EXHIBIT 2.3
ASSET PURCHASE AGREEMENT
between
INFINESSE CORPORATION
and
MICROSEMI CORPORATION
INFINESSE CORPORATION MICROSEMI CORPORATION
0000 Xxxx Xxxxxxx Xxxxxxxxx - Xxx 0000 0000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000 Xxxxx Xxx, Xxxxxxxxxx 00000
Tel: 000-000-0000 Fax 000-000-0000 Tel: 000-000-0000 Fax: 000-000-0000
E-Mail: xxxx@xxxxxxxxx.xxx E-Mail: xxxxxxxx@xxxxxxxxx.xxx
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(hereafter the "SELLER") (Hereafter the "BUYER")
THIS AGREEMENT, by and between Buyer and Seller, shall have an Effective Date of
February 15, 2000.
RECITALS:
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WHEREAS, the Seller is engaged in the design, development and processing of
proprietary radio frequency integrated circuits ("RFICs" ) and multi-chip
modules using advanced device/IC technologies, including Gallium Arsenide
("GaAs") and related semiconductor Heterojunction Bipolar Transistor ("HBT") and
Field-Effect Transistor ("FET") technologies for Application Specific Standard
Products ("ASSP") and custom derivatives for wireless communication
applications, and has developed proprietary devices/RFICs (hereafter the
"Products"), such Products being more specifically described in the Business
Sales Memorandum dated November 11, 1999, which is attached hereto as Exhibit A
WHEREAS, the Buyer, or its assign, desires to purchase, and the Seller desires
to sell and transfer to the Buyer, or its assign, certain Assets used by Seller
in, or in connection with, its GaAs HBT, RFIC Business Group, (hereafter the
"Business"), on the terms and conditions hereinafter set forth, such Business
being more specifically described in the Business Sales Memorandum dated
November 11, 1999, which is attached hereto as Exhibit A
AGREEMENT
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NOW THEREFORE, in consideration of the terms, covenants and conditions
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1.0 ASSETS BEING PURCHASED
1.1 Agreement to Buy and Sell. The Buyer hereby agrees to buy from the
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Seller, and the Seller hereby agrees to sell, transfer and assign to the
Buyer, free and clear of any and all restrictions and conditions on
transfer or assignment, and free and clear of any and all mortgages, liens,
security interests, encumbrances, pledges, cases, equities, claims,
charges, conditions, conditional sale contracts and any other adverse
Interests of any kind whatsoever, the following assets of the Infinesse
Business Group that are owned and controlled by the Seller (collectively
hereafter the "Purchased Assets"):
1.2 Inventory and Associated Wafers. The inventory and associated wafers,
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and masks including grandfather sets, comprehended hereunder as of the
Closing Date are set forth in detail on Schedule 1.2 attached hereto
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(collectively hereafter the "Inventory").
1.3 Equipment. The equipment comprehended hereunder as of the Closing
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Date as set forth in detail on Schedule 1.3 attached hereto (collectively
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hereafter the "Equipment"), including, but not limited to, network
workstations and related software capital equipment; and other equipment
that is used in the development, design, manufacture or test of Seller's
goods and services.
1.4 Backlog. The customer orders comprehended hereunder as of the Closing
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Date as set forth in detail on Schedule 1.4 attached hereto (collectively
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hereafter the "Customer orders"). On or prior to the Closing Date, Seller
will assign such customer Orders to Buyer, will provide Buyer with detailed
data concerning such Customer Orders and will notify the customers named
therein in writing of, and will request the written approval of such
customers to, such assignment.
1.5 Customer Data. Detailed data relating to any and all customers to
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which Seller has sold products or provided services during the three (3)
years prior to the Closing Date, whether or not there are any "open" sales
orders from such customers, as set forth in detail on Schedule 1.5 attached
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hereto (collectively hereafter the "Customer Data"), such Customer Data
shall include, but not be limited to, list of customer names with
addresses, telephone, facsimile and pager numbers, quotations, sales
orders, and any other tangible documents, files, and records in Seller's
possession regarding such customer activity.
1.6 Vendor Data. Detailed data relating to, and all right, title and
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interest in and to any tooling, molds and proprietary specifications Seller
has with, any and all vendors from which the Seller has purchased goods or
services during the three (3) years prior to the Closing Date, whether or
not there are any "open" purchase orders to such vendors, as set forth on
Schedule 1.6 attached hereto (collectively hereafter the "Vendor Data"),
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such Vendor Data shall include, but not be limited to, foundry alliance
contacts, list of vendor names with addresses, telephone, facsimile and
pager numbers, quotations, purchase orders, and any other tangible
documents, files and records in Seller's possession regarding such vendor
activity.
1.7 Intellectual Property. Any and all Intellectual Property that Seller
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uses, or has used during the three (3) years prior to the Closing Date, in
the development, design, manufacture, testing, marketing, sale or
distribution of Seller's goods and services, as set forth on Schedule 1.7
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attached hereto. As used herein, term "Intellectual Property" shall
include, but not be limited to, foundry alliance documentation, quotations,
sales orders, customer lists, vendor lists, product design data, product
drawings, engineering files, fab process circuit building blocks,
simulation and modeling techniques, device/IC fabrication and validation
technology and manufacturing documentation, manufacturing flow sheets, cost
and pricing data, product promotion strategies, marketing data , license
agreements, processes, methods, know how, trade secrets, invention
disclosures, patents, copyrights, trade names, trademarks and service marks
associated with the Purchased Assets and Business, and all applications
therefor, owned or held by Seller, whether or not such Intellectual
Property is used in the operation of the Business.
1.8 Royalty Agreements and Teaming Arrangements. Any and all product
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royalty agreements comprehending Joint Development Projects, and any
Teaming Arrangements with third parties for the design, development,
manufacture and sale of Products, such projects and arrangements being set
forth in detail in Schedule 1.8, attached hereto.
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1.9 Goodwill Excluded. Without limiting the generality of the foregoing,
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excluded from The Purchased Assets are any right, title and interest in and
to the Seller's name and goodwill and going concern value of the Business,
not associated with the Purchased Assets.
1.10 Confidentiality and Assignment of Intellectual Property Agreements.
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Any and all Confidentiality Agreements with employees, consultants, agents,
customers and vendors, and Assignment of Intellectual Property Agreements
with employees and consultants, such agreements being set forth in detail
in Schedule 8.9 attached hereto.
2.0 LIABILITIES ASSUMED AND LIABILITIES NOT ASSUMED
2.1 Purchase and Sale Contracts Assumed. Buyer hereby agrees to assume
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performance obligations arising on and after the Closing under the purchase
and sale contracts of the Business which have been entered into in the
ordinary course of Business and disclosed to Buyer, such contracts are
listed in Schedule 2.1 attached hereto (collectively, the "Assumed
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Contracts").
2.2 Employee Liabilities Assumed. Buyer hereby agrees to assume the
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obligations regarding accrued employee vacation and sick leave earned as of
the Closing Date of any employee hired by Buyer, to the extent, if any,
specified in Schedule 2.2 attached hereto (the "Assumed Employee
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Benefits"), such employees thereafter shall be subject to the vacation and
sick leave benefits of Buyer then in effect, and shall be eligible for any
other benefits provided by Buyer to its employees.
