Exhibit 2.2
 
 ASSET PURCHASE AGREEMENT
 
 ENDWAVE CORPORATION, as Seller,
 SHR CORPORATION, as Purchaser
  MICROSEMI CORPORATION, as Parent




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ASSET PURCHASE AGREEMENT
 THIS AGREEMENT (Agreement) Microsemi
Corporation Parent SHR Corporation Purchaser Endwave Corporation Seller
 RECITALS:
 WHEREAS EDSI Business
 WHEREAS Sale of the Business
 WHEREAS
 AGREEMENT
 NOW THEREFORE
 1
    
    ASSETS BEING PURCHASED.Upon the terms and subject to the conditions of this Agreement, at the Closing (as defined
below) Seller shall sell, assign, transfer, convey and deliver to Purchaser, and Purchaser
shall purchase, and accept any such assignment, transfer, conveyance or other delivery of,
all of Sellers right, title and interest in and to the assets of every kind and description
and wherever located, whether tangible or intangible, real, personal or mixed, used
exclusively in the Business, other than the Excluded Assets (as defined below)
(collectively, the Purchased Assets), including without limitation the following, in each
case (except as otherwise expressly provided to the contrary herein), free and clear of any
and all mortgages, liens, security interests, encumbrances, pledges and leases
(Encumbrances) other than those represented by the Assumed Liabilities (as defined below):1.1
    
    Raw Materials, Work in Process, Piece Parts Finished Goods and other Inventory. The
raw materials, work in process, piece parts, finished goods and other inventory, packaging,
and labels, supplies and other related personal property owned by Seller used exclusively in
the Business, a description of which is set forth on Schedule 1.1 hereto




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(collectively, the Inventory). Schedule 1.1 also contains a list of the addresses
of all warehouses and other facilities in which the Inventory is located. Except to the
extent provided in Schedule 1.1, the Inventory is in good and merchantable condition
in all material respects, is suitable and usable for the purposes for which it is intended
and is in a condition such that it can be sold in the ordinary course of the Business
consistent with past practice.1.2
    
    Equipment/Personal Property/Fixtures. All equipment and machinery used exclusively
in the Business, including, without limitation, those used exclusively in the development,
design, manufacture and testing of Sellers goods and services sold by the Business,
including, without limitation the items listed on Schedule 1.2, as well as all
furniture, fixtures and other tangible property owned by Seller at its Folsom, California
facility (collectively, the Equipment).1.3
    
    Prepaid Expenses and Other Current Assets. The prepaid expenses and other current
assets of Seller related exclusively to the Business set forth on Schedule 1.3.1.4
    
    Backlog. All outstanding customer orders that have been received in connection with
the Business by Seller (collectively, the Customer Orders). Schedule 1.4 hereto
sets forth a true and complete list of all Customer Orders that have been received as of the
Closing Date. At the Closing, Seller will be deemed, without further action, to have assigned
such Customer Orders to Purchaser, and Purchaser will be deemed, without further action, to
have assumed all of Sellers obligations under such Customer Orders.1.5
    
    Customer Data. Data in Sellers possession relating to any and all customers to
which Seller has sold products of the Business or provided services relating to the Business
over the three years prior to the Closing Date, whether or not there are any open sales
orders from such customers (collectively, Customer Data). A listing of such customers to
which Seller has sold products in the Business since January 1, 2008 is set forth on
Schedule 1.5. Such Customer Data shall include, to the extent possessed by Seller,
but not be limited to, name, address, e-mail information, all telephone and facsimile numbers,
and any and a tangible documents, files, and records in Sellers possession regarding such
Customers activity. Notwithstanding the foregoing, Customer Data shall not include any
information (A) with regard to any customers that did not purchase any products or services of
the Business, or (B) any transactions between Seller or any of its subsidiaries and such
customer relating to any business other than the Business.1.6
    
    Vendor Data. Data in Sellers possession relating to, and all right, title and
interest in and to, any tooling, molds, equipment and proprietary specifications owned by
Seller and Data that Seller is in the possession of relating to any and all vendors from which
Seller has purchased goods or services for the Business prior to the Closing Date, whether or
not there are any open purchase orders issued to such vendors, as well as names and other
information concerning any vendor that provides goods or services that are material to
operation of the Business (collectively, Vendor Data). A listing of all vendors from which
Seller has purchased material amounts of goods or services in the Business since January 1,
2008 is set forth on Schedule 1.6. Vendor Data shall include, but not be limited to,
name, address, e-mail information, all telephone and facsimile numbers, and
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any and all tangible documents, files and records in Sellers possession regarding such
vendors transactions with Seller solely as they relate to the Business. Notwithstanding
the foregoing, Vendor Data shall not include any information with regard to any vendors, or
any transactions between Seller or any of its subsidiaries and such vendor, relating to any
business other than the Business.1.7
    
    Intellectual Property. Any and all Intellectual Property that Seller uses
exclusively in the Business or had planned to use exclusively in the Business prior to the
Closing Date, including without limitation in connection with the development, design,
manufacture, testing, marketing, sale or distribution of Sellers goods and services related
to the Business, including but not limited to the registered Intellectual Property
specifically set forth on Schedule 1.7 hereto. As used herein, the term Intellectual
Propertyincludes, but is not limited to, product designs, manufacturing flow sheets, cost
and pricing data, promotion lists, marketing data and other compilations of names and
requirements, processes, methods, know how, trade secrets, patents, copyrights, trade names,
trademarks and service marks, and all applications therefor, owned by Seller and used
exclusively in the Business, and any and all other data in Sellers possession reasonably
required to manufacture and sell the goods and services of Seller related to the Business.
For the purposes of clarification, the Intellectual Property comprising Purchased Assets shall
not include the Endwave trade name or any Endwave logo (to which Purchaser shall have a
limited license as set forth in this Agreement) or any other Intellectual Property that is
used by any business of Seller other than the Business.1.8
    
    Receivables. Any and all accounts receivable, notes and other amounts receivable
from any customer or vendor payable to Seller and arising from the conduct of the Business
before the Closing, whether or not in the ordinary course (Receivables). A list of the
Receivables as of March 31, 2009, showing separately those Receivables that as of such date
had been outstanding for (a) 0 to 30 days, (b) 31 to 60 days, (c) 61 to 90 days, (d) 91 to 120
days and (e) more than 120 days is attached hereto as Schedule 1.8.1.9
    
    Claims. All claims, causes of action, choses in action, rights of recovery and
rights of setoff of any kind (including rights to insurance proceeds and rights under and
pursuant to all warranties, representations and guarantees made by suppliers of products,
materials or equipment, or components thereof) arising out of the Business and inuring to the
benefit of Seller except to the extent such claims, causes of action, choses in action, rights
of recovery and rights of setoff relate to the Excluded Assets. There are no such claims Known
to Seller as of the date of this Agreement.1.10
    
    Promotional and Marketing Materials. All sales, marketing and promotional
literature, cost and pricing data, promotion list, marketing data and other compilations of
names and requirements, customer lists and other sales-related materials of Seller used
exclusively in connection with the Business as of the Closing.1.11
    
