“Dispute” shall mean the dispute resulting if the
Indemnifying Party in a Response disputes its liability for all or part of the
Claimed Amount.

 

“Effective
Time” shall mean 11:59 PM on the date following the Closing Date.

 

“Employee Benefit Plan”  shall
mean any written plan, agreement or arrangement involving direct or indirect
compensation, including insurance coverage, severance benefits, disability
benefits, deferred compensation, bonuses, stock options, stock purchase,
phantom stock, stock appreciation or other forms of incentive compensation or
post-retirement compensation, including any “employee pension benefit
plan”, any “employee welfare benefit plan”, if applicable.

 

31

 

“Environmental Law” shall mean any federal, state or local
law, statute, rule, order, directive, judgment, Permit or regulation or the
common law relating to the environment, occupational health and safety, or
exposure of persons or property to Materials of Environmental Concern,
including any statute, regulation, administrative decision or order pertaining
to:   (i) the presence of or the
treatment, storage, disposal, generation, transportation, handling,
distribution, manufacture, processing, use, import, export, labeling,
recycling, registration, investigation or remediation of Materials of
Environmental Concern or documentation related to the foregoing; (ii) air,
water and noise pollution; (iii) groundwater and soil contamination; (iv) the
release, threatened release, or accidental release into the environment, the
workplace or other areas of Materials of Environmental Concern, including
emissions, discharges, injections, spills, escapes or dumping of Materials of
Environmental Concern; (v) transfer of interests in or control of real
property which may be contaminated; (vi) community or worker right-to-know
disclosures with respect to Materials of Environmental Concern; (vii) the
protection of wild life, marine life and wetlands, and endangered and
threatened species; (viii) storage tanks, vessels, containers, abandoned
or discarded barrels and other closed receptacles; and (ix) health and
safety of employees and other persons.

 

“Estimated Inventory Value” shall mean Sellers’s estimate of
the Inventory Value based upon the Preliminary Closing Inventory Listing.

 

“Excluded Assets” shall mean the following assets of the
Sellers:

 

(a)           cash, cash equivalents,
investments in cash, securities or otherwise and all of Sellers bank accounts;

 

(b)           any account receivable of
the Sellers;

 

(c)           all refunds of Taxes with respect to Taxes paid or
accrued by Sellers and not reimbursed or paid by Buyer;

 

(d)           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 anything other than the Acquired Assets or
the Assumed Liabilities;

 

(e)           all rights of the Sellers under this Agreement and
any Ancillary Agreements, or any other agreement, certificate, instrument or
other document executed and delivered by Sellers or Buyer in connection with
the Transaction or any side agreement between the Sellers and Buyer entered
into on or after the date hereof;

 

(f)            The Seller Retained Records as
detailed in Section 6.5 (provided, however, that to the extent they relate
principally to the Acquired Business, Seller shall retain them for the benefit
of the Buyer), all Intellectual Property rights of Sellers, including
software, web sites and the trade name Sanmina-SCI and derivatives thereof and
logos associated therewith and all related trademarks and service marks, and
software licenses;

 

32

 

(g)           all rights and licenses to Intellectual Property
rights unless specifically transferred to Buyer in an Ancillary Agreement.

 

(h)           all assets other than Acquired Assets, including but
not limited to land, buildings, leasehold improvements, information technology
systems, hardware and software (and other related intellectual property);

 

(i)            all capital stock, options and other securities of
Sellers, and all corporate minutes and stock books of account of Sellers, blank
stock certificates, qualifications to conduct business as a foreign
corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals and other
documents relating to the organization, maintenance and existence of Sellers as
corporations or other entities;

 

(j)            all agreements and contracts to which any of the
Sellers is a party or is bound or to which any of its assets are subject that
are not Assumed Contracts; and

 

(k)           all assets or rights that relate to the Employee
Plans of Sellers, all Books and Records relating to the Employees of Sellers as
of the Closing;

 

(l)            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 to the extent attributable to the
Excluded Claims;

 

(m)          leasehold improvements;

 

(n)           all claims and or other rights existing in favor of
Sanmina-SCI as of the Closing, including but not limited to any rights to
recover sums in ongoing DRAM or SRAM litigation matters.

