EXHIBIT 99.3
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement") is entered into as of this 30th day
of August, 2005 (the "Closing Date"), among SIMTEK CORPORATION, a Colorado
corporation ("Simtek"), Q-DOT, INC., an Illinois corporation and wholly-owned
subsidiary of Simtek (the "Company" and, together with Simtek, the "Seller
Parties"), HITTITE MICROWAVE CORPORATION, a Delaware corporation ("Hittite"),
HMC ACQUISITION CORPORATION, a Delaware corporation and a wholly-owned
subsidiary of Hittite ("Buyer" and, together with Hittite, the "Buyer Parties"),
and U.S. Bank, National Association ("Escrow Agent"). Capitalized terms used
herein without definition shall have their respective meanings as provided in
the Asset Purchase Agreement, dated as of the Closing Date, by and among the
Buyer Parties and the Seller Parties (the "Purchase Agreement").
WHEREAS, the Buyer Parties and the Seller Parties are entering into a
business transaction pursuant to the terms of the Purchase Agreement; and
WHEREAS, pursuant and subject to the Purchase Agreement, the Seller Parties
have agreed to indemnify the Buyer Parties for certain claims that the Buyer
Parties may incur; and
WHEREAS, pursuant to the Purchase Agreement, the Buyer Parties are
transferring concurrently herewith to the Escrow Agent as security for potential
claims that the Buyer Parties may incur, immediately available funds in the
amount of $200,000 (the "Escrow Deposit"), to be held by the Escrow Agent in an
escrow account established for such purpose (the "Escrow Account") upon the
terms and conditions set forth herein (for purposes of this Agreement, the term
"Escrow Fund" shall refer to the Escrow Deposit and any and all income earned
thereon while held in escrow pursuant to this Agreement).
NOW, THEREFORE, in consideration of the foregoing premises and the
respective covenants and agreements hereinafter contained, the parties hereby
agree as follows:
I. ESTABLISHMENT OF ESCROW DEPOSIT; SECURITY
1.1 Escrow Deposit. Contemporaneously with the execution hereof, Buyer
Parties have deposited the Escrow Deposit into the Escrow Account, and the
Escrow Agent hereby acknowledges receipt of the Escrow Deposit. Escrow Agent
agrees to hold, invest and disburse the Escrow Deposit for the benefit of Buyer
Parties and Seller Parties, as the case may be, in accordance with the terms and
provisions of this Agreement. The Escrow Deposit shall be deposited and
maintained in a separate, identified and segregated account, and no funds other
than the Escrow Deposit and the income earned thereon shall be deposited in the
Escrow Account.
1.2 Investments. Pending disbursement under this Agreement, Escrow Agent
shall invest amounts received by Escrow Agent in Eligible Investments and shall
not be responsible or liable for any loss accruing from any investment made in
accordance herewith. "Eligible Investments" shall mean direct obligations of, or
obligations guaranteed as to principal and interest by, the United States, the
remaining maturities of which do not exceed three months. For any period of time
before such securities can be purchased by the Escrow Agent or after the
securities mature, the Escrow Deposit shall be invested in a U.S. Bank money
market account. All earnings and income received from the investment of the
Escrow Deposit shall be credited to the Escrow Account and investment losses
shall be charged against the Escrow Account. Escrow Agent shall maintain, and
make available to the Buyer Parties and the Seller Parties upon request, a
statement setting forth (a) the amount of the Escrow Account; (b) all payments
from the Escrow Account pursuant to Section 3.2 hereof; and (c) with respect to
distributions made pursuant to this Escrow Agreement, a record of such claim
underlying such distribution.
II. THE ESCROW AGENT
2.1 Appointment. The Buyer Parties and Seller Parties hereby designate and
appoint the Escrow Agent as "Escrow Agent" under this Agreement and the Escrow
Agent hereby accepts such designation and appointment, subject to all of the
provisions of this Agreement.
(a) Each party to this Agreement (other than the Escrow Agent)
acknowledges and agrees that the Escrow Agent (i) shall not be responsible
for any of the agreements referred to or described herein, or for
determining or compelling compliance therewith, and shall not otherwise be
bound thereby, (ii) shall be obligated only for the performance of such
duties as are expressly and specifically set forth in this Agreement on its
part to be performed, each of which are ministerial (and shall not be
construed to be fiduciary) in nature, and no implied duties or obligations
of any kind shall be read into this Agreement against or on the part of the
Escrow Agent, (iii) shall not be obligated to take any legal or other
action hereunder which might in its reasonable judgment involve or cause it
to incur any expense or liability unless it shall have been furnished with
acceptable indemnification, (iv) may rely on and shall be protected in
acting or refraining from acting upon any written notice, instruction
(including wire transfer instructions, whether incorporated herein or
provided in a separate written instruction), instrument, statement,
certificate, request or other document furnished to it hereunder and
believed by it to be genuine and to have been signed or presented by the
proper person, and shall have no responsibility for determining the
accuracy thereof, and (v) may consult counsel satisfactory to it, including
in-house counsel, and the opinion or advice of such counsel in any instance
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with the opinion or advice of such counsel.