2.3 Credit for Service with Seller. All of Sellers employees hired by
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Buyer as of the Closing Date shall retain full credit for prior years of
service with Seller and its predecessors for vesting purposes regarding
benefits, policies and practices of Buyer.
2.4 Ad Valorum Taxes Assumed. Buyer hereby agrees to assume and pay the
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ad valorum taxes on the Purchased Assets that are due and payable for the
year of the Closing.
2.5 Liabilities Not Assumed . Except for the Assumed Contracts, the
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Seller agrees that the Buyer will not assume or perform, and the Seller
shall remain responsible for and shall indemnify, hold harmless and defend
the Buyer from and against, any and all liabilities and obligations of the
Seller, whether known or unknown, and regardless of when such liabilities
or obligations arise or are asserted, including, but not limited to, any
accounts payable, bank loans and promissory notes. Without limiting the
generality of the foregoing, Buyer expressly disclaims any liability or
obligation whatsoever with regard to (i) business income taxes, (ii) ad
valorum taxes for years prior to the year of Closing, (iii) Federal or the
State of California environmental claims or violation based on activities
of Seller on and at its facility prior to the Closing, (iv) employee
termination rights due and payable as of the Closing Date under Seller's
policies and practices, or under any applicable statute, law or regulation,
(v) liabilities under contracts with employees not expressly assumed
herein, and (vi) any obligations whatsoever to any shareholder, director,
officer, employee, agent, consultant, parent, subsidiary, affiliate, or
division of Seller not expressly assumed herein.
3.0 PURCHASE PRICE AND TERMS OF PAYMENT.
3.1 Purchase Price. As consideration for the Purchased Assets, Buyer
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shall pay Seller the sums listed in Paragraphs 3.4, 3.5, 3.6, 3.7 and 3.9.
3.2 Closing Date. The purchase and sale of the Purchased Assets shall
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take place at a closing (the "Closing") to be held at the offices of the
Buyer in Santa Ana, California, on February 15, 2000 (the "Closing Date"),
at 10:00 A.M., or on such other date and at such other time as may be
mutually agreed upon hereafter by the parties hereto.
3.3 At the Closing. At the Closing, The parties shall do the following:
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3.4 Cash Payment. Buyer shall pay Seller the sum of one million five
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hundred thousand dollars ($1,500,000);
3.5 Subordinated Term Note. Buyer shall issue to Seller its Interest
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Bearing, Subordinated Term Note, in substantially the form set forth in
Schedule 3.5 attached hereto, in the original principal amount of two
million dollars ($2,000,000), at an annual percentage rate (APR) of eight
and one-half percent (8.5%), such Note being payable in four (4) equal and
successive quarterly installments, with the first installment being due on
the first day of the fourth (4th) full month following the Closing Date.
Such Note shall be subject to setoff in order to satisfy any indemnity
obligations of Seller under this Agreement.
3.6 Restricted Common Stock. Buyer shall issue to Seller three hundred
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twelve thousand five hundred (312,500) shares of Microsemi Corporation
Restricted Common Stock , and shall be in the form set forth in Schedule
3.6 attached hereto. The Restricted Stock shall contain the restriction
duly imprinted thereon.
3.7 Subordinated Convertible Debenture. Buyer shall issue to Seller its
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Interest Bearing Subordinated Convertible Debenture having a two (2) year
Conversion Term, and a face amount of two million five hundred thousand
dollars ($2,500,000), convertible at Seller's option during the
ConversionTerm thereof into Microsemi Corporation Restricted Common Stock
at fifteen dollars ($15.00) per share (not to exceed 166,667 shares), and
shall be in the form set forth in Schedule 3.7 attached hereto. The
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interest rate shall be at an annual percentage rate (APR) of seven percent
(7%) and shall be payable to Seller on a quarterly basis commencing on the
first day of the fourth (4th) full month following the Closing Date. Such
note shall be subject to setoff for indemnification liabilities of Seller
under this Agreement.
3.8 Product Royalty Agreement. Seller shall assign to Buyer the Alpha
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Industries (Alpha) Product Royalty Agreement, such assignment shall be in
the form set forth in Schedule 3.8 attached hereto.
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3.9 Unsecured Term Note. Buyer shall issue to Seller its unsecured,
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Interest Free Term Note substantially in the form set forth in Schedule 3.9
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attached hereto. Payments of the Principal amount of this Term Note
shall be due only upon receipt of a royalty payment from Alpha under the
Product Royalty Agreement, and the amount of payment due from time to time
shall be limited to the amount of royalty payment received by Maker from
time to time from Alpha, and shall be payable to Payee within thirty (30)
days after receipt thereof. When the accrued amount of payments made
hereunder equals the Face Amount of one million seven hundred thousand
dollars ($1,700,000), this Term Note shall be deemed "paid-in-full" and
any and all royalty payments received from Alpha after such Face Amount is
received shall be to Buyer's account. The parties shall use their
commercially reasonable efforts to collect all royalties due under the
Alpha Industries Product Royalty Agreements.
3.10 Sellers Liability for Taxes on the Purchase Price Paid by Buyer.
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Seller is solely responsible for any taxes levied on the receipt from time-
to-time of the payment by Buyer of the Purchase Price set forth herein.
4.0 Representations and Warranties of the Seller.
Seller hereby represents and warrants to the Buyer, as of the date hereof and as
of the Closing Date, as follows:
4.1 Organization and Good Standing. The Seller is a corporation duty
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organized, validly existing and in good standing under the laws of the
State of California, has all necessary corporate power and authority to
conduct the Business as it is now conducted and to own and use the
properties and assets used therein, and is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in
which the failure to be so qualified or licensed and in good standing would
have a material adverse effect on the Seller or the Business.
4.2 Authority and Binding Effect. The Seller has all the necessary
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corporate power and authority to enter into, and perform its obligations
under, this Agreement. This Agreement and the performance by the Seller of
its obligations herein have been duly authorized by all necessary corporate
action of the Seller. This Agreement has been duly executed, and upon
delivery by the Seller will constitute the valid and binding agreement of
the Seller, enforceable against the Seller in accordance with its terms.
No other action is required to be taken by the Seller, nor is it necessary
for the Seller to obtain any action, approval or consent by or from any
third persons, governmental or other, to enable the Seller to enter into or
perform the Seller's obligations under this Agreements except consents of
third parties to the assignment and assumption of the Assumed Contracts
which shall be obtained by the Seller on or before the Closing (unless
waived by the Buyer).
4.3 The Purchased Assets. At the Closing the Seller will convey and
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transfer to the Buyer, good, complete and marketable title to all of the
Purchased Assets, free and clear of any and all mortgages, liens, security
interests, encumbrances, pledges, leases, equities, claims, charges,
conditions, conditional sale contracts and any other adverse interests.