    Rights Under Agreements. All of Sellers rights under all contracts, licenses,
sublicenses, agreements, leases, commitments, purchase orders, bids and offers related
exclusively to the Business and not included in the Customer Orders, other than those relating
to the Excluded Liabilities or Excluded Assets (Assumed Contracts).
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Schedule 1.11 lists all material Assumed Contracts. At the Closing, Seller will be
deemed, without further action, to have assigned such Assumed Contracts to Purchaser, and
Purchaser will be deemed, without further action, to have assumed all of Sellers
obligations under such Assumed Contracts.1.12
    
    Permits. All of Sellers rights pursuant to municipal, state and federal
franchises, permits, licenses, agreements, waivers and authorizations used by Seller
exclusively in connection with, or required for, the Business, but only to the extent such
rights are by their terms transferable (Permits). All Permits that are material to the
operation of Sellers business are listed in Schedule 1.12.1.13
    
    EDSI. All of Sellers right, title and interest as of the Closing in and to its
shares of capital stock of EDSI.1.14
    
    All Other Rights. All of Sellers right, title and interest as of the Closing in, to
and under all other assets of every kind and nature used exclusively or intended to be used
exclusively in the operation of the Business, including, without limitation, any other data or
know-how wherever found or of whatever kind not described above reasonably required to
manufacture and sell the goods and services of Seller related to the Business as well as all
books and records, and all files, documents, papers and agreements in Sellers possession
pertaining to the Purchased Assets and the Assumed Liabilities, subject to Sellers right to
retain or obtain copies of the same if and as it so chooses.1.15
    
    Excluded Assets. Seller is not selling, and Purchaser is not acquiring, any assets
that do not constitute Purchased Assets as defined in Section 1 including, without limitation:
(a) any assets that are used in any business of Seller other than the Business, including
Sellers telecommunications business; (b) the corporate minute books, tax records, financial
records and stock records of Seller; (c) the employment records of Seller (except to the
extent that the transfer of such records would violate applicable privacy and other laws and
regulations); and (d) all cash and cash equivalents of Seller and EDSI (collectively the
Excluded Assets).All schedules delivered by Seller to Purchaser prior to Closing described in this Section 1
shall be as of the most recent practicable date (which date shall appear on each schedule).
Within 10 days following the Closing, Seller shall deliver to Purchaser updated schedules
containing information effective as of the Closing Date.2
    
    LIABILITIES.2.1
    
    Liabilities Assumed. Upon the terms and subject to the conditions of this Agreement,
at the Closing, Purchaser shall assume and agrees to discharge, pay and perform the following
liabilities, debts and obligations, whether accrued or fixed, absolute or contingent, matured
or unmatured of Seller: (a) the trade accounts payable of Seller incurred in the course of the
Business (the Trade Payables), each as specifically identified, described and quantified on
Schedule 2.1(a), (b) liabilities, obligations and commitments of Seller arising from
warranty claims associated with the products of the Business (Warranty Claims); (c) any
obligations under the Assumed Contracts and
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Customer Orders (whether or not consent to assignment of any such Assumed Contract or
Customer Order is ever obtained); (d) any claims of Transferred Employees made in respect of
post-Closing employment by Seller, Parent or Purchaser or any of their subsidiaries
including, without limitation, all claims for salary, wages and vacation benefits related to
periods or arising after the Closing; (e) workers compensation claims by Transferred
Employees arising in the course of employment by Seller, Parent or Purchaser or any of their
subsidiaries after the Closing; and (f) the obligations listed in Schedule 2.1(f)
(collectively, the Assumed Liabilities).2.2
    
    Liabilities Not Assumed. Except for the Assumed Liabilities, Seller agrees that
Purchaser will not assume or perform, and Seller shall remain responsible for any and all
liabilities and obligations of Seller, whether known or unknown, accrued, fixed or contingent,
secured or unsecured, of any kind whatsoever, and regardless of when such liabilities or
obligations arise or are asserted, including, but not limited to: (1) any claims of current
and former employees of Seller or any of its subsidiaries made in respect of such employment
by Seller or any of its subsidiaries including, without limitation, all claims for salary,
wages and vacation benefits related to periods or arising prior to the Closing; (2) workers
compensation claims arising in the course of employment by Seller or any of its subsidiaries
prior to the Closing; (3) Plans (as defined below) offered to employees of Seller; (4) any
loans or indebtedness owed by Seller to any financial institution or other person other than
Trade Payables; (5) any Environmental Claims (as defined herein) or liabilities arising under
any Environmental Laws (as defined herein), in either case arising out of use of any location
other than the Building (as defined below) in Sellers business; (6) any product liability
claims (other than Warranty Claims) on account of any product shipped by Seller before the
Closing; and (7) any obligation or liability of every kind arising from or related to any of
the Excluded Assets. Seller agrees that it is liable for, and acknowledges its obligation to
pay, any and all monies due and payable to its employees that have accrued as of the Closing
Date. With respect to Taxes (as defined below), Seller specifically agrees to retain, and
shall be responsible for paying, performing and discharging when due, and Purchaser shall not
assume or have any responsibility for:
 (A) All Taxes now or hereafter owed by Seller for any period, including but not
limited to Seller Taxes (as defined below);(B) All other Taxes relating to the Purchased Assets, the Business or the Assumed
Liabilities for any period prior to the Closing; and(C) Taxes of Seller or any other person by reason of being a member of a
consolidated, combined, unitary or affiliated group that includes Seller or any of
its present or past affiliates prior to the Closing, by reason of a tax sharing, tax
indemnity or similar agreement entered into by Seller or any of its present or past
affiliates or any other person or by reason of transferee or successor liability
arising in respect of a transaction undertaken by Seller or any of its present or
past affiliates. Any tax sharing agreement between Seller and EDSI shall be
automatically terminated as of the Closing Date. For the purposes of this
Agreement, Taxesmeans any and all taxes, fees, levies, duties, tariffs, imposts,
and other charges of any kind (together with any and all interest, penalties,
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additions to tax and additional amounts imposed with respect thereto) imposed by any
Governmental Authority or other taxing authority, including taxes or other charges
on or with respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, withholding, social
security, workers compensation, unemployment compensation, or net worth; taxes or
other charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value added, or gains taxes; license, registration and documentation fees; and
customs duties, tariffs, and similar charges.
 3
    
    PURCHASE PRICE AND TERMS OF PAYMENT.3.1
    
    Purchase Price at Closing. As consideration for the Purchased Assets, Purchaser
shall:
 (a)
    
    assume and pay, perform or otherwise discharge, as the same shall become due in
accordance with their respective terms, all of the Assumed Liabilities;(b)
    
    at Closing, pay Twenty-Eight Million Dollars ($28,000,000) (the Purchase
Price) by wire transfer of immediately available funds to the account or accounts
designated by Seller;
 3.2
    
    Closing. The closing of the purchase and sale of the Purchased Assets shall take
place at a closing (the Closing) to be held at the offices of Microsemi Corporation, 2381
Morse Avenue, Irvine, California 92604 on April 30, 2009 (the Closing Date).3.3
    
    Instruments of Transfer. The transfer of the Purchased Assets and Assumed
Liabilities from Seller to Purchaser at the Closing shall be effected by the execution and
delivery of the Bill of Sale (as defined below) and other instruments of transfer as are
reasonably necessary to effect such transfer and are reasonably acceptable in form and
substance to Seller and Purchaser and their respective legal counsel.3.4
    
    Bulk Sales Compliance. Purchaser waives any compliance with the provisions and
procedures of Article 6 of the Uniform Commercial Code as currently enacted in California (the
Bulk Sales Law), and any similar laws applicable to the transactions contemplated hereby.3.5
    
