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LOWELL R. STERN
lowell.stern@usdoj.gov
United States Department of Justice
Antitrust Division
450 5th Street, N.W., Suite 8700
Washington, D.C. 20530
Telephone: (202) 307-0922
Facsimile: (202) 307-6283
Attorney for Plaintiff

MICHAEL E. ANTALICS
mantalics@omm.com
O'Melveny & Myers LLP
1625 Eye Street, N.W.
Washington, D.C. 20006
Telephone: (202) 383-5343
Facsimile: (202) 383-5414
Attorney for Defendant

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA



UNITED STATES OF AMERICA,    

                  Plaintiff,

                  v.

MICROSEMI CORPORATION,

                  Defendant.


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CASE NO.: 8:09-cv-00275-AG-AN

STIPULATION MODIFYING
ORDER TO PRESERVE AND
MAINTAIN ASSETS

Hon. Andrew J. Guilford

Filed: August 4, 2009



It is hereby stipulated and agreed by and between the undersigned parties, subject to approval and entry by the Court, that the December 24, 2008 Order to Preserve and Maintain Assets shall be modified to read as follows:

ORDER TO PRESERVE AND MAINTAIN ASSETS

1. Plaintiff United States filed a complaint on December 18, 2008, alleging that Defendant Microsemi Corporation's ("Microsemi") acquisition of substantially all of the assets of Semicoa, Inc. ("Semicoa") violated Section 7 of the Clayton Act, 15 U.S.C. § 18, and Section 2 of the Sherman Act, 15 U.S.C. § 2.

2. Plaintiff seeks preliminary and permanent equitable and other relief to remedy the alleged harm to competition, including the divestiture of the acquired assets.

3. Defendant Microsemi has agreed to preserve and maintain the assets it acquired from Semicoa pending a resolution on the merits of this action.

4. Microsemi agrees to this Order.

WHEREFORE, for good cause shown, it is hereby ORDERED:

For the purpose of this Order, the following definitions shall apply:

A. "Microsemi" means Defendant Microsemi Corporation, a Delaware corporation with its headquarters in Irvine, CA, its successors and assigns, and its subsidiaries, divisions, groups, affiliates, partnerships and joint ventures, and their directors, officers, managers, agents, and employees.

B. "Semicoa" means Semicoa, Inc., a California corporation with its headquarters in Costa Mesa, CA, its successors and assigns, and its subsidiaries, divisions, groups, affiliates, partnerships and joint ventures, and their directors, officers, managers, agents, and employees.

C. "Semicoa Assets" means all assets acquired by Microsemi from Semicoa on July 14, 2008, including but not limited to:

  1. all specifications, manufacturing plans, assembly instructions, standard operating procedures, and work instructions related to the manufacturing process, including all right, title and interest in or to all other assets of every kind and nature used or intended to be used in the operation of Semicoa's business, including, but not limited to, any finished or unfinished devices, any materials, data or know-how wherever found or of whatever kind reasonably required to manufacture and sell the goods and services previously produced by Semicoa as well as all books and records, and all files, documents, papers and agreements that are material to the continuing operation of Semicoa's business;
  2. all finished goods, works in progress, piece parts and materials inventory, packaging, and labels, supplies and other related personal property;
  3. all equipment, machinery or software used in the development, design, manufacturing and testing of goods previously manufactured by Semicoa;
  4. all right, title and interest in, and all information related to, any tooling, molds, equipment and proprietary specifications Semicoa previously had with any and all vendors from which Semicoa purchased goods or services, 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 were material to the operation of Semicoa's business;
  5. any list of customers to which Semicoa previously sold products or provided services over the three years prior to July 14, 2008, whether or not there are any "open" sales orders from such customers;
  6. 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;
  7. all intellectual property ("IP") assets or rights that have been used in the development, production, servicing, and sale of transistors and diodes, including but not limited to: all licenses, rights, and sublicenses, trademarks, trade names, service marks, service names, technical information, computer software and related documentation, know-how, trade secrets, approvals, certifications, advertising literature, and all manuals and technical information provided to the employees, customers, suppliers, agents, or licensees of Semicoa and used in connection with the development, design, manufacture, testing, markets, sale or distribution of transistors or diodes;
  8. all rights under all contracts, licenses, sublicenses, agreements, leases, building leases, commitments, purchase orders, bids and offers; and
  9. all rights acquired pursuant to municipal, state and federal franchises, permits, licenses, agreements, waivers and authorizations.