All of the Purchased Assets are in the exclusive possession and control of
the Seller and Seller has the unencumbered right to use and sell to the
Buyer all of the Purchased Assets without interference from others. No
actions, proceedings or transactions have been commenced or undertaken by
the Seller which give or would give rights to any person, other than the
Buyer, in any of the Purchased Assets or interfere with the consummation of
the transactions contemplated by this Agreement. The Customer Data set
forth on Schedule 1.4 hereto is a complete and accurate list, as of the
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date hereof, of all of the Seller's customers which have purchased goods or
services from the Business within the last three (3) years. Except as may
be set forth in Schedule 1.4 attached hereto, the Seller does not have any
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knowledge that any such customer intends to cancel their backlog of orders
entered as of the closing date, or their procurement of goods or services
from the Business.
4.4 Contracts, Agreements and Commitments. Seller has no contract,
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agreement, arrangement or commitment which may have a material adverse
effect on the transfer of the Purchased Assets to the Buyer.
Notwithstanding any term or provision of this Agreement, Buyer shall not
assume or be responsible for any liabilities associated with any contract
or agreement of Seller to be assumed by Buyer hereunder where consent is
required prior to transfer and such consent is not obtained. Seller has
performed in all material respects the obligations required to be performed
by it thereunder and there have been no defaults or claims of defaults and
there are no facts or conditions which have occurred or are anticipated to
occur which, through the passage of time or the giving of notice, or both,
would constitute a default thereunder or would cause the acceleration of
any obligation of any party thereto or the creation of a lien or
encumbrance upon any of the Purchased Assets. Seller has not waived any
right which it has under any such contact or commitment.
4.5 Taxes and Tax Returns. Seller has duty filed all tax reports and
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returns which are required by law to be filed by it and will duly pay all
state and local taxes due or claimed to be due from such authorities, which
could result in the imposition of any lien, encumbrance or liability or
charge on any of the Purchased Assets or, following the Closing, on Buyer
or any of Buyer's other assets or properties. Seller has properly withheld
and paid, or accrued for payment when due, to appropriate state
authorities, all amounts required to be, withheld from its employees'
wages, salaries and other compensation and has paid or will pay all
employment taxes as required under applicable laws.
4.6 Compliance with Laws. Seller has complied in all material respects
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with all applicable, United States federal, state, municipal and other
political subdivision or governmental agency statutes, ordinances and
regulations, including any bulk sale requirements.
4.7 Litigation and Proceedings. There is no action, suit, proceeding or
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investigation, or any counter or cross-claim in an action brought by or
behalf of the Seller, whether at law or in equity, or before or by any
governmental department commission, board, bureau, agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind,
that is pending or threatened, against the Seller, which (i) could
reasonably be expected to have a material adverse effect on Seller's,
ability to perform its obligations under this Agreement or any other
agreement entered into in connection with this Agreement or complete any of
the transactions contemplated hereby or thereby, or (ii) involves the
reasonable possibility of any judgment or liability, or which may become a
claim, against the Buyer or the Purchased Assets prior to or subsequent to
the Closing Date. The Seller is not subject to any judgment, order, writ,
injunction, decree or award of any court, arbitrator or governmental
department, commission, board, bureau, agency or instrumentality having
jurisdiction over the Seller or any of its assets.
4.8 Full Disclosure. Seller has not made any misstatement to Buyer of
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material fact or failed to state a fact to Buyer necessary in order to make
the statements made not misleading.
4.9 Bulk Sales Law. The purchase and sale hereunder is exempt from the
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requirements of the Bulk Sales Division of the California Commercial Code
since Seller will continue to operate a substantial portion of its existing
business after the Closing.
4.10 Intellectual Property. Seller owns or has the right to use pursuant
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to valid license, sublicense, agreement or permission any patents, patent
applications, copyrights, trade secrets or other intellectual property
necessary for or used in the Business, the Products or the Purchased
Assets, including without limitation all of the trade names (other than the
name Infinesse and all derivatives thereof), trademarks, logos, and other
marks or dress, whether or not registered, and all applications therefor.
The execution, delivery and consummation of transactions contemplated by
this Agreement shall not constitute a breach or default under, give rise to
a right of termination under or otherwise adversely affect the ability of
Buyer to use such intellectual property in conducting the Business or using
the Purchased Assets or selling or developing the Products after the
Closing Date. Seller has neither interfered with, nor infringed upon,
misappropriated or otherwise come into conflict with any intellectual
property rights of third parties. To the Sellers' knowledge, no third party
has interfered with, infringed upon, misappropriated or otherwise come into
conflict with any intellectual property rights of Seller being transferred
to Buyer under this Agreement. With respect to each such item of
intellectual property owned by Seller, Seller possesses all right, title
and interest in and to such item, free and clear of any encumbrance, lien,
license or other restriction; such item is not subject to any outstanding
injunction, judgment, order, decree, ruling or charge; no action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand is
pending or, to the Seller's knowledge, threatened that challenges the
legality, validity, enforceability, use or ownership of such item; and
Seller has not agreed to indemnify any person or entity for or against any
interference, infringement, misappropriation or other conflict with respect
to such item. With respect to each such item of intellectual property with
respect to which Seller uses such item under a license, sublicense,
agreement or permission: the license or agreement is disclosed as a
material intellectual property agreement in the appropriate Schedules to
this Agreement; the restrictions on use are ordinary in scope; to the
Seller's knowledge, the underlying item of intellectual property is not
subject to any outstanding injunction, judgment, order, decree, ruling or
charge; no action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand is pending or, to the Seller's knowledge,
threatened that challenges the legality, validity or enforceability of the
underlying item of intellectual property; and Seller has not granted any
sublicense or similar right with respect to such license, sublicense,
agreement or permission.
5.0 Representations and Warranties of the Buyer.
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The Buyer hereby represents and warrants to the Seller, as of the date hereof
and as of the Closing Date, as follows:
5.1 Organization and Related Matters. The Buyer, and any subsidiary to
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which Buyer assigns its rights hereunder, is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, has all necessary corporate power and authority to conduct its
business as it is now conducted and to own and use the properties and
assets used therein, and is duly qualified to do business and is in good
standing as a foreign corporation in all states in which the failure to be
so qualified or licensed and in good standing would have a material adverse
effect on the Buyer or its business.
5.2 Authority and Binding Effect. The Buyer, and any subsidiary to which
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Buyer assigns its rights hereunder, has all the necessary corporate power
and authority to enter into, and perform its obligations under, this
Agreement. This Agreement and the Performance by the Buyer of its
obligation herein have been duly authorized by all necessary corporate
action of the Buyer. This Agreement has been duly executed, and upon
delivery by the Buyer will constitute the valid and binding agreement of
the Buyer, enforceable against the Buyer in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
moratorium or other similar laws affecting creditors' rights, and (ii)
general principles of equity relating to the availability of equitable
remedies (regardless of whether any such agreement is sought to be enforce
in a proceeding at law or in equity).
6.0 Obligation Pending and Following the Closing.
6.1 Termination of Security Interest and Liens. The Seller shall cause
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to be removed, by the Closing Date, at no expense to the Buyer, all
security interests, liens, claims, encumbrances and adverse interests to
which any of the Purchased Assets are subject.
