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Singapore		3672		Not Applicable
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Jeffrey N. Ostrager, Esq. Curtis, Mallet-Prevost, Colt & Mosle LLP 101 Park Avenue New York, New York 10178 (212) 696-6000		David C. Adams, Esq. Bullivant Houser Bailey, PC 1415 L Street, Suite 1000 Sacramento, CA 95814 (916) 930-2500

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	•	If the average Flextronics closing price is equal to or greater than $10.5606 and equal to or less than $12.9074, you will receive a fraction of a Flextronics ordinary share that will range from 0.6202 to 0.5075 for each share of IDW common stock, which would represent an equivalent of $6.55 of value in Flextronics ordinary shares based on the average Flextronics closing price;
	•	If the average Flextronics closing price is greater than $12.9074 and equal to or less than $13.4941, you will receive a fraction of a Flextronics ordinary share equal to 0.5075 for each share of IDW common stock, which would represent an equivalent of more than $6.55 and up to $6.85 of value in Flextronics ordinary shares based on the average Flextronics closing price;
	•	If the average Flextronics closing price is greater than $13.4941, you will receive a fraction of a Flextronics ordinary share equal to $6.85 divided by the average Flextronics closing price for each share of IDW common stock, which would represent an equivalent of $6.85 of value in Flextronics ordinary shares based on the average Flextronics closing price; and
	•	If the average Flextronics closing price is less than $10.5606, you will receive a fraction of a Flextronics ordinary share equal to 0.6202 for each share of IDW common stock, which would represent an equivalent of less than $6.55 of value in Flextronics ordinary shares based on the average Flextronics closing price.

	Sincerely,
	Thomas A. Lacey
	Chief Executive Officer and
	Chairman of the Board of Directors

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	1. To consider and vote upon the approval and adoption of the Agreement and Plan of Merger, dated as of September 4, 2006, by and among Flextronics International Ltd., Granite Acquisition Corp., a wholly-owned subsidiary of Flextronics, and IDW, and the approval of the merger contemplated by the Agreement and Plan of Merger.
	2. To grant the persons named as proxies discretionary authority to vote to adjourn or postpone the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of approving and adopting the merger agreement.
	3. To transact such other business as may properly come before the special meeting and any adjournment or postponement thereof.

	By Order of the Board of Directors
	Alan M. Lefko
	Secretary

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			Page #
REFERENCES TO ADDITIONAL INFORMATION				iii
ABOUT THIS DOCUMENT				iv
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING				1
SUMMARY				4
	The Merger and the Merger Agreement			4
	Parties to the Merger			5
	Special Meeting of Stockholders of IDW			6
	Risk Factors			7
	Recommendation of the IDW Board of Directors			7
	IDW’s Reasons for the Merger			7
	Opinion of IDW’s Financial Advisor			7
	IDW’s Directors and Executive Officers Have Interests in the Merger			8
	What Is Needed to Complete the Merger			8
	IDW Is Prohibited from Soliciting Other Offers			9
	Change of Board Recommendation			9
	Flextronics and IDW May Terminate the Merger Agreement under Specified Circumstances			9
	IDW May Be Required to Pay a Termination Fee under Specified Circumstances			10
	Material United States Federal Income Tax Consequences of the Merger			10
	Accounting Treatment of the Merger			10
	The Merger Is Subject to Antitrust Laws			10
	No Appraisal Rights			10
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF FLEXTRONICS				11
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF IDW				13
MARKET PRICE AND DIVIDEND INFORMATION				15
COMPARATIVE HISTORICAL PER SHARE DATA				16
COMPARATIVE PER SHARE MARKET PRICE DATA				17
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION				18
RISK FACTORS				19
	Risks Relating to the Merger			19
	Risks Relating to Flextronics			23
THE SPECIAL MEETING OF IDW STOCKHOLDERS				34
PROPOSAL NO. 1 — THE MERGER				37
	General			37
	Proposal			37
	Background of the Merger			37
	IDW’s Reasons for the Merger and Recommendation of IDW’s Board			40
	Opinion of IDW’s Financial Advisor			43
	Flextronics’s Reasons for the Merger			50
	Interests of IDW’s Directors and Executive Officers in the Merger			50
	Material United States Federal Income Tax Consequences of the Merger			52
	Singapore Tax Considerations			54
	Accounting Treatment of the Merger			55

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			Page #
	Effect of the Merger on IDW Stock Option Plans			55
	Regulatory Filings and Approvals Required to Complete the Merger			56
	Delisting and Deregistration of IDW Common Stock After the Merger			56
	Restrictions on Sales of Flextronics Ordinary Shares Received in the Merger			56
	No Appraisal Rights			57
THE MERGER AGREEMENT				57
	Explanatory Note Regarding Summary of Merger Agreement and Representations and Warranties in the Merger Agreement			57
	Structure of the Merger			57
	Completion and Effectiveness of the Merger			58
	Conversion of IDW Common Stock in the Merger			58
	Fractional Shares			59
	Exchange of IDW Common Stock; Distributions on Flextronics Shares			59
	Transfers of Ownership and Lost Stock Certificates			59
	Representations and Warranties			60
	IDW’s Conduct of Business Before Completion of the Merger			61
	IDW’s Covenant Against Soliciting Other Offers			63
	IDW’s Covenant that its Board of Directors Recommend the Merger and Hold a Stockholders Meeting			64
	Treatment of IDW Stock Options			65
	Director and Officer Indemnification and Insurance			65
	Tax Matters			66
	Regulatory Filings			66
	Reasonable Efforts and Further Actions			66
	Conditions to Completion of the Merger			66
	Definition of Material Adverse Effect			67
	Termination of the Merger Agreement			68
	Payment of Termination Fee			69
THE VOTING AGREEMENTS				70
DESCRIPTION OF FLEXTRONICS SHARE CAPITAL				71
COMPARISON OF RIGHTS OF HOLDERS OF IDW COMMON STOCK AND HOLDERS OF FLEXTRONICS ORDINARY SHARES				75
PROPOSAL NO. 2 — ADJOURNMENT OF THE SPECIAL MEETING				83
FUTURE IDW STOCKHOLDER PROPOSALS				83
LEGAL MATTERS				83
EXPERTS				84
WHERE YOU CAN FIND MORE INFORMATION				84
ANNEX A — Agreement and Plan of Merger				A-1
ANNEX B — Form of Voting Agreement between Flextronics and certain stockholders of IDW				B-1
ANNEX C — Opinion of Deutsche Bank Securities Inc.				C-1
EX-8.01: OPINION OF CURTIS, MALLET-PREVOST, COLT & MOSLE LLP
EX-8.02: OPINION OF BULLIVANT HOUSER BAILEY, PC
EX-15.01: LETTER IN LIEU OF CONSENT OF DELOITTE & TOUCHE LLP
EX-23.01: CONSENT OF DELOITTE & TOUCHE LLP
EX-23.02: CONSENT OF GRANT THORNTON LLP
EX-23.03: CONSENT OF GRANT THORNTON LLP
EX-99.03: FORM OF INTERNATIONAL DISPLAYWORKS, INC. PROXY CARD

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	•	a prospectus of Flextronics under Section 5 of the Securities Act of 1933, as amended, or the Securities Act, with respect to the Flextronics ordinary shares to be issued to the holders of IDW common stock in the merger;
	•	a proxy statement of IDW under Section 14(a) of the Exchange Act; and
	•	a notice of special meeting of IDW stockholders, at which, among other things, IDW stockholders will consider and vote upon the approval and adoption of the merger agreement and the approval of the merger.

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Q:		Why am I receiving this proxy statement/ prospectus?
A:		Flextronics International Ltd. has agreed to acquire International DisplayWorks, Inc. under the terms of a merger agreement that is described in this proxy statement/ prospectus. Please see the section entitled “The Merger Agreement” beginning on page 57 of this proxy statement/ prospectus. A copy of the merger agreement is attached to this proxy statement/ prospectus as Annex A.
		In order to complete the merger, IDW stockholders must adopt the merger agreement and approve the merger by the affirmative vote of the holders of a majority of the shares of IDW common stock outstanding on the record date for the special meeting and all other conditions to the merger must be satisfied or waived. IDW will hold a special meeting of its stockholders to obtain the required stockholder approval. You should read this proxy statement/ prospectus carefully, as it contains important information about the merger agreement, the merger and the special meeting. The enclosed voting materials for the special meeting allow you to vote your shares of IDW common stock without attending the special meeting. Shareholders of Flextronics are not required to approve the merger agreement, the merger, the issuance of Flextronics ordinary shares in the merger or any matter relating to the merger, and accordingly, Flextronics will not hold a special meeting of its shareholders in connection with the merger.
Q:		What will I receive in the merger for my IDW common stock?
A:		Upon completion of the merger, each share of IDW common stock that you hold will be converted into a fraction of a Flextronics ordinary share based on an exchange ratio formula that is provided in the merger agreement. The exchange ratio will be calculated using the average per share closing price of Flextronics’s ordinary shares on the Nasdaq Global Select Market for the 20 consecutive trading days ending on the fifth trading day before the closing of the merger, and will provide the following:
		• If the average Flextronics closing price is equal to or greater than $10.5606 and equal to or less than $12.9074, you will receive a fraction of a Flextronics ordinary share that will range from 0.6202 to 0.5075 for each share of IDW common stock, which would represent an equivalent of $6.55 of value in Flextronics ordinary shares based on the average Flextronics closing price;
		• If the average Flextronics closing price is greater than $12.9074 and equal to or less than $13.4941, you will receive a fraction of a Flextronics ordinary share equal to 0.5075 for each share of IDW common stock, which would represent an equivalent of more than $6.55 and up to $6.85 of value in Flextronics ordinary shares based on the average Flextronics closing price;
		• If the average Flextronics closing price is greater than $13.4941, you will receive a fraction of a Flextronics ordinary share equal to $6.85 divided by the average Flextronics closing price for each share of IDW common stock, which would represent an equivalent of $6.85 of value in Flextronics ordinary shares based on the average Flextronics closing price; and
		• If the average Flextronics closing price is less than $10.5606, you will receive a fraction of a Flextronics ordinary share equal to 0.6202 for each share of IDW common stock, which would represent an equivalent of less than $6.55 of value in Flextronics ordinary shares based on the average Flextronics closing price.
		At an average Flextronics closing price of $9.9739, you would receive a fraction of a Flextronics ordinary share equal to 0.6202 for each share of IDW common stock, which would represent an equivalent of $6.19 of value in Flextronics ordinary shares based on this average Flextronics closing price. If the average Flextronics closing price is less than $9.9739, IDW would have the right to call off the merger, unless Flextronics elects to adjust the exchange ratio in order to provide that you would receive a fraction of a Flextronics ordinary share with an equivalent value, based on the average Flextronics closing price, of $6.19 for each share of IDW common stock. However, IDW might not elect to exercise this right to call off the merger, in which case you would receive a fraction of a Flextronics ordinary share equal to 0.6202 for each share of IDW common stock, which would represent an equivalent of less than $6.19 of value in Flextronics ordinary shares based on the average Flextronics closing price.

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		On October 24, 2006, the last trading day prior to the printing of this document, the closing price of Flextronics’s ordinary shares on the Nasdaq Global Select Market was $12.47. If that closing price was the applicable average Flextronics closing price, then you would receive a fraction of a Flextronics ordinary share equal to 0.5253, representing a value, based on this assumed average Flextronics closing price, of $6.55 for each share of IDW common stock. Flextronics and IDW plan to issue a joint press release prior to the date of the IDW special meeting setting forth the anticipated average Flextronics closing price and the exchange ratio calculation.
Q:		Are Flextronics ordinary shares traded on any public stock market?
A:		Yes. Flextronics ordinary shares are traded on the Nasdaq Global Select Market under the symbol “FLEX.”
Q:		When and where will the IDW special meeting be held?
A:		The special meeting will take place on November 28, 2006, at the Hilton Garden Inn located at 1951 Taylor Road, Roseville, California, at 10:00 a.m. local time.
Q:		Who is entitled to vote?
A:		You are entitled to vote at the special meeting if you owned shares of IDW common stock at the close of business on October 18, 2006, the record date for the special meeting. You will have one vote at the special meeting for each share of IDW common stock you owned at the close of business on the record date. There are 44,938,704 shares of IDW common stock entitled to be voted at the special meeting.
Q:		How can I vote?
A:		If you are a stockholder of record, you may submit a proxy for the special meeting: (i) by completing, signing, dating and returning the proxy card in the pre-addressed envelope provided; (ii) using the telephone; or (iii) via the Internet. For specific instructions on how to use the telephone or the Internet to submit a proxy for the special meeting, please refer to the instructions on your proxy card.
		If you hold your shares of IDW common stock in a stock brokerage account or if your shares are held by a bank or nominee (i.e., in “street name”), you must provide the record holder with instructions on how to vote your shares. Please check the voting instruction card included by your bank, broker or nominee for directions on providing instructions to vote your shares.
		If you are a stockholder of record, you may also vote in person at the special meeting. If you hold shares in street name, you may not vote in person at the special meeting unless you obtain a signed proxy from the record holder giving you the right to vote the shares.
Q:		How will my proxy be exercised with respect to the proposals?
A:		If you properly give your proxy and submit it to IDW by 11:59 p.m. Pacific Time on November 27, 2006, one of the individuals named as your proxy will vote your shares as you have directed. You may direct your shares to be voted “FOR” or “AGAINST” the proposals or abstain from voting. If you submit your proxy but do not make specific choices with respect to the proposals, your proxy will follow the recommendations of the IDW board of directors and vote your shares in favor of the proposals.
Q:		What happens if I do not return a proxy card or vote?
A:		If you do not sign and send in your proxy card or vote in person at the special meeting, or if you mark the “abstain” box on the proxy card or voting instruction card, it will have the same effect as a vote against the proposal to adopt the merger agreement and approve the merger, but will have no effect on the proposal to grant discretionary authority to the persons named as proxies to vote to adjourn or postpone the special meeting.
Q:		If my shares are held in “street name,” will my broker vote my shares for me?
A:		Your broker will vote your shares held in “street name” on the proposal to adopt the merger agreement and approve the merger only if you provide instructions on how to vote. Therefore, you should be sure to provide your broker with instructions on how to vote your shares. Without instructions, your shares will not be voted on the proposal to adopt the merger agreement and approve the merger, which will have the same effect as a vote against the proposal to adopt the merger agreement and approve the merger.

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Q:		What should I do if I receive more than one set of voting materials?
A:		Please complete, sign, date and return each proxy card and voting instruction card that you receive. You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If your shares are held in more than one name, you will receive more than one proxy or voting instruction card.
Q:		May I change my vote after I have mailed my signed proxy card or voting instruction card or submitted my proxy using the telephone or Internet?
A:		Yes. If you have submitted a proxy, you may change your vote at any time before your proxy is voted at the IDW special meeting of stockholders. Prior to the special meeting, you may:
		• timely submit another properly completed proxy card with a later date;
		• timely submit another proxy by telephone or over the Internet; or
		• send a written notice that you are revoking your proxy to IDW’s Corporate Secretary at its principal offices located at 1613 Santa Clara Drive, Suite 100, Roseville, CA 95661-3542.
		During the special meeting, you may vote in person prior to the close of voting. Simply attending the special meeting will not, by itself, revoke your proxy. If you have instructed a bank, broker or nominee to vote your shares of IDW common stock by executing a voting instruction card or by using the telephone or Internet, you must follow the directions received from your bank, broker or nominee to change your instructions.
Q:		Who will bear the cost of this solicitation?
A:		IDW will pay the expenses of soliciting proxies for the special meeting. IDW has retained Georgeson Inc., a proxy solicitation firm, to solicit proxies in connection with the special meeting at a cost of approximately $10,000 plus out-of-pocket expenses. In addition, IDW may reimburse banks, brokerage houses, fiduciaries and custodians representing beneficial owners of shares for their expenses in forwarding soliciting materials to such beneficial owners. IDW directors, officers and employees may also solicit proxies in-person or by mail, telephone, facsimile, e-mail or by other means of communication. No additional compensation will be paid to IDW directors, officers and employees for these services.
Q:		Do I need to send in my IDW stock certificates now?
A:		No. You should not send in your IDW stock certificates now. Following the merger, the exchange agent selected by Flextronics will send IDW stockholders a letter of transmittal informing them where to deliver their IDW stock certificates in order to receive Flextronics ordinary shares and any cash in lieu of a fractional Flextronics ordinary share. You should not send in your IDW common stock certificates prior to receiving this letter of transmittal.
Q:		When do you expect the merger to be completed?
A:		If IDW stockholders adopt the merger agreement and approve the merger at the special meeting, Flextronics and IDW expect to complete the merger as soon as practicable after the special meeting, assuming all other conditions to the merger have been satisfied or waived, including the receipt of required regulatory approvals.
Q:		Who can answer my questions about the merger or IDW’s special meeting of stockholders?
A:		If you would like additional copies of this proxy statement/ prospectus without charge or if you have questions about the merger or IDW’s special meeting of stockholders, including the procedures for voting your shares, you should contact:

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	Because the market price of Flextronics’s shares may fluctuate, you cannot be certain of the market value of the Flextronics shares that you will receive in the merger.

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	The market price of Flextronics ordinary shares may be affected by factors different from those affecting the shares of IDW common stock.

	IDW stockholders will have limited ability to influence Flextronics’s actions and decisions following the merger.

	The directors and executive officers of IDW have interests and arrangements that could affect their decision to support or approve the merger.

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	If the merger does not qualify as a tax-free reorganization for U.S. federal income tax purposes, you will recognize gain or loss on the exchange of your shares of IDW common stock.

	Flextronics and IDW may be unable to obtain the regulatory approvals required to complete the merger.

	Failure to complete the merger with Flextronics could materially and adversely affect IDW’s results of operations and IDW’s stock price.

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	•	IDW will remain liable for significant transaction costs, including legal, accounting, financial advisory and other costs relating to the merger;
	•	under specified circumstances, IDW may have to pay a termination fee in the amount of $8.0 million to Flextronics; (see “The Merger Agreement — Payment of Termination Fee” beginning on page 69 of this proxy statement/ prospectus);
	•	any operational investments that IDW may delay due to the pending transaction would need to be made, potentially on an accelerated timeframe, which could then prove costly and more difficult to implement; and
	•	the market price of IDW’s common stock may decline to the extent that the current market price reflects a belief by investors that the merger will be completed.

	•	the attention of IDW’s management and IDW’s employees may be diverted from day-to-day operations;
	•	IDW’s customers and suppliers may seek to modify or terminate existing agreements, or prospective customers may delay entering into new agreements or purchasing IDW’s products as a result of the announcement of the merger; and
	•	IDW’s ability to attract new employees and retain IDW’s existing employees may be harmed by uncertainties associated with the merger.

	The termination fee and the restrictions on solicitation contained in the merger agreement may discourage other companies from trying to acquire IDW.

	IDW will be subject to business uncertainties and contractual restrictions while the merger is pending.

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	Flextronics may not realize the expected benefits of the merger due to difficulties integrating the businesses, operations and product lines of Flextronics and IDW.

	•	demonstrating to Flextronics’s and IDW’s customers and suppliers that the merger will not result in adverse changes in client service standards or business focus;
	•	persuading Flextronics’s employees that Flextronics’s and IDW’s business cultures are compatible; and
	•	addressing any perceived adverse changes in business focus.