    Allocation of the Purchase Price. As soon as practicable after Closing, Purchaser
shall retain Global View Advisors LLC to value the Purchased Assets and issue a written report
setting forth its recommended allocation of the Purchase Price across the Purchased Assets.
Such report shall be issued no later than ninety (90) days after the Closing and shall be
subject to the reasonable approval of both Purchaser and Seller. If such report is not
approved by both Purchaser and Seller, the parties will work together in good faith to agree
upon an allocation of the Purchase Price. Seller shall reimburse Purchaser for 50% of the
fees paid by Purchaser to such third party in connection with such report. Purchaser, Parent
and Seller shall use the allocation set forth in the report (if accepted by both parties) or
the allocation mutually agreed by Purchaser and Seller (if not set forth in such report) in
filing their respective Internal Revenue Service Forms 8594 and all applicable Tax returns.
Neither Purchaser, Parent nor Seller will take any position
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(whether in audit, Tax returns or otherwise) that is inconsistent
with such allocation unless required to do so by law.4
    
    REPRESENTATIONS AND WARRANTIES OF SELLER.Seller hereby represents and warrants to Purchaser that except as set forth in the
corresponding section of the Disclosure Schedule delivered to Purchaser on the date hereof
(the Disclosure Schedule), each of the following statements is true and correct:4.1
    
    Organization and Good Standing. Seller 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 the Business as it is now conducted; 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 Business. Other
than EDSI, Seller does not own or control any subsidiaries or other entities that, in turn,
own or have previously owned or operated the Business, in whole or in part, or any of the
Purchased Assets. EDSI is a corporation duly 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; 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 Business. EDSI does not own or control any
subsidiaries or other entities that, in turn, own or have previously owned or operated the
Business, in whole or in part, or any of the Purchased Assets.4.2
    
    Authority and Binding Effect. Seller has all the necessary corporate power and
authority to enter into, and perform its obligations under, this Agreement, the Bill of Sale,
the Indemnification Agreement (as defined below) and the Transition Services Agreement (as
defined below) (collectively with this Agreement, Transaction Documents). The Transaction
Documents and the performance by Seller of its obligations therein have been duly authorized
by all necessary corporate action of Seller. This Agreement has been duly executed and
delivered, and upon execution and delivery of the other Transaction Documents, by Seller the
same will constitute the valid and binding agreements of Seller, each enforceable against
Seller 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 (regardless of whether any such agreement is sought to be
enforced in a proceeding at law or in equity). No other action is required to be taken by
Seller, nor is it necessary for Seller to obtain any action, approval or consent by or from
any third persons, governmental or other entities, to enable Seller to enter into or perform
Sellers obligations under the Transaction Documents, except those consents of third parties
to the assignment and assumption of the Assumed Contracts as identified in Section 4.2of the
Disclosure Schedule or as otherwise disclosed or obtained in connection herewith.
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4.3
    
    Purchased Assets. At the Closing, Seller will convey and transfer to Purchaser, all
of the Purchased Assets, free and clear of any and all Encumbrances (other than the Assumed
Liabilities). All of the Purchased Assets are in the exclusive possession and control of
Seller, and Seller has the unencumbered right to use and sell to Purchaser all of the
Purchased Assets without interference from others. No actions, proceedings or transactions
have been commenced or undertaken by Seller that (A) would interfere with the consummation of
the transactions contemplated by this Agreement; of (B) give or would give rights to any other
person, other than Purchaser, to acquire any of the Purchased Assets (other than purchases of
products and services by customers of the Business). The Purchased Assets constitute all of
the rights, properties and assets (tangible or intangible) that are necessary for the conduct
of the Business, including but not limited to the design and manufacture of all the products
of the Business, prior to the Closing Date. Seller has the complete and unrestricted power
and unqualified right to sell, assign, transfer, convey and deliver the Purchased Assets to
Purchaser. The documents of transfer to be executed and delivered by Seller at the Closing
will be sufficient to convey the Purchased Assets to Purchaser, free and clear of all
Encumbrances, other than the Assumed Liabilities.4.4
    
    Contracts, Agreements and Commitments. Seller has supplied Purchaser with a true and
correct copy of each Assumed Contract in Schedule 1.11. Seller has performed in all
material respects the obligations required to be performed by it under any material Assumed
Contract as of the date hereof. To Sellers Knowledge, 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
material default under such material contracts or would cause the acceleration of any material
obligation of Seller thereunder or the creation of a lien or encumbrance upon any of the
Purchased Assets. Seller has not waived any material right which it has under any such
material contact. For the purposes of this Agreement, Sellers Knowledgeand words of
similar import mean the actual knowledge of Edward A. Keible, Jr., John Mikulsky, Brett
Wallace, David Hall, Daniel Teuthorn and Curt Sacks after due inquiry.4.5
    
    Taxes and Tax Returns. Seller has duly filed all Tax reports and returns which are
required by law to have been filed by it and has paid when due all federal, state and local
Taxes due from such authorities on or prior to the date hereof, which relate to the Business
or the Purchased Assets or may result in the imposition of any Encumbrance on any of the
Purchased Assets. Seller has properly withheld and paid, or accrued for payment when due, to
appropriate federal, state and local authorities, all amounts required to be, withheld from
its employees wages, salaries and other compensation and has paid or accrued all employment
Taxes as required under applicable laws. True and correct copies of Sellers Federal, State
and local income tax returns and reports for the tax years 2006 and 2007 have been made
available to Purchaser prior to the date hereof.4.6
    
    Compliance with Laws. Since January 1, 2004, except as set forth in Section 4.6of
the Disclosure Schedule, Seller and EDSI have complied in all material respects with all
applicable United States federal, state, municipal and foreign and other political subdivision
or Governmental Authority statutes, ordinances, regulations, judgments and
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Schedule 1.12
 4.7
    
    Litigation and Proceedings. There is no action, suit, proceeding or investigation,
or any counter or cross-claim in an action brought by or on behalf of 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, to Sellers Knowledge, threatened, against Seller or EDSI, which (i) would reasonably be
expected to have a material adverse effect on Sellers ability to perform its obligations
under this Agreement or complete any of the transactions contemplated hereby, or (ii) which
would reasonably be expected to result in a material judgment, liability or claim against
Purchaser or the Purchased Assets prior to, or subsequent to, the Closing Date. Neither
Seller nor EDSI is 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 Seller or any of its assets which would reasonably be
expected to have a material adverse effect on Sellers ability to perform its obligations
under this Agreement or complete any of the transactions contemplated hereby.4.8
    
    No Conflict. The execution, delivery and performance of this Agreement by Seller do
not and will not (a) violate, conflict with or result in the breach of any provision of the
Certificate of Incorporation or By-Laws of Seller, or (b) except as described in Section 4.8
of the Disclosure Schedule, conflict with, result in any material breach of, constitute a
material default (or event which with the giving of notice or lapse of time, or both, would
become a material default) under, require any consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or cancellation of, or result in
the creation of any encumbrance on any of the material Purchased Assets pursuant to, any note,
bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise
or other instrument or arrangement to which Seller or EDSI is a party or by which any of the
Purchased Assets is bound or affected.4.9
    