6.2 Consents. Each party to this Agreement shall use its best efforts
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to obtain or cause to be obtained at the earliest practicable date and
prior to the Closing Date, all consents, approvals and licenses and
permits, if any, which such party requires to permit it to consummate the
transactions contemplated hereby without violating any material agreement,
contract, instrument or applicable law or regulation, license or permit, to
which it is a party or to which it or its assets are subject. The parties
hereto shall cooperate with each other in their efforts to obtain all such
consents, approvals and licenses.
6.3 Further Assurances. Each party hereto shall execute and deliver, both
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before and after the Closing, such instruments and take such other actions
as the other party or parties, as the case may be, may reasonably request
in order to carry out the intent of this Agreement or to better evidence or
effectuate the transactions contemplated herein.
6.4 Employee Hiring. Buyer has advised Seller that it or its assign
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intends to hire as of the Closing Date, all of the employees of the
Business (hereafter the "Employees" ), so that their employment shall be
uninterrupted. A list of such Employees is set forth in Schedule 6.4
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attached hereto. Seller shall not interfere with any attempt by Buyer to
hire such Employees following the Closing, and shall agree for a period
of two (2) years following the Closing to not solicit or hire any such
Employees , or any other employee hired by Buyer during such two (2) year
period, without the prior written consent of Buyer. Seller hereby
authorizes the Buyer to offer employment to any or all of its employees
involved in the Business conditioned on the consummation of the sale of the
Purchased Assets pursuant hereto; waives any rights the Seller may have to
prohibit such employees from being employed by the Buyer; and shall not
offer new employment to those of such employees who are offered employment
by the Buyer and who accept such employment. To the extent required by any
applicable statute, law or regulation, Seller shall retain all liability
for severance or other similar compensation, vested in and payable to such
hired employees as of the Closing Date for any reason whatsoever with
respect to their employment by Seller on or prior to the Closing Date,
notwithstanding the fact that such employees were hired by Buyer.
6.5 Location of Business and Facility Lease. Buyer has also advised
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Seller that it is its present intention to continue the operation of the
Business in a location to be determined prior to Closing, which may be
Sellers present location. Buyer does not assume any lease obligations of
the Seller existing as of the Closing Date. However, in the event Buyer
decides to use the facility presently used by the Seller, the parties agree
to negotiate in good faith a lease or sublease for 8000 s.f. (approx.) of
such facility for a six (6) year Term following the Closing Date.
6.6 Taxes. Except for the taxes assumed by Buyer under paragraph 2.4,
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above, the Seller shall pay taxes of any kind or nature arising from (i)
the conduct of the Business by Seller, and (ii) consummation of the
transactions contemplated hereby, including, without limitation, all sales
or similar taxes, if any, that may arise from or be assessed by reason of
the sale of the Purchased Assets by the Seller to the Buyer (the "Seller
Taxes"). If any Seller Taxes required under this Section to be borne by
the Seller are assessed against the Buyer, the Buyer shall notify the
Seller in writing promptly thereafter and the Seller shall be entitled to
contest, in good faith, such assessment or charge. In the event the Buyer
pays any Seller Taxes, the Seller shall indemnify Buyer pursuant to section
11 below.
6.7 Publicity. Buyer and Seller shall keep strictly confidential
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the existence and terms of this Agreement prior to the issuance or
dissemination of any mutually agreed upon press release or other disclosure
of the sale and purchase hereunder. Buyer and Seller will cooperate on the
drafting of appropriate announcements and press releases.
6.8 Noncompete. During the two (2) year period commencing on the Closing
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Date, Seller shall not solicit any actual or potential customers on the
Customer Data list attached hereto as Schedule 1.5, nor shall Seller
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provide goods or services in connection with or own an interest in a
company that provides goods or services reasonably similar to the goods and
services provided by Seller which are related to the Products and Business
described in the Recitals, at any time prior to the Closing Date. In the
event a provision of this Section is more restrictive than allowed by the
law of the State of California said provision shall be deemed amended and
shall be fully enforceable to the extent permitted by such law. Seller, its
officers, directors and shareholders acknowledge and agree that any
violation of this Section would cause immediate irreparable damage to the
Buyer, and that it would be extremely difficult or impossible to determine
the amount of damage caused to Buyer. Therefore such parties agree that
the Buyer's remedies at law are inadequate, and hereby consent to issuance
of a temporary restraining order, preliminary and permanent injunction and
other appropriate relief to restrain any actual or threatened violation of
this Section without limiting any remedies that the Buyer may have at law
or in equity. Products and business not included in the noncompete
include, but are not limited to, next-generation, low-cost, wireless
voice/data network systems, with or without telephone (PSTN) lines, or as
extension to existing wired key systems/PBXs for single-cell, stand-alone,
small-medium capacity wireless indoor/outdoor LANWAN, point-to-point
wireless applications of the type designed and developed by Sellers Digital
Signal Processing Communication/Sensor Systems Business Group of
7.0 Survival of Representations, Warranties and Covenants.
All of the representations and warranties set forth in this Agreement or in any
certificates delivered pursuant hereto shall remain in full force and effect and
shall survive the Closing, regardless of any investigation, verification or
approval by any party hereto or by anyone or on behalf of any party hereto.
8.0 Conditions to Obligations of the Buyer.
The obligation of the Buyer to consummate the transactions contemplated by this
Agreement is subject to the satisfaction, or the waiver (in writing) by the
Buyer, at or before, the Closing, of all the conditions set out herein.
8.1 Inventory Valuation. The Buyer and the Seller will have agreed on
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the value of the Inventory as of the Closing Date.
8.2 Accuracy of Representations and Warranties/Compliance With Covenants.
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All of the representations and warranties of the Seller contained in this
Agreement and the schedules hereto were true and correct when made and
remain true and correct as of the Closing Date. The Seller shall, in all
material respects, have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement to have
been performed or complied with by it on or before the Closing Date
8.3 No Material Adverse Changes. There shall not have occurred nor shall
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there exist (i) any material adverse change in the customer relations
properties or assets, except for changes disclosed in this Agreement or in
the Schedules hereto delivered with this Agreement on the date hereof; (ii)
any material breach or default by any party thereto of any of the Assumed
Contracts or Assumed Liabilities or any other material contracts or
agreements relating to or affecting the Purchased Assets, the existence of
which breach or default is not disclosed in this Agreement or in the
Schedules delivered with this Agreement on the date hereof nor any
proceedings in the Schedules delivered with this Agreement on the date
hereof: (iii) any material damage or loss, whether or not insured, to any
of the Purchased Assets; or (iv) any other event or condition or state of
facts of any character which could materially and adversely affect the
Purchased Assets.
8.4 Absence of Litigation. There shall be an absence of litigation,
---------------------
whether brought against the Seller or the Buyer, seeking to prevent the
consummation of the transactions contemplated by this Agreement, and no
such litigation shall have been threaten nor shall there be in effect any
order restraining or prohibiting the consummation of the transactions
contemplated by this Agreement nor any proceeding pending with respect
thereto. There shall be no pending or threaten litigation, or asserted or
unasserted claims, assessments, or other loss contingencies, materially
affecting the Purchased Assets.