	Flextronics depends on industries that continually produce technologically advanced products with short life cycles and Flextronics’s business would be adversely affected if Flextronics’s customers’ products are not successful or if Flextronics’s customers lose market share.

	•	computing, which includes products such as desktop, handheld and notebook computers, electronic games and servers;
	•	mobile communication devices, which includes GSM, CDMA, and WCDMA handsets;
	•	consumer digital devices, which includes products such as set top boxes, home entertainment equipment, printers, copiers and cameras;
	•	industrial, semiconductor and white goods, which includes products such as home appliances, industrial meters, bar code readers and test equipment;
	•	automotive, marine and aerospace, which includes products such as navigation instruments, radar components, instrument panel and radio components;
	•	infrastructure, which includes products such as cable modems, cellular base stations, hubs and switches; and
	•	medical devices, which includes products such as drug delivery, diagnostic and telemedicine devices.

	•	rapid changes in technology or evolving industry standards and requirements for continuous improvement in products and services, result in short product life cycles;
	•	demand for Flextronics’s customers’ products may be seasonal;
	•	Flextronics’s customers may fail to successfully market their products, and Flextronics’s customers’ products may fail to gain widespread commercial acceptance;
	•	Flextronics’s customers may experience dramatic market share shifts in demand which may cause them to exit the business; and

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	•	there may be recessionary periods in Flextronics’s customers’ markets.

	Flextronics’s customers may cancel their orders, change production quantities or locations, or delay production, and the inherent difficulties involved in responding to these demands could harm Flextronics’s business.

	Flextronics’s industry is extremely competitive; if Flextronics is not able to continue to provide competitive services, Flextronics may lose business.

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	Flextronics’s operating results may fluctuate significantly due to a number of factors, many of which are beyond Flextronics’s control.

	•	changes in demand for Flextronics’s products or services;
	•	Flextronics’s effectiveness in managing manufacturing processes and costs;
	•	Flextronics’s increased design services and components offerings may reduce profitability as Flextronics continues to make substantial investments in these capabilities;
	•	the mix of the types of manufacturing services Flextronics provide, as high-volume and low-complexity manufacturing services typically have lower gross margins than lower volume and more complex services;
	•	changes in the cost and availability of labor and components, which often occur in the electronics manufacturing industry and which affect Flextronics’s margins and its ability to meet delivery schedules;
	•	Flextronics’s ability to achieve commercially viable production yields and manufacture commercial quantities of Flextronics’s components;
	•	the degree to which Flextronics is able to utilize its available manufacturing capacity;
	•	Flextronics’s ability to manage the timing of its component purchases so that components are available when needed for production, while avoiding the risk of purchasing inventory in excess of immediate production needs;
	•	local conditions and events that may affect Flextronics’s production volumes, such as labor conditions, political instability and local holidays;
	•	changes in demand in Flextronics’s customers’ end markets; and
	•	adverse changes in general economic or geopolitical conditions.

	The majority of Flextronics’s sales come from a small number of customers and a decline in sales to any of these customers could adversely affect Flextronics’s business.

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	Flextronics may encounter difficulties with acquisitions, which could harm Flextronics’s business.

	•	diversion of management’s attention from the normal operation of Flextronics’s business;
	•	potential loss of key employees and customers of the acquired companies, which is a particular concern in the acquisition of companies engaged in product and software design;
	•	difficulties managing and integrating operations in geographically dispersed locations;
	•	lack of experience operating in the geographic market or industry sector of the acquired business;
	•	the potential for deficiencies in internal controls at acquired companies;
	•	increases in Flextronics’s expenses and working capital requirements, which reduce Flextronics’s return on invested capital; and
	•	exposure to unanticipated liabilities of acquired companies.

	Flextronics’s strategic relationships with major customers create risks.

	•	Flextronics may need to pay a purchase price to the divesting OEM that exceeds the value Flextronics may realize from the future business of the OEM;
	•	the integration of the acquired assets and facilities into Flextronics’s business may be time-consuming and costly;
	•	Flextronics, rather than the divesting OEM, bears the risk of excess capacity at the facility;
	•	Flextronics may not achieve anticipated cost reductions and efficiencies at the facility;

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	•	Flextronics may be unable to meet the expectations of the OEM as to volume, product quality, timeliness and cost reductions;
	•	Flextronics’s supply agreements with the OEMs generally do not require any minimum volumes of purchase by the OEMs, and the actual volume of purchases may be less than anticipated; and
	•	if demand for the OEM’s products declines, the OEM may reduce its volume of purchases, and Flextronics may not be able to sufficiently reduce the expenses of operating the facility or use the facility to provide services to other OEMs.

	If Flextronics does not effectively manage changes in its operations, Flextronics’s business may be harmed; Flextronics has taken substantial restructuring charges in the past and Flextronics may need to take material restructuring charges in the future.

	•	Flextronics may not be able to attract and retain the management personnel and skilled employees necessary to support newly-acquired or expanded operations;
	•	Flextronics may not efficiently and effectively integrate new operations and information systems, expand its existing operations and manage geographically dispersed operations;
	•	Flextronics may incur cost overruns;
	•	Flextronics may incur charges related to its expansion activities;
	•	Flextronics may encounter construction delays, equipment delays or shortages, labor shortages and disputes and production start-up problems that could harm Flextronics’s growth and its ability to meet customers’ delivery schedules; and
	•	Flextronics may not be able to obtain funds for acquisitions and expansions on attractive terms, and Flextronics may not be able to obtain loans or operating leases with attractive terms.

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	Flextronics’s substantial investments and start-up and integration costs in Flextronics’s design services business may adversely affect Flextronics’s margins and profitability.

	Flextronics’s components business is dependent on Flextronics’s ability to quickly launch world-class components products, and Flextronics’s investment in development, and start-up and integration costs necessary to achieve quick launches of world-class components products may adversely affect Flextronics’s margins and profitability.

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	Intellectual property infringement claims against Flextronics’s customers or Flextronics could harm Flextronics’s business.

	The success of certain of Flextronics’s activities depends on Flextronics’s ability to protect its intellectual property rights.

	If Flextronics’s products or components contain defects, demand for Flextronics’s services may decline and Flextronics may be exposed to product liability and product warranty liability.

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	Flextronics may not meet regulatory quality standards applicable to Flextronics’s manufacturing and quality processes for medical devices, which could have an adverse effect on Flextronics’s business, financial condition or results of operations.

	Flextronics is subject to the risk of increased income taxes.

	•	tax incentives have been extended to encourage foreign investment; or
	•	income tax rates are low.

	Flextronics is exposed to intangible asset risk.

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	Flextronics’s exposure to financially troubled customers, particularly in the automotive industry, may adversely affect Flextronics’s financial results.

	If OEMs stop or reduce their manufacturing and supply chain management outsourcing, Flextronics’s business could suffer.

	Flextronics may be adversely affected by shortages of required electronic components.

	Flextronics conducts operations in a number of countries and is subject to risks of international operations.

	•	fluctuations in the value of local currencies;
	•	labor unrest and difficulties in staffing;
	•	longer payment cycles;

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	•	cultural differences;
	•	increases in duties and taxation levied on Flextronics’s products;
	•	imposition of restrictions on currency conversion or the transfer of funds;
	•	limitations on imports or exports of components or assembled products, or other travel restrictions;
	•	expropriation of private enterprises; and
	•	a potential reversal of current favorable policies encouraging foreign investment or foreign trade by Flextronics’s host countries.

	Fluctuations in foreign currency exchange rates could increase Flextronics’s operating costs.

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	Flextronics depends on its executive officers and skilled management personnel.

	Flextronics’s failure to comply with environmental laws could adversely affect Flextronics’s business.

	The market price of Flextronics’s ordinary shares is volatile.

	It may be difficult for investors to effect service of process on Flextronics within the United States or to enforce civil liabilities under the federal securities laws of the United States against Flextronics.

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Time and Place:		November 28, 2006, at the Hilton Garden Inn located at 1951 Taylor Road, Roseville, California, at 10:00 a.m., local time.
Purpose of Special Meeting Is to Vote on the Following Items:		1. To consider and vote upon the approval and adoption of the merger agreement and the approval of the merger, as described in the section titled “Proposal No. 1 — The Merger” on page 37.
		2. To grant the persons named as proxies discretionary authority to vote to adjourn or postpone the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of approving and adopting the merger agreement.
		3. To transact such other business as may properly come before the special meeting and any adjournment or postponement thereof.
Record Date:		The board of directors of IDW has fixed October 18, 2006 as the record date for the determination of IDW stockholders entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. Only holders of record of shares of IDW common stock at the close of business on the record date are entitled to notice of, and to vote at, the special meeting.
Outstanding Shares Held on Record Date:		On the record date, there were an aggregate of 44,938,704 shares of IDW common stock outstanding and entitled to vote.
Shares Entitled to Vote:		Only shares of IDW common stock are entitled to vote at the special meeting. Each share of IDW common stock is entitled to one vote.
Quorum Requirement:		A quorum is necessary to hold a valid special meeting. A majority of shares of IDW common stock outstanding as of the record date, represented by proxy or present in person, constitutes a quorum for the special meeting. Based on the aggregate of 44,938,704 shares of IDW common stock outstanding on the record date, 22,469,353 shares must be represented by proxy or present in person at the special meeting to have a quorum. The inspector of elections will determine whether or not a quorum is present.
		Abstentions and broker non-votes count towards the quorum requirement. If there is no quorum, a majority of the shares present in person or by proxy at the special meeting may vote to adjourn the special meeting to another date.

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Shares Owned by IDW Directors and Executive Officers as of the Record Date:		On the record date, IDW directors and executive officers owned 303,648 shares of IDW common stock and vested options that if exercised would represent an additional 627,500 shares. In the aggregate, these 931,148 shares represented approximately 2.1% of the total voting power of IDW’s common stock on the record date. These shares and options are subject to the provisions of voting agreements that IDW’s directors and executive officers have entered into with Flextronics. See “The Voting Agreements” beginning on page 71 of this proxy statement/prospectus.

Proposal		Vote Necessary
Merger Proposal		Adoption of the merger agreement and approval of the merger requires the affirmative vote of a majority of the shares of IDW common stock outstanding on the record date. Abstentions and broker non-votes have the same effect as a vote against the merger proposal.
Proposal to Grant Discretionary Authority to the Persons Named as Proxies		Approval of the proposal to grant discretionary authority to vote to adjourn or postpone the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of approving and adopting the merger agreement, requires the affirmative vote of the holders of a majority of shares of IDW common stock represented and entitled to vote at the special meeting.

	How to Vote by Proxy

By telephone:		You may submit your proxy by telephone by following the instructions included on your proxy card. Telephone voting will be accessible until 11:59 p.m. Pacific Time on November 27, 2006. If you submit your proxy by telephone, you do not need to return your proxy card.
By Internet:		You may also choose to submit your proxy on the Internet. The website for Internet voting is listed on your proxy card. Internet voting will be accessible until 11:59 p.m. Pacific Time on November 27, 2006. If you submit your proxy on the Internet, you do not need to return your proxy card.
By mail:		To submit your proxy by mail, simply complete, date and sign your proxy and return it in the return envelope provided. Postage will be pre-paid if mailed in the United States.

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	•	“FOR” adoption of the merger agreement and approval of the merger; and
	•	“FOR” the proposal to grant the persons named as proxies discretionary authority to vote to adjourn or postpone the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of approving and adopting the merger agreement.

	•	timely submit another properly completed proxy card with a later date;
	•	timely submit another proxy by telephone or over the Internet; or
	•	send a written notice that you are revoking your proxy to IDW’s Corporate Secretary at IDW’s principal offices at 1613 Santa Clara Drive, Suite 100, Roseville, CA 95661-3542.

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	•	historical information concerning IDW’s and Flextronics’s respective businesses, prospects, financial performance and condition, operations, management, competitive positions and pro forma assumptions on synergies from the combination of the companies;
	•	IDW management’s view of the financial condition, results of operations and business of IDW and Flextronics before and after giving effect to the proposed merger;
	•	current financial market conditions and historical stock prices, volatility and trading information with respect to both IDW and Flextronics;

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	•	the relationship between the market value of the merger consideration implied by the exchange ratio, and a comparison of comparable merger transactions, including the premium to market at the time the merger agreement was reached and the trading averages of each company’s respective stock price for the 30-, 60-, and 90-day periods preceding such date;
	•	potential synergistic opportunities through a larger international footprint for sales, and increased access to larger customers and working capital by the combined company;
	•	the significant vertical integration opportunities arising from the combination, which should allow rapid scaling in the use of IDW’s manufacturing capacity with resulting cost savings;
	•	the expectation that the combined company would utilize the skills and resources of an expanded employee base in developing new products;
	•	the risks associated with IDW continuing to operate independently and continuing with its strategy of scaling and aggressive growth;
	•	the risk that IDW’s customers, including Flextronics, would develop or acquire capabilities and solutions that compete with IDW’s products and services;
	•	the increased liquidity that IDW stockholders, including employees who hold stock options, would realize from the proposed merger;
	•	the potential to achieve future growth in additional markets from an improved integrated platform resulting from the merger;
	•	the structure of the merger, including the fact that the exchange ratio formula provides a share exchange value of $6.55 per IDW share within a 10% collar based on the average Flextronics closing price, which would limit the risk of a decrease in the trading price of Flextronics’s shares prior to the completion of the merger;
	•	the structure of the exchange ratio formula in providing IDW with a right to terminate the merger if the average Flextronics closing price falls more than 15% below the reference price;
	•	the written opinion of Deutsche Bank dated September 4, 2006, that, as of the date of such opinion, and based upon and subject to the assumptions made, matters considered and limits of the review undertaken by Deutsche Bank, the exchange ratio contained in the merger agreement was fair, from a financial point of view, to IDW’s stockholders (the full text of Deutsche Bank’s written opinion is attached as Annex C to this proxy statement/prospectus, and IDW stockholders are urged to read in their entirety both the opinion and the description of the opinion contained under the caption “Opinion of IDW’s Financial Advisor” beginning on page 43 of this proxy statement/prospectus) and the related financial analysis of Deutsche Bank with respect to such opinion;
	•	the inclusion of a “fiduciary out” in the merger agreement that permits IDW, subject to the payment of a termination fee, to terminate the merger agreement in order to accept a superior acquisition proposal made by a third party;
	•	the ability to consummate the merger, including the conditions to the merger requiring receipt of necessary regulatory approvals, and the likelihood of the merger being approved by the appropriate regulatory authorities; and
	•	the fact that the merger is expected to be tax-free to IDW stockholders for U.S. federal income tax purposes, except to the extent that IDW stockholders recognize gain on cash received for any fractional shares.

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	•	the risk that the potential synergies sought in the proposed merger might not be fully realized;
	•	the possibility that the proposed merger might not be consummated, or that consummation might be unduly delayed, and the potential adverse consequences resulting therefrom;
	•	the risk that the expected benefits from the merger will not be achieved;
	•	the potential financial expenses that would be incurred, and the impact of those expenses on operating results, in the event the proposed merger is not consummated;
	•	the risks associated with the exchange ratio formula, which provides a share exchange value of $6.55 per IDW share within a 10% collar based on the average Flextronics closing price, which would limit IDW stockholders from benefitting from any increase in the trading price of Flextronics’s shares prior to the completion of the merger;
	•	the risk that the exchange ratio formula would result in a share exchange value of less than $6.55 per IDW share if the average Flextronics closing price fell more than 10% below the reference price;
	•	the potential loss of customers and suppliers and the termination of contracts of either company as a result of a customer’s, supplier’s, or other counterparty’s unwillingness to do business with the combined company;
	•	the challenges and costs of integrating the assets, operations, management teams, strategies, cultures and organizations of the companies;
	•	the interests of IDW’s executive officers with respect to the merger may be different from, or in addition to, the interests of IDW’s stockholders, as described in the section entitled “— Interests of IDW’s Directors and Executive Officers in the Merger” beginning on page 50 of this proxy statement/prospectus;
	•	the decision of IDW’S board of directors to pursue the proposed merger without soliciting third party offers based on the IDW board’s determination that it was preferable not to risk the loss of the proposed transaction with Flextronics and that it was unlikely that another party would propose a more favorable transaction, and based on the structure of the merger agreement allowing IDW’s board of director to consider unsolicited acquisition proposals if IDW’s board of directors determined in good faith that an acquisition proposal was or was reasonably likely to result in an acquisition proposal that was more favorable to the IDW stockholders; and
	•	various other risks associated with the merger and the business of Flextronics and the combined company, including some of those described in the section entitled “Risk Factors” beginning on page 19 of this proxy statement/prospectus.

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	•	reviewed the reported prices and trading activity for the common stock of IDW and the ordinary shares of Flextronics;
	•	compared certain financial and stock market information for IDW and Flextronics with similar information for selected companies whose securities are publicly traded;
	•	reviewed the financial terms of certain recent business combinations which it deemed comparable to the merger;
	•	reviewed the terms of the September 3 draft merger agreement (the “latest draft merger agreement”); and
	•	performed such other studies and analyses and considered such other factors as it deemed appropriate.

	•	the executed version of the merger agreement would, in no respect material to its analysis, differ from the latest draft merger agreement (which IDW has confirmed to Deutsche Bank);
	•	the representations and warranties of IDW, Flextronics and the Flextronics merger subsidiary that will be merged into IDW (“merger subsidiary”) contained in the merger agreement were true and correct;
	•	Flextronics, merger subsidiary and IDW would each perform all of the covenants and agreements to be performed by it under the merger agreement;
	•	all conditions to the obligation of each of Flextronics, merger subsidiary and IDW to consummate the merger would be satisfied without any waiver of any of them;
	•	all material governmental, regulatory, judicial or other approvals and consents required in connection with the consummation of the merger would be obtained; and
	•	in connection with obtaining any necessary governmental, regulatory, judicial or other approvals and consents, or any amendments, modifications or waivers to any agreements, instruments or orders to which either Flextronics or IDW was a party or subject or by which it was bound, no limitations, restrictions or conditions would be imposed or amendments, modifications or waivers made that would have a material adverse effect on Flextronics or IDW or materially reduce the contemplated benefits of the merger to IDW.

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	EMS

	•	Benchmark Electronics, Inc.
	•	Celestica Inc.
	•	Flextronics International, Ltd.
	•	Hon Hai Precision Industry Co., Ltd.
	•	Jabil Circuit, Inc.
	•	Plexus Corp.
	•	Sanmina-SCI Corporation
	•	Solectron Corporation

	U.S. components and modules

	•	Amphenol Corporation
	•	Anaren, Inc.
	•	Molex Incorporated
	•	SMART Modular Technologies (WWH), Inc.

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	U.S. high growth electronics

	•	Diodes Incorporated
	•	Genesis Microchip Incorporated
	•	Microsemi Corporation
	•	RF Micro Devices, Inc.

