Business Entity

Business Entity: Nomensi

Daniel Santiago

Legal Environment in Business, LAW 529

Mr. Ed Adelman, J.D.

March 19, 2007

Business Entity: Nomensi

Business Scenario

I along with three other former employees of ChipeX, Inc. have designed and developed a prototype for a new microprocessor in hopes it can provide customers an alternative to those designed by AMD and Intel. Venture capitalists will provide whatever financing is needed to manufacture the processor chip, provided they take 51% of the ownership interest. The venture capitalists do not want to be involved in the management and business operations and have agreed to allow the engineers to control the operations, provided certain financial objectives are achieved. They forecast to begin high volume manufacturing of the chip in two years. According to many expert analysts, the chip should be a big player in the semiconductor industry. Eventually, the business enterprise, called Nomensi, will go public in five years.

NOMENSI's Mission, Values and Strategy

The worldwide semiconductor market is estimated to experience a five-year compound annual growth rate (CAGR) of 11.3% from 2003-2008. The enterprise storage semiconductor market is expected to reach $1.2 billion in 2008, representing 11% CAGR for 2003-08. The worldwide desktop and mobile PC semiconductor market is expected to grow at a CAGR of 7.8%, rising from $45.4 billion in 2003 to $66.1 billion in 2008 (AMD, 2006). Being a new competitor in the semiconductor industry, the company is well positioned to tap into this opportunity.

Mission

Nomensi's mission is to lead through innovative and customer-oriented solutions that improve businesses, enhance customer's digital lifestyle and to further accelerate the global digital transformation. We lead through innovation--championing creative ideas and solutions that enable our customers to truly differentiate their solutions in the marketplace. We believe that fair and open competition places the freedom of choice in the hands of customers, allowing the widest population to have access to the best possible technology.

Integrity

Nomensi will operate with the highest standards of honesty and integrity, both as individuals and as a company--to be the role model among semiconductor companies worldwide through our ethical business practices and environmental citizenship.

Business Strategy

As Nomensi's founders, we realize that customers demand the highest quality building blocks in order to succeed in the competitive global digital market. To help meet customer needs as rapidly as possible, Nomensi has purchased and retooled many of the previous products of their former employer ChipeX, improving the processor's performance and energy consumption.

Nomensi's General Legal Strategy

Nomensi's General Legal Strategy is to help ensure we can design, manufacture and market worldwide leading edge electronic products without delay or significant technical or legal restrictions.

* Maximize flexibility in how we design products

* Remove unfounded regulatory barriers preventing access or ability to use the raw materials that are necessary to manufacture our desired

* Prevent dissemination of requirements that would impede the functionality of our products

* Minimize product liability

Nomensi will operate on a worldwide basis and will be subject to many laws, rules and regulations that affect our dealings with our, employees, customers, suppliers, governments, neighbors and the general public. Many of these laws affect our behavior around the world, and many other laws may vary from place to place. Compliance is an operational component of Nomensi's daily activities at all current and future sites.

Legal Regulations and Compliance

1. Software Compliance

Nomensi's policy is to always pay for software when payment is expected or required for Nomensi related business, or when software is used on Nomensi equipment or Nomensi premises. Software must be used according to applicable copyright laws, software licensing agreements, and Nomensi guidelines. "Software" includes, but is not limited to, any and all applications programs, video and audio files (for example MP3, MPG, AVI and so forth). Employees are prohibited from obtaining or using software that is not paid for, obtaining or using illegal copies of software, making or distributing illegal copies of software, and using software in any way that violates any law, license agreement or Nomensi guideline.

2. Environmental Regulations

Environmental compliance is expected with respect to air and water quality, toxic chemicals, ozone depleting substances, solid waste recycling when Nomensi manufactures the silicon microchips.

3. Trade Compliance /Bureau of Industry and Security (BIS) Regulations

Nomensi must comply with all applicable trade restrictions and boycotts imposed by the U.S. government. Moreover, Nomensi also must abide by U.S. anti-boycott laws that prohibit companies from participating in any international boycott not sanctioned by the U.S. government.

The purpose of the BIS is to implement the Export Administration Act of 1979 and the Int'l Emergency Economic Powers Act (IEEPA). These Acts encourage trade with countries the U.S. has diplomatic relations with and protect our national interest. To protect the national interest of the U.S., the Regulations attempt to restrict trade that would aid terrorism, chemical & biological weapon development, nuclear proliferation, missile technology, regional instability and a host of other concerns.

Other regulations Nomensi is subject to when exporting?

U.S. Dept. of State, Office of Foreign Assets Control, Bureau of Census, Anti-Boycott, and others. The Dept. of State deals with items that can have military applications such as radiation hardened microelectronics for satellite communication equipment. Any items subject to the Dept. of State are strictly

...