8.5 Certificates. The Buyer shall have received from Seller a
------------
Certificate of Good Standing, as of recent date, from the California
Secretary of State.
8.6 Xxxx of Sale. At the Closing, the Seller and the Buyer shall have
------------
executed the Xxxx of Sale and Assumption Agreement in the form of Exhibit B
attached hereto.
8.7 Due Diligence. Buyer and its representatives shall have completed
-------------
their business, legal and accounting due diligence investigation and Buyer
shall be satisfied, in its sole discretion, with the results thereof.
8.8 Other consents and Approvals. Receipt of all consents and approvals
-----------------------------
required for the consummation of the transactions contemplated by this
Agreement and to permit the Buyer to acquire all of the Purchased Assets
pursuant hereto, without thereby violating any laws, government regulations
or agreements to which the Buyer is subject or is a party, in form and
substance reasonably acceptable to Buyer.
8.9 Other Documents. The Seller shall have delivered to the Buyer all
---------------
instruments, consents, deeds, assignments and other documents called for
in this Agreement, in form and substance satisfactory to Buyer, properly
executed and acknowledged for transfer, and such other documents and
instruments as the Buyer or its counsel reasonably requests to better
evidence or effectuate the transactions contemplated hereby. Seller has
also delivered its response to Buyer's questions asked during due diligence
and other supporting information, such being set forth in detail in
Schedule 8.9 attached hereto.
------------
8.10 Structure of Newco. The Buyer and Seller will have agreed generally
------------------
to the capitalization, voting rights, right of first refusal, buy-out
rights, By Laws, initial Board of Directors, and structure of Newco, the
Corporation to be formed pursuant to Paragraph 16.2. The parties agree to
exert their best efforts in good faith to execute a mutually acceptable
Memorandum of Understanding comprehending the more salient aspects of the
structure of Newco.
9.0 Conditions to the Obligations of the Seller
-------------------------------------------
The obligations of the Seller under this Agreement to be performed on or before
the Closing Date shall be subject to the satisfaction, or the waiver by the
Seller on or before the Closing Date, of each of the following conditions:
9.1 Inventory Valuation. The Buyer and the Seller will have agreed on
-------------------
the value of the Inventory as of the Closing Date and will have agreed to
any adjustment to the Purchase Price of the Purchased Assets resulting from
such valuation.
9.2 Accuracy of Representations, Warranties and Compliance with Covenants.
---------------------------------------------------------------------
All of the representations and warranties of the Buyer contained in this
Agreement and in the Schedules hereto were true and correct when made and
remain true and correct as of the Closing Date. The Buyer, in all material
respects, shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by the Buyer on or prior to the
closing.
9.3 Absence of Litigation. No action, suit, investigation or other
---------------------
proceeding before any court or by any governmental body or other authority
shall have been instituted or threatened which questions the validity or
legality of the transactions contemplated hereby.
9.4 Structure of Newco. The Buyer and Seller will have agreed generally
------------------
to the capitalization, voting rights, right of first refusal, buy-out
rights, By Laws, initial Board of Directors, and structure of Newco, the
Corporation to be formed pursuant to Paragraph 16.2 The parties agree to
exert their best efforts in good faith to execute a mutually acceptable
Memorandum of Understanding comprehending the more salient aspects of the
structure of Newco.
10.0 Termination.
------------
This Agreement may be terminated and the transactions herein contemplated may be
abandoned at any time after February 29, 2000, of the Closing contemplated
herein has not occurred, without liability to the terminating party (i) by
written notice of the Buyer or the Seller, or (ii) by either the Buyer or the
Seller, provided that the party so terminating is not in breach of any of its
material obligations under this Agreement.
11.0 Indemnification.
----------------
11.1 Indemnification by the Seller. In addition to Buyer's rights of set
-----------------------------
off under the Notes and Debentures issued to the Seller as specified
herein, the Seller shall defend, indemnify and hold harmless the Buyer and
its offices, directors, employees, successors and assigns in respect of any
and all claims, actions, suits or other proceedings and any and all losses,
costs, expenses, liabilities, fines, penalties, interest and damages,
whether or not arising out of any claim, action, suit or other proceeding
(and including reasonable counsel and accountants' fees and expenses and
all other reasonable costs and expenses of investigation, defense or
settlement of claims and amounts paid in settlement) ("Damages") incurred
by, imposed on or borne by the Buyer resulting from the breach of any of
the representations, warranties, covenants or agreements made by the Seller
in this Agreement or the conduct of the Business prior to the Closing Date.
In addition to and not in limitation of the foregoing, the Seller will
indemnify the Buyer for any Damages suffered due to any claims made against
the Buyer or damages suffered by Buyer resulting out of any of the Seller's
liabilities.
11.2 Claims for Indemnification. Whenever any claim shall arise for
--------------------------
indemnification hereunder, Buyer shall promptly notify the Seller of the
claim and, when known, the facts constituting the basis for such claim;
provided, however, that the Buyer's failure to give such notice shall not
affect any rights or remedies of the Buyer hereunder with respect to
indemnification for damages except to the extent that the Seller is
materially prejudiced thereby.
11.3 Defense by Seller. In connection with any claim giving rise to
-----------------
indemnity or resulting from or arising out of any claim or legal proceeding
by a person who is not a party to this Agreement, Seller at its sole cost
and expense may, upon written notice to Buyer, assume the defense of any
such claim or legal proceeding if they acknowledge to Buyer in writing its,
obligations to indemnify Buyer with respect to all elements of such claim,
and thereafter diligently conduct the defense thereof with counsel
reasonably acceptable to Buyer.
12.0 Expenses / Prorations / Broker's Fees / Finder's Fees
-----------------------------------------------------
12.1 Expenses/Prorations. Each party shall pay all costs and expenses
-------------------
incurred or to be incurred by it in connection with the negotiation,
preparation, execution, delivery and performance of its respective
obligations under this Agreement and the agreements and transactions
contemplated hereby. Obligations under the Assumed Contracts will be
prorated as of the Closing Date.
12.2 Broker's Finder's Fees. Seller has advised Buyer that it has
-----------------------
utilized the services of, and that it does and will have liability to a
broker or finder in connection with this Agreement or the transactions
contemplated hereby. Seller agrees to indemnify and hold Buyer harmless
against any loss, liability, damage, cost, claim or expense incurred by
any brokerage commission or finder's fee alleged to be payable as a result
or in connection with this Agreement or the transactions contemplated
hereby.
13.0 Notices.
--------
All notices, requests, demands or other communications hereunder shall be in
writing and shall be deemed to have been duly given, if delivered in person or
mailed, certified, return-receipt requested, postage prepaid:
If to the Seller, addressed to: INFINESSE CORPORATION
0000 Xxxx Xxxxxxx Xxxxxxxxx - Xxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxx
If to Buyer, addressed to: MICROSEMI CORPORATION
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Any party hereto may from time to time, by written notice to the other parties,
designate a different address, which shall be substituted for the one specified
above for such party. If any notice or other document is sent by certified or
registered mail, return receipt requested, postage prepaid, property addressed
as aforementioned, the same shall be deemed served or delivered seventy-two (72)
has after mailing thereof. If any notice is sent by facsimile machine ("fax")
to a party, it will be deemed to have been delivered on the date the fax thereof
is actually received, provided the original thereof is sent by mail, in the
manner set forth above, within twenty-four (24) hours after the fax is sent.