			Range of
			Implied Share
			Prices of IDW
			Common Stock
Financial Metric			Low				High
EBITDA
	Trailing twelve months		$	2.57			$	3.13
	CY 2006 E			3.46				5.33
	CY 2007 E			4.85				6.89
EBIT
	Trailing twelve months		$	2.31			$	2.73
	CY 2006 E			3.60				4.69
	CY 2007 E			5.54				6.92
EPS
	Trailing twelve months		$	1.90			$	2.30
	CY 2006 E			3.44				4.77
	CY 2007 E			4.92				6.64

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	•	SMART Modular/ Francisco Partners, Shah Capital, Texas Pacific Group (2/12/04)
	•	Philips Display Business/ Toppoly (11/10/05)
	•	Quanta Display/ AU Optronics (4/7/06)

	•	the range of implied share prices of IDW common stock based upon multiples of enterprise value to forward twelve-month EBITDA for the target companies in the Selected Transactions was $2.38 to $3.91 per share; and
	•	the range of implied share prices of IDW common stock based upon forward twelve-month P/ E multiples for the target companies in the Selected Transactions was $1.41 to $5.21 per share.

	•	U.S. Transactions: the group included sixteen selected completed merger and acquisition transactions valued at between $200 million and $600 million and publicly announced since January 1, 2002 (the “Selected (All) Transactions”). All premiums for the Selected (All) Transactions were based on public information available at the time of announcement of such transactions, without taking into account differing market or other conditions during the periods during which such transactions occurred.

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	•	U.S. Technology Transactions: the group included seven selected completed merger and acquisition transactions valued at between $200 million and $600 million and publicly announced since January 1, 2002 (the “Selected (Technology) Transactions”). All premiums for the Selected (Technology) Transactions were based on public information available at the time of announcement of such transactions, without taking into account differing market or other conditions during the periods during which such transactions occurred.

			Range of
			Implied Share
			Prices of IDW
			Common Stock
Metric			Low				High
Selected (All) Transactions
	1 day prior to announcement		$	7.38			$	7.68
	20 days prior to announcement			5.82				6.11
Selected (Technology) Transactions
	1 day prior to announcement		$	7.44			$	7.74
	20 days prior to announcement			5.96				6.44

	•	an historical exchange ratio analysis, and
	•	a combination analysis

Historical Exchange Ratio Analysis. Deutsche Bank reviewed the historical ratio of the daily per share market closing prices of IDW common stock divided by the corresponding prices of Flextronics ordinary shares over the 90-day, 60-day and 30-day periods prior to September 1, 2006. The average exchange ratios for these time periods were 0.4762x, 0.4736x, and 0.4466x, respectively. Deutsche Bank then calculated the respective premiums over such average daily exchange ratios represented by the exchange ratio used for purposes of its analysis, 0.5582x, which were 17.2%, 17.9%, and 25.0%, respectively. In addition, Deutsche Bank reviewed the historical exchange ratios as of August 7, 2006 (20 business days, or four weeks, prior to announcement of the merger) and as of September 1, 2006 (the last business day prior to announcement of the merger). The exchange ratios for these dates were 0.4148x and

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	0.5055x, respectively. Deutsche Bank then calculated the respective premiums over such daily exchange ratios represented by the exchange ratio used for purposes of its analysis, 0.5582x, which were 34.6% and 10.4%, respectively.
	Combination Analysis. Deutsche Bank calculated certain pro forma impacts of the merger on the combined Flextronics/ IDW company in the second half of Flextronics’s fiscal 2007 and Flextronics’s fiscal 2008. To prepare this analysis, Deutsche Bank utilized projections of net income, earnings per share and weighted average number of outstanding shares for each of those years furnished by the management of IDW for IDW and analyst estimates published by another investment banking firm for Flextronics, without making any assumptions regarding synergies that the combined company might realize from, or any costs related to, the merger. From this analysis, Deutsche Bank estimated that the merger would be approximately 1.3% dilutive to earnings per share of the combined company for the second half of Flextronics’s fiscal 2007 and approximately 0.8% dilutive to earnings per share of the combined company for Flextronics’s fiscal 2008.

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	•	Flextronics believes that adding IDW’s LCD design and manufacturing capabilities to Flextronics’s product offering and capabilities will augment Flextronics’s vertically integrated solutions capabilities;
	•	Flextronics expects to benefit from a number of synergies by combining IDW’s LCD operations with Flextronics’s Camera Module Group, and TV tuner and Wifi and TFT module assembly operations; and
	•	Flextronics expects to add to its customer base by having access to IDW’s portable media player market.

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	Indemnification and Insurance

	IDW Options and Restricted Stock Held by Directors and Executive Officers

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	Positions with Surviving Corporation

	Voting Agreements

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	•	an IDW stockholder will not recognize any gain or loss upon the receipt of Flextronics ordinary shares in exchange for IDW common stock in connection with the merger, except with respect to cash received in lieu of a fractional Flextronics ordinary share;
	•	an IDW stockholder will have an aggregate tax basis in the Flextronics ordinary shares received in the merger (including a fractional share deemed received and redeemed as described below) equal to the stockholder’s aggregate tax basis in its shares surrendered pursuant to the merger, reduced by the portion of the stockholder’s tax basis in its shares surrendered in the merger that is allocable to a fractional Flextronics ordinary share. If an IDW stockholder acquired any of its shares of IDW common stock at different prices or at different times, Treasury Regulations provide guidance on how such stockholder may allocate its tax basis to Flextronics ordinary shares received in the merger. IDW stockholders that hold multiple blocks of IDW common stock are urged to consult their tax advisors regarding the proper allocation of their basis among shares of Flextronics ordinary shares received under the Treasury Regulations;
	•	the holding period of the Flextronics ordinary shares received by an IDW stockholder in connection with the merger (including a fractional Flextronics ordinary share deemed received and redeemed) will include the holding period of the IDW common stock surrendered in connection with the merger; and
	•	cash received by an IDW stockholder in lieu of a fractional Flextronics ordinary share in the merger will be treated as if such fractional share had been issued in connection with the merger and then redeemed by Flextronics, and an IDW stockholder will generally recognize capital gain or loss with respect to such cash payment, measured by the difference between the amount of cash received and the tax basis in such fractional share. Any capital gain will be long-term capital gain if, as of the date of the merger, the shareholder’s holding period in IDW stock is greater than one year.

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	Income Taxation Under Singapore Law

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	Singapore Estate Taxation

	Tax Treaties Regarding Withholding Taxes

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	•	an effective registration statement under the Securities Act covering the resale of those shares;
	•	an exemption under paragraph (d) of Rule 145 under the Securities Act; or
	•	any other applicable exemption under the Securities Act.

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	•	equal to or greater than $10.5606 and equal to or less than $12.9074, the exchange ratio will be equal to $6.55 divided by the average Flextronics closing price;
	•	greater than $12.9074 and equal to or less than $13.4941, the exchange ratio will be fixed at 0.5075;
	•	greater than $13.4941, the exchange ratio will be equal to $6.85 divided by the average Flextronics closing price; or
	•	less than $10.5606, the exchange ratio will be fixed at 0.6202.

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	•	corporate organization, power and authority;
	•	corporate authority to enter into, and complete the transactions under, the merger agreement; and enforceability of the merger agreement;
	•	absence of any conflict or violation of the charter documents, legal requirements or contracts as a result of the merger;
	•	regulatory approvals required to complete the merger;
	•	outstanding shares, options, warrants and convertible securities;
	•	information supplied for inclusion in this proxy statement/ prospectus;
	•	filings with the SEC, financial statements, internal controls over financial reporting and disclosure controls and procedures;
	•	brokers’ and finders’ fees owed in connection with the merger;
	•	compliance with laws; and
	•	the absence of certain legal proceedings.

	•	corporate organization, power and capitalization of its subsidiaries;
	•	the unanimous approval by its board of directors of the merger agreement and the transactions contemplated by the merger agreement;
	•	the absence of undisclosed material liabilities;
	•	the absence of certain changes to IDW or its subsidiaries or events not in the ordinary course consistent with past practices since October 31, 2005 through the date of the merger agreement;
	•	the filing of required tax returns, payment of taxes, the absence of tax audits and certain other tax matters;
	•	title to the assets it owns and validity of its leases;
	•	its intellectual property and the non-infringement of the intellectual property of others;
	•	governmental authorizations;
	•	its compliance with environmental laws, its hazardous materials activities and its environmental liabilities;
	•	the absence of related party transactions;
	•	its employee benefit plans and related matters;
	•	material contracts to which IDW or any of its subsidiaries is a party;

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	•	its insurance;
	•	its customers, suppliers, warranties and product returns;
	•	the opinion received from its financial advisor as to fairness to the IDW stockholders, from a financial point of view, of the exchange ratio; and
	•	actions related to anti-takeover statutes.

	•	enter into a new line of business;
	•	adopt or propose any change to its certificate of incorporation or bylaws;
	•	declare or pay dividends or make any other distributions in respect of any capital stock, or effect any stock splits, combinations or reclassifications or authorize the issuance of any other securities in respect of its capital stock;
	•	purchase, redeem or otherwise acquire any shares of IDW capital stock or the capital stock of any subsidiary;
	•	issue, sell, transfer, pledge, redeem, accelerate rights under, dispose of or encumber any shares of IDW capital stock or any options, warrants, convertible securities or other rights of any kind to acquire any shares of IDW capital stock, or any other ownership interest in IDW or any of its subsidiaries, other than the issuances of shares pursuant to the exercise of outstanding stock options;
	•	acquire or agree to acquire by merging or consolidating with, or by purchasing any equity or voting interest in or all or substantially all the assets of, or by any other manner, any business or other entity or division;
	•	except for purchases of inventory in the ordinary course of business consistent with past practice, acquire or agree to acquire any assets that are material, individually or in the aggregate, to the business of IDW and its subsidiaries, or in any event, for consideration in excess of $250,000;
	•	enter into any agreement with respect to the formation of any joint ventures, strategic partnerships or alliance;
	•	sell, lease, license, encumber or otherwise dispose of any properties or assets that are material, individually or in the aggregate, to the business of IDW and its subsidiaries, for consideration in excess of $500,000, except for the sale or license of current IDW products in the ordinary course of business consistent with past practice;
	•	effect any material restructuring activities by IDW or any of its subsidiaries with respect to their employees;
	•	make any loans, financings or investments in any other person or entity, other than loans or investments by IDW or a wholly-owned subsidiary to or in IDW or a wholly-owned subsidiary, employee loans or advances for expenses in the ordinary course of business consistent with past practice and in

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		accordance with applicable law, or extensions of credit or financing to customers made in the ordinary course of business consistent with past practice;
	•	except as required by generally accepted accounting principles, as concurred by IDW’s independent auditors, make any change in accounting methods or principles of accounting or revalue any of its assets;
	•	amend any material tax returns, make or change any material election relating to taxes, adopt or change any material accounting method relating to taxes, or settle, consent or enter into any closing agreement relating to any audit or consent to any waiver of the statutory period of limitations of any audit;
	•	cancel, terminate or materially amend any material insurance policy other than the renewal of existing policies;
	•	commence or settle any lawsuit, proceeding or other investigation, other than settlements entered into in the ordinary course of business and only requiring IDW and its subsidiaries to pay monetary damages not exceeding $250,000 or involving ordinary course collection claims for accounts receivable due and payable to IDW and its subsidiaries;
	•	except as required by legal requirements or pursuant to contracts binding on IDW or its subsidiaries on the date of the merger agreement:

	•	increase in any manner the compensation or benefits of, or pay or grant any bonus, change of control, severance or termination pay to, any employees, service providers or directors of IDW or its subsidiaries, other than increases or payments to non-officer employees in the ordinary course and consistent with past practice;
	•	adopt or amend any employee benefit plan or make any contributions, other than regularly scheduled contributions, to any employee benefit plan;
	•	except as provided in the merger agreement, accelerate, amend or change the vesting or exercisability of options, reprice options or authorize cash payments in exchange for options;
	•	subject to certain exceptions, enter into, modify or amend any management, employment, severance, separation, settlement, consulting, contractor, change of control or other agreement or contract with any employees or service providers; or
	•	enter into any collective bargaining agreement;

	•	enter into any agreement that would subject Flextronics or the surviving company or their businesses to any non-compete, most-favored nation, unpaid future deliverables rights, exclusivity or other material restrictions;
	•	provide any material refund, credit or rebate to any customer, reseller or distributor other than in the ordinary course of business consistent with past practice;
	•	incur or guarantee any indebtedness in excess of $250,000, issue or sell any debt securities or options, warrants or other rights to acquire debt securities, enter into any “keep well” or other agreement to maintain any financial statement condition of another person, other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities as in effect on the date of the merger agreement, or (iii) loans, investments, or guarantees by IDW or any of its subsidiaries to, in or of its subsidiaries;
	•	create or incur any lien on any material asset of IDW or any of its subsidiaries;
	•	enter into, modify or amend or terminate any material contract or waive, release or assign any material rights under such material contracts other than in the ordinary course of business consistent with past practice; or
	•	take or commit or agree to any of the foregoing actions.

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	•	solicit, initiate, or take any action that could reasonably be expected to facilitate or encourage, the making, submission or announcement of, any acquisition proposal, as described below;
	•	enter into or participate in any discussions or negotiations with any third party regarding any acquisition proposal;
	•	furnish any non-public information to any third party regarding any acquisition proposal;
	•	cooperate in any manner with, or assist, participate in, facilitate or encourage any effort by any third party concerning the making of any proposal that constitutes or would reasonably be expected to lead to, any acquisition proposal;
	•	approve, endorse or recommend or make or authorize any public statement, recommendation or solicitation in support of any acquisition proposal; or
	•	execute or enter into, or agree to execute or enter into, any letter of intent or similar document or any contract, agreement or commitment contemplating or otherwise relating to any acquisition proposal or any transaction contemplated by such an acquisition proposal.

	•	any purchase from IDW or acquisition by any person or group of more than a 20% interest in the total outstanding voting securities of IDW or any of its subsidiaries;
	•	any tender offer or exchange offer that if consummated would result in any person or group beneficially owning 20% or more of the total outstanding voting securities of IDW or any of its subsidiaries;
	•	any merger, consolidation, business combination or similar transaction involving IDW or any of its subsidiaries;
	•	any sale, lease outside the ordinary course of business, exchange, transfer, license outside the ordinary course of business, acquisition or disposition of more than 20% of the assets of IDW (including its subsidiaries taken as a whole); or
	•	any liquidation or dissolution of IDW.

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	•	IDW complies with the terms of the merger agreement relating to acquisition proposals;
	•	prior to furnishing non-public information or entering into any negotiations or discussions with such third party, IDW enters into a confidentiality agreement with the third party that contains customary limitations on the use and disclosure of such information and also contemporaneously furnishes Flextronics with a copy of the information furnished to the potential third party acquirer to the extent not previously furnished to Flextronics; and
	•	IDW’s board of directors reasonably determines in good faith, after consultation with its outside legal counsel, that failure to do so would reasonably likely be expected to result in a breach of its fiduciary duties to IDW stockholders under applicable law.

	•	the acquisition proposal is an unsolicited bona fide acquisition proposal (with the “20%” thresholds in the definition of “acquisition proposal” replaced with “50%”) made by a third party; and
	•	the acquisition proposal is on terms that the IDW board of directors has in good faith concluded, after consultation with its outside legal counsel and financial advisor, taking into account, among other things, all legal, financial, regulatory and other aspects of the offer and the third party making the offer, to be more favorable to IDW’s stockholders (in their capacities as stockholders) than the terms of the merger and is reasonably capable of being completed.

	•	the board of directors of IDW has determined in good faith, after consultation with its financial advisor and its outside legal counsel, that a superior offer has been made and has not been withdrawn;
	•	the stockholders of IDW have not approved the merger agreement in accordance with applicable law;
	•	IDW has provided Flextronics, at least four business days prior to publicly changing its recommendation, written notice of its receipt of a superior offer and has disclosed in the notice the most recent terms and conditions of the superior offer, the identity of the third party or group making the superior offer, and its intent to change its recommendation to its stockholders;
	•	during the four business day period described above, IDW has provided Flextronics with a reasonable opportunity to make adjustments to the terms and conditions of the merger agreement proposed by Flextronics and negotiated in good faith with respect to such adjustments, to enable IDW to proceed with its recommendation to the IDW stockholders in favor of the adoption of the merger agreement and approval of the merger;

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	•	the board of directors of IDW has determined in good faith, after consultation with its financial advisor, that the terms of the superior offer are more favorable to the stockholders of IDW than the merger (as it may be adjusted during the four day period described above) and after consultation with its outside legal counsel, that the failure of the board of directors to change its recommendation would reasonably be expected to result in a breach of its fiduciary duties to its stockholders under applicable law; and
	•	IDW has not breached any of the provisions in the merger agreement relating to the special meeting of stockholders, the recommendation of the board of directors and non-solicitation of other acquisition proposals.

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	•	the adoption of the merger agreement and approval of the merger by IDW stockholders;
	•	no statute, rule, regulation or other order having been enacted or issued by a governmental entity of competent jurisdiction which is in effect and has the effect of making the merger illegal or otherwise prohibiting completion of the merger;
	•	the effectiveness of a registration statement filed in connection with the issuance of Flextronics ordinary shares in the merger and no stop order proceedings suspending the registration statement or this prospectus/proxy statement;
	•	the expiration or termination of any applicable waiting periods under the HSR Act with respect to the merger and the receipt of any consents, waivers or approvals required under foreign merger control regulations; and
	•	Flextronics and IDW having each received from their respective tax counsel an opinion to the effect that the merger will constitute a “reorganization” within the meaning of Section 368(a) of the Code.

	•	IDW’s representations and warranties being true and correct in all material respects as of the date of the merger agreement and as of the closing date (except those representations and warranties which address matters only as of a particular date, which must be true and correct as of that date);
	•	the performance and compliance by IDW in all material respects with all of its agreements and covenants required by the merger agreement to be performed or complied with by it before completion of the merger;
	•	the absence of any change, event, development, violation, inaccuracy, circumstance or effect which, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on IDW; and

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	•	there being no pending or overtly threatened suit, action or proceeding asserted by any governmental authority challenging or seeking to restrain or prohibit the completion of the merger or seeking to require Flextronics or IDW to divest any business or agree to any material limitation on the conduct of its business in order to effect the merger.

	•	Flextronics’s representations and warranties being true and correct as of the date of the merger agreement and as of the closing date (except those representations and warranties which address matters only as of a particular date, which must be true and correct as of that date), except as does not constitute a material adverse effect on Flextronics on the closing date;
	•	the performance and compliance by Flextronics in all material respects with all of its agreements and covenants required by the merger agreement to be performed or complied with by it before completion of the merger; and
	•	there being no pending or overtly threatened suit, action or proceeding asserted by any governmental authority challenging or seeking to restrain or prohibit the completion of the merger.

	•	changes in general economic or market conditions or Effects affecting the industry generally in which such entity and its subsidiaries operates, which changes do not disproportionately affect such entity taken as a whole with its subsidiaries as compared to other similarly situated participants in the industry in which such entity and its subsidiaries operate;
	•	changes in applicable law, United States generally accepted accounting principles or international accounting standards;
	•	acts of terrorism or war which do not disproportionately affect such entity taken as a whole with its subsidiaries;
	•	with respect to IDW, compliance with the express terms of the merger agreement which require that IDW take actions in furtherance of the transactions contemplated by the merger agreement;
	•	a failure to meet securities analysts’ published revenue or earnings projections, which failure occurred in the absence of a material deterioration in the business or financial condition of such entity that would otherwise constitute a material adverse effect;
	•	the announcement or pendency of the merger agreement or the proposed merger; or
	•	any legal claims made or brought by any IDW stockholders or other legal proceedings primarily and proximately arising out of or related to the merger agreement or the proposed merger.