    Governmental Consents and Approvals. The execution, delivery and performance of this
Agreement by Seller do not and will not require any consent, approval, authorization or other
order of, action by, filing with or notification to, any national, federal, state, provincial,
county, municipal or local government, foreign or domestic, or the government of any political
subdivision of any of the foregoing, or any entity, authority, agency, ministry or other
similar body exercising executive, legislative, judicial, regulatory or administrative
authority or functions of or pertaining to government, including any authority or other
quasi-governmental entity established to perform any of such functions (Governmental
Authority), the absence of which would have a material adverse effect on the Business.
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4.10
    
    Financial Information; Books and Records. True and complete copies of the following
have been provided by Seller to Purchaser prior to the date hereof: (i) the unaudited balance
sheet of the Business as of March 31, 2009 and (ii) the unaudited statements of operations of
the Business for the year ended December 31, 2008 and the quarter ended March 31, 2009
(collectively, the Financial Statements). The foregoing documents (A) were prepared in
accordance with the books of account and other financial records of Seller and (B) except as
set forth in Section 4.10of the Disclosure Schedule, present fairly in all material respects
the financial condition and results of operations of the Business as of the dates thereof or
for the periods covered thereby and were prepared in accordance with United States generally
accepted accounting principles. Since December 31, 2008, there have not been any material
write-offs, write-downs or write-ups of the value of any inventory or other assets of Seller
comprising Purchased Assets outside the ordinary course of business, any creation, assumption,
or notice of any material liability in connection with the Business (other than the acceptance
of new Customer Orders and execution of Assumed Contracts) or the Purchased Assets, or to
Sellers Knowledge any other material adverse change in the financial or other condition of
Business or the Purchased Assets.4.11
    
    Absence of Undisclosed Liabilities. There are no liabilities of the Business of the
type that would be required to be recorded or disclosed as liabilities on a balance sheet
prepared in accordance with United States generally accepted accounting principles, and there
are no other material liabilities of the Business, other than: (i) liabilities reflected in
the Financial Statements, (ii) liabilities incurred in the ordinary course of business after
March 31, 2009 consistent with past practice, and (iii) liabilities set forth in Section 4.11
of the Disclosure Schedule.4.12
    
    Customers. Except as set forth in Section 4.12of the Disclosure Schedule, Seller
has not received any notice and has no Knowledge that any significant customer of the Business
has ceased, or will cease, to use the products, equipment, goods or services of the Business,
or has substantially reduced, or will substantially reduce, the use of such products,
equipment, goods or services at any time.4.13
    
    Vendors. Seller has not received any notice and has no Knowledge that any vendor
will not sell raw materials, supplies, merchandise and other goods to Purchaser at any time
after the Closing on terms and conditions substantially similar to those used in its current
sales to the Business, subject only to general and customary price increases.4.14
    
    Labor Matters. Except as set forth in Section 4.14of the Disclosure Schedule,
(a) Seller is not a party to any collective bargaining agreement or other labor union contract
applicable to persons employed by Seller in connection with the Business, and, to Sellers
Knowledge, currently there are no organizational campaigns, petitions or other unionization
activities seeking recognition of a collective bargaining unit with respect to Sellers
employees employed in connection with the Business; (b) there are no controversies, strikes,
slowdowns or work stoppages pending or, to Sellers Knowledge, threatened between Seller and
any of its employees employed in connection with the Business, and Seller has not experienced
any such controversy, strike, slowdown or work stoppage within the past three years; (c)
Seller has not breached or otherwise failed to
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comply in any material respect with the provisions of any collective bargaining or union
contract, and there are no grievances outstanding against Seller under any such agreement or
contract which would have a material adverse effect on the Business; (d) there are no unfair
labor practice complaints pending against Seller before the National Labor Relations Board
or any other Governmental Authority or any current union representation questions involving
employees of Seller employed in connection with the Business which would have a material
adverse effect on the Business; (e) Seller is currently in compliance in all materials
respects with all applicable laws relating to the employment of labor, including those
related to wages, hours, collective bargaining and the payment and withholding of taxes and
other sums as required by the appropriate Governmental Authority and has withheld and paid
to the appropriate Governmental Authority or is holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from employees of Seller employed
in connection with the Business and is not liable for any arrears of wages, taxes, penalties
or other sums for failure to comply with any of the foregoing; (f) Seller has paid in full
to all employees of Seller employed in connection with the Business or adequately accrued
for in accordance with GAAP all wages, salaries, commissions, bonuses, benefits and other
compensation due to or on behalf of such employees; (g) there is no claim with respect to
payment of wages, salary or overtime pay that has been asserted or is now pending or, to
Sellers Knowledge, threatened before any Governmental Authority with respect to any persons
currently or formerly employed by Seller in connection with the Business; (h) Seller is not
a party to, or otherwise bound by, any consent decree with, or citation by, any Governmental
Authority relating to employees of Seller employed in connection with the Business or
Sellers employment practices with respect thereto; (i) there is no charge or proceeding
with respect to a violation of any occupational safety or health standard that is now
pending or, to Sellers Knowledge, threatened with respect to Sellers operation of the
Business; and (j) there is no charge of discrimination in employment or employment practices
for any reason, including age, gender, race, retaliation, religion or other legally
protected category, with respect to employees of Seller employed in connection with the
Business, which is now pending or, to Sellers Knowledge, threatened before the United
States Equal Employment Opportunity Commission or any other Governmental Authority in any
jurisdiction in which Seller has employed or currently employs any person in connection with
the Business.4.15
    
    Employees. Schedule 4.15 lists the name, place of employment, the current
annual salary rates, the date of employment and position of each current salaried employee or
officer of Seller whose name appears on Schedule 4.15. Except as set forth in
Schedule 4.15, all officers, management employees and technical employees of Seller
employed in connection with the Business are under written obligation to Seller to maintain in
confidence all confidential or proprietary information acquired by them in the course of their
employment and all technical employees of Seller employed in connection with the Business are
under written obligation to assign to Seller all inventions made by them within the scope of
their employment during such employment. EDSI has no employees.4.16
    
    Employee Benefit Matters. Purchaser will not be liable under any employee benefit
plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended) or any bonus, stock option, stock purchase, restricted stock, incentive,
 11




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deferred compensation, retiree medical or life
insurance, supplemental retirement, severance
or other benefit plans, programs or
arrangements, or any employment, termination,
severance or other contracts or agreements,
whether legally enforceable or not, to which
Seller is a party, with respect to which Seller
has any obligation or which is maintained,
contributed to or sponsored by Seller for the
benefit of any current or former employee,
officer or director of Seller who performs or
performed services with the Business
(collectively, the Plans). EDSI has no such
plans, programs or arrangements.4.17
    
    Intellectual Property.
 (a)
    
    Seller owns and possesses, and upon consummation of the transactions
contemplated hereby, Purchaser will hold, right, title and interest in the Intellectual
Property, free and clear of all Encumbrances.(b)
    
    Seller has taken all reasonably necessary action to protect the Intellectual
Property, including but not limited to the fact that Seller enforces a policy of
requiring each employee, contractor and consultant to execute a confidentiality and
assignment agreement in the form or forms previously provided to Purchaser for review.
No written claim by any third party contesting the validity, enforceability, use or
ownership by Seller of any Intellectual Property has been made, is currently pending
or, to Sellers Knowledge, is threatened, against Seller. Seller has not received any
notice of any infringement or misappropriation by, or conflict with, any third party
with respect to any of the Intellectual Property.(c)
    