14.0 Miscellaneous.
--------------
14.1 Binding Effect Assignment. This Agreement shall be binding upon
-------------------------
the heirs, executors, representatives, successors and assigns of the
respective parties hereto. The Seller may not assign this Agreement, or
assign its rights or delegate, its duties hereunder, without the prior
written consent of the Buyer. Buyer may assign its rights under this
Agreement and to the Business to a wholly-owned subsidiary.
14.2 Counterparts. This Agreement may be executed in facsimile and in
------------
any number of counterparts, each of which shall be deemed to be an
original and all of which together shall be deemed to be one and the same
instrument.
14.3 Headings. The subject headings of the sections and subsections of
--------
this Agreement are included for purposes of convenience only and shall not
affect the construction or interpretation of any of its provisions.
14.4 No Waiver; Cumulative Remedies. No failure or delay on the part of
------------------------------
any party hereto in exercising any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
14.5 Entire Agreement. This Agreement, including the Schedules, Exhibits
----------------
and other documents referred to herein which form a part hereof, embodies
the entire agreement and understanding of the parties hereto, and supersedes
all prior or contemporaneous agreements or understandings (whether written
or oral) among the parties, in respect to the subject matter contained
herein.
14.6 Governing Law. This Agreement is deemed to have been made in the
-------------
State of California, and its interpretation, its construction and the
remedies for its enforcement or breach are to be applied pursuant to, and in
accordance with the laws of California for contracts made and to be
performed in that state.
14.7 Alternative Dispute Resolution. The parties agree that they shall
------------------------------
attempt to settle any dispute arising out of this Agreement, the execution
thereof or in connection therewith, through friendly consultation and
negotiation in the spirit of mutual cooperation, and if settlement cannot be
reached within a reasonable time, then the dispute shall first be submitted
to a mutually acceptable neutral advisor for "Non-Binding Mediation"
("Mediation"). Neither party shall unreasonably withhold acceptance of such
advisor, and selection thereof shall be made within forty-five (45) days
after written notice by one party requesting such Mediation. Any disputes
arising hereunder which the parties cannot resolve in good faith within four
(4) months of the date of the written request for Mediation, shall be
submitted for arbitration ("Arbitration") to an arbitration association
comprised of retired judges and located in the state of California for
Arbitration in accordance with its commercial rules of procedure. Each
party shall select one (1) arbitrator, and they shall elect a third (3rd)
independent arbitrator, who shall act as chairman. All Arbitration's shall
take place in the State of California and each party shall be responsible
for the cost and expenses of their selected arbitrator, and shall equally
share the cost and expense of the chairman. The parties agree that the
Arbitral Award shall be final and binding upon both parties. During
arbitration, the terms and conditions of this Agreement shall be executed
continuously by both parties except for matters in dispute. Each party
shall be responsible for its own costs associated with the preparation and
representation by attorneys, or any other persons retained thereby, to
assist in connection with any such Alternative Dispute Resolution. However,
all costs charged by the mutually agreed upon Alternative Dispute Resolution
Entity, shall be shared by the parties. All Arbitrations shall be completed
within six (6) months of the selection of the initial Arbitration Panel.
14.9 Limitation of Liability. The obligation of the parties under this
-----------------------
understanding or the Agreement shall not constitute the personal
obligations of their shareholders, or of their directors, officers,
employees, consultants, agents or invitees, and each party shall look only
to the assets of the other party for the satisfaction of any liability
with respect to the Agreement, and shall not seek recourse against the
shareholders of the other party, or against the directors, officers,
employees, consultants, agents, or invitees of the other party, or against
their personal assets for such satisfaction.
15.0 Seller's Pre-Closing Covenants.
------------------------------
In consideration of the payment of $75,000 as a "No-Shop Payment" by Buyer to
Seller, and the substantial time, effort and expense to be incurred by the Buyer
in performing its due diligence review and preparing for Closing, Seller agrees
as follows:
15.1 Continue Business Operations. Pending Closing Seller shall use its
----------------------------
good faith best efforts to preserve intact its business assets and
goodwill, and the value thereof, including without limitation its
relationship with its customers, suppliers and employees.
15.2 Stand-Still Arrangement. Pending Closing, unless and until the
-----------------------
Buyer either materially breaches this Agreement or abandons the proposed
transaction, Seller shall refrain from all further discussions with any
other third party interested in acquiring the Business, or any part
thereof, and shall refrain from otherwise pursuing any other transaction
competitive with the transaction contemplated hereby.
15.3 Vesting of No-Shop Payment. The No-Shop Payment shall be non-
--------------------------
refundable, except upon breach of any provision of this Agreement by the
Seller.
15.4 Liquidated Damages. The Seller acknowledges that since it will be
------------------
difficult to ascertain any loss suffered due to Buyer's breach of the
Agreement, and that since the amount of any damages resulting from such
breach will be impossible or impractical to calculate, Seller shall retain
the No-Shop Payment as full and complete liquidated damages if the Buyer
in any way breaches the terms of the Agreement The Seller further
acknowledges that the No-Shop Payment is a fair and reasonable amount of
liquidated damages for any breach of the Agreement by the Buyer.
15.5 Novation of Agreements. The Seller shall make reasonable efforts
-----------------------
with existing customers for the Products comprehended hereunder to novate
any existing Agreements and otherwise facilitate the establishment of a
business relationship with Buyer.
16.0 Formation of Corporation
------------------------
16.1 Place of Business. The parties agree to form a new corporation
------------------
(Newco) having a principal place of business in California. The State of
incorporation shall be selected by Buyer, and it shall be a subsidiary of
Microsemi Corporation, and have the same fiscal year as its parent.
16.2 Ownership of Newco. Buyer shall own eighty percent (80%) of Newco,
------------------
and the Seller, and its designee, shall own ten percent (10%) of Newco. The
parties agree that the remaining ten percent (10%) of Newco shall be
reserved for stock grants and options as established by the Board of
Directors of Newco. The Capitalization of Newco, voting rights, buy-out
rights, By Laws, initial Board of Directors, and company policy, practices
and procedures shall be generally agreed to prior to closing, it being
understood, however, that such organizational matters shall be greatly
influenced by the organizational structure of Buyer, and must be compatible
therewith.
16.3 Appointment of VP/GM. The parties agree that Xx. Xxx shall be the
--------------------
V.P & General Manager of Newco, and shall report directly to Xxxx Xxxx, Xx.
16.4 FY2000 Budget. Prior to the Closing Date, Xx. Xxx shall prepare and
-------------
submit to Xxxx Xxxx, Xx. a Proforma Operating Budget for fiscal year 2000,
which shall be duly funded by Buyer. Such Budget is set forth in Schedule
--------
16.4 attached hereto.