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	•	by mutual written consent duly authorized by the boards of directors of Flextronics and IDW;
	•	by IDW or Flextronics:

	•	if the merger is not completed by the date that is six months from the date of the merger agreement, provided that either party may extend such date by three months if the condition requiring the obtaining of requisite regulatory approvals and consents shall not have been satisfied, provided that this right to terminate is not available to any party whose action or failure to act was a principal cause of, or resulted in the failure of, the merger to occur on or before such date and such action or failure to act constitutes a breach of the merger agreement (we refer to such six month anniversary date, as may be extended to nine months, as the termination date of the merger agreement);
	•	if any governmental entity issues any order or takes any other action having the effect of permanently restraining, enjoining or prohibiting the completion of the merger; or
	•	if the required vote of IDW stockholders is not obtained at a duly convened meeting of stockholders, except that this right to terminate is not available to IDW if IDW’s action or failure to act caused the failure to obtain the requisite vote and such action or failure to act constitutes a breach of the merger agreement;

	•	by Flextronics, at any time prior to the adoption of the merger agreement and approval of the merger by the required vote of IDW stockholders, if any of the following triggering events occur with respect to IDW:

	•	its board of directors withdraws, amends or modifies, in a manner adverse to Flextronics, its unanimous recommendation in favor of the adoption of the merger agreement and approval of the merger;
	•	it fails to include in this proxy statement/ prospectus the unanimous recommendation of its board of directors in favor of the adoption of the merger agreement and approval of the merger;
	•	its board of directors fails to reaffirm (publicly, if Flextronics requests) its unanimous recommendation in favor of adoption of the merger agreement and approval of the merger within 10 business days after being requested in writing by Flextronics to reaffirm such recommendation;
	•	its board of directors fails to reject, or approves or recommends any acquisition proposal described in the section entitled “— IDW’s Covenant Against Soliciting Other Offers” beginning on page 62 of this proxy statement/ prospectus;
	•	it enters into any letter of intent or similar document or any agreement, contract or commitment accepting any superior offer, following notice of such superior offer to Flextronics no later than 24 hours after IDW’s board of directors determined, in good faith, after consultation with its outside legal counsel and its financial advisors that the failure to take such action with respect to the superior offer would reasonably be expected to result in a breach of the board of directors’ fiduciary duties to the stockholders of IDW under applicable law, and during the five business days following such notice, IDW provided Flextronics a reasonable opportunity to make adjustments in the terms and conditions of the merger agreement and negotiate in good faith to enable IDW to proceed with the merger;

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	•	a tender or exchange offer relating to its securities is initiated by a third party, and it does not send to its security holders, pursuant to Rule 14e-2 promulgated under the Securities and Exchange Act, within 10 business days after the tender or exchange offer is first published, sent or given, a statement disclosing that its board of directors recommends rejection of the tender or exchange offer;
	•	it materially breaches its non-solicitation obligations under the merger agreement;
	•	it breaches its obligations with respect to the recommendation of its board of directors and holding a meeting of its stockholders; or
	•	its board of directors has resolved to do any of the above;

	•	by IDW upon a breach of any representation, warranty, covenant or agreement on the part of Flextronics in the merger agreement or if any representation or warranty of Flextronics has become untrue so that the condition to completion of the merger regarding Flextronics’s representations and warranties or covenants would not be met, except if the breach or inaccuracy is curable by Flextronics prior to the termination date of the merger agreement, then IDW may not terminate the merger agreement for 30 days after delivery of written notice from IDW to Flextronics of the breach if such breach is cured during those 30 days, or if IDW is otherwise in material breach of the merger agreement;
	•	by Flextronics upon a breach of any representation, warranty, covenant or agreement on the part of IDW in the merger agreement or if any representation or warranty of IDW has become untrue so that the condition to completion of the merger regarding IDW’s representations and warranties or covenants would not be met, except if the breach or inaccuracy is curable by IDW prior to the termination date of the merger agreement, then Flextronics may not terminate the merger agreement for 30 days after delivery of written notice from Flextronics to IDW of the breach if such breach is cured during those 30 days, or if Flextronics is otherwise in material breach of the merger agreement;
	•	by IDW, if IDW enters into a binding definitive agreement with respect to a superior offer in compliance with the rules described in the section entitled “— IDW’s Covenant that its Board of Directors Recommend the Merger and Hold a Stockholders Meeting” beginning on page 64 of this proxy statement/ prospectus and IDW has paid to Flextronics the termination fee described below;
	•	by Flextronics, if there has been, or any event has occurred since the date of the merger agreement that would reasonably be expected to have, a material adverse effect on IDW, and (i) the material adverse effect is not reasonably capable of being cured prior to the termination date of the merger agreement, or (ii) the material adverse effect is not cured prior to the earlier of the termination date and 30 days following the receipt of written notice from Flextronics to IDW of the material adverse effect, provided that Flextronics may not exercise this termination right if it is in material breach of the merger agreement or if the material adverse effect is cured; or
	•	by IDW, if the average Flextronics closing price is less than $9.9739 and IDW exercises its right to notify Flextronics of its election to terminate the merger agreement and Flextronics does not exercise its right to increase the exchange ratio to the quotient obtained by dividing $6.19 by the average Flextronics closing price.

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	•	prior to the termination of the merger agreement, there has been a public disclosure of an acquisition proposal with respect to IDW; and
	•	within 12 months following termination of the merger agreement, an acquisition involving IDW is consummated or IDW enters into a definitive agreement or letter of intent with respect to an acquisition.

	•	a merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving IDW, pursuant to which its stockholders immediately preceding such transaction hold less than 50% of the aggregate equity interests in the surviving or resulting entity of such transaction, or any direct or indirect parent of such entity;
	•	a sale or other disposition by the party of assets representing in excess of 40% of the aggregate fair market value of IDW’s business immediately prior to such sale; or
	•	the acquisition by any person or group, including by way of a tender offer or an exchange offer or issuance by it, directly or indirectly, of beneficial ownership or a right to acquire beneficial ownership of shares representing in excess of 40% of the voting power of the then outstanding shares of IDW’s capital stock.

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	•	in favor of the adoption of the merger agreement and approval of the merger, including all other actions and transactions contemplated by the merger agreement or the proxy and any other actions presented to IDW stockholders that would reasonably be expected to facilitate the merger agreement, the merger and the other actions and transactions contemplated by the merger agreement or the proxy;
	•	against approval of any proposal made in opposition to, or in competition with, the merger agreement or the consummation of the merger and the other transactions contemplated by the merger agreement; and
	•	against any acquisition proposal or any other action that is intended, or would reasonably be expected to impede, interfere with, delay, postpone, discourage or adversely affect the merger or any of the other transactions contemplated by the merger agreement.

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	(i) the conclusion of the next annual general meeting; or
	(ii) the expiration of the period within which the next annual general meeting is required by law to be held.

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	(i) the chairman of the meeting;
	(ii) not less than three shareholders who are entitled to vote at the meeting and who are present in person or by proxy or by attorney, or in the case of a corporation, by a representative;
	(iii) any shareholder or shareholders present in person or by proxy or by attorney, or in the case of a corporation, by a representative, and representing not less than one-tenth of the total voting rights of all shareholders having the right to vote at the meeting; or
	(iv) any shareholder or shareholders present in person or by proxy or by attorney, or in the case of a corporation, by a representative, and holding not less than one-tenth of the total number of paid-up shares of Flextronics (excluding treasury shares).

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	•	issue bonus shares for which no consideration is payable to Flextronics to the shareholders in proportion to their shareholdings or
	•	capitalize any reserves or profits and distribute them as bonus shares to the shareholders in proportion to their shareholdings.

	(i) any person acquires whether by a series of transactions over a period of time or not, shares which (taken together with shares held or acquired by persons acting in concert with him) carry 30% or more of the voting rights of a company, or
	(ii) any person who, together with persons acting in concert with him, holds not less than 30% but not more than 50% of the voting rights and such person, or any person acting in concert with him, acquires in any period of six months additional shares carrying more than 1% of the voting rights,

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	•	the conclusion of the next annual general meeting; or
	•	the expiration of the period within which the next annual general meeting is required by law to be held.

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	•	any person acquires whether by a series of transactions over a period of time or not, shares which (taken together with shares held or acquired by persons acting in concert with him) carry 30% or more of the voting rights of a company, or
	•	any person who, together with persons acting in concert with him, holds not less than 30% but not more than 50% of the voting rights and such person, or any person acting in concert with him, acquires in any period of six months additional shares carrying more than 1% of the voting rights,

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	•	notwithstanding anything in the company’s memorandum or articles of association, directors are not permitted to carry into effect any proposals for disposing of the whole or substantially the whole of the company’s undertaking or property unless those proposals have been approved by shareholders in a general meeting;
	•	subject to the memorandum of each amalgamating company, an amalgamation proposal must be approved by the shareholders of each amalgamating company via special resolution at a general meeting; and
	•	notwithstanding anything in the company’s memorandum or articles of association, the directors may not, without the prior approval of shareholders, issue shares.

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	•	Flextronics’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006, filed with the SEC on May 31, 2006;
	•	Flextronics’s Quarterly Reports on Form 10-Q for the quarters ended June 30, 2005 and June 30, 2006, filed with the SEC on August 10, 2005 and August 8, 2006, respectively;
	•	Flextronics’s Current Reports on Form 8-K filed on April 19, 2006, April 21, 2006, July 7, 2006, July 18, 2006, August 24, 2006, September 5, 2006, September 6, 2006, September 8, 2006, September 18, 2006 and October 11, 2006; and

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	•	the description of Flextronics’s ordinary shares contained in Flextronics’s registration statement on Form 8-A, declared effective by the SEC on January 31, 1994, including any amendments or reports filed for the purpose of updating such description.

	•	IDW’s Annual Report on Form 10-K for the fiscal year ended October 31, 2005, filed with the SEC on January 10, 2006; and
	•	IDW’s Quarterly Reports on Form 10-Q for the quarters ended January 31, 2006, April 30, 2006 and July 31, 2006, filed with the SEC on March 13, 2006, June 8, 2006, and September 7, 2006, respectively.
	•	IDW’s Current Reports on Form 8-K filed on November 18, 2005, December 13, 2005, January 10, 2006, January 27, 2006, February 1, 2006, March 13, 2006, June 8, 2006, September 5, 2006, September 6, 2006, and September 7, 2006 and Form 8-K/A on July 28, 2005; and
	•	The description of IDW’s common stock contained in IDW’s registration statement on Form 8-A filed with the SEC on October 17, 1995 under Section 12(g) of the Exchange Act, including any amendment or report filed for the purpose of updating such description.

For information relating to Flextronics:		For information relating to IDW:
Flextronics International Ltd.		International DisplayWorks, Inc.
2090 Fortune Drive		1613 Santa Clara Drive, Suite 100
San Jose, California 95131		Roseville, CA 95661-3542
Attention: Investor Relations		Attention: Corporate Secretary
Telephone: (408) 576-7722		(916) 797-6800

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				Page No.
Article I THE MERGER					A-1
1.1		The Merger			A-1
1.2		Effective Time; Closing			A-1
1.3		Effect of the Merger			A-2
1.4		Certificate of Incorporation and Bylaws			A-2
1.5		Directors and Officers			A-2
1.6		Effect on Capital Stock			A-2
1.7		Surrender of Certificates			A-4
1.8		No Further Ownership Rights in Company Common Stock			A-5
1.9		Lost, Stolen or Destroyed Certificates			A-6
1.10		Amendment to Agreement			A-6
1.11		Further Action			A-6
Article II REPRESENTATIONS AND WARRANTIES OF THE COMPANY					A-6
2.1		Organization; Standing and Power; Charter Documents; Subsidiaries			A-6
2.2		Capital Structure			A-7
2.3		Authority; No Conflict; Necessary Consents			A-9
2.4		SEC Filings; Financial Statements; Internal Controls			A-10
2.5		Absence of Certain Changes or Events			A-12
2.6		Taxes			A-14
2.7		Title to Properties			A-16
2.8		Intellectual Property			A-17
2.9		Restrictions on Business Activities			A-20
2.10		Governmental Authorizations			A-20
2.11		Litigation			A-21
2.12		Compliance with Law			A-21
2.13		Environmental Matters			A-21
2.14		Brokers’ and Finders’ Fees			A-22
2.15		Transactions with Affiliates			A-22
2.16		Employee Benefit Plans and Compensation			A-22
2.17		Contracts			A-26
2.18		Insurance			A-28
2.19		Customers and Suppliers			A-28
2.20		Foreign Corrupt Practices Act			A-28
2.21		Information in Registration Statement and Prospectus/ Proxy Statement			A-29
2.22		Fairness Opinion			A-29
2.23		Takeover Statutes and Rights Plans			A-29
Article III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB					A-29
3.1		Organization			A-29
3.2		Authority; No Conflict; Necessary Consents			A-30
3.3		Capital Structure			A-30
3.4		Information in Registration Statement and Prospectus/ Proxy Statement			A-31
3.5		SEC Filings; Financial Statements			A-31
3.6		Brokers’ and Finders’ Fees			A-32
3.7		Interim Operations of Merger Sub			A-33

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				Page No.
3.8		Foreign Corrupt Practices Act			A-33
3.9		Legal Proceedings			A-33
Article IV CONDUCT BY THE COMPANY PRIOR TO THE EFFECTIVE TIME					A-33
4.1		Conduct of Business by the Company			A-33
Article V ADDITIONAL AGREEMENTS					A-35
5.1		Prospectus/ Proxy Statement; Registration Statement			A-35
5.2		Meeting of Company Stockholders; Board Recommendation			A-36
5.3		Acquisition Proposals			A-36
5.4		Confidentiality; Access to Information; No Modification of Representations, Warranties or Covenants			A-40
5.5		Public Disclosure			A-40
5.6		Regulatory Filings; Reasonable Efforts			A-41
5.7		Notification of Certain Matters			A-42
5.8		Third-Party Consents			A-42
5.9		Equity Awards and Employee Matters			A-42
5.10		Indemnification			A-43
5.11		Section 16 Matters			A-44
5.12		Tax Matters			A-44
5.13		145 Affiliates			A-45
Article VI CONDITIONS TO THE MERGER					A-45
6.1		Conditions to the Obligations of Each Party to Effect the Merger			A-45
6.2		Additional Conditions to the Obligations of Parent			A-45
6.3		Additional Conditions to the Obligations of the Company			A-46
Article VII TERMINATION, AMENDMENT AND WAIVER					A-47
7.1		Termination			A-47
7.2		Notice of Termination; Effect of Termination			A-48
7.3		Fees and Expenses			A-49
7.4		Amendment			A-50
7.5		Extension; Waiver			A-50
Article VIII GENERAL PROVISIONS					A-50
8.1		Non-Survival of Representations and Warranties			A-50
8.2		Notices			A-50
8.3		Interpretation; Knowledge			A-51
8.4		Counterparts			A-52
8.5		Entire Agreement; Third-Party Beneficiaries			A-52
8.6		Severability			A-52
8.7		Other Remedies; Specific Performance			A-53
8.8		Governing Law			A-53
8.9		Rules of Construction			A-53
8.10		Assignment			A-53
8.11		Waiver of Jury Trial			A-53
Exhibit A Form of Voting Agreement
Exhibit B Form of Affiliate Agreement

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Defined Term		Section
401(k) Plan			5.9(c)
Acquisition			7.3(b)(iii)
Acquisition Proposal			5.3(h)(i)
Action of Divestiture			5.6(d)
Agreement			Preamble
Audit			2.6(a)
Average Parent Share Price			1.6(a)
Business Day			1.2
Certificate of Merger			1.2
Certificates			1.7(c)
Change of Recommendation			5.3(d)
Change of Recommendation Notice			5.3(d)(iii)
Closing			1.2
Closing Date			1.2
COBRA			2.16(a)
Code			Recitals
Company			Preamble
Company Balance Sheet			2.4(b)
Company Charter Documents			2.1(b)
Company Common Stock			1.6(a)
Company Disclosure Schedule			Article II
Company Employee Plan			2.16(a)
Company Financials			2.4(b)
Company Intellectual Property			2.8
Company Material Contract			2.17(a)
Company Options			2.2(b)
Company Preferred Stock			2.2(a)
Company Products			2.8
Company Registered Intellectual Property			2.8
Company SEC Reports			2.4(a)
Company Significant Customer			2.19(a)
Confidentiality Agreements			5.4(a)
Contaminants			2.8(j)
Continuing Employees			5.9(d)
Contract			2.1(a)
Delaware Law			1.1
Deutsche Bank			2.14
DOJ			2.3(d)
DOL			2.16(a)
Effect			8.3(d)
Effective Time			1.2
Employee/ Service Provider			2.16(a)

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Defined Term		Section
Employee Agreement			2.16(a)
End Date			7.1(b)
Environmental Claim			2.13(a)
Environmental Laws			2.13(a)
ERISA			2.16(a)
ERISA Affiliate			2.16(a)
Exchange Act			2.3(d)
Exchange Agent			1.7(a)
Exchange Fund			1.7(b)
Exchange Ratio			1.6(a)
FCPA			2.20
FTC			2.3(d)
GAAP			2.4(b)
Governmental Authorizations			2.10
Governmental Entity			2.3(d)
HSR Act			2.3(d)
HIPAA			2.16(a)
Include, Includes, Including			8.3(a)
Indemnified Parties			5.10(a)
Intellectual Property			2.8
Intellectual Property Contracts			2.8(a)
Intellectual Property Rights			2.8
International Employee Plan			2.16(a)
IRS			2.16(a)
Knowledge			8.3(b)
Lease Documents			2.7(b)
Leased Real Property			2.7(a)
Legal Requirements			1.7(f)
Liens			2.1(c)
Made Available			8.3(c)
Material Adverse Effect			8.3(d)
Materials of Environmental Concern			2.13(a)
Measurement End Date			1.6(a)
Merger Sub			Preamble
Merger Sub Charter Documents			3.1
Merger Sub Common Stock			1.6(d)
Merger			1.1
Necessary Consents			2.3(d)
Open Source Code			2.8
Option Plans			2.2(b)
Parent			Preamble
Parent Benefit Plan			5.9(d)
Parent Charter Documents			3.1
Parent Ordinary Shares			1.6(a)

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Defined Term		Section
Parent Disclosure Schedule			Article III
Parent Financials			3.5(b)
Parent Options			3.3(a)
Parent SEC Reports			3.5
Parent’s 401(k) Plan			5.9(c)
Pension Plan			2.16(a)
Per Share Merger Consideration			1.6(e)
Permitted Liens			2.7(c)
Person			8.3(e)
Prospectus/ Proxy Statement			2.21
Registered Intellectual Property			2.8
Registration Statement			2.21
SEC			2.3(d)
Securities Act			2.4(a)
Shrink-Wrapped Code			2.8
Significant Subsidiary			2.1(b)
Significant Supplier			2.19(b)
Source Code			2.8
Stockholders’ Meeting			5.2(a)
Subsidiary			2.1(a)
Subsidiary Charter Documents			2.1(b)
Superior Offer			5.3(h)(ii)
Surviving Corporation			1.1
Tax			2.6(a)
Tax Authority			2.6(a)
Tax Opinions			5.12
Tax Return			2.6(a)
Taxes			2.6(a)
Termination Fee			7.3(b)(i)
Top-up Notice			1.6(a)
Trade Secret			2.8
Triggering Event			7.1
Voting Agreements			Recitals
Voting Debt			2.2(c)
Walk-Away Notice			1.6(a)
Walk-Away Price			1.6(a)
WARN			2.16(a)

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(a) Company Common Stock. Each share of the common stock, par value $0.001 per share, of the Company (“Company Common Stock”) issued and outstanding immediately prior to the Effective Time, other than any shares of Company Common Stock to be canceled pursuant to Section 1.6(c), will be canceled and extinguished and automatically converted (subject to Section 1.6(f)) into the right to receive a fraction (rounded to the nearest ten thousandth or carried out to five one-hundred thousandths if the fraction ends in 0.00005) of a validly issued, fully paid and nonassessable ordinary share, no par value, of Parent (“Parent Ordinary Shares”), such fraction to be in the ratio hereinafter provided (the “Exchange Ratio”). If the Average Parent Share Price is

	(i) equal to or greater than $10.5606 and equal to or less than $12.9074, the Exchange Ratio shall be equal to the quotient obtained by dividing $6.55 by the Average Parent Share Price;
	(ii) greater than $12.9074 and equal to or less than $13.4941, the Exchange Ratio shall be fixed at 0.5075;
	(iii) greater than $13.4941, the Exchange Ratio shall be equal to the quotient obtained by dividing $6.85 by the Average Parent Share Price; or
	(iv) less than $10.5606, the Exchange Ratio shall be fixed at 0.6202;

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provided, that if the Average Parent Share Price is less than $9.9739 (the “Walk-Away Price”), the Company shall have the right to give telephonic notice to Parent (a “Walk-Away Notice”), followed promptly by written notice, that the Company elects to terminate this Agreement in accordance with Section 7.1(j) hereof. Any Walk-Away Notice shall be delivered to Parent no later than 5:00 p.m., New York City time on the first Business Day following the Measurement End Date. If the Company delivers a timely Walk-Away Notice, Parent shall have the right to give telephonic notice to the Company (the “Top-Up Notice”), followed promptly by written notice, that Parent elects to increase the Exchange Ratio to equal the quotient obtained by dividing $6.19 by the Average Parent Share Price. Any Top-Up Notice shall be delivered to the Company no later than 5:00 p.m., New York City time on the second Business Day following the Measurement End Date. As used herein, the “Average Parent Share Price” shall mean the average of the per share closing prices of the Parent Ordinary Shares reported on the Nasdaq Global Market during the twenty consecutive trading days ending on the fifth trading day immediately preceding, but not including, the Closing Date (the “Measurement End Date”).