(b) Escrow Agent shall not be liable to anyone for any action taken or
omitted to be taken by it hereunder except in the case of the Escrow
Agent's gross negligence, bad faith or willful misconduct.
2.2 Successor. Escrow Agent may at any time resign as Escrow Agent
hereunder by giving thirty (30) days' prior written notice of resignation to
Buyer Parties and Seller Parties or may be removed, with or without cause, by
Buyer Parties and Seller Parties, acting jointly, at any time by giving of
thirty (30) day's prior written notice to the Escrow Agent. Such resignation or
removal shall take effect upon the appointment of a successor Escrow Agent as
provided herein. Prior to the effective date of the resignation or removal as
specified in such notice, Seller Parties and Buyer Parties agree that they will
jointly appoint a bank or trust company to act as successor escrow agent
promptly. Upon such appointment such successor shall execute, acknowledge and
deliver to its predecessor, and also to Buyer Parties and Seller Parties, an
instrument in writing accepting such appointment hereunder and agreeing to be
bound by the terms and provisions of this Agreement. Thereupon such successor
Escrow Agent, without any further act, shall become fully vested with all the
rights, immunities, and powers, and shall be subject to all of the duties and
obligations of its predecessor and such predecessor Escrow Agent shall promptly
deliver the Escrow Fund to such successor. In the event that a successor Escrow
Agent has not been appointed within thirty days of the date of any such
resignation, removal, dissolution, incapacity or vacancy, the Escrow Agent shall
deposit the Escrow Fund with the clerk of a court of the federal or state courts
of the State of Delaware and shall interplead all of the parties hereto. Upon so
depositing the Escrow Fund and filing its pleading, this Agreement shall
terminate as to the Escrow Agent.
2.3 Compensation, Expenses Reimbursement and Indemnification.
(a) The Company agrees (i) to reimburse Escrow Agent for its
reasonable attorneys' fees and expenses incurred in connection with the
preparation and review of this Agreement and (ii) to pay Escrow Agent's
compensation for its normal services hereunder in accordance with Schedule
I hereto.
(b) Simtek and Hittite each agree to reimburse the Escrow Agent for
50% of all reasonable costs and expenses incurred in connection with the
administration of this Agreement or the escrow created hereby or the
performance or observance of its duties hereunder which are in excess of
its compensation for normal services hereunder, including payment of any
reasonable legal fees and out-of-pocket expenses incurred by the Escrow
Agent in connection with the resolution of any claim by any party
hereunder.
(c) Escrow Agent may obtain reimbursement for its fees and expenses
from the Escrow Deposit, including reimbursement from any accrued earnings
resulting from the investment of the Escrow Deposit.
(d) Seller Parties and Buyer Parties covenant and agree to jointly and
severally indemnify Escrow Agent (and its directors, officers and
employees) and hold it (and such directors, officers and employees)
harmless from and against any loss, liability, damage, cost and expense of
any nature incurred by Escrow Agent arising out of or in connection with
this Agreement or with the administration of its duties hereunder,
including, but not limited to, attorneys' fees and other costs and expenses
of defending or preparing to defend against any claim of liability unless
and except to the extent such loss, liability, damage, cost and expense
shall be caused by the Escrow Agent's gross negligence, bad faith or
willful misconduct. The foregoing indemnification and agreement to hold
harmless shall survive the termination of this Agreement and the
resignation of the Escrow Agent.
2.4 Dispute Resolution. If, at any time, there shall exist any dispute
between Seller Parties and Buyer Parties with respect to the holding or
disposition of any portion of the Escrow Deposit or any other obligations of
Escrow Agent hereunder, or if at any time Escrow Agent is unable to determine,
to Escrow Agent's sole satisfaction, the proper disposition of any portion of
the Escrow Deposit or Escrow Agent's proper actions with respect to its
obligations hereunder, or if Seller Parties and Buyer Parties have not within
thirty (30) days of the furnishing by the Escrow Agent of a notice of
resignation pursuant to Section 2.2 hereof, appointed a successor Escrow Agent
to act hereunder, then the Escrow Agent, in its sole discretion, shall take
either or both of the following actions:
(a) suspend the performance of any of its obligations under this
Agreement until such dispute or uncertainty shall be resolved and the
Escrow Agent has been provided with joint written instructions regarding
such dispute or uncertainty or until a successor Escrow Agent shall have
been appointed (as the case may be); and/or
(b) petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in the State of
Delaware, for instructions with respect to such dispute or uncertainty, and
pay into or deposit with such court the Escrow Fund for holding and
disposition in accordance with the instructions of such court.
The Escrow Agent shall have no liability to Seller Parties, Buyer Parties,
or any other person with respect to any such suspension of performance or
disbursement to court, specifically including any liability that may arise, or
be alleged to have arisen, out of or as a result of any delay in the
disbursement of funds held in the Escrow Account or any delay in or with respect
to any other action required or requested of Escrow Agent.