    To the Sellers Knowledge, the Business has not infringed, misappropriated or
otherwise conflicted with any material Intellectual Property rights of any third
parties. The Intellectual Property constitutes all of the patents, copyrights,
technology, inventions, product drawings, trade secrets, know-how, customer lists,
manufacturing processes, process data, product designs, bills of materials and other
proprietary information or rights necessary for the conduct of the Business as
heretofore conducted.(d)
    
    Seller has not granted any right, license or permission to any person to
exercise any rights under, practice or otherwise exploit any of the Intellectual
Property comprising Purchased Assets other than the Assumed Contracts.
 4.18
    
    Real Property.
 (a)
    
    Except as set forth in Section 4.18of the Disclosure Schedule, the Building,
Sellers San Jose, California headquarters and Sellers Thailand facilities and
contract manufacturers facilities comprise the only locations at which Seller has
operated the Business prior to Closing (Sellers Facilities).(b)
    
    To Sellers Knowledge, the zoning of the Building permits Seller to conduct the
Business. To Sellers Knowledge, neither the whole nor any part of the Building is
subject to any governmental decree or order to be sold nor have any proceedings for the
condemnation, expropriation or other taking of all or any
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portion of such real property or improvements been instituted or, to Sellers
Knowledge, threatened by any Governmental Authority, with or without payment
therefor.
 4.19
    
    Environmental Matters. (i) To Sellers Knowledge, the Sellers Facilities are being
and has been operated by Seller in compliance with all Environmental Laws, except for
non-compliance that would not have a material adverse effect on the Business as a whole, (ii)
to Sellers Knowledge, Seller and EDSI have, and at all times have had, all permits, licenses
and other approvals and authorizations required under applicable Environmental Laws for its
operation of Sellers Facilities, (iii) except for non-compliance that would not have a
material adverse effect on the Business as a whole, Seller has not received any written notice
from any Governmental Authority that Seller or any of its Affiliates may be a potentially
responsible party in connection with any waste disposal site or facility used, directly or
indirectly, by or otherwise related to Sellers Facilities, (iv) no reports have been filed,
or, to Sellers Knowledge, have been required to be filed, by Seller or EDSI concerning the
release of any Regulated Substance or the violation of any Environmental Law near, below,
above on in Sellers Facilities, (v) to Sellers Knowledge, no Regulated Substance has been
unlawfully disposed of, transferred, released or transported by Seller or any of its
subsidiaries from Sellers Facilities since such Facilities were occupied by Seller and EDSI,
other than as permitted under applicable Environmental Law pursuant to appropriate
regulations, permits or authorizations, except for non-compliance that would not have a
material adverse effect on the Business as a whole, (vi) there have been no environmental
investigations, studies, audits, tests, reviews, or other analyses conducted by or which are
in the possession of Seller relating to Sellers Facilities, except to the extent that true
copies thereof have been delivered to Purchaser prior to the date hereof, (vii) to Sellers
Knowledge, there are no underground storage tanks on, in or under Sellers Facilities and no
underground storage tanks have been closed or removed from such facilities during Sellers and
EDSIs occupancy of Sellers Facilities, (viii) to Sellers Knowledge, Seller and EDSI have
has not presently incurred, and Sellers Facilities are not presently subject to, any material
liabilities (fixed or contingent) relating to any Environmental Claim in connection with such
facilities which would have a material adverse effect on the Business as a whole, (ix) to
Sellers Knowledge, all documents filed by or on behalf of Seller or EDSI with any
Governmental Authority pursuant to any Environmental Law in connection with Sellers
Facilities were, when filed, true, correct and complete in all material respects, and
(x) there are no civil, criminal or administrative actions, suits, demands, claims, hearings,
investigations or other proceedings pending or, to Sellers Knowledge, threatened against
Seller or EDSI or, to Sellers Knowledge, any predecessor or affiliate of Seller or EDSI with
respect to Sellers Facilities relating to any Environmental Claim, and neither Seller nor, to
Sellers Knowledge, any predecessor or affiliate of Seller has received any written notices,
demand letters or requests for information from governmental agencies, arising out of, in
connection with, or resulting from, a violation, or alleged violation, of any Environmental
Law which proceedings violation or liability is unresolved or would not be reasonably likely
to have a material adverse effect on the Business as a whole. Environmental Claimsmeans (a)
any judicial or administrative enforcement actions, proceedings, claims or orders (including
consent orders and decrees) instituted or, to Sellers Knowledge, threatened by any
Governmental Authority
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pursuant to any Environmental Law concerning Sellers Facilities; or (b) any suits,
arbitrations, legal proceedings, actions or claims instituted, made or threatened (including
notices of non-compliance, notices of violations and notices to comply) that relate to any
damage, contribution, cost recovery, compensation, loss or injury resulting from the Release
or threatened Release (whether sudden or non-sudden or accidental or non-accidental) of, or
exposure to, any Regulated Substances, or the violation or alleged violation of any
Environmental Law, or the generation, manufacture, use, storage, transportation, treatment,
or disposal of Regulated Substances. Environmental Lawsmeans any and all federal, state
and local laws, statutes, orders, ordinances, rules, regulations or decrees and the like
relating to (i) environmental matters, including without limitation those relating to fines,
injunctions, penalties, damages, contribution, cost recovery compensation, losses or
injuries resulting from the unlawful Release or threatened Release of Regulated Substances,
(ii) the generation, use, storage, transportation, treatment or disposal of Regulated
Substances, or (iii) occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal, health or welfare, in any manner applicable to the
Business or Sellers Facilities, each as in effect on or prior to the Closing Date, and all
rules and regulations promulgated under each of the foregoing, as they are enacted and in
effect on or prior to the Closing Date. Regulated Substancesmeans (i) any chemical,
material or substance now defined as or included in the definition of hazardous substance,
hazardous waste, hazardous material, extremely hazardous waste, restricted hazardous
waste, infectious waste, toxic substance, or any other formulations intended to define,
list or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity or other words of
similar import under any applicable Environmental Laws or publications promulgated pursuant
thereto, and any other chemical, material or substance, exposure to which is prohibited or
regulated by any Governmental Authority or Environmental Law, or which is reasonably likely
to pose a hazard to the health and safety of the owners, occupants or any other persons in
the vicinity of the Building, (ii) any oil, petroleum or petroleum derived substance, (iii)
any drilling fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources, (iv) any
radioactive materials, (v) asbestos in any form which is or could become friable, (vi) urea
formaldehyde foam insulation, (vii) polychlorinated biphenyls, or (viii) pesticides.
Releasemeans any release, spill, emission, leaking, pumping, pouring, injection,
escaping, deposit, disposal, discharge, dispersal, dumping, leaching, or migration of
Regulated Substances into the indoor or outdoor environment (including without limitation,
the abandonment or disposal of any storage tanks, barrels, containers or other closed
receptacles containing any Regulated Substance), or into or out of the Building, including
the movement of any Regulated Substances through the air, soil, surface water, or
groundwater of the Building.4.20
    
    Projections. The financial projections relating to the Business provided by Seller
to Purchaser were prepared by Seller in good faith based on information available to
management as of the date of such projections; provided, however, Seller does not warrant the
accuracy of the information (although Seller does not have Knowledge of any inaccuracy) used
in creating such projections or that any results projected in such projections will actually
be achieved.
 14