----
16.5 Key Managers Eligibility. Buyer agrees that the Key Managers of
------------------------
Newco shall be eligible to participate in the incentive compensation
plans, including bonus' and stock options of Newco.
16.6 Equity Interest Waiver Agreement. Seller has delivered to Buyer
---------------------------------
fully executed agreements with all persons or entities having an equity
interest in and to Infinesse. Such agreements expressly surrender for
cancellation their equity interest in an to Infinesse, and each person or
entity has expressly ackowledged the existance of this Agreement, that they
have read the Agreement, and have agreed to the sale of the Purchased
Assets as contemplated herein. Copies of such Equity Interest Waiver
Agreements are attached hereto as Schedule 16.6.
--------------
17.0 Severability.
------------
Any provision of this Agreement which is illegal, invalid or unenforceable shall
be ineffective to the extent of such illegality, invalidity or unenforceability,
without affecting in any way the remaining provisions hereof.
18. Entire Agreement. This Agreement, including the Schedules, Exhibits and
other documents referred to herein which form a part hereof, and the Memorandum
of Understanding for the formation of Newco attached hereto as Exhibit C,
---------
embodies the entire agreement and understanding of the parties hereto, and
supersedes all prior or contemporaneous agreements or understandings (whether
written or oral) among the parties, in respect to the subject matter contained
herein.
IN WITNESS WHEREOF, the undersigned corporations have caused this Agreement
to be executed by officers thereunto duly authorized, and the individuals have
executed this Agreement, on the date first above stated.
MICROSEMI CORPORATION
By: /S/ XXXXX X. XXXXXXX
----------------------
Title: VP FINANCE AND CFO
-------------------
Date: 2/29/00
-------------------
INFINESSE CORPORATION
By: /S/ XXXXXXX X. XXX
----------------------
Title: PRESIDENT
-------------------
Date: 2/29/00
-------------------
EXHIBITS
--------
Exhibit A Business Sales Memorandum, dated November, 1999
---------
Exhibit B Form of Xxxx of Sale
---------
Exhibit C Memorandum of Understanding for the formation of Newco
---------
SCHEDULES
---------
1.2 Inventory
1.3 Equipment
1.4 Customer Orders
1.5 Customer Data
1.6 Vendor Data
1.7 Intellectual Property
1.8 Royalty Agreements/Teaming Arrangements
2.1 Assumed Agreements
2.2 Assumed Employee Benefits
3.5 Subordinated Term Note
3.6 Microsemi Corporation Restricted Common Stock
3.7 Subordinated Convertible Debenture
3.8 Product Royalty Agreement
3.9 Unsecured Interest Free Term Note
6.4 List of Seller's Employees hired by Buyer
8.9 Response to Questions asked during due diligence with supporting
information.
16.4 Proforma Operating Budget for FY2000
16.6 Equity Interest Waiver Agreements
EXHIBIT B
XXXX OF SALE
------------
INFINESSE CORPORATION MICROSUB CORPORATION
0000 Xxxx Xxxxxxx Xxxxxxxxx - Xxx 0000 0000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000 Xxxxx Xxx, Xxxxxxxxxx 00000
Tel: 000-000-0000 Fax: 000-000-0000 Tel: 000-000-0000 Fax: 000-000-0000
E-Mail xxxx@xxxxxxxxx.xxx E-Mail xxxxxxxx@xxxxxxxxx.xxx
(hereafter the "SELLER") (hereafter the "BUYER")
KNOW ALL MEN BY THESE PRESENTS, that SELLER, for and in consideration of the
payments specified in that certain Asset Purchase Agreement by and between
SELLER and BUYER, dated February 15, 2000, which was duly paid or delivered by
BUYER to SELLER on the Closing Date thereof, has bargained and sold, and by
these presents does grant and convey unto BUYER, its successors and assigns, the
Purchased Assets set forth therein. A list and description of said Purchased
Assets transferred and sold hereby are set forth in detail in Exhibit B-1, which
is attached hereto and by this reference made a part hereof.
SELLER warrants and represents for itself, its successors and assigns, that it
has good, complete and marketable title to all of the Purchased Assets, free and
clear of all mortgages, liens, security interests, encumbrances, pledges,
leases, equities, claims, charges, conditions, conditional sale contracts, and
any other adverse interests; and that all of said Purchased Assets are in
SELLER'S exclusive possession and control; and that SELLER has the unencumbered
right to sell all of said Purchased Assets without interference from any third
party; and that no actions, proceedings or transactions have been commenced or
undertaken by SELLER which give or would give rights to any third party in any
of said Purchased Assets or interfere with the consummation of the transactions
contemplated by said Asset Purchased Agreement.
SELLER further warrants it will defend the sale of said Purchased Assets unto
BUYER, its successors and assigns, against any and all persons whomsoever and
any all adverse claims whatsoever.
SELLER disclaims any warranty of merchantability or fitness for a particular
purpose; said Purchased Assets being sold in their present condition "as is and
where is".
IN WITNESS WHEREOF, the parties hereto have caused these presents to be signed
by their duly authorized representative.
INFINESSE CORPORATION MICROSUB CORPORATION
Issued by:XXXXXXX X. XXX Accepted by: XXXXX X. XXXXXXX
-------------------------- -------------------------
Title:PRESIDENT Title: VICE PRESIDENT FINANCE AND CFO
------------------------------ ------------------------------
Date: 2/29 , 2000 Date: 2/29 , 2000
------------------------------ ------------------------------
MICROSEMI CORPORATION
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Tel 000-000-0000 Fax 000-0000000
E-mail MASLEGAL @ xxxxxxxx.xxx.xxx
February 15, 2000
Xx. Xxxxxxx X. Xxx
President
Infinesse Corporation
0000 Xxxx Xxxxxxx Xxxxxxxxx - Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Tel: 000-000-0000 Fax: 000-000-0000
E-Mail xxxx@xxxxxxxxx.xxx
Dear Xx. Xxx:
RE: MEMORANDUM OF UNDERSTANDING (MOU)
for the formation of a California Corporation pursuant to Section 16.0
of the Asset Purchase Agreement (APA) between Infinesse Corporation
and Microsemi Corporation, dated February 15, 2000
The more salient terms and conditions of the contemplated formation of a
California Corporation are as follows:
1. Agreement to Incorporate
In consideration of the mutual promises contained in this agreement, the
undersigned parties agree to organize a corporation to be initially known as
Newco, or such other name as the parties may hereafter mutually agree upon,
under the laws of the State of California within fifteen (15) days after the
Closing of the APA, for the purpose of engaging in a GaAs HBT, RFIC Business as
more specifically described in the Business Sales Memorandum dated November,
1999, which is attached to the APA. Newco shall be a subsidiary of Microsemi
Corporation and have the same fiscal year as its parent.
2. Duration
The period of Newco's duration will be perpetual.
3. Registered Office and Agent of Newco
The registered office of Newco will be in California, and a registered
agent shall be appointed upon the filing of the Articles of Incorporation.
