EXHIBIT 2.1
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CONFIDENTIAL
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
CENTENNIAL TECHNOLOGIES, INC.
AND
INTEL CORPORATION
DATED AS OF DECEMBER 29, 1999
TABLE OF CONTENTS
ARTICLE I DEFINITIONS............................................................................1
1.01. Definitions............................................................................1
1.02. Index of Other Defined Terms...........................................................5
ARTICLE II PURCHASE AND SALE......................................................................6
2.01. Purchased Assets.......................................................................6
2.02. Excluded Assets........................................................................7
2.03. Assumption of Liabilities..............................................................7
2.04. Excluded Liabilities...................................................................8
2.05. Assignment of Contracts and Rights.....................................................8
2.06. Purchase Price.........................................................................8
2.07. Closing...............................................................................10
2.08. Employee Matters......................................................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER..............................................10
3.01. Existence and Good Standing...........................................................11
3.02. Authorization and Enforceability......................................................11
3.03. Governmental or Other Authorization...................................................11
3.04. Non-Contravention.....................................................................11
3.05. Financial Information; Undisclosed Liabilities; Books and Records.....................12
3.06. Absence of Certain Changes............................................................12
3.07. Properties: Material Leases; Tangible Assets..........................................13
3.08. Inventories...........................................................................13
3.09. Litigation............................................................................14
3.10. Contracts.............................................................................14
3.11. Required Consents.....................................................................14
3.12. Compliance with Applicable Laws.......................................................15
3.13. Advisory Fees.........................................................................15
3.14. Tax Matters...........................................................................15
3.15. Product Warranties....................................................................15
3.16. Customers.............................................................................15
3.17. Investment Representations............................................................15
3.18. Intellectual Property.................................................................16
3.19. License Agreements....................................................................16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER...........................................17
4.01. Existence and Good Standing...........................................................17
4.02. Authorization and Enforceability......................................................17
4.03. Governmental or Other Authorization...................................................17
4.04. Non-Contravention.....................................................................17
4.05. Capitalization........................................................................18
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4.06. Valid Issuance........................................................................18
4.07. Litigation............................................................................18
4.08. Compliance with Applicable Laws.......................................................19
4.09. SEC Documents.........................................................................19
4.10. Absence of Changes Since Balance Sheet Date...........................................19
4.11. Intellectual Property.................................................................20
4.12. Advisory Fees.........................................................................20
4.13. Purchaser Rights Agreement............................................................20
ARTICLE V COVENANTS OF SELLER...................................................................21
5.01. Access to Information.................................................................21
5.02. Customer Introductions................................................................21
5.03. Post-Closing Transition Services......................................................21
5.04. Non-Competition.......................................................................21
ARTICLE VI SELLER LICENSE........................................................................22
6.01. Grant of License......................................................................22
6.02. No Other Rights.......................................................................22
6.03. No Implied Obligation.................................................................22
6.04. No Implied Warranties.................................................................22
ARTICLE VII COVENANTS OF PURCHASER................................................................23
7.01. Compliance with Terms of Governmental Approvals and Consents..........................23
7.02. Use of Marks..........................................................................23
7.03. Audit Rights..........................................................................23
ARTICLE VIII COVENANTS OF ALL PARTIES..............................................................24
8.01. Further Assurances....................................................................24
8.02. Public Announcements..................................................................24