 

“Expected  Claim  Notice”  shall  mean  a  notice  that,  as  a  result  of  a  legal  proceeding  instituted  by  or  written  claim  made  by  a  third  party,  an  Indemnified  Party  reasonably  expects  to  incur  Damages  for  which  it  is  entitled  to  indemnification  under  ARTICLE  VII.

 

“Facility”
shall mean the facility located at Av. de la Solidaridad
Iberoamericana No. 7020 Col. Club de Golf Atlas, El Salto, Jalisco, Mexico which is the subject of the Facility Lease
Agreement.

 

“Facility
Lease Agreement” shall mean that certain between Buyer and Seller dated February 22, 2008, and attached
hereto as Exhibit C.

 

“Financial Statements” shall mean, in each case solely with
respect to the Acquired Business:

 

(a)   the operating expenses for the Acquired Business during the last 2.5 fiscal
years, and

 

(b)   other selected balance sheet information.

 

33

 

The term “financial
statements” shall in no event refer to any statement which shows the
profitability of the Acquired Business.

 

“Fixed Assets” shall mean computers,
machinery, equipment, spare parts, furniture, fixtures, supplies, and other
tangible personal property.

 

“Foxconn Transaction” shall
mean the transaction contemplated by the Purchase and Sale Agreement
dated as of February 17, 2008 entered into by and between Sanmina-SCI
Corporation, Sanmina-SCI USA Inc., SCI Technology, Inc., Sanmina-SCI
Systems de Mexico S.A. de C.V., Sanmina-SCI Systems Services de Mexico S.A. de
C.V., Sanmina-SCI Hungary Electronics Manufacturing Limited Liability Company
and Sanmina-SCI Australia PTY LTD and Foxteq Holdings Inc.-Cayman (“Foxteq”).

 

GAAP” shall mean United States
generally accepted accounting principles.

 

“Governmental Entity” shall mean any court, arbitrational
tribunal, administrative agency or commission or other governmental or
regulatory authority or agency.

 

“Hired Employee” shall have the meaning set forth in Section 6.6.

 

“Indemnified Party” shall mean a party entitled, or seeking
to assert rights, to indemnification under ARTICLE
VII of this Agreement.

 

“Indemnifying Party” shall mean the party from whom
indemnification is sought by the Indemnified Party.

 

“Intellectual Property” shall mean all:

 

(a)  patents, patent applications, patent disclosures and
all related continuation, continuation-in-part, divisional, reissue,
reexamination, utility model, certificate of invention and design patents,
patent applications, registrations and applications for registrations;

 

(b)  trademarks, service marks, trade dress, Internet
domain names, logos, trade names and corporate names and registrations and
applications for registration thereof;

 

(c)  copyrights and registrations and applications for
registration thereof;

 

(d)  mask works and registrations and applications for
registration thereof;

 

(e)  computer software, data and documentation, and any
related research and development documentation and white papers;

 

(f)  inventions, trade secrets and confidential business
information, whether patentable or nonpatentable and whether or not reduced to
practice, know-how, manufacturing and product processes and techniques,
research and development information, copyrightable works, financial, marketing
and business data, pricing and cost information, business and marketing plans
and customer and supplier lists and information;

 

34

 

(g)  other proprietary rights relating to any of the
foregoing (including remedies against infringements thereof and rights of
protection of interest therein under the laws of all jurisdictions); and

 

(h)  copies and tangible embodiments thereof.

 

“Internal Systems” shall mean the internal systems of the
Sellers that are used in the Acquired Business, including manufacturing and
testing systems and computer hardware systems, software applications and
embedded systems.

 

“Inventory” shall mean Sellers’s inventories of raw materials
(including equipment parts), work in process, finished goods, supplies and
other personal property held for sale or lease to Buyer
pursuant to the Manufacturing Agreement or (b) consumption in connection
with performance of the Manufacturing Agreement.

 

“Inventory Listing” shall mean a  listing of the
Inventory (containing the part number, quantity and price) prepared in a manner
consistent with Sellers’s past practices.

 

“Inventory Value” shall mean the book value of the Inventory
as of the Closing Date.

 

“Legal Proceeding” shall mean any action, suit, proceeding,
claim, arbitration or investigation before any Governmental Entity or before
any arbitrator.

