EXHIBIT 99.1
Mr. Xxxxxx Xxxx September 11, 2003
Asante Technologies, Inc.
000 Xxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Re: Acquisition of Asante Technologies, Inc.
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Dear Xx. Xxxx:
This letter of intent ("LOI") is for the purpose that Acorn Campus Fund
II, Inc., (the "Acquiror"), is interested to acquire Asante Technologies, Inc.,
a Delaware corporation (the "Seller"), in an all cash merger transaction (the
"Acquisition") under the following terms and conditions.
1. Acquisition of Stock. The Acquiror shall acquire all of the issued and
outstanding capital stock of the Seller and any shares of capital stock
of the Seller underlying any outstanding options or warrants (the
"Stock") for the total cash price at $5,400,000
2. Conditions Precedent. The consummation of the Acquisition is subject to
the following conditions:
(a) Due Diligence. The Acquiror and its Representatives shall have
ten (10) working days to complete their due diligence
investigation. Seller shall fully cooperate with Acquiror for
the documents required, and Acquiror or its Representatives
shall keep everything confidential. Acquiror agrees that this
due diligence condition shall be satisfied (and the Acquiror
shall not have any basis to terminate this agreement) and the
purchase price shall not be reduced unless Acquiror has
reasonably identified material gross fraud during its due
diligence investigation.
(b) Formal Agreement. A formal Merger and Acquisition Agreement
between both parties shall be signed within fifteen (15)
working days.
(c) SEC Filings. The Seller is currently working through a
restatement of its financials, and hence cannot file a 10-Q
for its third fiscal quarter ended June 28, 2003, until a Form
10-K/A is filed with the SEC. The Company plans to file its
10Q shortly after filing of its 10-K/A. Subject to this
exclusion, the Seller shall have (i) prepared all necessary
proxy materials related to the Acquisition, such
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September 11, 2003
materials shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated to
make the statements therein not misleading in light of the
circumstances under which they are made; (ii) filed such
materials with the Securities and Exchange Commission (the
"SEC"); and (iii) received approval, to the extent necessary,
from the SEC of such proxy materials prior to consummation of
the Acquisition.
(d) Tax Clearance Certificates. The Seller shall have obtained,
from every jurisdiction in which the Seller conducts its
business operations and is required to pay taxes, a tax
clearance certificate or similar document indicating that the
Seller has paid all taxes due to the respective jurisdiction's
taxing authority.
(e) Fairness Opinion. The Seller, shall have obtained a fairness
opinion regarding the terms of the Acquisition.
(f) Conduct of the Business. From the date of this LOI until the
closing date, the Seller (i) shall continue to operate the
business as it has in the past and shall not engage in any
transactions outside the ordinary course of business; (ii)
shall continue to make regularly scheduled payments on its
existing debt; (iii) shall not make any material expenditures
or incur any additional indebtedness except in the ordinary
course of business; and (iv) shall not make any distributions
to stockholders or bonus payments to employees and shall not
increase any employee's salary other than a regularly
scheduled increase in the ordinary course of business.
(g) Employment Arrangements. The Acquiror shall have entered into
satisfactory employment arrangements with key employees of the
Seller to be designated by the Acquiror.
(h) Further Assurances. The Seller and its officers and directors
shall execute all documents necessary and do all such further
deeds, acts, things and assurances that may be reasonably
requested by Acquiror for carrying out the intention of or
facilitating the consummation of the Acquisition, including,
without limitation, deeds, acts and things required to be
performed post-closing.
(i) Absence of Adverse Change. There shall have been no material
adverse change in the business, properties, operations,
condition (financial or otherwise), prospects, assets or
liabilities of the Seller or the business since the date of
the Seller's last audited financial statement and all
representations and warranties of the Seller in the merger
agreement shall be true and accurate and all covenants therein
shall have been performed.
(j) Government and Third Party Approvals. The Acquisition shall
have been approved by all government agencies and third
parties from whom such approval
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September 11, 2003
is required and no court or governmental entity shall have
issued an injunction preventing, limiting or restricting the
Acquisition.
(k) Corporate and Stockholder Approvals. The Acquisition shall
have been approved by the Boards of Directors of the Acquiror
and the Seller, and by the Seller's stockholders.
(l) Financing. Attached Exhibit A is the proof of Acquiror's bank
statement.
(m) Closing Date. The Seller and the Acquiror shall use their best
efforts to close the Acquisition no later than December 31,
2003.
3. Broker. There is no Broker or Agent involved in this transaction.
4. Expenses. Except as otherwise expressly provided herein, all parties
will be responsible for their own costs and expenses, including
attorney fees, incurred in connection with the transactions
contemplated by this LOI.
5. Indemnification. Xxxxxxxx agrees to indemnify and hold Seller harmless
for any and all fees and expenses required to be paid, if any, by
Seller pursuant to Section 7.3 of that certain Agreement and Plan of
Merger by and between Oblique, Inc. and Seller dated as of June 13,
2003 in the event Buyer and Seller do not consummate the Acquisition.
6. Confidentiality. The Seller and the Acquiror agree that except for
disclosures (i) required by law or governmental or other rules and
regulations (including rules of any stock exchange) by which any of the
parties hereto are bound (it being agreed that anything set forth in a
proxy statement or any other document filed pursuant to law will be
deemed required by law); (ii) to employees, officers, directors,
stockholders, agents, attorneys, accountants, lenders and other
representatives of and advisers to the parties hereto who need to know
the information for the purpose of assisting such party in connection
with the transactions contemplated hereby; and (iii) disclosures
ordered by any court of competent jurisdiction over any party hereto,
the terms of this LOI or any aspect of the Acquisition shall be
strictly confidential and will not be communicated to any person or
entity without the written consent of the other party hereto. Any
public announcement or press release of information with respect to the
transactions contemplated by this LOI will be in the form approved by
both parties hereto and their respective counsel. -
7. Termination. Acquiror acknowledges and agrees that prior to the
execution of a definitive merger agreement Seller may terminate this
agreement if it accepts a bona fide offer providing for the purchase,
merger or acquisition of Seller which the Board of Directors in its
discretion has determined is a superior offer with respect to pricing
or other material terms.
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September 11, 2003
8. Expiration. The proposal set forth in this LOI will terminate at 5:00
p.m. PST, on ______________________ unless countersigned in the place
indicated below and returned to the Acquiror by such time and date.
Please acknowledge your intent to proceed with the Acquisition on the
basis outlined in this LOI by signing where indicated below and returning one
signed original to the Acquiror to the attention of the undersigned at 0 Xxxxxxx
Xxx, Xxxxxxxxx, XX 00000.
Acorn Campus Fund II, LLC
By: __________________________________
General Partner/CFO
Agreed to and Accepted this
_____ day of ___________, 2003.
Asante Technologies, Inc.
By:
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Name:
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Title:
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