8.03. Tax Matters...........................................................................24
8.04. Allocation of Purchase Price..........................................................26
8.05. Confidentiality.......................................................................26
8.06. Waiver of Bulk Sales Laws.............................................................27
ARTICLE IX CONDITIONS TO CLOSING.................................................................27
9.01. Conditions to Obligations of Purchaser................................................27
9.02. Conditions to Obligations of Seller...................................................28
ARTICLE X INDEMNIFICATION.......................................................................30
Section 10.1. General Survival.............................................................30
Section 10.2. Indemnification..............................................................30
Section 10.3. Manner of Indemnification....................................................31
Section 10.4. Third-Party Claims...........................................................32
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Section 10.5. Exclusive Remedy.............................................................32
ARTICLE XI MISCELLANEOUS.........................................................................32
11.01. Notices...............................................................................32
11.02. Amendments; Waivers...................................................................34
11.03. Expenses..............................................................................34
11.04. Successors and Assigns................................................................34
11.05. Governing Law.........................................................................35
11.06. Counterparts; Effectiveness...........................................................35
11.07. Entire Agreement......................................................................35
11.08. Captions..............................................................................35
11.09. Severability..........................................................................35
11.10. Construction..........................................................................35
11.11. Dispute Resolution....................................................................35
11.12. Submission to Jurisdiction; Waiver of Jury Trial......................................36
11.13. Meaning of Include and Including......................................................37
11.14. Cumulative Remedies...................................................................37
11.15. Third Party Beneficiaries.............................................................37
11.16. Specific Performance..................................................................37
11.17. Survival..............................................................................37
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EXHIBITS
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Exhibit 1.01A Form of Assignment and Assumption Agreement
Exhibit 1.01B Form of ▇▇▇▇ of Sale
Exhibit 2.06A Form of Certificate of Designation of Series B Preferred Stock
Exhibit 3.05 Financial Information
Exhibit 3.10 Form of Customer Contract
Exhibit 9.01 Matters to be Covered by Opinion of Legal Counsel to Seller
Exhibit 9.02 Matters to be Covered by Opinion of Legal Counsel to Purchaser
SCHEDULES
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Schedule 1.01A Seller Individuals With Knowledge
Schedule 1.01B Purchaser Individuals With Knowledge
Schedule 2.01(a) Inventory
Schedule 2.01(c) Equipment
Schedule 2.01(d) Backlog
Schedule 2.01(e) Designs and Documentation
Schedule 2.01(f) Assumed Contracts
Schedule 2.02(b) Excluded Contracts Relating to the Business
Schedule 3.03 Seller Approvals
Schedule 3.04 Non-Contravention Exceptions
Schedule 3.06 Ordinary Course Exceptions
Schedule 3.19 License Agreements
Schedule 3.10 Contracts
Schedule 3.11(a) Permits and Approvals
Schedule 3.11(b) Required Contractual Consents
Schedule 3.15 Product Warranties
Schedule 3.16 Customers
Schedule 4.03 Purchaser Approvals
Schedule 4.04 Non-Contravention Exceptions
Schedule 4.07 Litigation
Schedule 4.10 Ordinary Course Exceptions
Schedule 8.04 Allocation of Purchase Price
Schedule 9.01(b) Required Seller Closing Consents
Schedule 9.02(b) Required Purchaser Closing Consents
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CONFIDENTIAL
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT, dated as of December 29, 1999
(the "AGREEMENT"), is by and between Intel Corporation, a Delaware corporation
("SELLER") and Centennial Technologies, Inc., a Delaware corporation
("PURCHASER"). All capitalized terms have the meanings ascribed to such terms in
Article I or as otherwise defined herein.
W I T N E S S E T H:
WHEREAS, Seller desires to sell to Purchaser, and Purchaser
desires to purchase from Seller the assets of the Business;
WHEREAS, Purchaser desires to license from Seller, and Seller
desires to license to Purchaser, certain Intellectual Property rights not
included in the Purchased Assets;
WHEREAS, Purchaser and Seller are entering into a Supply
Agreement and a Rights Agreement simultaneously herewith; and
WHEREAS, in connection with the sale of the Purchased Assets
to Purchaser by Seller, Seller has agreed to enter into a non-competition
agreement in favor of Purchaser.
NOW, THEREFORE, in consideration of the foregoing premises,
the mutual representations, warranties, covenants and agreements hereinafter set
forth, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. The following terms, as used herein, have
the following meanings:
"ACQUISITION DOCUMENTS" means this Agreement, the Rights
Agreement, the Supply Agreement, the ▇▇▇▇ of Sale, the Assignment and Assumption
Agreement, the Transition Services Agreement, the Note and the Security
Agreement and any other document or agreement executed in connection with any of
the foregoing, together with any Exhibits and Schedules thereto, and in each
case as modified, amended, supplemented, restated or renewed from time to time.