 

“Liabilities” shall mean any liabilities, indebtedness,
obligations, accrued expenses or contingencies, whether known or unknown,
absolute or contingent, liquidated or unliquidated, due or to become due and
accrued or unaccrued.

 

“Materials of Environmental Concern” shall mean any:
pollutants, contaminants or hazardous substances, pesticides, solid wastes and hazardous wastes, chemicals, other
hazardous, radioactive or toxic materials, oil, petroleum and petroleum
products (and fractions thereof), or any other material (or article containing
such material) listed or subject to regulation under any law, statute, rule,
regulation, order, Permit, or directive due to its potential, directly or
indirectly, to harm the environment or the health of humans or other living beings.

 

“Most Recent Balance Sheet” shall mean the unaudited
consolidated balance sheet of the Sellers as of the Most Recent Balance Sheet
Date.

 

“Most Recent Balance Sheet Date” shall mean December 29, 2007.

 

“Non-controlling Party” shall mean the party not controlling
the defense of any Third Party Action.

 

“Ordinary Course of Business” shall mean the ordinary course
of business consistent with past custom and practice (including with respect to
frequency and amount).

 

“Parties” shall mean the Sellers and the Buyer.

 

35

 

“Permits” shall mean all permits, licenses, registrations,
certificates, orders, approvals, franchises, variances and similar rights
issued by or obtained from any Governmental Entity (including those issued or
required under Environmental Laws and those relating to the occupancy or use of
owned or leased real property).

 

“Preliminary
Closing Inventory Listing” has the
meaning set forth in Section 1.7.

 

 “Purchase
Price” shall mean the purchase price to be paid by the Buyer for the
Acquired Assets at the Closing, as set forth in Section 1.3, as it may be adjusted pursuant to Section 1.7.

 

“Reasonable Best Efforts” shall mean best efforts, to the
extent commercially reasonable.

 

“Requisite Approval” shall mean the approval of the sale of
the Acquired Assets by the Sellers to the Buyer as contemplated by this
Agreement by a majority of the outstanding shares of stock entitled to vote
thereon.

 

“Response” shall mean a written response containing the
information provided for in Section 7.3(b)(ii).

 

 “Retained
Liabilities” shall mean any and all Liabilities and any costs or
obligations attendant to the defense thereof, whether claims with respect
thereto are asserted before or after the Closing and whether contingent,
accrued, matured, known or unknown, of the Sellers or any of its affiliates
which are not expressly identified as Assumed Liabilities, including but not
limited to (i) any Liabilities arising on or prior to the Closing Date or (ii) any
Liabilities under any Assumed Contract that arises after the Closing Date but
that arise out of or relate to any breach of or noncompliance with such Assumed
Contract by Sellers that occurred prior to the Closing Date.

 

“Security Interest” shall mean any mortgage, pledge, security
interest, encumbrance, charge or other lien (whether arising by contract or by
operation of law), other than (i) mechanic’s, materialmen’s, and similar
liens, (ii) liens arising under worker’s compensation, unemployment
insurance, social security, retirement, and similar legislation and (iii) liens
on goods in transit incurred pursuant to documentary letters of credit, in each
case arising in the Ordinary Course of Business of the Sellers and not material
to the Sellers.

 

“Sellers Certificate” shall mean a certificate to the effect
that each of the conditions specified in clause (a) of Section 5.1 and clauses (a) through
(d) (insofar as clause (d) relates to Legal Proceedings involving the
Sellers) of Section 5.2 is
satisfied in all respects.

 

 “Material
Adverse Effect” shall mean any material adverse change, event,
circumstance or development with respect to, or material adverse effect on, (i) the
Acquired Business, including the assets, liabilities, capitalization,
prospects, condition (financial or other), or results of operations of the
Sellers relating to the Acquired Business, or (ii) the ability of the
Buyer to operate the Acquired Business immediately after the Closing in the
manner operated by the Sellers prior to the Closing.

 

36

 

“Seller Plan”  shall
mean any Employee Benefit Plan maintained, or contributed to, by the Sellers or
any Affiliate, but only to the extent to which the Seller Plan relates to
the Acquired Business; if any Seller has an Employee Benefit Plan which relates
to a business other than the Acquired Business, it shall not be considered a
Seller Plan.