It is FURTHER ORDERED that:

A. Unless the United States consents in writing, Microsemi, and its officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with Microsemi who receive actual notice of this Order by personal service or otherwise, are hereby ordered to preserve and maintain the Semicoa Assets, and are restrained from

  1. licensing or encumbering any such asset;
  2. removing, selling, leasing, assigning, transferring, pledging, or otherwise disposing of any such asset, other than in the ordinary course of business;
  3. transferring or reassigning to other facilities of Microsemi, or dismissing except for cause, employees previously employed by Semicoa; and
  4. idling any fabrication, assembly or testing lines (or equipment comprising those lines) other than in the ordinary course of business;

or causing or assisting others in carrying out any of these prohibited activities.

B. Unless the United States consents in writing, Microsemi, and its officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with Microsemi who receive actual notice of this Order by personal service or otherwise, are hereby ordered

  1. to provide the United States ten (10) days' advance notice of any dismissal for cause of an employee of the Semicoa Assets;
  2. to take all commercially reasonable steps necessary to ensure that the Semicoa Assets are fully maintained in an operable condition and to maintain and adhere to normal repair and maintenance schedules for the Semicoa Assets; and
  3. to take all commercially reasonable steps necessary to ensure that the Semicoa Assets retain all regulatory approvals, including but not limited to certifications and qualifications granted by the Defense Supply Center Columbus.

C. Microsemi is hereby ordered to appoint a person or persons to oversee the Semicoa Assets who will be responsible for Microsemi's compliance with this Order and shall have complete managerial responsibility for such assets.

D. The United States may consent to a divestiture of the Semicoa Assets by Microsemi if the United States determines, in its sole discretion, that the Semicoa Assets can and will be used by the acquirer of the Semicoa Assets as part of a viable, ongoing business engaged in the development, manufacture, and sale of transistors and diodes and that such divestiture will remedy the competitive harm alleged in the complaint. Any divestiture of the Semicoa Assets: (1) shall be made to an acquirer that, in the United States's sole judgment, has the intent and capability (including the necessary managerial, operational, technical, and financial capability) of competing effectively in the business of developing, manufacturing, and selling transistors and diodes; and (2) shall be accomplished so as to satisfy the United States, in its sole discretion, that none of the terms of any agreement between an acquirer and Microsemi gives Microsemi the ability unreasonably to raise the acquirer's costs, to lower the acquirer's efficiency, or otherwise to interfere in the ability of the acquirer to compete effectively.

E. This Order shall not expire until Judgment is entered in this matter and any appeals are final.

F. This Order is without prejudice to the United States seeking additional relief at any time pending a final determination of the merits.

Dated: July 31, 2009 By: _______________/s/________________
          Lowell R. Stern
          Attorney for Plaintiff


Dated: July 31, 2009 By: _______________/s/________________
          Michael Antalics
          Attorney for Defendant


CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 4th August of July, 2009, I will electronically file the foregoing with the Clerk of Court using the CM/ECF system, which will then send a notification of such filing (NEF) to the following:

Brett J. Williamson
Darin J. Glasser
O'Melveny & Myers LLP
610 Newport Center Drive, 17th Floor
Newport Beach, CA 92660-6429

Michael E. Antalics
Benjamin G. Bradshaw
O'Melveny & Myers LLP
1625 Eye Street, N.W.
Washington, D.C. 20006

    _______________/s/________________
Lowell R. Stern
Attorney for Plaintiff