	(b) Repurchase Rights. If any shares of Company Common Stock outstanding immediately prior to the Effective Time are unvested or are subject to a repurchase option, risk of forfeiture or other condition (including, without limitation, restrictions on transferability) under any applicable restricted stock purchase agreement or other agreement or arrangement with the Company that does not by its terms provide that such repurchase option, risk of forfeiture or other condition lapses upon consummation of the Merger, then the Parent Ordinary Shares issued in exchange for such shares of Company Common Stock will, to the extent permitted by applicable law, also be unvested and subject to the same repurchase option, risk of forfeiture or other condition (including, without limitation, restrictions on transferability), and the certificates representing such Parent Ordinary Shares may accordingly be marked with appropriate legends. The Company shall use reasonable best efforts to provide that, from and after the Effective Time, the Surviving Corporation is entitled to exercise any such repurchase option or other right set forth in any such restricted stock purchase agreement or other agreement.
	(c) Cancellation of Treasury and Parent Owned Stock. Each share of Company Common Stock held by the Company or Parent or any direct or indirect wholly-owned subsidiary of the Company or of Parent immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof.
	(d) Capital Stock of Merger Sub. Each share of common stock, par value $0.001 per share, of Merger Sub (the “Merger Sub Common Stock”) issued and outstanding immediately prior to the Effective Time shall be converted into one validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation.
	(e) Stock Options. At the Effective Time, each Company Option that is unexpired, unexercised and outstanding immediately prior to the Effective Time shall, on the terms and subject to the conditions set forth in this Agreement, terminate in its entirety at the Effective Time, and the holder of each Company Option shall to the extent permitted under the Option Plans be entitled to receive therefor an amount of cash (rounded down to the nearest whole cent) equal to the product of (i) the number of shares of Company Common Stock that are subject to such Company Option and that are unexpired, unexercised and outstanding immediately prior to the Effective Time, and (ii) the excess, if any of the Per Share Merger Consideration over the per share exercise price of such Company Option immediately prior to the Effective Time. As used herein, “Per Share Merger Consideration” shall mean the product of the Exchange Ratio and the Average Parent Share Price, rounded down to the nearest whole cent. The Company shall keep Parent apprised of all actions taken to terminate the Company Options in accordance with this Section 1.6(e), and in connection with such termination, the Company shall take such actions as may be necessary to allow for the net share settlement of the Company Options upon their exercise, if such action may be taken without any adverse effect to the Company and otherwise is effected in a manner approved by Parent.
	(f) Fractional Shares. No fraction of a Parent Ordinary Shares will be issued by virtue of the Merger, but in lieu thereof each holder of shares of Company Common Stock who would otherwise be

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	entitled to a fraction of a Parent Ordinary Shares (after aggregating all fractional shares of Parent Ordinary Shares that otherwise would be received by such holder) shall, upon surrender of such holder’s Certificate(s), receive from Parent an amount of cash (rounded to the nearest whole cent), without interest, less the amount of any withholding taxes as contemplated by Section 1.7(f), which are required to be withheld with respect thereto, equal to the product of: (i) such fraction, multiplied by (ii) the Average Parent Share Price.
	(g) Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted to reflect fully the appropriate effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Parent Ordinary Shares or Company Common Stock), reorganization, recapitalization, reclassification or other like change with respect to Parent Ordinary Shares or Company Common Stock having a record date on or after the date hereof and prior to the Effective Time.

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	(a) any event, change or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company;
	(b) any merger or consolidation involving the Company or any of its Subsidiaries, or any acquisition by the Company or any of its Subsidiaries of any business, whether by purchasing all or substantially all of the assets of or equity securities of, or otherwise acquiring, any business or corporation, partnership, association or other business organization or a division thereof;
	(c) any material Contract entered into by the Company or any of its Subsidiaries, other than in the ordinary course of business and as provided to Parent, or any material amendment or termination of, or default under, any material Contract to which the Company or any of its Subsidiaries is a party or by which it or any of them is bound;
	(d) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of the Company’s or any of its Subsidiaries’ capital stock (other than any distribution, payment or dividend by any of the Company’s Subsidiaries to the Company or to any of the other Company’s Subsidiaries), or any purchase, redemption or other acquisition by the Company or any of its Subsidiaries of any of the Company’s or any of its Subsidiaries’ capital stock or any other securities of the Company or any options, warrants, calls or rights to acquire any such shares or other securities (except for repurchases from employees following their termination pursuant to the terms of their pre-existing stock option agreements and other than transactions among the Company and its Subsidiaries);
	(e) any split, combination, recapitalization, exchange, readjustment or reclassification of any of the Company’s or any of its Subsidiaries’ capital stock;
	(f) any granting by the Company or any of its Subsidiaries, whether orally or in writing, of any (i) increase in compensation or fringe benefits payable or otherwise due to officers of the Company or any Subsidiary or (ii) material increase in compensation or fringe benefits payable or otherwise due to any non-officer employees of the Company or any Subsidiary whose annual base salary is in excess of $100,000 other than in the ordinary course of business consistent with past practice;

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	(g) (i) any change by the Company or any of its Subsidiaries of severance, termination or bonus policies and practices (excluding sales commissions), (ii) any change in the policy of the Company relating to the granting of stock options to its employees, directors and consultants; (iii) any entry by the Company or any of its Subsidiaries into, or amendment of, (A) any employment, severance, deferred compensation, termination, change of control or indemnification agreement or (B) any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving the Company of the nature contemplated hereby (either alone or upon the occurrence of additional or subsequent events), or (iv) the establishment, adoption or amendment (except as required by law) of any collective bargaining, bonus, profit-sharing, thrift, pension, retirement or other similar benefit plan or arrangement covering any director, officer or employee of the Company or any of its Subsidiaries;
	(h) any material amendment or termination of any Company Material Contract;
	(i) any Contract entered into by the Company or any of its Subsidiaries relating to its assets or business (including the acquisition or disposition of any assets or property) or any relinquishment by the Company or any of its Subsidiaries of any Contract or other right, in each case having a stated contract amount or involving obligations or entitlements with a value of more than $500,000 in each individual case (other than Contracts with customers, suppliers, distributors and representatives entered into in the ordinary course of business, consistent with past practice);
	(j) any change in any method of accounting principles or practices by the Company or any of its Subsidiaries, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the Exchange Act;
	(k) any debt, capital lease or other debt or equity financing transaction by the Company or any of its Subsidiaries or entry into any agreement by the Company or any of its Subsidiaries in connection with any such transaction, except for capital leases entered into in the ordinary course of business consistent with past practice which are not, individually or in the aggregate, material to the Company and its Subsidiaries taken as a whole;
	(l) any grants of any material refunds, credits, rebates or other allowances by the Company or any of its Subsidiaries to any customer, reseller or distributor, in each case, other than in the ordinary course of business consistent with past practice;
	(m) any material change in the level of product returns, bad debts or reserves relating to accounts receivable experienced by the Company or any of its Subsidiaries;
	(n) any material restructuring activities by the Company or any of its Subsidiaries, including any material reductions in force, or any lease terminations or restructuring of contracts;
	(o) any license of or Lien on any properties or assets, except licenses and Liens which are not material, individually or in the aggregate, to the business of the Company or any of its Subsidiaries;
	(p) any loan, advance or capital contribution by the Company or any of its Subsidiaries to, or investment in, any Person other than (i) loans or advances to Employees/ Service Providers in connection with business related travel and expenses, in each case in the ordinary course of business consistent with past practice; (ii) loans, advances or capital contributions or investments by the Company to or in any wholly-owned Subsidiary, by any wholly-owned Subsidiary in the Company, or by a wholly-owned Subsidiary of the Company in any other wholly-owned Subsidiary of the Company; or (iii) loans or advances to vendors consistent with past practice that are not, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole;
	(q) any material purchases of fixed assets or other long term assets other than in the ordinary course of business and in a manner consistent with past practice;
	(r) any amendment of any material Tax Returns, any adoption of or change in any material election in respect of Taxes, adoption or change in any accounting method in respect of Taxes, agreement or

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	settlement of any closing agreement relating to an Audit, or consent to any waiver of the statutory period of limitations in respect of any Audit;
	(s) any material revaluation, or any indication that such a revaluation is required under GAAP, by the Company or any of its Subsidiaries of any of their respective assets, including, without limitation, writing down the value of long-term or short-term investments, fixed assets, goodwill, intangible assets, deferred tax assets, or writing off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
	(t) any significant deficiency or material weakness identified in the system of internal controls utilized by the Company and its Subsidiaries;
	(u) any settlement of any lawsuit or other proceeding by the Company or any Subsidiary;
	(v) any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the properties, assets or business of the Company or any of its Subsidiaries; or
	(w) any material recall, field notification or field correction with respect to products manufactured by on or behalf of the Company or any of its Subsidiaries.

	(i) All Tax Returns required to be filed by or with respect to the Company and each of its Subsidiaries have been timely filed and in the manner prescribed by law. All such Tax Returns are true, correct and complete in all material respects, and all Taxes owed by the Company and its Subsidiaries, whether or not shown on any Tax Return (including all withholding and payroll Taxes), have been paid. None of the Company or any of its Subsidiaries has received written notice of any claim by any Tax Authority in any jurisdiction other than in which it has filed Tax Returns that the Company or any of its Subsidiaries are or may be subject to taxation by that jurisdiction.
	(ii) No material adjustment relating to any Tax Return of the Company or any of its Subsidiaries by any Tax Authority has been proposed in writing formally or informally by any Tax Authority to the Company or any of its Subsidiaries.
	(iii) There are no Liens or other encumbrances with respect to Taxes upon any of the assets or properties of the Company or any of its Subsidiaries, other than with respect to Taxes not yet due and payable.
	(iv) No Audit is currently pending with respect to any Tax Return of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has received any written communication from any Tax Authority that an Audit is forthcoming. Neither the Company nor any of its Subsidiaries has been delinquent in the payment of any material Tax, and there is no deficiency for any Taxes that is outstanding, assessed or proposed against the Company or any of its Subsidiaries, which deficiency has not been paid in full when due and payable.

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	(v) There are no outstanding written agreements or waivers extending the statutory period of limitation applicable to any claim for, or the period for the collection or assessment of, Taxes due from or with respect to the Company or any of its Subsidiaries for any taxable period. No power of attorney granted by or with respect to the Company or any of its Subsidiaries relating to Taxes is currently in force, and no extension of time for filing any Tax Return required to be filed by or on behalf of the Company or any of its Subsidiaries is in force. The Company has delivered or made available to Parent complete and correct copies of all foreign, federal and state income Tax Returns, audit reports and statements of deficiencies for the Company and each of its Subsidiaries filed by or issued to or with respect to the Company and each of its Subsidiaries for all periods which have been requested by Parent.
	(vi) With respect to Taxes not yet due or owing, the Company and its Subsidiaries have made such accruals for such Taxes in the Company Financials as are required by GAAP. The Company and its Subsidiaries have no liability for unpaid Taxes which have not been accrued for or reserved in the most recent Company Financials, whether asserted or unasserted, contingent or otherwise, which is material to the Company, other than any liability for unpaid Taxes that may have accrued since the date of the most recent Company Financials in connection with the operation of the business of the Company and its Subsidiaries in the ordinary course, including, without limitation, as a result of acquisitions.
	(vii) Neither the Company nor any of its Subsidiaries is a party to or bound by, or has any obligation under, any Tax sharing agreement or similar contract or arrangement. Neither the Company nor any of its Subsidiaries has been a member of an affiliated group filing a consolidated, combined, or unitary income Tax Return (other than a group the common parent of which was the Company). Neither the Company nor any of its Subsidiaries has liability for the Taxes of any person (other than the Company and such Subsidiary) under Treasury Regulation 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract, or otherwise.
	(viii) Neither the Company nor any of its Subsidiaries has agreed to, or is required to, make any adjustments under Section 481(a) or Section 263A of the Code or any comparable provision under state or foreign Tax laws by reason of a change in accounting method or otherwise.
	(ix) Neither the Company nor any of its Subsidiaries has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the two years prior to the date of this Agreement or in a distribution which could otherwise constitute part of a “plan” or “series of related transaction” (within the meaning of Section 355(e) of the Code) in conjunction with the Merger.
	(x) There are no outstanding options, warrants, securities convertible into stock or other contractual obligations that might reasonably be treated for Federal income tax purposes as stock or another equity interest in the Company or any of its Subsidiaries.
	(xi) All transactions among the Company and any of its Subsidiaries (and all other inter-company transactions) comply with the transfer pricing rules contained in Section 482 of the Code (and similar provisions of applicable state, local or foreign law); the Company and its Subsidiaries have complied with all Tax reporting, filing and documentation required under the Code (and similar provisions of applicable state, local or foreign law) relating to such intercompany transactions; and neither the Company nor any of its Subsidiaries has entered into any advance pricing agreement or similar agreement or received written notice from a Tax Authority regarding any transfer pricing inquiry under Section 482 of the Code (or a similar provision of state, local or foreign law) that remains unresolved.
	(xii) The Company and its Subsidiaries have not “participated” in a “reportable transaction” (as defined in Section 1.6011-4 of the United States Treasury Regulations promulgated under the Code).
	(xiii) The Company and each of its Subsidiaries is not, and during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code has not been, a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code.

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	(xiv) Section 2.6 of the Company Disclosure Schedule sets forth the amount of any net operating loss, net capital loss, unused investment or other credit, unused foreign tax, or excess charitable contribution allocable to the Company or its Subsidiaries as of the Closing Date.
	(xv) None of Company’s nor any of its Subsidiaries’ assets are tax exempt use property within the meaning of Section 168(h) of the Code.
	(xvi) Neither the Company nor any of its Subsidiaries has taken or agreed to take any action, or is aware of any fact or circumstance, that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368 of the Code.

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	“Company Intellectual Property” shall mean any and all Intellectual Property and Intellectual Property Rights that are owned by, or exclusively licensed to, the Company or its Subsidiaries.
	“Company Products” shall mean all products and services developed or under development by or on behalf of the Company or any of its Subsidiaries and owned, made, provided, distributed, imported, sold or licensed by or on behalf of the Company or any of its Subsidiaries.
	“Intellectual Property” shall mean any or all of the following (i) original works of authorship including computer programs, source code and executable code, whether embodied in software, firmware or otherwise, documentation, designs, files and records, (ii) inventions (whether or not patentable), discoveries, improvements and technology, (iii) trademarks and service marks, logos, trade names, trade dress, (iv) Trade Secrets, (v) domain names, web addresses and sites, (vi) tools, methods and processes and (vii) schematics.
	“Intellectual Property Contract” shall mean any Contract that is material to the business of the Company and that provides for the license or other use of Company Intellectual Property or the license or other use by the Company or its Subsidiaries of Intellectual Property or Intellectual Property Rights of a third party.
	“Intellectual Property Rights” shall mean all statutory or common law rights in Intellectual Property, together with the right to enforce and recover remedies for infringement thereof.
	“Open Source Code” shall mean Source Code that is subject, in whole or in part, to open source, public source or freeware license provisions, including without limitation any GNU general public license or GNU lesser general public license, or other software license whose terms require the distribution of or access to Source Code or restrict the ability of the licensee to charge for distribution of or to use software for commercial purposes.
	“Registered Intellectual Property” shall mean any Intellectual Property Rights which have been registered, filed, or issued by or under the authority of any Governmental Entity responsible for issuing or registering Intellectual Property or Intellectual Property Rights, including, without limitation, (i) patents and patent applications, (ii) copyright registrations and copyright applications and “moral rights,” (iii) trademark and service mark registrations, and applications therefor, (iv) trade name and domain name registrations, (v) designs registrations, and (vi) divisions, continuations, renewals, reissuances and extensions of any of the foregoing (as applicable).
	“Shrink-Wrapped Code” shall mean generally commercially available off-the-shelf software code or programs where available for a cost of not more than $10,000 for a perpetual license for a single user or work station (or $75,000 in the aggregate for all users and work stations).
	“Source Code” shall mean computer software and code in a human-readable computer programming language, which may include related programmer comments and annotations.
	“Trade Secret” shall mean any proprietary and confidential information or know-how, databases, data compilations or collections of technical data or business data including, to the extent kept confidential, customer lists, customer contact information, customer correspondence and customer licensing and purchasing histories relating to its current and former customers.

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	“Environmental Claim” means any claim, action, cause of action, suit, proceeding, investigation, order, demand or notice (in each instance in writing) by any Person alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (a) the presence, or release into the environment, of, or exposure to, any Material of Environmental Concern at any location, whether or not owned or operated by the Company or any of its Subsidiaries or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.
	“Environmental Laws” mean all applicable federal, state, local and foreign laws, regulations, ordinances, treaties and common law relating to pollution or protection of human health (to the extent relating to exposure to Materials of Environmental Concern) or protection of the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata, and natural resources), including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of, or exposure to, Materials of Environmental Concern.
	“Materials of Environmental Concern” means hazardous chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products, asbestos or asbestos-containing materials or products, polychlorinated biphenyls, lead or lead-based paints or materials, radon, toxic fungus, toxic mold, mycotoxins or other hazardous substances that would reasonably be expected to have an adverse effect on human health or the environment.