 

 “Subsidiary”
shall mean any corporation, partnership, trust, limited liability company or
other non-corporate business enterprise in which the Sellers (or another
Subsidiary) holds stock or other ownership interests representing (a) more
than 50% of the voting power of all outstanding stock or ownership interests of
such entity or (b) the right to receive more than 50% of the net assets of
such entity available for distribution to the holders of outstanding stock or
ownership interests upon a liquidation or dissolution of such entity.

 

“Taxes” shall mean all taxes, charges, fees, levies or other
similar assessments or liabilities, including income, gross receipts, ad
valorem, premium, value-added, excise, real property, personal property, sales,
use, transfer, withholding, employment, unemployment, insurance, social
security, business license, business organization, environmental, workers
compensation, payroll, profits, license, lease, service, service use,
severance, stamp, occupation, windfall profits, customs, duties, franchise and
other taxes imposed by the United States of America, Mexico or any state, local
or foreign government, or any agency thereof, or other political subdivision of
the United States, Mexico or any such government, and any interest, fines,
penalties, assessments or additions to tax resulting from, attributable to or
incurred in connection with any tax or any contest or dispute thereof.

 

“Tax Returns” shall mean all reports, returns, declarations,
statements or other information required to be supplied to a taxing authority
in connection with Taxes.

 

“Third Party Action” shall mean any suit or proceeding by a
person or entity other than a Party for which indemnification may be sought by
a Party under ARTICLE VII.

 

ARTICLE X

 

MISCELLANEOUS

 

10.1         Press Releases and Announcements.  Except as
contemplated herein:

 

(a)           each Party shall keep strictly confidential the terms of this Agreement,
the other Ancillary Agreements and the transactions contemplated hereby and
thereby;

 

(b)           each Party shall keep strictly confidential, and shall not use or disclose,
any non-public document or other information that relates directly or
indirectly to the business of the other Party or any of such Party’s
Affiliates; and

 

(c)           neither Party shall issue any press release or public announcement relating
to the subject matter of this Agreement without the prior written approval of
the other Party;

 

37

 

provided, however, that either Party may make any public disclosure it believes in good
faith is required by applicable law, regulation or stock market rule (in
which case the disclosing Party shall use reasonable efforts to advise the
other Party and provide it with a copy of the proposed disclosure prior to
making the disclosure).

 

10.2         No Third Party Beneficiaries.  This
Agreement shall not confer any rights or remedies upon any person other than
the Parties and their respective successors and permitted assigns.

 

10.3         Entire Agreement.  This Agreement (including the
documents referred to herein and the Schedules referred to herein) constitutes
the entire agreement between the Parties and supersedes any prior
understandings, agreements, or representations by or between the Parties,
written or oral, with respect to the subject matter hereof.  Notwithstanding the foregoing, any
confidentiality agreement between the Parties executed prior to the date hereof
shall survive the execution and delivery of this Agreement and shall terminate
in full at the Closing.

 

10.4         Succession and Assignment.  This
Agreement shall be binding upon and inure to the benefit of the Parties named
herein and their respective successors and permitted assigns. Neither Party may
assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Party; provided  that the Buyer may
assign some or all of its rights, interests and/or obligations hereunder to one
or more Affiliates of the Buyer provided that Buyer shall remain liable for
such Affiliates performance.

 

10.5         Counterparts and Facsimile Signature.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.  This Agreement may be
executed by facsimile signature.

 

10.6         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.

 

10.7         Notices.  All notices, requests, demands, claims, and
other communications hereunder shall be in writing.  Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly delivered 4 business days after it
is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent for next business day delivery
via a reputable nationwide overnight courier service, in each case to the
intended recipient as set forth below:

 

	
  If to the Sellers:

  	
  Copy to:

  
	
   

  	
   

  
	
  Rob Walker

  	
  Steven H. Jackman

  
	
  Vice President, Corporate Development

  	
  Vice President & Corporate Counsel

  
	
  Sanmina-SCI Corporation

  	
  Sanmina-SCI Corporation

  
	
  2700 N. First Street

  	
  2700 N. First Street

  
	