4. Directors of Newco
Newco will initially have 3 directors. One (1) director to be appointed
by Infinesse or its designee; and two (2) directors to be appointed by
Microsemi or its designee.
5. Officers of Corporation
The first officers of Newco for the below listed positions will be
appointed by the Board of Directors at its initial meeting. The parties
have agreed that Xx. Xxxxxxx X. Xxx shall be appointed Vice President and
General Manager:
President: ________________________________ [to be named]
Vice-President and General Manager: Xx. Xxxxxxx X. Xxx
Secretary: ________________________________ [to be named]
Treasurer: ________________________________ [to be named]
6. Initial Capitalization of Corporation
The initial capitalization of the corporation shall be nine hundred
dollars ($900), payable in cash
7. Incorporation and Issuance of Securities
The parties hereto agree to cause Newco to issue 900 shares of its common
stock to the parties as follows:
Name Number of Shares Consideration Paid
Microsemi Corporation 800 $800
Infinesse (or designee) 100 $100
Reserved for Options 100 ---
In addition, Newco will issue to Microsemi, or its designee, an open-ended,
promissory note in the initial amount equal to the value of the capital
contributions made by Microsemi to Newco.
8. Costs of Incorporating
All costs and expenses, including attorneys' fees, required for the
formation and organization of the corporation, will be paid by Microsemi.
9. Employment Agreement
The parties agree that Newco will enter into an employment agreement with
Xx. Xxxxxxx X. Xxx at an initial salary as set forth in the Newco budget
submitted by him pursuant to the APA.
The terms and conditions of such employment agreement shall be negotiated
in good faith by the parties on or about the effective date of the
formation of Newco.
10. Buy Out Rights Provision in Newco Common Stock
Any Newco common stock issued to any individual or entity other than
Microsemi, shall be non-tranferable for a period of five (5) years after
the formation of Newco without the express writen approval of Newco, which
approval shall not be unreasonable withheld, and shall contain a "Buy Out
Rights" Provision in the event of death of any such individual, or in the
event of bankruptcy, insolvency or dissolution of any such entity. The
purchase price of such common stock shall be negotiated in good faith and
based upon reasonable fair market valuation. In the event a mutually agreed
upon purchase price is not reached within sixty (60) days after Newco's
written notice of the exercise of its buy-out rights, such event shall be
deemed a dispute and resolved as provided in the Alternate Dispute
Resolution provision of this Memorandum.
11. Right of First Offer
In the event Infinesse or any person or entity ("the Selling Party")desires
to sell all or any part of their shares of Newco common stock, such Selling
Party shall give Microsemi thirty (30) days written notice of such desire,
whereupon Microsemi shall have sixty (60) days to submit a bone fide, good
faith offer to buy such common stock.. The Selling Party shall accept or
reject such offer within thirty (30) days after receipt thereof.
12. Right of First Refusal
In the event Infiness or any person or entity (the "Selling Party")
receives a bone fide, good faith offer to buy all or any part of their
shares of Newco common stock, such Selling Party shall give the Microsemi
thirty (30) days written notice of such offer, along with a detailed
description of the terms and conditions of such offer and certification of
its authenticity, whereupon such Microsemi shall have sixty (60) days to
submit its offer to buy such common stock under substantially the same
terms and conditions.
13. Miscellaneous
The following matters will require a 91% majority of the shareholders and a
unanimous vote of the board:
Change in the number of directors
Authorization of any additional shares of stock or any other reorganization
of the stock structure of Newco, provided that such approval will not be
required for the following:
a. Spin-off of Newco to Microsemi shareholders; or
b. Public offerings of Newco stock
The merger or sale, of the corporation into any entity controlled by
Microsemi.
The sale of additional stock at below fair market value.
14. Alternative Dispute Resolution
The parties agree that they shall attempt to settle any dispute arising out
of this Memorandum , the execution thereof or in connection therewith,
through friendly consultation and negotiation in the spirit of mutual
cooperation, and if settlement cannot be reached within a reasonable time,
then the dispute shall first be submitted to a mutually acceptable neutral
advisor for "Non-Binding Mediation" ("Mediation"). Neither party shall
unreasonably withhold acceptance of such advisor, and selection thereof
shall be made within forty-five (45) days after written notice by one party
requesting such Mediation. Any disputes arising hereunder which the parties
cannot resolve in good faith within four (4) months of the date of the
written request for Mediation, shall be submitted for arbitration
("Arbitration") to an arbitration association comprised of retired judges
and located in the state of California for Arbitration in accordance with
its commercial rules of procedure. Each party shall select one (1)
arbitrator, and they shall elect a third (3rd) independent arbitrator, who
shall act as chairman. All Arbitration's shall take place in the State of
California and each party shall be responsible for the cost and expenses of
their selected arbitrator, and shall equally share the cost and expense of
the chairman. The parties agree that the Arbitral Award shall be final and
binding upon both parties. During arbitration, the terms and conditions of
this Agreement shall be executed continuously by both parties except for
matters in dispute. Each party shall be responsible for its own costs
associated with the preparation and representation by attorneys, or any
other persons retained thereby, to assist in connection with any such
Alternative Dispute Resolution. However, all costs charged by the mutually
agreed upon Alternative Dispute Resolution Entity, shall be shared by the
parties. All Arbitration's shall be completed within six (6) months of the
selection of the initial Arbitration Panel.
15. Limitation of Liability
The obligation of the parties under this understanding or the Agreement
shall not constitute the personal obligations of their shareholders, or of
their directors, officers, employees, consultants, agents or invitees, and
each party shall look only to the assets of the other party for the
satisfaction of any liability with respect to the Agreement, and shall not
seek recourse against the shareholders of the other party, or against the
directors, officers,
employees, consultants, agents, or invitees of the other party, or against
their personal assets for such satisfaction.
16. Entire Understanding
--------------------
This Memorandum, and Section 16 of the Asset Purchase Agreement, and any
other documents s referred to herein which form a part hereof, embodies the
entire agreement and understanding of the parties hereto, and supersedes all
prior or contemporaneous agreements or understandings (whether written or oral)
among the parties, in respect to the subject matter contained herein.
If the foregoing terms and conditions are acceptable to you, please so
indicate by signing and dating the enclosed copies thereof and return one to us
for our records.
Sincerely,
XXXXX X. XXXXXXX
-------------------------
Xxxxx X. Xxxxxxx
VP Finance, CFO, Treasurer & Secretary
Microsemi Corporation
AGREED AND ACCEPTED
INFINESSE CORPORATION
By: XXXXXXX X. XXX
-------------------------------------
Title: PRESIDENT
-----------------------------------
Date: 2/29/00
-----------------------------------
CC: Xxxx Xxxx, Xx., President, Chairman & CEO, Microsemi Corporation
Xxxxxxx X. Xxxxx, Xx., Esq., Corporate Counsel, Microsemi Corporation
Nina Yoblok, Esq., Corporate Counsel, Infinesse Corporation
Xxxx X. Xxxxx, Esq., Stradling, Yocca, Xxxxxxx & Xxxxx, PC
MAS/eas (File A373) InfinesseMOU15Feb00