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“Company Employee Plan” shall mean any plan, program, policy, practice, contract, agreement or other arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or equity-related awards, welfare benefits, retirement benefits, fringe benefits or other employee benefits or remuneration of any kind, whether written, unwritten or otherwise, funded or unfunded, including each “employee benefit plan,” within the meaning of Section 3(3) of ERISA which is maintained, contributed to, or required to be contributed to, by the Company, any of its Subsidiaries or any ERISA Affiliate for the benefit of any Employee/ Service Provider, or with respect to which the Company, any of its Subsidiaries or any ERISA Affiliate has or may have any liability or obligation and any International Employee Plan.

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	“COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
	“DOL” shall mean the United States Department of Labor.
	“Employee/ Service Provider” shall mean any current or former employee, including officers, consultants, independent contractors or directors of the Company, any of its Subsidiaries or any ERISA Affiliate, excluding consultants and independent contractors who are not individuals.
	“Employee Agreement” shall mean each management, employment, severance, separation, settlement, consulting, contractor, change of control, relocation, repatriation, expatriation, loan, visa, work permit or other agreement, or contract (including, any offer letter which provides for any term of employment (other than employment at will) or any agreement providing for acceleration of Company Options or any other agreement providing for compensation or benefits) between the Company, any of its Subsidiaries or any ERISA Affiliate and any director or any Employee/ Service Provider pursuant to which the Company or any of its Subsidiaries has or may have any current or future liabilities or obligations.
	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
	“ERISA Affiliate” shall mean any other Person under common control with the Company or any of its Subsidiaries within the meaning of Section 414(b), (c), (m) or (o) of the Code, and the regulations issued thereunder.
	“HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996, as amended.
	“International Employee Plan” shall mean any plan, program, policy, practice, contract, agreement or other arrangement that is described in the definition of Company Employee Plan or Employee Agreement that has been adopted or maintained by the Company, any of its Subsidiaries or any ERISA Affiliate, whether formally or informally, or with respect to which the Company, any of its Subsidiaries or any ERISA Affiliate will or may have any liability, for the benefit of Employees/ Service Providers who perform services outside the United States.
	“IRS” shall mean the United States Internal Revenue Service.
	“Pension Plan” shall mean each Company Employee Plan that is an “employee pension benefit plan,” within the meaning of Section 3(2) of ERISA.
	“WARN” shall mean the Worker Adjustment and Retraining Notification Act of 1989.

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	(i) There are no pending or, to the Company’s Knowledge, threatened actions, suits, charges, complaints, claims or investigations against, concerning or with respect to any Company Employee Plans, other than ordinary and usual claims for benefits by participants and beneficiaries. Each Company Employee Plan can be amended, terminated or otherwise discontinued after the Effective Time in accordance with its terms, without liability to Parent, the Company, any of its Subsidiaries or any ERISA Affiliate (other than ordinary administration expenses or with respect to benefits previously earned, vested or accrued thereunder).
	(ii) There are no audits, inquiries, investigations or other proceedings of any nature pending or to the Company’s Knowledge, threatened by the IRS, DOL, or any other Governmental Entity with respect to any Company Employee Plan. Neither the Company, any of its Subsidiaries nor any ERISA Affiliate is subject to any penalty or Tax with respect to any Company Employee Plan under Section 502(i) of ERISA or Sections 4975 through 4980 (including 4980B) of the Code.

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	(i) any “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) with respect to the Company and its Subsidiaries;
	(ii) any employment, contractor or consulting Contract with any executive officer or other Employee/ Service Provider of the Company or any of its Subsidiaries providing for annual base salary in excess of $150,000 or with any member of the Company’s Board of Directors, in each case other than those that are terminable by the Company or any of its Subsidiaries on no more than 30 days’ notice without liability or financial obligation to the Company or any of its Subsidiaries, or any collective bargaining agreement or contract with any labor union or other employee organization;
	(iii) any Contract or plan, including, without limitation, any Company Employee Plan or Employee Agreement, any of the benefits of which will be increased, or the vesting of benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement (either alone or upon the occurrence of additional or subsequent events) or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement (either alone or upon the occurrence of additional or subsequent events);
	(iv) any agreement of indemnification or any guaranty (other than indemnities of banks and other financial institutions, financial advisers or underwriters, indemnification provisions in any acquisition or

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	disposition agreements, or any agreement of indemnification entered into in connection with the sale, license, maintenance, support or service of Company Products in the ordinary course of business);
	(v) any Contract relating to the disposition or acquisition by the Company or any of its Subsidiaries of assets for consideration in excess of $500,000 or any interest in any other Person or business enterprise, in each case, other than in the ordinary course of business, and in each case entered into within the past two years or which contains any continuing obligations or responsibilities on the part of the Company or any of its Subsidiaries;
	(vi) any Lease Document;
	(vii) any mortgages, indentures, guarantees, loans or credit agreements, security agreements or other Contracts relating to the borrowing of money or extension of credit in excess of $250,000, other than accounts receivable and accounts payable arising in the ordinary course of business;
	(viii) any Contract containing any manufacturing, supply, purchase, design, support, maintenance or service obligations on the part of the Company or any of its Subsidiaries involving total payments in excess of $500,000, other than those obligations that are terminable by the Company or any of its Subsidiaries on no more than 30 days notice without liability or financial obligation to the Company or its Subsidiaries;
	(ix) any settlement agreement which contains continuing material obligations of the Company or any of its Subsidiaries;
	(x) any dealer, distributor, joint marketing or development agreement under which the Company or any of its Subsidiaries have continuing material obligations to jointly market any product, technology or service and which may not be canceled without penalty to the Company or any of its Subsidiaries upon notice of 30 days or less, or any material agreement pursuant to which the Company or any of its Subsidiaries have continuing material obligations to jointly develop any Intellectual Property or Intellectual Property Rights which may not be terminated without penalty to the Company or any of its Subsidiaries upon notice of 30 days or less;
	(xi) any Intellectual Property Contract; or
	(xii) any Contract imposing payment obligations on the Company and its Subsidiaries that by its terms will not terminate within twelve months from the date hereof and involves aggregate payments by the Company and its Subsidiaries in excess of $100,000 in any single year or aggregate payments by the Company and its Subsidiaries in excess of $250,000 during the entire term, other than purchase orders entered into in the ordinary course of business consistent with past practice.

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3.1     Organization. Each of Parent and Merger Sub (i) is a company duly organized, validly existing and in good standing (where the concept of good standing is recognized under the laws of such jurisdiction) under the laws of the jurisdiction in which it is organized; and (ii) has the requisite corporate or other power and authority to own, lease and operate its properties and to carry on its business as currently conducted. Parent has Made Available to the Company a true and correct copy of (i) the memorandum and articles of association of Parent, each as amended to date (collectively, the “Parent Charter Documents”) and (ii) the certificate of incorporation and bylaws of Merger Sub, each as amended to date (collectively, the “Merger Sub Charter Documents”). Parent is not in material

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	violation of any of the provisions of the Parent Charter Documents and Merger Sub is not in material violation of any of the provisions of the Merger Sub Charter Documents.
	3.2     Authority; No Conflict; Necessary Consents.

	(a) Authority. Each of Parent and Merger Sub has all requisite corporate or other power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery by each of Parent and Merger Sub of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate or other action on the part of Parent and Merger Sub and no further action is required on the part of Parent and Merger Sub to authorize the execution and delivery of this Agreement or to consummate the Merger and the other transactions contemplated hereby, subject only to the filing of the Certificate of Merger pursuant to Delaware Law. This Agreement has been duly executed and delivered by Parent and Merger Sub and, assuming due authorization, execution and delivery of this Agreement by the Company, constitutes the valid and binding obligations of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the rights and remedies of creditors generally and to general principles of equity.
	(b) No Conflict. The execution and delivery by Parent and Merger Sub of this Agreement and the consummation of the transactions contemplated hereby will not (i) conflict with or violate any provision of their respective Charter Documents, (ii) subject to compliance with the requirements set forth in Section 3.2(c), conflict with or violate any Legal Requirements applicable to Parent or Merger Sub or by which Parent or Merger Sub or any of their respective properties or assets (whether tangible or intangible) is bound or affected, except for such conflicts or violations that would not reasonably be expected to be material to Parent and its Subsidiaries, taken as a whole or (iii) result in any material breach of or constitute a material default (or an event that with notice or lapse of time or both would become a material default) under, or materially impair Parent’s or Merger Sub’s rights or, to the Knowledge of Parent or Merger Sub, alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of any Contract that is material to Parent or Merger Sub.
	(c) Necessary Consents. No consent, waiver, approval, order or authorization of, registration, declaration or filing with any Governmental Entity, is required to be made or obtained by Parent or Merger Sub in connection with the execution and delivery of this Agreement by Parent and Merger Sub, except for (i) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which the Company or Parent are qualified to do business, (ii) the filing and effectiveness of the Registration Statement with the SEC in accordance with the requirements of the Securities Act, and the rules and regulations promulgated thereunder, (iii) the filing of the Notification and Report Forms with the FTC and the Antitrust Division of the United States DOJ required by the HSR Act and the expiration or termination of the applicable waiting period under the HSR Act and such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under the foreign merger control regulations identified in Section 3.2(c) of the Parent Disclosure Schedule, (iv) such other filings and notifications as may be required to be made by Parent under federal, state or foreign securities laws or the rules and regulations of The Nasdaq Stock Market, and (v) such other consents, waivers, approvals, orders, authorizations, registrations, declarations and filings which, if not obtained or made would not, individually or in the aggregate, reasonably be expected to materially affect the ability of Parent and Merger Sub to consummate the Merger or have a Material Adverse Effect on Parent.

3.3     Capital Structure. As of the close of business on September 1, 2006: (i) 579,233,683 Parent Ordinary Shares were issued and outstanding, and (ii) no Parent Ordinary Shares were issued and held by Parent in its treasury. All outstanding Parent Ordinary Shares are, and all Parent Ordinary Shares which may be issued pursuant to this Agreement will, when issued in accordance with the terms hereof,

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	be, duly authorized, validly issued, fully paid and non-assessable and not subject to preemptive rights created by statute, the Parent Charter Documents, or any agreement to which Parent is a party or by which it is bound. As of the close of business on March 31, 2006, 55,042,556 Parent Ordinary Shares were issuable upon the exercise of outstanding options to purchase Parent Ordinary Shares (such options, whether payable in cash, shares or otherwise are referred to in this Agreement as “Parent Options”). Other than Parent’s Convertible Junior Subordinated Notes due 2009 and Convertible Subordinated Notes due 2010, there is not outstanding any debt securities of Parent that is convertible or exchangeable into Parent Ordinary Shares.
	3.4     Information in Registration Statement and Prospectus/ Proxy Statement. None of the information supplied or to be supplied by or on behalf of Parent or Merger Sub for inclusion or incorporation by reference in the Registration Statement will, at the time the Registration Statement becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by or on behalf of Parent or Merger Sub for inclusion or incorporation by reference in the Prospectus/ Proxy Statement will, at the time the Prospectus/ Proxy Statement is mailed to the stockholders of the Company or at the time of the Stockholders’ Meeting or as of the Closing, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Prospectus/ Proxy Statement will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations promulgated by the SEC thereunder. Notwithstanding the foregoing, no representation or warranty is made by Parent or Merger Sub with respect to statements made or incorporated by reference therein about the Company supplied by the Company for inclusion or incorporation by reference in the Registration Statement or the Prospectus/ Proxy Statement.
	3.5     SEC Filings; Financial Statements.

(a) SEC Filings. Parent has timely filed or furnished all required registration statements, prospectuses, reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated by reference) required to be filed or furnished by it with the SEC since April 1, 2003. All such required registration statements, prospectuses, reports, schedules, forms, statements and other documents, as each of the foregoing have been amended since the time of their filing (including those that Parent may file subsequent to the date hereof) are referred to herein as the “Parent SEC Reports.” As of their respective dates, the Parent SEC Reports (i) were prepared in accordance with, and complied in all material respects with, the requirements of the Securities Act or the Exchange Act, as the case may be, and, in each case, the rules and regulations promulgated thereunder applicable to such Parent SEC Reports and (ii) did not at the time they were filed or furnished contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except to the extent revised: (A) in the case of Parent SEC Reports filed on or prior to the date of this Agreement that were amended or superseded on or prior to the date of this Agreement, by the filing of the applicable amending or superseding Parent SEC Report; and (B) in the case of Parent SEC Reports filed after the date of this Agreement that are amended or superseded prior to the Effective Time, by the filing of the applicable amending or superseding Parent SEC Report. Parent has Made Available to the Company true, correct and complete copies of all material correspondence between the SEC, on the one hand, and Parent and any of its Subsidiaries, on the other, since January 1, 2005, including all SEC comment letters and responses to such comment letters by or on behalf of Parent. To Parent’s Knowledge, as of the date hereof, none of the Parent SEC Reports is the subject of ongoing SEC review or outstanding SEC comment. Each of the principal executive officer of Parent and the principal financial officer of Parent (or each former principal executive officer or former chief financial officer, as applicable) has made all certifications required by Rule 13a-14 or Rule 15d-14

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	under the Exchange Act or Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 with respect to Parent SEC Reports. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act of 2002.
	(b) Financial Statements. Each of the consolidated financial statements (including, in each case, any related notes thereto) contained in the Parent SEC Reports (the “Parent Financials”) including each Parent SEC Report filed after the date hereof until the Closing: (i) complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, (ii) was prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes thereto or, in the case of unaudited interim financial statements, as may be permitted by the rules of the SEC and except that the unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end adjustments) and (iii) fairly presented the consolidated financial position of Parent and its consolidated Subsidiaries as at the respective dates thereof and the consolidated results of Parent’s operations and cash flows for the periods indicated (subject, in the case of unaudited quarterly statements, to normal year-end audit adjustments).
	(c) Internal Controls. Parent has established and maintains a system of internal controls over financial reporting required by Rules 13a-15(f) or 15d-15(f) under the Exchange Act designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of its consolidated financial statements in accordance with GAAP and including those policies and procedures that: (i) require the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Parent and its Subsidiaries; (ii) provide reasonable assurance that material information relating to Parent and its Subsidiaries is promptly made known to the officers responsible for establishing and maintaining the system of internal controls; (iii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of Parent and its Subsidiaries are being made only in accordance with authorizations of management and the Board of Directors of Parent; (iv) provide reasonable assurance that access to assets is permitted only in accordance with management’s general or specific authorization; (v) provide reasonable assurance that the reporting of assets is compared with existing assets at regular intervals and appropriate action is taken with respect to any differences; and (vi) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of Parent and its Subsidiaries. There are no “material weaknesses” (as defined by the Public Company Accounting Oversight Board) in the design or operation of the Company’s internal controls, and there is no series of multiple “significant deficiencies” (as defined by the Public Company Accounting Oversight Board) that collectively represent a “material weakness” in the design or operation of the Company’s internal controls. Since March 31, 2006, neither Parent nor any of its Subsidiaries (including any current employee or service provider thereof) nor, to Parent’s Knowledge, Parent’s independent auditors have identified or been made aware of (A) any significant deficiency or material weakness in the system of internal controls utilized by Parent and its Subsidiaries, (B) any fraud, whether or not material, that involves Parent’s management or other employees who have a role in the preparation of financial statements or the internal controls utilized by Parent and its Subsidiaries or (C) any material claim or allegation regarding any of the foregoing.
	(d) Disclosure Controls. Parent has established and maintains disclosure controls and procedures required by Rules 13a-15(e) or 15d-15(e) under the Exchange Act to ensure that information required to be disclosed by Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to Parent’s management to allow timely decisions regarding required disclosure.

	3.6     Brokers’ and Finders’ Fees. Neither Parent nor any of its Subsidiaries has incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders’ fees or agents’ commissions, fees related

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	to investment banking or similar advisory services or any similar charges in connection with this Agreement or any transaction contemplated hereby.
	3.7     Interim Operations of Merger Sub. Merger Sub was formed solely for the purpose of consummating the Merger pursuant to Section 1.1 hereof and has not conducted and will not conduct any activities other than the execution of this Agreement and the consummation of the Merger.
	3.8     Foreign Corrupt Practices Act. To Parent’s Knowledge, neither Parent nor any of its Subsidiaries (including any of their officers, directors, agents, distributors, employees or other Person acting on behalf of Parent or its Subsidiaries) have, directly or indirectly, taken any action which would cause them to be in violation of the FCPA, or, to Parent’s Knowledge, used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, made, offered or authorized any unlawful payment to foreign or domestic government officials or employees, whether directly or indirectly, or made, offered or authorized any unlawful bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment, whether directly or indirectly. Parent has established reasonable internal controls and procedures intended to ensure compliance with the FCPA.
	3.9     Legal Proceedings. No claim, action, proceeding or investigation is pending before any court, arbitrator or administrative, governmental or regulatory authority or body which seeks to delay or prevent the consummation of the transactions contemplated hereby or which would reasonably be likely to materially and adversely affect or restrict Parent’s or Merger Sub’s ability to consummate the transactions contemplated hereby.