  San Jose, CA 95134

  	
  San Jose, CA 95134

  

 

38

 

	
  Phone: (408) 964-3601

  	
  Phone: (408) 964-3617

  
	
  Fax: (408) 964-3699

  	
  Fax: (408) 964-3888

  
	
   

  	
   

  
	
  rob.walker@sanmina-sci.com

  	
  steven.jackman@sanmina-sci.com

  
	
   

  	
   

  
	
  If to the Buyer:

  	
  Copy to:

  
	
   

  	
   

  
	
  Francisco
  Cano

  	
  Santiago
  Concha

  
	
  Americas
  Manufacturing Exec

  	
   

  
	
  Lenovo
  Mexico

  	
  LatinAmerica
  General Counsel

  
	
  Av.
  Santa Fe # 505, Piso 15

  	
   

  
	
  Mexico
  DF, CP: 05349

  	
  Lenovo
  Mexico

  
	
   

  	
  Av.
  Santa Fe # 505, Piso 15

  
	
  Phone:
  5255 5000 8500

  	
  Mexico
  DF, CP: 05349

  
	
   

  	
   

  
	
   

  	
  Phone:
  5255 5000 8559

  
	
  fcano@lenovo.com

  	
   

  
	
   

  	
  sconcha@lenovo.com

  

 

Either Party may give any
notice, request, demand, claim, or other communication hereunder using any other
means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail) other than electronic mail, but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the party for whom it is
intended.  Either Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the manner
herein set forth.

 

10.8         Governing Law.  This Agreement (including the
validity and applicability of the arbitration provisions of this Agreement, the
conduct of any arbitration of a Dispute, the enforcement of any arbitral award
made hereunder and any other questions of arbitration law or procedure arising
hereunder) shall be governed by and construed in accordance with the laws of
Mexico DF, without giving effect to any choice or conflict of law provision or rule that
would  cause the application of laws of
any jurisdictions other than those of Mexico DF.

 

10.9         Amendments and Waivers.  The Parties
may mutually amend any provision of this Agreement at any time prior to the
Closing.  No amendment of any provision
of this Agreement shall be valid unless the same shall be in writing and signed
by each of the Parties.  No waiver by
either Party of any right or remedy hereunder shall be valid unless the same
shall be in writing and signed by the Party giving such waiver.  No waiver by either Party with respect to any
default, misrepresentation, or breach of warranty or covenant hereunder shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.

 

39

 

10.10       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.  If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or unenforceable,
the Parties agree that the court making the determination of invalidity or
unenforceability shall have the power to limit the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified.

 

10.11       Expenses.  Except as specifically set forth this
Agreement (including ARTICLE VII),
each Party shall bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.

 

10.12       Specific Performance.  Each Party acknowledges and agrees that the
other Party would be damaged irreparably in the event any of the provisions of
this Agreement (including Sections 6.1 and
6.2) are not performed in accordance with their specific terms or
otherwise are breached.  Accordingly,
each Party agrees that the other Party shall be entitled to an injunction or
other equitable relief to prevent breaches of the provisions of this Agreement
and to enforce specifically this Agreement and the terms and provisions hereof
in any action instituted in any court of the United States or any state thereof
having jurisdiction over the Parties and the matter, in addition to any other
remedy to which it may be entitled, at law or in equity. Notwithstanding the
foregoing, the Parties agree that if a Dispute is submitted to arbitration in
accordance with Section 7.3(b)(iii) and
Section 7.3(b)(iv), then the
foregoing provisions of this Section 10.13
shall not apply to such Dispute, and the provisions of Section 7.3(b)(iii) and Section 7.3(b)(iv) shall govern
availability of injunctive relief, specific performance or other equitable
relief with respect to such Dispute.

 

10.13       Construction.

 

(a)           The language used in this Agreement shall be deemed to be the language
chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against either Party.

 

(b)           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.

 

(c)           Any reference herein to “including” shall be interpreted as “including
without limitation.”

 

(d)           Any reference to any Article, Section or paragraph shall be deemed to
refer to an Article, Section or paragraph of this Agreement, unless the
context clearly indicates otherwise.