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4.21
    
    No Additional Representations. Purchaser acknowledges that neither the Seller nor
any of its employees or other representatives have made or shall not be deemed to have made
any representation, warranty, covenant or agreement, express or implied, with respect to the
Seller, the Business or the Purchased Assets, other than those explicitly set forth herein.4.22
    
    Product Related Claims. Section 4.22of the Disclosure Schedule contains (a) a
summary of all product returns and repair/replacement work performed by or on behalf of Seller
pursuant to any Product Warranties (as defined herein) or otherwise with regard to products
and services of the Business for the period from October 1, 2007 to December 31, 2008 (or such
longer period as indicated on Section 4.22of the Disclosure Schedule) and (b) a listing of
all pending claims for product returns and repair/replacement work with regard to the
Business. Seller does not have knowledge of any facts or circumstances which would cause
product returns, replacement or repair work relating to any product sold by the Business to
deviate materially from the historical return, repair or replacement work set forth in Section
4.22of the Disclosure Schedule. Seller has no knowledge of, and has not received any notice
with respect to, any product liability claim or claims based on failure of products sold by
the Business (other than claims for product return, replacement or repair not deviating
materially from historical return, replacement or repair work) and/or any notice of any
epidemic failure with respect to such products. To Sellers Knowledge, no products
manufactured or sold by Seller have a design or manufacturing defect that renders the type,
series or class of product reasonably likely to either (a) result in injuries to persons or
property or (b) give rise to an obligation to recall such type, series or class of product.
Seller has no Knowledge of any or actual alleged breach by Seller of, or non-performance by
Seller under, any Assumed Contract or Customer Order prior to the Closing, or any liability as
a result thereof accruing under any Assumed Contract or Customer Order with respect to any
period prior to the Closing.4.23
    
    Solvency Representation. Both immediately before, and immediately after giving effect
to, the transactions contemplated by this Agreement: (i) the fair value of the Sellers assets
would exceed its liabilities (including contingent liabilities); (ii) the present fair
saleable value of Sellers assets would be greater than the amount required to pay its
probable liabilities on its existing debts (including contingent
liabilities) as such debts
become absolute and mature; (iii) Seller would be able to pay
its liabilities (including
contingent liabilities) as they mature; (iv) Seller is solvent (within the meaning of
applicable laws relating to fraudulent transfers) and would not have unreasonably small
capital for the business in which it is engaged and in which it is proposed to be engaged
following consummation of the transactions contemplated by this Agreement. Seller does not
intend to incur, and Seller does not believe that it has incurred or will incur as a result of
the transactions contemplated by this Agreement, debts beyond Sellers ability to pay such
debts as such debts mature.4.24
    
    Fair Value Representation. The Strategic Transaction Committee of the Board of
Directors of Seller, which has been vested with the full authority of the Board of Directors
to approve and consummate the transactions contemplated by this Agreement, has determined,
after consultation with its financial advisors, that the transactions contemplated under this
Agreement are in the best interest of the Seller and its
 15




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stockholders and the cash and other consideration received in connection with the
transactions contemplated by this Agreement are fair to the Seller and its stockholders.5
    
    REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT.Purchaser and Parent, jointly and severally, hereby represent and warrant to Seller as
follows:5.1
    
    Organization and Related Matters. Purchaser 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 Purchaser or its
business.5.2
    
    Authority and Binding Effect. Each of Purchaser and Parent has all the necessary
corporate power and authority to enter into, and perform its obligations under, this
Agreement. This Agreement and the performance by each of Purchaser and Parent of its
obligations herein have been duly authorized by all necessary corporate action of Purchaser.
This Agreement has been duly executed, and upon delivery by Purchaser and Parent will
constitute the valid and binding agreement of Purchaser and Parent, enforceable against
Purchaser and Parent 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).5.3
    
    No Conflicts. The execution, delivery and performance of this Agreement by Purchaser
and Parent do not and will not (i) violate, conflict with or result in the breach of any
provision of the Certificate of Incorporation or By-Laws of Purchaser or Parent (or similar
organizational documents), or (ii) to the best of Purchasers and Parents knowledge, conflict
with, result in any breach of, constitute a default (or event which with the giving of notice
or lapse of time, or both, would become a default) under, require any consent under, or give
to others any rights of termination, amendment, acceleration, suspension, revocation or
cancellation of, or result in the creation of any encumbrance on any of the assets of
Purchaser or Parent pursuant to, any note, bond, mortgage or indenture, contract, agreement,
lease, sublease, license, permit, franchise or other instrument or arrangement to which
Purchaser or Parent is a party or by which any of its assets is bound or affected or (iii)
violate any law applicable to Purchaser or Parent.5.4
    
    Litigation and Proceedings. There is no action, suit, proceeding or investigation,
or any counter or cross-claim in an action brought by or on behalf of Purchaser or Parent,
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, to Purchasers and Parents knowledge, threatened, against Purchaser or
Parent that would reasonably be expected to have a material adverse effect
 16




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6
    
    ADDITIONAL OBLIGATIONS OF THE PARTIES.Following the Closing, Purchaser and Seller agree to take the following actions:6.1
    
    Termination of Security Interest and Liens. Seller shall cause to be removed, at
Sellers sole cost and expense and at no expense to Purchaser (unless agreed to in writing by
Purchaser prior to the Closing), any Encumbrances to which any of the Purchased Assets are
subject that arose in connection with the conduct of the Business prior to the Closing and are
discovered after the Closing (except those related to the Assumed Liabilities).6.2
    
    Further Assurances. Purchaser and Seller shall execute and deliver such instruments
and take such other actions as may reasonably be required in order to carry out the intent of
this Agreement and to evidence and effectuate the transactions contemplated herein. Seller
shall hold in trust for Purchaser and as promptly as reasonably practicable following receipt
turn over to Seller any money or other property or consideration that Seller receives on
account of any Receivable constituting part of the Purchased Assets. Seller shall provide
prompt notice to Purchaser relating to any written notice it receives with respect to any
Purchased Asset or Assumed Liability. In connection therewith Seller shall use commercialy
reasonable efforts to assist Purchaser to obtain or cause to be obtained at the earliest
practicable date, all consents, approvals, licenses and permits, if any, required in order to
consummate the Sale of Business and the transactions contemplated by this Agreement and in
order not to violate any material agreement, contract, instrument or applicable law or
regulation, license or permit, to which Seller is a party or to which it the Purchased Assets
are subject, including to the extent that after the Closing it is discovered that any such
consent, approval, license or permit is required in connection with the Sale of the Business.
To the extent that a consent of any third party is required to enable Seller to assign any
Assumed Contract, Customer Order, or Permit that is not obtained prior to the Closing, Seller
shall use commercially reasonable efforts to assist Purchaser to obtain such third partys
consent to the assignment of such item. Notwithstanding anything in this Agreement to the
contrary, this Agreement shall not constitute an assignment of any such item if an attempted
assignment thereof, without the consent of a party thereto, would constitute a breach or other
contravention thereof or in any way adversely affect the rights that are sought to be assigned
or transferred to Purchaser pursuant to this Agreement. If such consent is not obtained, or
if an attempted assignment thereof would adversely affect the rights intended to be assigned
to Purchaser thereunder, then Seller and Purchaser shall cooperate in a mutually agreeable
arrangement until such item has expired or the consent to the assignment to Purchaser of such
item has been obtained. Under such arrangement, Purchaser would obtain the
 17