	(i) Enter into any new line of business;
	(ii) Adopt or propose to adopt any change to the Company’s Charter Documents;
	(iii) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
	(iv) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock or the capital stock of its Subsidiaries;

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	(v) Issue, sell, transfer, pledge, redeem, accelerate rights under, dispose of or encumber, or authorize the issuance, sale, transfer, pledge, redemption, acceleration of rights under, disposition or encumbrance of, any shares of its capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its capital stock, or any other ownership interest in the Company or any of its Subsidiaries, except in each case for the issuance of shares of Company Common Stock upon the exercise of the Company Options outstanding as of the date of this Agreement in accordance with their terms;
	(vi) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity or voting interest in or all or substantially all the assets of, or by any other manner, any business or any Person or division thereof;
	(vii) Except for purchases of inventory in the ordinary course of business consistent with past practice, acquire or agree to acquire any assets that are material, individually or in the aggregate, to the business of the Company and its Subsidiaries, or in any event, for consideration in excess of $250,000 in any one case or in the aggregate or solicit or participate in any negotiations with respect to the foregoing;
	(viii) Enter into any agreement with respect to the formation of any joint venture, strategic partnership or alliance;
	(ix) Sell, lease, license, encumber or otherwise dispose of any properties or assets that are material, individually or in the aggregate, to the business of the Company and its Subsidiaries, for consideration in excess of $500,000 in any one case or in the aggregate, except the sale or licenses of current Company Products in the ordinary course of business and in a manner consistent with past practice;
	(x) Effect any material restructuring activities by the Company or any of its Subsidiaries with respect to their respective employees, including any material reductions in force;
	(xi) Make any loans, extensions of credit or financing, advances or capital contributions to, or investments in, or grant extended payment terms to any other Person, other than: (a) loans or investments by the Company or a wholly-owned Subsidiary of the Company to or in the Company or any wholly-owned Subsidiary of the Company, (b) subject to applicable law, employee loans or advances for travel and entertainment expenses made in the ordinary course of business consistent with past practice, or (c) extensions of credit or financing to, or extended payment terms for, customers made in the ordinary course of business consistent with past practice;
	(xii) Except as required by GAAP, as concurred in by its independent auditors, make any change in its methods or principles of accounting or revalue any of its assets;
	(xiii) (A) Amend any material Tax Returns, make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by a change in the Code, or (B) settle, consent, or enter into any closing agreement relating to any Audit or consent to any waiver of the statutory period of limitations in respect of any Audit;
	(xiv) Cancel or terminate without reasonable substitute policy therefor, or amend in any material respect or enter into, any material insurance policy, other than the renewal of existing insurance policies;
	(xv) Commence or settle any lawsuit or proceeding or other investigation, other than settlements entered into in the ordinary course of business and requiring of the Company and its Subsidiaries only the payment of monetary damages not exceeding $250,000 or involving ordinary course collection claims for accounts receivable due and payable to the Company and its Subsidiaries; provided, that this provision shall not prevent the taking of any action against Parent, Merger Sub or any of their Affiliates;
	(xvi) Except as required by Legal Requirements or Contracts currently binding on the Company or its Subsidiaries, (1) increase in any manner the amount of compensation or fringe benefits of, or pay or grant any bonus, change of control, severance or termination pay to, any Employee/ Service Provider or director of the Company or any Subsidiary of the Company, other than increases or payments to

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	employees that are not officers of the Company in the ordinary course of business, consistent with past practice, (2) adopt or amend any Company Employee Plan or make any contribution, other than regularly scheduled contributions, to any Company Employee Plan, (3) waive any stock repurchase rights, accelerate, amend or change the period of vesting or exercisability of Company Options, or reprice any Company Options or authorize cash payments in exchange for any Company Options, or (4) enter into, modify or amend any Employee Agreement or indemnification agreement with any Employee/ Service Provider (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable “at will,” or modifications whereby an Employee/ Service Provider waives the right to acceleration, or agrees to the cancellation of, any Company Option or other award) or (5) enter into any collective bargaining agreement;
	(xvii) Enter into any Contracts containing, or otherwise subject the Surviving Corporation or Parent to, any (A) non-competition, “most favored nations,” or unpaid future deliverables rights or provisions of any type or scope, or (B) exclusivity or other material restrictions on the Company or the Surviving Corporation or Parent, or any of their respective businesses, following the Closing;
	(xviii) Provide any material refund, credit or rebate to any customer, reseller or distributor, in each case, other than in the ordinary course of business consistent with past practice;
	(xix) Incur any indebtedness for borrowed money or guarantee any indebtedness of another Person in excess of $250,000, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than (A) in connection with the financing of ordinary course trade payables consistent with past practice, (B) pursuant to existing credit facilities as in effect on the date hereof, or (C) loans, investments or guarantees by the Company or any of its Subsidiaries to, in or of its Subsidiaries;
	(xx) Create or otherwise incur any Lien on any material asset of the Company or any of its Subsidiaries;
	(xxi) Enter into, modify or amend, or terminate any Company Material Contract, or waive, release or assign any material rights or claims thereunder, in each case other than in the ordinary course of business consistent with past practice; or
	(xxii) Take, commit, or agree (in writing or otherwise) or announce the intention to take, any of the actions described in Sections 4.1(b) hereof, or take any other action that would reasonably be expected to result in any of the conditions to the Merger set forth in Article VI not to be satisfied.

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	(i) the Company complies with all of the terms of this Section 5.3;
	(ii) prior to furnishing any nonpublic information or entering into any negotiations or discussions with such third party, (A) the Company receives from such third party an executed confidentiality agreement containing customary limitations on the use and disclosure of all nonpublic written and oral information furnished to such third party on the Company’s behalf (a copy of which confidentiality agreement shall be provided to Parent) and (B) contemporaneously with furnishing any such nonpublic information to such third party, the Company furnishes such nonpublic information to Parent (to the extent such nonpublic information has not been previously so furnished); and
	(iii) the Board of Directors of the Company reasonably determines in good faith, after consultation with outside legal counsel, that the failure to provide such information or enter into such discussion or negotiations would reasonably be expected to result in a breach of the Board of Directors’ fiduciary duties to the stockholders of the Company under applicable law.

	(i) the Board of Directors of the Company determines in good faith, after consultation with the Company’s financial advisors and outside legal counsel, that a Superior Offer has been made and not withdrawn;
	(ii) the stockholders of the Company have not approved this Agreement in accordance with applicable law;
	(iii) the Company shall have delivered to Parent written notice (a “Change of Recommendation Notice”) at least four Business Days prior to publicly effecting such Change of Recommendation which shall state expressly (A) that the Company has received a Superior Offer, (B) the most recent terms and conditions of the Superior Offer and the identity of the Person or group making the Superior Offer (and in the event the Company exercises its right to terminate this Agreement pursuant to Section 7.1(h), the Company shall provide to Parent a copy of the final agreement to be entered into in connection with the Superior Offer) and (C) that the Company intends to effect a Change of Recommendation;
	(iv) after delivering the Change of Recommendation Notice, the Company shall provide Parent with a reasonable opportunity to make such adjustments in the terms and conditions of this Agreement during such four-Business Day period, and negotiate in good faith with respect thereto during such four-Business Day period, as would enable the Company to proceed with its recommendation to stockholders in favor of adoption of this Agreement without making a Change of Recommendation;
	(v) the Board of Directors of the Company shall have determined in good faith (A) after consultation with its financial advisor, that the terms of the Superior Offer are more favorable to the stockholders of the Company than the Merger (as it may be adjusted pursuant to subsection (iv) above) and (B) after consultation with outside legal counsel, the failure to effect a Change of Recommendation

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	would reasonably be expected to result in a breach of the Board of Directors’ fiduciary duties to the stockholders of the Company under applicable law; and
	(vi) the Company shall not have materially breached any of the provisions set forth in Section 5.2 or this Section 5.3.

	(i) “Acquisition Proposal,” with respect to the Company, shall mean any offer or proposal relating to any transaction or series of related transactions involving: (a) any purchase from the Company or acquisition by any Person or “group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) of more than a 20% interest in the total outstanding voting securities of the Company or any of its Subsidiaries or any tender offer or exchange offer that if consummated would result in any Person or group beneficially owning 20% or more of the total outstanding voting securities of the Company or any of its Subsidiaries, (b) any merger, consolidation, business combination or similar transaction involving the Company or any of its Subsidiaries, other than any such transaction effected by the Company in which the only parties to such transaction are any of the Company and/or one or more of its Subsidiaries, provided that no such transaction may be effected without obtaining Parent’s prior written consent, (c) any sale, lease (other than in the ordinary course of business consistent with past practice), exchange, transfer, license (other than in the ordinary course of business consistent with past practice), acquisition or disposition of more than 20% of the assets of the Company (including its Subsidiaries taken as a whole) or (d) any liquidation or dissolution of the Company (provided, however, that the transactions between Parent and the Company contemplated by this Agreement shall not be deemed an Acquisition Proposal); and
	(ii) “Superior Offer,” with respect to the Company, shall mean an unsolicited, bona fide Acquisition Proposal by a third party on terms that the Board of Directors of the Company has in good faith concluded, after consultation with its outside legal counsel and financial advisor, taking into account, among other things, all legal, financial, regulatory and other aspects of the offer and the Person making the offer, to be more favorable to the Company’s stockholders (in their capacities as stockholders) than the terms of the Merger and is reasonably capable of being consummated, provided that each reference to 20% in the definition of “Acquisition Proposal” shall be replaced with “50%” for purposes hereof.

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	(a) Company Stockholder Approval. This Agreement shall have been approved and adopted, and the Merger shall have been approved, each by the requisite vote under applicable law by the stockholders of the Company.
	(b) Registration Statement Effective; Proxy Statement. The SEC shall have declared the Registration Statement effective. No stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose, and no similar proceeding in respect of the Prospectus/ Proxy Statement, shall have been initiated or threatened in writing by the SEC.
	(c) No Order. No Governmental Entity of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which (i) is in effect and (ii) has the effect of making the Merger illegal or otherwise prohibiting or preventing consummation of the Merger.
	(d) HSR Act and Foreign Approvals. All waiting periods (and any extension thereof) under the HSR Act relating to the transactions contemplated hereby will have expired or terminated early and the parties shall have obtained or received any material consents, waivers, approvals, orders, authorizations, registrations, declaration and filings required (or any applicable waiting period shall have been terminated or shall have expired) under the foreign merger control regulations set forth in Section 2.3(d) of the Company Disclosure Schedule.
	(e) Tax Opinions. Parent and the Company shall have received an opinion of Curtis, Mallet-Prevost, Colt & Mosle LLP and Bullivant Houser Bailey PC, respectively, dated as of the Closing Date, to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code; provided, however, that if Bullivant Houser Bailey PC fails to render such opinion, this condition shall nonetheless be deemed to be satisfied with respect to the Company if Curtis, Mallet-Prevost, Colt & Mosle LLP renders such opinion to the Company. The issuance of such opinions shall be conditioned upon the receipt by such counsel of customary representation letters from each of Parent, Merger Sub, and the Company, in each case, in form and substance reasonably satisfactory to such counsel. Each such representation letter shall be dated on or before the date of such opinion and shall not have been withdrawn or modified in any material respect.

(a) Representations and Warranties. The representations and warranties of the Company contained in this Agreement shall have been true and correct in all material respects as of the date hereof (except that those representations and warranties which address matters only as of a particular date shall have been true and correct only on such date) and shall be true and correct in all material respects as of the Closing Date with the same force and effect as if made on the Closing Date (except that those representations and warranties which address matters only as of a particular date shall have been true and

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	correct only on such date), it being understood that, for purposes of determining the accuracy of such representations and warranties, (1) all “Material Adverse Effect” qualifications and other qualifications based on the word “material” or similar phrases contained in such representations and warranties shall be disregarded, and (2) any update of or modification to the Company Disclosure Schedule made or purported to have been made after the execution of this Agreement shall be disregarded.
	(b) Agreements and Covenants. The Company shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it at or prior to the Closing Date.
	(c) Material Adverse Effect. There shall not have occurred or otherwise arisen and be continuing any Effect which, either individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect on the Company.
	(d) No Governmental Restriction. There shall not be any pending or overtly threatened suit, action or proceeding asserted by any Governmental Entity (i) challenging or seeking to restrain or prohibit the consummation of the Merger or any of the other transactions contemplated by this Agreement, the effect of which restraint or prohibition if obtained would cause the condition set forth in Section 6.1(c) to not be satisfied or (ii) seeking to require Parent or the Company or any Subsidiary or affiliate thereof to effect an Action of Divestiture.
	(e) Officer’s Certificate. Parent and Merger Sub shall have received a certificate, dated as of the Closing Date, to the effect that conditions set forth in Sections 6.2(a) and (b) have been satisfied signed on behalf of the Company by an authorized executive officer of the Company.

	(a) Representations and Warranties. The representations and warranties of Parent and Merger Sub contained in this Agreement shall have been true and correct as of the date hereof (except that those representations and warranties which address matters only as of a particular date shall have been true and correct only on such date) and shall be true and correct as of the Closing Date with the same force and effect as if made on the Closing Date (except that those representations and warranties which address matters only as of a particular date shall have been true and correct only on such date), except, in each case or in the aggregate, as does not constitute a Material Adverse Effect on Parent at the Closing Date (it being understood that, for purposes of determining the accuracy of such representations and warranties, any update of or modification to the Parent Disclosure Schedule made or purported to have been made after the execution of this Agreement shall be disregarded). The Company shall have received a certificate with respect to the foregoing signed on behalf of Parent, with respect to the representations and warranties of Parent, by an authorized executive officer of Parent and a certificate with respect to the foregoing signed on behalf of Merger Sub, with respect to the representations and warranties of Merger Sub, by an authorized executive officer of Merger Sub.
	(b) Agreements and Covenants. Parent and Merger Sub shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date, and the Company shall have received a certificate with respect to the foregoing signed on behalf of Parent, with respect to the covenants of Parent, by an authorized executive officer of Parent and a certificate with respect to the foregoing signed on behalf of Merger Sub, with respect to the covenants of Merger Sub, by an authorized executive officer of Merger Sub.
	(c) No Governmental Restriction. There shall not be any pending or overtly threatened suit, action or proceeding asserted by any Governmental Entity challenging or seeking to restrain or prohibit the consummation of the Merger or any of the other transactions contemplated by this Agreement, the effect of which restraint or prohibition if obtained would cause the condition set forth in Section 6.1(c) to not be satisfied.

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	(a) by mutual written consent duly authorized by the Boards of Directors of each of Parent and the Company;
	(b) by either the Company or Parent if the Merger shall not have been consummated by the date that is six (6) months after the date of this Agreement (the “End Date”); provided, however, that the End Date shall be extended to the date that is nine (9) months after the date of this Agreement upon written notice of either the Company to Parent and Merger Sub or Parent to the Company, which notice shall be delivered on or within ten (10) days before the date that is six (6) months after the date of this Agreement if any of the conditions specified in Section 6.1(d) have not been satisfied on the date of such notice; and provided, further, that the right to terminate or extend this Agreement under this Section 7.1(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Merger to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;
	(c) by either the Company or Parent if a Governmental Entity shall have issued an order, decree or ruling or taken any other action (including the failure to have taken an action), in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger, which order, decree, ruling or other action is final and nonappealable;
	(d) by either the Company or Parent if the required approval of the stockholders of the Company contemplated by this Agreement shall not have been obtained by reason of the failure to obtain the required vote at a meeting of the Company stockholders duly convened therefor or at any adjournment thereof; provided, however, that the right to terminate this Agreement under this Section 7.1(d) shall not be available to the Company where the failure to obtain such stockholder approval shall have been caused by the action or failure to act of the Company, and such action or failure to act constitutes a breach by the Company of this Agreement;
	(e) by Parent (at any time prior to the adoption of this Agreement by the required vote of the stockholders of the Company) if a Triggering Event with respect to the Company shall have occurred;
	(f) by the Company, upon a breach of any representation, warranty, covenant or agreement on the part of Parent set forth in this Agreement, or if any representation or warranty of Parent shall have become untrue, in either case such that the conditions set forth in Section 6.3(a) or Section 6.3(b) would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue; provided, however, that if such inaccuracy in Parent’s representations and warranties or breach by Parent is curable by Parent prior to the End Date, then the Company may not terminate this Agreement under this Section 7.1(f) prior to 30 days following Parent’s receipt of written notice from the Company of such breach, provided Parent continues to exercise all reasonable efforts to cure such breach through such 30-day period (it being understood that the Company may not terminate this Agreement pursuant to this subsection (f) if it shall have materially breached this Agreement or if such breach by Parent is cured);
	(g) by Parent, upon a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company shall have become untrue, in either case such that the conditions set forth in Section 6.2(a) or Section 6.2(b) would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue; provided, however, that if such inaccuracy in the Company’s representations and warranties or breach by the Company is curable by the Company prior to the End Date, then Parent may not terminate this Agreement under this Section 7.1(g) prior to 30 days following the Company’s receipt

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	of written notice from Parent of such breach, provided the Company continues to exercise all reasonable efforts to cure such breach through such 30-day period (it being understood that Parent may not terminate this Agreement pursuant to this subsection (g) if it shall have materially breached this Agreement or if such breach by the Company is cured);
	(h) by the Company, if, the Company shall have entered into a definitive binding agreement with respect to a Superior Offer pursuant to and in compliance with Section 5.3(d), and the Company shall have paid Parent the Termination Fee described in Section 7.3(b);
	(i) by Parent, if any Effect, either individually or in the aggregate, shall have occurred or otherwise arisen since the date hereof that has had, or would reasonably be expected to have, a Material Adverse Effect on the Company and (x) such Material Adverse Effect is not capable of being cured prior to the End Date or (y) such Material Adverse Effect is not cured prior to the earlier of the End Date and 30 days following the receipt of written notice from Parent to the Company of such Material Adverse Effect (it being understood that Parent may not terminate this Agreement pursuant to this subsection (i) if it shall have materially breached this Agreement or if such Material Adverse Effect is cured); and
	(j) by the Company, pursuant to Section 1.6(a), if under the circumstances set forth in such Section, the Company has delivered a timely Walk-Away Notice, provided that termination in accordance with this subsection (j) shall not be effective unless and until Parent has failed to deliver a timely Top-Up Notice in accordance with Section 1.6(a).

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	(i) Payment. The Company shall promptly, but in no event later than two Business Days after the date of termination pursuant to the sections of this Agreement as set forth below, pay Parent a fee equal to $8.0 million in immediately available funds (the “Termination Fee”) in the event that this Agreement is (i) terminated by Parent pursuant to Section 7.1(e), (ii) terminated by the Company pursuant to Section 7.1(h), provided, however, in the case of termination under Section 7.1(h), payment of the Termination Fee by the Company shall be made concurrent with such termination, or (iii) terminated by Parent or the Company, as applicable, pursuant to Section 7.1(b), Section 7.1(d) or Section 7.1(g); provided that in the case of termination pursuant to Section 7.1(b), Section 7.1(d), or Section 7.1(g), (a) such payment shall be made only if prior to the termination of this Agreement, there has been disclosure publicly of an Acquisition Proposal with respect to the Company and within 12 months following the termination of this Agreement, an Acquisition of the Company is consummated or the Company enters into a definitive agreement or letter of intent with respect to an Acquisition of the Company and (b) such payment shall be made promptly, but in no event later than two Business Days after the consummation of such Acquisition of the Company or the entry by the Company into such agreement or letter of intent.
	(ii) Interest and Costs; Other Remedies. The Company acknowledges that the agreements contained in this Section 7.3(b) are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, Parent would not enter into this Agreement. Accordingly, if the Company fails to pay in a timely manner the amounts due pursuant to this Section 7.3(b) and, in order to obtain such payment, Parent makes a claim that results in a judgment against the Company for the amounts set forth in this Section 7.3(b), the Company shall pay to Parent the reasonable costs and expenses of Parent (including reasonable attorneys’ fees and expenses) in connection with such suit, together with interest on the amounts due pursuant to this Section 7.3(b) at the prime rate of Citibank, N.A. in effect on the date such payment was required to be made. Except in the case of willful breach of this Agreement by the Company, payment of the Termination Fee by the Company shall be the sole and exclusive remedy of Parent and Merger Sub under this Agreement for any breaches or events that result in the payment of the Termination Fee.
	(iii) Certain Definitions. For the purposes of this Section 7.3(b) only, “Acquisition,” with respect to a party hereto, shall mean any of the following transactions (other than the transactions contemplated by this Agreement): (i) a merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the party pursuant to which the equity interests held in such party and retained following such transaction or issued to or otherwise received in such transaction by the stockholders of the party immediately preceding such transaction constitute less than 50% of the aggregate equity interests in the surviving or resulting entity of such transaction or any direct or indirect

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parent thereof, (ii) a sale or other disposition by the party of assets representing in excess of 40% of the aggregate fair market value of the party’s business immediately prior to such sale or (iii) the acquisition by any Person or group (including by way of a tender offer or an exchange offer or issuance by the party or such Person or group), directly or indirectly, of beneficial ownership or a right to acquire beneficial ownership of shares representing in excess of 40% of the voting power of the then outstanding shares of capital stock of the party.