 

40

 

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

 

	
   

  	
  SELLERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SANMINA-SCI USA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jure Sola

  
	
   

  	
  Name:  Jure Sola

  
	
   

  	
  Title:  Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SANMINA-SCI SYSTEMS DE MEXICO
  S.A.

  DE C.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jure Sola

  
	
   

  	
  Name:  Jure Sola

  
	
   

  	
  Title:  Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SANMINA-SCI
  SYSTEMS SERVICES DE

  MEXICO S.A. DE C.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jure Sola

  
	
   

  	
  Name: Jure Sola

  
	
   

  	
  Title: Chairman
  and Chief Executive Officer

  

 

Signature page for SELLERS

 

 

	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENOVO
  (SINGAPORE) PTE. LTD

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Damion
  Glendinning

  
	
   

  	
  Name:

  	
  Damion Glendinning

  
	
   

  	
  Title:  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENOVO CENTRO TECNOLOGICO, SdeRL DE CV

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Francisco J.
  Cano

  
	
   

  	
  Name:

  	
  Francisco J. Cano

  
	
   

  	
  Title:  AG Manufacturing Executive Director

  
				

 

Signature page for BUYER

 

 

	
  Exhibits

  	
   

  
	
   

  	
   

  
	
  Exhibit A-1

  	
  Invoice

  
	
  Exhibit A-2

  	
  Invoice

  
	
  Exhibit B

  	
  Instrument of Assumption

  
	
  Exhibit C

  	
  Facility Lease

  
	
  Exhibit D

  	
  Transition Services Agreement

  
	
   

  	
   

  
	
  Schedules

  	
   

  
	
  Schedule 1.1(a)

  	
  Assumed Contracts

  
	
  Schedule 1.5

  	
  Allocation of Purchase Price among Acquired
  Assets

  
	
  Schedule 5.2(i)

  	
  List of Employees Required to Have Accepted
  Offers

  
	
  Schedule 6.2

  	
  List of Persons not to Hire

  
	
  Disclosure ScheduleEXHIBIT 10.68

 

FIRST
AMENDMENT AGREEMENT

 

FIRST AMENDMENT AGREEMENT, dated as of November 26,
2007 (this “First Amendment”), to the Revolving Trade Receivables Purchase
Agreement, dated as of September 21, 2007 (as amended, supplemented or
otherwise modified from time to time, the “Receivables Purchase Agreement”),
among Sanmina-SCI Magyarorszag Elektronikai Gyarto Kft and Sanmina-SCI Systems
de Mexico, S.A. de C.V., as Originators, Sanmina-SCI Corporation and
Sanmina-SCI UK Ltd., as Servicers, the several banks and other financial
institutions or entities from time to time parties thereto, as Purchasers, and
Deutsche Bank AG New York Branch, as Administrative Agent.  Unless otherwise defined herein, terms used
herein shall have the meanings assigned thereto in the Receivables Purchase
Agreement.

 

W I T
N E S S E T H :

 

WHEREAS, the Servicers have requested that certain
provisions of the Receivables Purchase Agreement be amended, so that they may
elect to extend the Facility Termination Date; and

 

WHEREAS, the Purchasers are willing to agree to such
amendment only upon the terms and subject to the conditions set forth herein;
and

 

NOW, THEREFORE, in consideration of the premises and
the mutual covenants contained herein, the Servicers, the Originators, the Purchasers
and the Administrative Agent  hereby
agree as follows:

 

1.               Amendments to the Receivables Purchase
Agreement. The definition of
“Facility Termination Date” is hereby amended to read in its entirety as
follows:

 

“Facility Termination Date” means the earlier of (i) March 21,
2008, and (ii) the date on which the Administrative Agent delivers to the
Servicers a notice of termination as a result of a Termination Event in
accordance herewith (or the date on which such termination becomes effective
automatically pursuant to Section 7); provided, however that the Servicers
may elect, by notice in writing to the Administrative Agent not later than 30
days prior to March 21, 2008, to extend the Facility Termination Date for
an additional  18 months from March 21,
2008.  The effectiveness of such election
shall require written acceptance thereof by the Purchasers, which acceptance
will be subject to then-prevailing market conditions with respect to Obligor
Limits and Applicable Margins, all necessary credit and insurance approvals,
execution of mutually satisfactory documentation and there having occurred and
continuing no Termination Event or Incipient Termination Event..