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benefits and assume the obligations
thereunder in accordance with this
Agreement (such as a
subcontracting, sublicensing or
subleasing arrangements under which
Seller would enforce for the
benefit of Purchaser any and all
rights of Seller against a third
person thereto and Purchaser would
assume Sellers obligations).
Seller shall promptly pay and
deliver to Purchaser, when
received, all monies and other
benefits received by Seller in
respect of any such item.6.3
    
    Employees.
 Schedule 4.15 Transferred Employees Section 6.3
    18




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6.4
    
    Taxes.
   19




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6.5
    
    Non-Compete. During the three (3) year period commencing on the Closing Date, Seller
shall not, directly or indirectly or through any affiliated entity, (A) solicit the business
of any current or former customers of the Business for the purpose of competing with the
Business, (B) solicit the employment of any employees of the Business (during the term of
their employment by Parent), and (C) own an interest in a company (other than ownership of up
to 5% of the outstanding stock of any public company) that provides goods or services
reasonably similar to the Business; provided, however, that clauses (A) and (C) of this
sentence shall expire and be of no further force and effect at such time after the Closing as
Seller (i) enters into any merger, reorganization or consolidation of Seller into or with
another corporation or entity in which the holders of Sellers outstanding securities
immediately preceding such merger, reorganization or consolidation do not own voting
securities of the surviving or resulting corporation or entity in approximately the same
proportions, relative to each other, as immediately before such transaction, or (ii) sells all
or substantially all of its assets to another corporation or entity. Notwithstanding
subsections 6.5 (i) and (ii) above Sellers obligations under this Section 6.5, including
clauses (A) and (C) of the first sentence hereof, shall remain in effect for the period
provided therein if the entity that has purchased substantially all of the assets of Seller or
the entity that is the party to the merger, reorganization or consolidation transaction was
not engaged in a business activities reasonably similar to the Business for a period of at
least nine months prior to the closing date of the transaction outlined in subsections 6.5(i)
or 6.5(ii) above In the event a provision of this Section 6.5is more restrictive than
allowed by the laws of the State of California, said provision shall be deemed amended and
shall be fully enforceable to the extent permitted by such law. Seller acknowledges and
agrees that any violation of this Section 6.5would not be fully compensated by money damages
alone and Purchaser and Parent shall be entitled to seek equitable relief to restrain any
actual or threatened violation of this Section 6.5. Notwithstanding the foregoing and
notwithstanding the consummation of any transaction described in clauses (i) and (ii) above,
during the non-competition period specified above, Seller shall not use any designs for
products of the Business or derivatives thereof to compete with Purchaser or Parent in the
high reliability end-markets (defense, space and homeland security).6.6
    
    Confidentiality. Neither party shall disclose this Agreement or the transactions
contemplated hereby or any dealings between the parties in connection with the subject matter
hereof, except to the extent as may, in the judgment of such party, be required (a) by laws,
regulations, stock exchange listing requirements or legal process or (b) to notify, after the
Closing, Customers, Vendors or other similar third parties of the Sale of Business to the
extent necessary to carry out the purposes of this Agreement. After the Closing, Parent,
Purchaser and Seller may make public statements or news releases announcing the closing of the
transaction contemplated hereunder and may report the transaction in filings with Governmental
Authorities, which statements and reports shall contain any and all information that Parent,
Purchaser or Seller, as the case may be, in its sole discretion, deems important to announce.
Except as provided above, or as may be required by applicable laws, regulations or stock
exchange listing requirements, in the judgment of either party after considering advice of its
legal counsel, neither Seller, on the one hand, nor Purchaser or Parent, on the other hand,
nor its respective affiliates, shall issue any press release or otherwise publicly disclose
this Agreement or the transactions
 20




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contemplated hereby or any dealings between the parties in connection with the subject
matter hereof without the prior approval of the other, which shall not be unreasonably
withheld.6.7
    
    Product Warranty Work. Purchaser shall perform repair and/or replacement warranty
work on behalf of Seller in accordance with the terms and conditions of Sellers warranties as
set forth in Schedule 6.7 (Product Warranties) with respect to products of the
Business that were manufactured and/or sold by Seller prior to the Closing.6.8
    
    Incidental Right to Use Sellers Marks. Purchaser and its distribution channels
shall be permitted, but not required, (a) to continue to use all purchased packaging materials
(e.g., boxes) bearing the Sellers mark, name and/or logo, but only until such materials have
been used, (b) to sell or resell Inventory bearing Sellers mark, name and/or logo
manufactured by Seller until such Inventory shall have been sold, and (c) repair, reship,
refurbish or resell product manufactured by the Seller and bearing Sellers logo in the course
of the warranty work contemplated in Section 6.7.6.9
    
    Covenant Regarding Sellers Patents. Seller covenants not to sue or bring any other
legal action against Purchaser or any successor, assign, distributor, reseller or customer of
Purchaser related to or on account of any patent owned by Seller (including any continuation
or re-issuance thereof) or filed by Seller prior to the Closing Date and not transferred to
Purchaser hereunder being infringed, actually or allegedly, by any product family that is part
of the Business as conducted prior to Closing or any derivative works. This covenant shall be
irrevocably attached to any such patent, and Seller shall not transfer any patent covered
hereunder without an express assumption in writing of this covenant.6.11
    
    Escrow Agreement. In the event that any time after the Closing Date until the second
anniversary of the Closing Date, the Board of Directors of Seller determines to wind up
Sellers operations and liquidate, then prior to taking any such action, Seller and Parent
shall enter into an Escrow Agreement to secure the Sellers obligations under the
Indemnification Agreement. Such Escrow Agreement in mutually-acceptable and customary form
with an escrow agent, which Escrow Agreement shall expire on the second anniversary of the
Closing and shall place into the escrow account formed thereby an amount to negotiated in good
faith by the parties based on the circumstances and likelihood and probable magnitude of any
indemnifiable claims thereunder at that time of such negotiations, but in no event not less
than $2,000,000, which amount shall be deposited by Seller with the escrow agent to hold and
distribute pursuant to the terms of the Escrow Agreement. Seller will not declare any cash
dividend, repurchase any shares of its capital stock or distribute any cash to its
stockholders upon liquidation prior to the second anniversary of this Agreement except in
accordance with applicable Delaware law.6.11
    
    Return of Letter of Credit and Security Deposit. Purchaser or Parent shall return to
Seller the letter of credit and security deposit deposited by Seller with the Landlord by the
date that is two weeks after the Closing.
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7
    
    SURVIVAL OF REPRESENTATIONS AND OTHER ITEMS7.1
    
    Survival. All of the representations and warranties set forth in this Agreement or
in the Bill of Sale shall survive until the second anniversary of the Closing Date. The
covenants and agreements set forth in this Agreement or in the Bill of Sale shall survive the
Closing Date.8
    
    CONDITIONS TO OBLIGATIONS OF PURCHASER.At or prior to the Closing (A) each of the parties shall have delivered the following
documents and/or (B) each of the following conditions shall have been satisfied, or waived
(in writing) by Purchaser:8.1
    
    Certificates of Good Standing of EDSI. Purchaser shall have received from Seller a
Certificate of Good Standing for EDSI from the Secretary of State of California, dated as of a
recent date.8.2
    
