MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) Files An 8-K Entry into a Material Definitive Agreement

As previously reported on a Current Report on Form 8-K filed on
June 2, 2016 by MACOM Technology Solutions Holdings, Inc. (MACOM),
on May 26, 2016, MACOM Technology Solutions, Inc. (formerly known
as M/A-COM Technology Solutions Inc.), a wholly-owned subsidiary of
MACOM, and Calare Properties, Inc., a Delaware corporation
(together with its affiliates, Buyer), entered into a Purchase and
Sale Agreement and Escrow Instructions (as amended through the date
hereof, the Purchase Agreement) for the sale and leaseback of
certain parcels of property, including MACOMs headquarters, located
at 100 and 144 Chelmsford Street, Lowell, Massachusetts 01851 (the
Chelmsford Property”). The transactions contemplated by the
Purchase Agreement closed on December 28, 2016 (the “Closing”),
including the sale of the Chelmsford Property to Buyer for $4.25
million plus a tenant construction allowance of $4.0 million for
future improvements. In connection with the Closing, on December
28, 2016, MACOM entered into certain lease agreements with Buyer
including: (1) a 20-year leaseback to MACOM of the facility located
at 100 Chelmsford Street (the “100 Chelmsford Lease”) and (2) a
20-year build-to-suit lease arrangement for the construction and
lease to MACOM of a new facility to be located at 144 Chelmsford
Street (the 144 Chelmsford Lease, together with the 100 Chelmsford
Lease, the Leases). to the 100 Chelmsford Lease, MACOM will pay
annual base rent in the amount of $700,000, which will be increased
annually by 1.75%, and to the 144 Chelmsford Lease, MACOM will pay
annual base rent in the amount of $1,278,750, which will be
increased annually by 1.50%. to the 144 Chelmsford Lease, it is
anticipated that Buyer will contribute approximately $16.5 million
toward the cost of constructing the new 144 Chelmsford Street
facility with MACOM contributing any construction costs over that,
and that the $4.0 million tenant construction allowance noted above
may be used as a source of MACOMs related payment obligations in
certain circumstances.

The foregoing descriptions of the 100 Chelmsford Lease and the 144
Chelmsford Lease do not purport to be complete and

are qualified in their entirety by reference to the 100 Chelmsford
Lease and the 144 Chelmsford Lease, copies of which are

filed hereto as Exhibits 10.1 and 10.2, respectively, and are
incorporated herein by reference.

Because the transactions contemplated by the Purchase Agreement and
the related Leases were negotiated and consummated at the same time
and in contemplation of one another to achieve the same commercial
objective, the transactions will be accounted for by MACOM as a
single unit of accounting, which will result in the Purchase
Agreement and the related Leases being accounted for as a failed
sale-leaseback due to MACOMs continuing involvement in the
properties. As a result, the Leases will be accounted for under the
financing method and MACOM will be the deemed accounting owner of
all assets under the arrangement, including the assets to be
constructed under the 144 Chelmsford Lease. MACOM will continue to
recognize the existing building and improvements sold under the
Purchase Agreement, capitalize the assets constructed under the 144
Chelmsford Lease, and depreciate the assets over the shorter of
their estimated useful lives or the 20-year lease term. The sale
proceeds from the Purchase Agreement and future construction costs
funded by Buyer under the 144 Chelmsford Lease will be recognized
as a financing obligation on MACOMs balance sheet, which will be
amortized over the 20-year lease term based on the minimum lease
payments required under the Leases and MACOMs incremental borrowing
rate.

Forward-Looking Statements

DISCLOSURE NOTICE: This document contains forward-looking
statements related to MACOM and the real estate transactions
described herein that involve substantial risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied by such statements. Forward-looking statements
in this document include, among other things, statements about the
potential timing, costs or benefits associated with the proposed
transactions. Risks and uncertainties include, among other things,
risks related to the ability of Buyer to construct the new 144
Chelmsford Street facility on time, on budget or at all; the
ability of MACOM to realize the anticipated benefits of the
transactions, including the possibility that the expected benefits
from the transactions will not be realized or will not be realized
within the expected time period; disruption from these transactions
making it more difficult to maintain or conduct MACOM’s business;
potentially negative effects of these transactions on the market
price of MACOMs common stock and on MACOMs operating results;
unknown liabilities; litigation and/or regulatory actions related
to the transactions or construction of the new 144 Chelmsford
Street facility; and other risks described in MACOMs Annual Report
on Form 10-K for the fiscal year ended September 30, 2016 filed
with the U.S. Securities and Exchange Commission and available at
www.sec.gov. The information contained in this document is as of
its filing date, and MACOM assumes no obligation to update
forward-looking statements contained in this document as the result
of new information or future events or developments.

Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 of this Current Report on
Form 8-K is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.