Arima to Sell Notebook and Server Business to Flextronics

Arima Computer Corporation announced the signing of a binding Letter of Intent to sell the notebook computer and server related business, operation and assets owned by Arima and Arima Computer JiangSu (Arima's subsidiary), including but not limited to operation, facilities (Including one plant, four dormitories together with the related land usage right, located at Wu-Jiang ), machineries, products, technology, customer lists, inventories, as well as the entire stockholding or shareholding of Arima’s wholly-owned subsidiaries Arima Computer (UK) Ltd., Arima Computer (Texas) Corporation , Arima Computer (California) Corporation and Arima Computer (Japan) Corporation to Flextronics Computing Sales and Marketing (L) Ltd. (Flextronics).

The transaction price is $59.5 million (NT$1,963 million) over the book value of the disposed assets at closing. As of June 30, 2007, the book value of the relevant assets were about $132 million (NT$4,356 million). The definitive sale and purchase agreement is expected to be executed within 45 days.

www.arima.com.tw