III. TERM; DISBURSEMENTS
3.1 Term. This Agreement shall commence on the Closing Date and shall
terminate at such time as the entire Escrow Deposit shall have been distributed
pursuant to the terms of this Agreement.
3.2 Disbursements of Escrow Funds. The Escrow Agent shall not distribute
all or any portion of the Escrow Fund to any party, except in accordance with
this Section 3.2.
(a) Either of Buyer Parties shall notify in writing each of the Escrow
Agent and the Seller Parties of any Buyer claim for indemnification pursuant to
the Purchase Agreement (a "Buyer Claim") in accordance with the notice
provisions set forth in Section 4.3 of this Agreement, specifying the alleged
amount and basis thereof in detail. The Escrow Agent shall have no
responsibility whatsoever to determine if a copy of such notice was sent or
received by the Buyer Parties to the Seller Parties.
(b) Upon any Buyer Claim permitting recovery from the Escrow Fund in
accordance with the terms of the Purchase Agreement, the Escrow Agent shall:
(i) if the Seller Parties shall, within thirty (30) days after
their receipt of the claim notice, deliver to each of the Escrow Agent
and the Buyer Parties a written notice that they object to such claim,
setting forth in reasonable detail the basis of such objection, and if
the Buyer Claim shall thereafter be submitted by the Buyer Parties to
a judicial proceeding, then in such event upon receipt of a
certificate from the Buyer Parties (A) attaching a copy of the award
from such proceeding in a judgment which is non-appealable and final,
specifying the amount of such recovery and (B) certifying that the
Buyer Parties properly notified the Seller Parties of the Buyer Claim,
as required by the Purchase Agreement and this Agreement; or
(ii) in the case of a Buyer Claim settled by written agreement
among the Buyer Parties and the Seller Parties, upon receipt of a copy
of such agreement, specifying the amount of recovery and authorizing
release of such recovery; or
(iii) in the case of a Buyer Claim where the Seller Parties fail
to deliver to the Escrow Agent a written objection to the Buyer Claim
within thirty (30) days of the Escrow Agent's receipt of the claim
notice, and Buyer has provided a certificate to the Escrow Agent
certifying that Buyer has served the Seller Parties with proper notice
under the Purchase Agreement and this Agreement;
deliver to Buyer cash from the Escrow Fund in an amount consistent with the
provisions of Section 3.2(b)(i), (ii) or (iii) hereof, as the case may be, and
in accordance with written instructions from Buyer including wire instructions
or an address to where a check should be sent.
(c) Escrow Agent shall release any remaining balance in the Escrow
Account to Simtek immediately upon the expiration of twelve (12) months
following the Closing Date, unless prior to such time Escrow Agent has received
written notice (i) from one or both of Buyer Parties of a Buyer Claim which has
not yet been satisfied hereunder, or (ii) from any of Buyer Parties or Seller
Parties that there exists a dispute as to whether a Buyer Claim exists, in which
case Escrow Agent, in its discretion, shall take either or both of the actions
set forth in Section 2.4(a) and 2.4(b) hereof.
(d) All distributions shall be made by the Escrow Agent in accordance
with written instructions delivered to the Escrow Agent and the Escrow Agent
shall have no responsibility whatsoever for determining whether the distribution
is in accordance with the Purchase Agreement or satisfies the conditions set
forth therein.
(e) All distributions shall be made by federal funds wire transfer or
by cashier's check, as elected by the party receiving the distribution.
IV. MISCELLANEOUS
4.1 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and may not
be effectively amended, changed, modified or altered, except in writing executed
by Buyer Parties, Seller Parties, and Escrow Agent.
4.2 Governing Law. The Agreement shall be governed by and construed
pursuant to the laws of the State of Delaware.
4.3 Notices. Until changed by written notice from one party hereto to the
other, all communications under this Agreement shall be in writing and shall be
hand delivered or mailed by registered mail to the parties, and shall be deemed
given when mailed, as follows:
Notices to be given to Hittite or Buyer will be addressed to:
Hittite Microwave Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇ LLP
World Trade Center West
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If given to Simtek or the Company, notices will be addressed to:
Simtek Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President & CEO
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
If given to Escrow Agent, notices will be addressed to:
U.S. Bank, National Association
Escrow Services
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▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
4.4 Headings. The captions and headings herein are for convenience only and
in no way define or limit the scope or intent of any provisions or sections of
this Agreement.
4.5 Counterparts. This Agreement may be executed in several counterparts
and such counterparts together shall constitute one and the same instrument.
4.6 Severability. If any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
4.7 Assignment. Neither party may assign its rights or obligations
hereunder and any assignment in contravention of the terms hereof shall be void.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized corporate officers as of the day and year
first above written.
SIMTEK CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President & CEO
Q-DOT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President
HITTITE MICROWAVE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: President & CEO
HMC ACQUISITION CORPORATION
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: President & CEO
ESCROW AGENT:
U.S. BANK, NATIONAL ASSOCIATION
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President