    Bill of Sale. Seller shall have executed and delivered a Bill of Sale and Assignment
and Assumption Agreement in the form agreed upon by Seller and Purchaser.8.3
    
    Transition Services Agreement. Seller shall have executed and delivered a Transition
Services Agreement in the form agreed upon by Seller and Purchaser.8.4
    
    Lease. 88 12 LLC, dba Garaventa Properties (collectively Landlord) shall have
consented to the assignment of the lease between Seller and Landlord for Sellers Folsom,
California facility (the Building).8.5
    
    Other Documents. Seller shall have executed and delivered an Indemnification
Agreement substantially in the form attached hereto as Exhibit A (Indemnification
Agreement). Seller shall have delivered an certificate of secretary in the form agreed upon
by Seller and Purchaser and the opinion of counsel in in the form agreed upon by Seller and
Purchaser.9
    
    CONDITIONS TO OBLIGATIONS OF SELLER.At or prior to the Closing (A) each of the parties shall have delivered the following
documents and/or (B) each of the following conditions shall have been satisfied, or waived
(in writing) by Seller:9.1
    
    Bill of Sale. Purchaser shall have executed and delivered the Bill of Sale.9.2
    
    Payment of Purchase Price. Purchaser shall have tendered payment of the Purchase
Price.9.3
    
    Indemnification Agreement. Parent shall have executed and delivered the
Indemnification Agreement.
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10
    
    EXPENSES/BROKERS FEES.10.1
    
    Expenses; Brokers. Each of the parties shall pay all its own costs and expenses
incurred or to be incurred by it in connection with the Sale of the Business and the
performance of its respective obligations under this Agreement. Each party hereto represents
and warrants that it has not utilized the services of, and that it does not and will not have
any liability to, any broker or finder in connection with this Agreement or transactions
contemplated hereby, except that Seller has utilized the services of Needham & Company in
connection with the transactions contemplated by this Agreement. Seller shall pay all fees and
other expenses of Needham & Company incurred in connection with such services.11
    
    MISCELLANEOUS.11.1
    
    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 addressed to each of the parties at the
address for such party as set forth in the Preamble of this Agreement. 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,
properly addressed as aforementioned, the same shall be deemed served or delivered seventy-two
(72) hours 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.11.2
    
    Binding Effect; Assignment. This Agreement shall be binding upon the heirs,
executors, representatives, successors and assigns of the respective parties hereto. No party
may assign this Agreement, or assign its rights or delegate its duties hereunder, without the
prior written consent of the other party hereto; provided, however, that upon written notice
to Seller, Purchaser may assign this Agreement to any entity that is controlled and wholly
owned, directly or indirectly, by Microsemi Corporation.11.3
    
    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.11.4
    
    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.11.5
    
    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.
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The remedies herein provided are cumulative and not exclusive of any remedies provided by
law.11.6
    
    Entire Agreement; No Third-Party Beneficiaries. This Agreement, including the
Schedules and Exhibit and other documents attached or referred to herein, which form a part
hereof, embodies the entire agreement and understanding of the parties hereof, and supersedes
all prior or contemporaneous agreements or understandings (whether written or oral) among the
parties, in respect to the subject matter contained herein. The Mutual Non-disclosure Letter
Agreement between Microsemi Corporation and Seller (the NDA) shall survive the execution of
this Agreement and the Closing Date; provided, however, Microsemi Corporations
confidentiality obligations under the NDA as they relate to the Business or the Purchased
Assets shall terminate immediately upon the Closing. This Agreement and the obligations
hereunder are not intended to confer any rights or remedies to any third party and is not
intended to operate, in anyway, as an agreement for the benefit of any third-party.11.7
    
    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 the State of
California without reference to conflict of laws provisions thereunder.11.8
    
    Alternate Dispute Resolution (ADR). 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 thirty (30) days after written notice by one party requesting such
Mediation. Any disputes arising hereunder which the parties cannot resolve in good faith
within three (3) months of the date of the written request for Mediation, shall be submitted
to the Judicial Arbitration and Mediation Services (JAMS) for arbitration in accordance with
its rules and procedures (Arbitrationand collectively with Mediation, ADR). Any ADR
shall occur in Orange County, California. The parties are authorized in such arbitration
proceedings to conduct discovery in accordance with the California Code of Civil Procedure §§
1280 et seq. The arbitrator shall give a detailed reasoned opinion. The parties agree that
the arbitral award shall be final and binding upon both parties. The parties expressly waive
their appeal rights under California Code of Civil Procedure § 1294(b), (c) and (d). The
arbitral award may be enforced in any other jurisdiction by suit on the judgment or in any
other manner provided by law. During ADR, the terms and conditions of this Agreement shall be
performed continuously by both parties except for matters in dispute. Each party shall be
responsible for all its own costs associated with the preparation and representation by
attorneys, or any other persons retained thereby, to assist it in connection with any such
ADR. All costs charged by JAMS or any other the mutually agreed upon ADR entity shall be
equally shared by the parties pending the arbitration award. The arbitrator may include in
the arbitration award costs, expenses and reasonable attorneys fees in favor of the
prevailing party or parties. Notwithstanding anything to the contrary herein stated,
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each partys right to seek injunctive relief in any court of competent jurisdiction against
any person or entity as provided herein shall not be deemed waived or diminished for any
reason whatsoever. Each party for itself irrevocably submits to the jurisdiction of JAMS in
Orange County, California, over any ADR, irrevocably waives the defense of an inconvenient
forum or improper venue to the maintenance of such an ADR proceeding, and agrees to accept
and not to contest service of process by certified mail as to any ADR proceeding, which
method of service is deemed adequate by the parties hereto.11.9
    
    Severability; Amendment. 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. This Agreement
may not be amended except by execution and delivery of an instrument  in writing signed by
officers of Seller and Purchaser on behalf of Seller and Purchaser.11.10
    
    Joint and Several Liability and Guarantee. Parent and Purchaser shall be jointly
and severally liable for all of Purchasers and Parents obligations to Seller under this
Agreement and all other Transaction Documents and Parent hereby guarantees Purchasers
performance of such obligations.
  25




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SHR Corporation
    
    
    
    Endwave CorporationBy:
    
    /s/ James J. Peterson
    
    
    
    By:
    
    /s/ Edward A. Keible Jr.Title:
    
    President and Chief
Executive Officer
    
    
    
    Title:
    
    President and Chief
Executive OfficerMicrosemi CorporationBy:
    
    /s/ James J. PetersonTitle:
    
    President and Chief
Executive Officer
 Asset
Purchase Agreement




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##### 



SCHEDULES
 Schedule 1.1
    
    InventorySchedule 1.2
    
    EquipmentSchedule 1.3
    
    List of Prepaid Expenses and Other Current AssetsSchedule 1.4
    
    List of Customer OrdersSchedule 1.5
    
    List of CustomersSchedule 1.6
    
    List of VendorsSchedule 1.7
    
    List of Registered Intellectual PropertySchedule 1.8
    
    List of ReceivablesSchedule 1.11
    
    List of Assumed ContractsSchedule 1.12
    
    List of PermitsSchedule 2.1(a)
    
    Trade PayablesSchedule 2.1(f)
    
    Other Assumed LiabilitiesDisclosure ScheduleSchedule 4.15
    
    Transferred EmployeesSchedule 6.7
    
    Sellers Product Warranties




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EXHIBIT
 Exhibit A
    
    Indemnification Agreement