	Flextronics International Ltd.
	One Marina Boulevard
	#28-00 Singapore 018989
	Attention: Chief Financial Officer
	Facsimile No.: (65) 6890 7188
	with copies to:
	Flextronics International USA, Inc.
	305 Interlocken Parkway
	Broomfield, CO 80021
	Attention: General Counsel
	Facsimile No.: (303) 927-4513

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	with copies to:
	Curtis, Mallet-Prevost, Colt & Mosle LLP
	101 Park Avenue
	New York, NY 10178
	Attention: Jeffrey N. Ostrager
	Telephone No.: (212) 696-6918
	Facsimile No.: (212) 697-1559
	if to the Company, to:
	International DisplayWorks, Inc.
	1613 Santa Clara Drive, Suite 100
	Roseville, CA 95661
	Attention: Chief Financial Officer
	Telephone No.: (916) 797-6800
	Facsimile No.: (916) 797-6898
	with copies to:
	Bullivant Houser Bailey PC
	1415 L Street, Suite 1000
	Sacramento, CA 95814
	Attention: David C. Adams
	Telephone No.: (916) 930-2511
	Facsimile No.: (916) 930-2501

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	FLEXTRONICS INTERNATIONAL LTD.

	By:	/s/ Manny Marimuthu

	Name: Manny Marimuthu

	Title:	Authorized Signatory

	GRANITE ACQUISITION CORP.

	By:	/s/ Donald H. Standley

	Name: Donald H. Standley

	Title:	President

	INTERNATIONAL DISPLAYWORKS, INC.

	By:	/s/ Thomas A. Lacey

	Name: Thomas A. Lacey

	Title:	Chairman and CEO

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Schedule 2.1(c)		—		Subsidiaries
Schedule 2.2(b)(i)		—		Company Options
Schedule 2.2(b)(ii)		—		Accelerated Vesting or Exercisability of Company Options
Schedule 2.2(d)		—		Other Securities
Schedule 2.3(d)		—		Necessary Consents
Schedule 2.4(c)		—		Internal Controls
Schedule 2.5		—		Absence of Certain Changes or Events
Schedule 2.6(b)		—		Tax Returns and Audits
Schedule 2.7(a)		—		Leased Real Property
Schedule 2.7(c)		—		Title to Properties — Valid Title
Schedule 2.8(b)		—		Intellectual Property — No Infringement
Schedule 2.8(c)		—		Intellectual Property — Notice
Schedule 2.8(l)		—		Intellectual Property — Licenses-In
Schedule 2.8(n)		—		Trade Secrets
Schedule 2.8(p)		—		Intellectual Property — Ownership of Intellectual Property Rights
Schedule 2.10		—		Governmental Authorizations
Schedule 2.11		—		Litigation
Schedule 2.12		—		Compliance with Law
Schedule 2.13(b)		—		Environmental Compliance
Schedule 2.16(b)(i)		—		Employee Benefit Plans and Compensation — Company Employee Plans; Employee Agreements
Schedule 2.16(b)(ii)		—		Employee Benefit Plans and Compensation — Employees with Base Salary >$100,000
Schedule 2.16(b)(iii)		—		Employee Benefit Plans and Compensation — Consultants/ Advisors with Base Salary >$100,000
Schedule 2.16(j)		—		Section 162(m)
Schedule 2.17(b)		—		Company Material Contracts
Schedule 2.18		—		Insurance Policies with Premiums> $50,000/year
Schedule 2.19(a)		—		Company Significant Customers
Schedule 2.19(b)		—		Company Significant Suppliers
Schedule 4.1(b)		—		Required Consents
Schedule 5.10(a)		—		Indemnification Agreements

Schedule 3.2(c)		—		Necessary Consents

Exhibits
	Exhibit A			—		Form of Voting Agreement (included as Annex B to this Registration Statement on Form S-4)
	Exhibit B			—		Form of Rule 145 Letter

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	1.     Certain Definitions. Capitalized terms not defined herein shall have the meanings ascribed to them in the Merger Agreement. For purposes of this Agreement:

	(a) A Person shall be deemed to “Beneficially Own” a security if such Person has “beneficial ownership” of such securities as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended.
	(b) “Constructive Sale” means, with respect to any security, a short sale or entering into or acquiring an offsetting derivative contract with respect to such security, entering into or acquiring a futures or forward contract to deliver such security or entering into any other hedging or other derivative transaction that has the effect of materially changing the economic benefits and risks of ownership of such security.
	(c) “Expiration Date” means the earlier to occur of (i) such date and time as the Merger shall become effective in accordance with the terms and provisions of the Merger Agreement and (ii) such date and time as the Merger Agreement shall have been validly terminated pursuant to Article VII thereof.
	(d) “Governmental Entity” means any supranational, national, state, municipal, local or foreign government, any instrumentality, subdivision, court, arbitral body, administrative agency or commission or other governmental authority or instrumentality or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority.
	(e) “Options” means: (i) all securities Beneficially Owned by Stockholder as of the date of this Agreement that are convertible into, or exercisable or exchangeable for, shares of capital stock

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	of the Company, including, without limitation, options, warrants and other rights to acquire shares of Company Common Stock or other shares of capital stock of the Company; and (ii) all securities of which Stockholder acquires Beneficial Ownership during the period from the date of this Agreement through and including the Expiration Date that are convertible into, or exercisable or exchangeable for, shares of capital stock of the Company, including, without limitation, options, warrants and other rights to acquire shares of Company Common Stock or other shares of capital stock of the Company.
	(f) “Person” means any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity.
	(g) “Shares” means: (i) all shares of capital stock of the Company Beneficially Owned by Stockholder as of the date of this Agreement; and (ii) all shares of capital stock of the Company of which Stockholder acquires Beneficial Ownership during the period from the date of this Agreement through and including the Expiration Date, including, without limitation, in each case, shares issued upon the conversion, exercise or exchange of Options.
	(h) “Transfer” means, with respect to any security, the direct or indirect (i) assignment, sale, transfer, tender, pledge, hypothecation, gift, placement in trust, Constructive Sale or other disposition of such security (excluding transfers by testamentary or intestate succession), of any right, title or interest in such security (including, without limitation, any right or power to vote to which the holder thereof may be entitled, whether such right or power is granted by proxy or otherwise) or of the record or beneficial ownership of such security, or (ii) offer to make any such sale, transfer, tender, pledge, hypothecation, gift, placement in trust, Constructive Sale or other disposition, and each agreement, arrangement or understanding, whether or not in writing, to effect any of the foregoing, in each case, excluding any Transfer pursuant to a court order.

	2.     “Voting Period” shall mean the period commencing on the date hereof and ending on the earlier of: (i) the date on which the Merger Agreement is validly terminated; and (ii) the date on which a final vote is taken by the stockholders of Company to approve the Merger.
	3.     No Transfer of Shares or Options. Stockholder agrees that, at all times during the Voting Period, Stockholder shall not Transfer (or cause or permit any Transfer of) any Shares or Options, or make any agreement relating thereto, in each case, without the prior written consent of Parent, other than the issuance of Company Common Stock to Stockholder in connection with the exercise by Stockholder of Company Options pursuant to a cashless exercise. Notwithstanding the foregoing, the Stockholder may Transfer Shares to any member of Stockholder’s immediate family or to a trust for the benefit of Stockholder or any member of Stockholder’s immediate family. Stockholder agrees that any Transfer in violation of this Agreement shall be void and of no force or effect.
	4.     No Transfer of Voting Rights. Stockholder agrees that, during the Voting Period, Stockholder shall not deposit (or cause or permit the deposit of) any Shares or Options in a voting trust or grant (or cause or permit the grant of) any proxy or enter into (or cause or permit the entry into) any voting agreement or similar agreement with respect to any of the Shares or Options other than as contemplated by this Agreement.
	5.     Agreement to Vote Shares.

(a) Until the Expiration Date, at every meeting of stockholders of the Company, however called, at every adjournment or postponement thereof, and on every action or approval by written consent of stockholders of the Company with respect to any of the following, Stockholder shall vote, to the extent not voted by the Person(s) appointed under the Proxy (as defined below), all of the Shares or cause the Shares to be voted:

	(i) in favor of (1) adoption of the Merger Agreement, including all actions and transactions contemplated by the Merger Agreement or the Proxy and (2) any other actions

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	presented to holders of shares of capital stock of the Company that would reasonably be expected to facilitate the Merger Agreement, the Merger and the other actions and transactions contemplated by the Merger Agreement or the Proxy;
	(ii) against approval of any proposal made in opposition to, or in competition with, the Merger Agreement or consummation of the Merger and the other transactions contemplated by the Merger Agreement or the Proxy; and
	(iii) against any Acquisition Proposal or any other action that is intended, or would reasonably be expected, to, in any manner impede, prevent, interfere with, delay, postpone, discourage or otherwise adversely affect the Merger or any of the other transactions contemplated by the Merger Agreement.

	(b) Stockholder shall not enter into any agreement or understanding with any Person to vote or give instructions to vote, or make any public announcement that is in any manner inconsistent with this Section 5.

	6.     Irrevocable Proxy. Concurrently with the execution of this Agreement, Stockholder agrees to deliver to Parent an irrevocable proxy in the form attached hereto as Exhibit A (the “Proxy”), which shall be irrevocable to the fullest extent permitted by applicable law, covering all Shares. Stockholder shall deliver additional proxies in the form or Exhibit A covering any additional Shares which Stockholder acquires Beneficial Ownership during the period from the date of this Agreement through and including the Expiration Date, including, without limitation, in each case, shares issued upon the conversion, exercise or exchange of Options.
	7.     Representations, Warranties and Covenants of Stockholder. Stockholder represents, warrants and covenants to Parent as follows:

	(a) Stockholder is the Beneficial Owner of the Shares and the Options indicated on the signature page of this Agreement.
	(b) Stockholder does not Beneficially Own any shares of capital stock of the Company or any securities convertible into, or exchangeable or exercisable for, shares of capital stock of the Company, other than the Shares and Options set forth on the signature page hereto.
	(c) Stockholder has the full power to dispose, vote or direct the voting of the Shares.
	(d) The Shares are, and at all times up to and including the Expiration Date the Shares will be, unless Transferred in compliance with Section 3, Beneficially Owned by Stockholder, free and clear of any rights of first refusal, co-sale rights, security interests, liens, pledges, claims, options, charges, proxies, voting trusts or agreements, understandings or arrangements, or any other encumbrances of any kind or nature.
	(e) The execution and delivery of this Agreement and the Proxy by Stockholder do not, and Stockholder’s performance of its obligations under this Agreement will not conflict with or violate any order, decree, judgment, statute, law, rule, regulation or agreement applicable to the Stockholder and such Shares or Options, except where such conflict or violation would not, individually or in the aggregate, materially impair the ability of the Stockholder to perform his or her obligations hereunder.
	(f) Stockholder has all requisite power and authority to make, enter into and perform the terms of this Agreement and the Proxy without limitation, qualification or restriction on such power and authority.

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	8.     Consents and Waivers. Stockholder (not in his or her capacity as a director or officer of the Company) hereby gives all consents and waivers that may be reasonably required from him or her for the execution and delivery of this Agreement and the Proxy under the terms of any agreement or instrument to which such Stockholder is a party, which consent or waiver is required solely because of the consummation of the Merger in accordance with the terms of the Merger Agreement.
	9.     Termination. This Agreement and the Proxy shall terminate and shall have no further force or effect as of the Expiration Date.
	10.     Stockholder Capacity. So long as Stockholder or a representative of Stockholder is an officer or director of the Company, nothing in this Agreement shall be construed as preventing or otherwise affecting any actions, judgment or decisions taken by Stockholder in his or her capacity as an officer or director of the Company or any of its Subsidiaries or from fulfilling the obligations and responsibilities of such office (including the performance of obligations required by the fiduciary obligations and responsibilities of Stockholder acting solely in his or her capacity as an officer or director), it being agreed and understood that this Agreement shall apply to the Stockholder solely in his or its capacity as a stockholder.
	11.     Miscellaneous.

	(a) Waiver. No failure on the part of Parent, Company or Stockholder to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of Parent, Company or Stockholder in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. Neither Parent, Company nor Stockholder shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of Parent, Company or Stockholder, as appropriate; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.
	(b) Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally and/or by messenger service, (ii) on the date of confirmation of receipt (or, the first business day following such receipt if the date is not a business day) of transmission by facsimile, or (iii) on the date of confirmation of receipt (or, the first business day following such receipt if the date is not a business day) if delivered by a nationally recognized courier service. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

	If to Parent, to:
	Flextronics International Ltd.
	One Marina Boulevard
	#28-00 Singapore 018989
	Attention: Chief Financial Officer
	Facsimile No.: (65) 6890 7188
	with copies to:
	Flextronics International USA, Inc.
	305 Interlocken Parkway
	Broomfield, CO 80021
	Attention: General Counsel
	Facsimile No.: (303) 927-4513

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	with copies to:
	Curtis, Mallet-Prevost, Colt & Mosle LLP
	101 Park Avenue
	New York, NY 10178
	Attention: Jeffrey N. Ostrager
	Telephone No.: (212) 696-6918
	Facsimile No.: (212) 697-1559
	if to the Company, to:
	International DisplayWorks, Inc.
	1613 Santa Clara Drive, Suite 100
	Roseville, CA 95661
	Attention: Chief Financial Officer
	Telephone No.: (916) 797-6800
	Facsimile No.: (916) 797-6898
	with copies to:
	Bullivant Houser Bailey PC
	1415 L Street, Suite 1000
	Sacramento, CA 95814
	Attention: David C. Adams
	Telephone No.: (916) 930-2511
	Facsimile No.: (916) 930-2501
	if to Stockholder:
	To the address for notices set forth on the signature page hereof.

	(c) Headings. All captions and section headings used in this Agreement are for convenience only and do not form a part of this Agreement.
	(d) Counterparts. This Agreement may be executed in two or more counterparts, and by facsimile, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.
	(e) Entire Agreement; Amendment. This Agreement and the Proxy constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. This Agreement may not be changed or modified, except by an agreement in writing specifically referencing this Agreement and executed by each of the parties hereto.
	(f) Severability. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the greatest extent possible, the economic, business and other purposes of such void or unenforceable provision.
	(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.
	(h) Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application

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	of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
	(i) Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. In the event of any such proceedings to enforce this agreement, the non-prevailing party will pay all costs and expenses incurred by the prevailing party, including all reasonable attorneys’ and experts’ fees.
	(j) Binding Effect; No Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, and, except as otherwise specifically provided herein, neither this Agreement nor any of the rights, interests or obligations of the parties hereto may be assigned by any of the parties without the prior written consent of the other parties. Any purported assignment in violation of this Section 11(j) shall be void.

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	FLEXTRONICS INTERNATIONAL LTD.

	By:

	Name:

	Title:

	INTERNATIONAL DISPLAYWORKS, INC.

	By:

	Name:
	Title:

	Name:

	Address for Notice:

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	(i) in favor of (1) adoption of the Merger Agreement, including all actions and transactions contemplated by the Merger Agreement or this Proxy and (2) any other actions presented to holders of shares of capital stock of the Company that would reasonably be expected to facilitate the Merger Agreement, the Merger and the other actions and transactions contemplated by the Merger Agreement or this Proxy;
	(ii) against approval of any proposal made in opposition to, or in competition with, the Merger Agreement or consummation of the Merger and the other transactions contemplated by the Merger Agreement or this Proxy; and
	(iii) against any Acquisition Proposal or any other action that is intended, or would reasonably be expected, to, in any manner impede, prevent, interfere with, delay, postpone, discourage or otherwise adversely affect the Merger or any of the other transactions contemplated by the Merger Agreement.

B-8

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B-9

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	Dated:                     , 2006

	Signature:

	Print Name:

	Address:

	Shares:

B-10

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C-1

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C-2

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	Very truly yours,
	/s/ Deutsche Bank Securities Inc.
	DEUTSCHE BANK SECURITIES INC.

C-3

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Item 20.	Indemnification of Directors and Officers.

Item 21.	Exhibits and Financial Statement Schedules.

Incorporated by Reference

Exhibit

Filing

Exhibit

Filed

No.

Exhibit

Form

File No.

Date

No.

Herewith

2.01*

Agreement and Plan of Merger, dated as of September 4, 2006, among Flextronics International Ltd., Granite Acquisition Corp. and International DisplayWorks, Inc. (included as Annex A to the proxy statement/ prospectus forming a part of this registration statement on Form S-4)

X

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Incorporated by Reference

Exhibit

Filing

Exhibit

Filed

No.

Exhibit

Form

File No.

Date

No.

Herewith

2.02

Form of Voting Agreement, dated as of September 4, 2006, among Flextronics International Ltd. and certain stockholders of International DisplayWorks, Inc. (included as Annex B to the proxy statement/ prospectus forming a part of this registration statement on Form S-4)

X

3.01

Memorandum of Association of the Registrant

10-Q

000-23354

02-09-01

3.01

3.02

Amended and Restated Articles of Association of the Registrant

8-K

000-23354

10-11-06

3.01

**5.01

Opinion of Allen & Gledhill

8.01

Opinion of Curtis, Mallet-Prevost, Colt & Mosle LLP regarding tax matters

X

8.02

Opinion of Bullivant Houser Bailey, PC regarding tax matters

X

15.01

Letter in lieu of consent of Deloitte & Touche LLP, regarding unaudited interim financial information

X

23.01

Consent of Deloitte & Touche LLP, independent registered public accounting firm of Flextronics International Ltd.

X

23.02

Consent of Grant Thornton LLP, independent registered public accounting firm of International DisplayWorks, Inc.

X

23.03

Consent of Grant Thornton LLP, independent registered public accounting firm of Three-Five Systems (Beijing) Co., Ltd.

X

**23.04

Consent of Allen & Gledhill (included in Exhibit 5.01)

23.05

Consent of Curtis, Mallet-Prevost, Colt & Mosle LLP (included in Exhibit 8.01)

X

23.06

Consent of Bullivant Houser Bailey, PC (included in Exhibit 8.02)

X

**24.01

Power of Attorney (included on the signature page to the registration statement on Form S-4)

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Incorporated by Reference

Exhibit

Filing

Exhibit

Filed

No.

Exhibit

Form

File No.

Date

No.

Herewith

99.01

Opinion of Deutsche Bank Securities Inc. regarding the fairness of the merger consideration (included as Annex C to the proxy statement/ prospectus forming a part of this registration statement on Form S-4)

X

**99.02

Consent of Deutsche Bank Securities Inc.

99.03

Form of International DisplayWorks, Inc. Proxy Card

X

	*	Exhibits and schedules have been omitted and will be furnished supplementally to the Securities and Exchange Commission upon its request.

**	Previously filed.

Item 22.	Undertakings.

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	FLEXTRONICS INTERNATIONAL LTD.

	By:	/s/ Thomas J. Smach

	Name: Thomas J. Smach

	Title:	Chief Financial Officer

Signature				Title		Date
/s/ Michael M. McNamara   Michael M. McNamara				Chief Executive Officer and Director (Principal Executive Officer)		October 25, 2006
/s/ Thomas J. Smach   Thomas J. Smach				Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)		October 25, 2006
*   Michael E. Marks				Chairman of the Board		October 25, 2006
*   H. Raymond Bingham				Director		October 25, 2006
*   James A. Davidson				Director		October 25, 2006
*   Ajay B. Shah				Director		October 25, 2006
*   Lip-Bu Tan				Director		October 25, 2006

*	By: /s/ Thomas J. Smach

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