 

2.               Representations and Warranties

 

Each of the Originators and the Servicers, as of the
date hereof and after giving effect to the amendments contained herein, hereby
confirms, reaffirms and restates the representations and warranties made by it
in the Receivables Purchase Agreement and otherwise in the Transaction
Documents to which it is a party, all as if made on the date hereof, and hereby
represents and warrants to the Purchasers, the Administrative Agent and the
Collateral Agent that no Termination Event or Incipient Termination Event has
occurred and is continuing after giving effect to the terms hereof.

 

3.               Effectiveness

 

This First Amendment shall become effective on the
date upon which  the Administrative Agent
shall have received counterparts of this First Amendment, duly executed and
delivered by the Originators, the Servicers, the Administrative Agent and the
Required Purchasers, as the case may be;

 

4.               Limited Effect

 

The execution, delivery and effectiveness of this
First Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of the Administrative Agent or any
Purchaser under the Receivables Purchase Agreement or any other Transaction
Document, nor constitute a waiver of compliance with any provision of the
Receivables Purchase Agreement or any other Transaction Document.  Except as expressly amended, modified and
supplemented herein, all of the provisions and covenants of the Receivables
Purchase Agreement and the other 

 

 

Transaction Documents are
and shall continue to remain in full force and effect in accordance with the
terms thereof and are hereby in all respects ratified and confirmed.  Each reference to the Receivables Purchase
Agreement in any Transaction Document shall be a reference to the Receivables
Purchase Agreement as amended by this First Amendment.

 

5.               Confirmation of Guarantee

 

By its execution and delivery hereof, Sanmina-SCI
Corporation hereby confirms that the Guarantee dated as of September 21,
2007 in favor of the Administrative Agent is and shall remain in full force and
effect after the effectiveness of this First Amendment and hereby confirms its
obligations under the Guarantee after giving effect to this First Amendment.

 

6.               Governing Law; Counterparts (a) This
First Amendment and the rights and obligations of the parties hereto shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York.  The provisions of Section 9.12
of the Receivables Purchase Agreement shall apply mutatis mutandis as if set
forth in full herein.

 

(b)  This First
Amendment may be executed by one or more of the parties hereto on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.  This First Amendment may be delivered by
facsimile transmission of the relevant signature pages hereof.

 

[remainder of this
page intentionally left blank]

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this First Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

 

 

	
  ORIGINATORS

  	
  SANMINA-SCI
  MAGYARORSZAG ELEKTRONIKAI 

  
	
   

  	
  GYARTO KFT.

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ GABOR PAPP DR  

  
	
   

  	
   

  	
  Name:  Gabor Papp Dr.  

  
	
   

  	
   

  	
  Title:  Managing Director  

  
	
   

  	
   

  	
   

  
	
   

  	
  By  

  	
   

  
	
   

  	
   

  	
  Name:  

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SANMINA-SCI SYSTEMS DE MEXICO, S.A. DE C.V.

  
	
   

  	
   

  
	
   

  	
  By  

  	
  /s/ SHELLY L. BYERS

  
	
   

  	
   

  	
  Name:  Shelly L. Byers

  
	
   

  	
   

  	
  Title:  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SERVICERS

  	
  SANMINA-SCI CORPORATION

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ WALTER BOILEAU

  
	
   

  	
   

  	
  Name:  Walter Boileau

  
	
   

  	
   

  	
  Title:  VP and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SANMINA-SCI UK LTD.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ SHELLY L. BYERS

  
	
   

  	
   

  	
  Name:  Shelly L. Byers

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
  ADMINISTRATIVE AGENT

  	
  DEUTSCHE BANK AG, NEW
  YORK BRANCH,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ NANCY ADAMO

  
	
   

  	
   

  	
  Name:  Nancy Adamo

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PURCHASERS

  	
  DEUTSCHE BANK AG, NEW
  YORK BRANCH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ NANCY ADAMO

  
	
   

  	
   

  	
  Name:  Nancy Adamo

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ STEPHEN ATALLAH

  
	
   

  	
   

  	
  Name:  Stephen Atallah

  
	
   

  	
   

  	
  Title:  Managing Director

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]