"AFFILIATE" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such other Person.
"APPLICABLE LAW" means, with respect to any Person, any
federal, state, local or foreign statute, law, ordinance, rule, administrative
interpretation, regulation, order, writ, injunction, directive, judgment,
decree or other requirement of any Governmental Authority applicable to such
Person or any of its Affiliates or ERISA Affiliates or any of their respective
properties, assets, officers, directors, employees, consultants or agents.
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"ASSIGNMENT AND ASSUMPTION AGREEMENT" means that certain
Assignment and Assumption Agreement dated as of the Closing Date, to be entered
into by Purchaser and Seller, in substantially the form attached hereto as
EXHIBIT 1.01A.
"ASSOCIATE" or "ASSOCIATED WITH" means, when used to indicate
a relationship with any Person, (a) any other Person of which such first Person
is an officer, director or partner or is, directly or indirectly, the beneficial
owner of ten percent (10%) or more of any class of equity securities,
partnership or membership interests or other comparable ownership interests
issued by such other Person, (b) any trust or other estate in which such first
Person has a ten percent (10%) or more beneficial interest or as to which such
first Person serves as trustee or in a similar fiduciary capacity and (c) any
relative or spouse of such first Person who has the same home as such first
Person.
"▇▇▇▇ OF SALE" means that certain ▇▇▇▇ of Sale dated as of the
Closing Date, to be executed by Seller in favor of Purchaser, in substantially
the form attached hereto as EXHIBIT 1.01B.
"BUSINESS" means the flash memory card business of Seller,
which produces and sells flash memory cards, including the PCMCIA card families
(Series 2, Value Series 100 and 200) and the Miniature card families (Series 100
and 200), as heretofore or currently conducted by Seller, including all standard
and custom products.
"BUSINESS DAY" means each day other than a Saturday, Sunday or
other day on which commercial banks in San Francisco, California or Boston,
Massachusetts are authorized or required by law to close.
"CLOSING DATE" means the date of the Closing.
"CONTRACTS" means all contracts, agreements, options, leases,
licenses, sales and purchase orders, commitments and other instruments of any
kind, whether written or oral, to which Seller is a party or is otherwise bound.
"DAMAGES" means all demands, claims, actions or causes of
action, assessments, losses, damages (whether direct or indirect but excluding
consequential damages), deficiencies, costs, expenses, Liabilities, judgments,
settlements, awards, fines, response costs, sanctions, Taxes, penalties, charges
and amounts paid in settlement, including reasonable out-of-pocket costs, fees
and expenses (including costs, fees and expenses of attorneys, accountants and
auditors and other agents of, or other Persons retained by, such Person).
"EQUIPMENT" means all machinery, jigs and fixtures used in
connection with the Business.
"GAAP" means generally accepted accounting principles in the
United States of America applied on a consistent basis.
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"GOVERNMENTAL APPROVAL" means an authorization, consent,
approval, permit or license issued by, or a registration or filing with, or
notice to, or waiver from, any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any foreign or domestic
federal, territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
"INTELLECTUAL PROPERTY" means intellectual property rights
arising from or in respect of the following, whether protected, created or
arising under the laws of the United States or any other jurisdiction:
(1) copyrights and registrations and
applications therefor (collectively, "COPYRIGHTS") and mask work rights; and
(2) know-how, inventions, discoveries, concepts,
ideas, methods, processes, designs, formulae, technical data, drawings,
specifications, data bases and other proprietary and confidential information,
including customer lists, in each case excluding any rights in respect of any of
the foregoing that comprise or are protected by Copyrights, mask work rights or
Patents (collectively, "TRADE SECRETS"); and
(3) patents and applications therefor, including
continuation, divisional, continuation-in-part, or reissue patent applications
and patents issuing thereon (collectively, "PATENTS").
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" means, with respect to any Person, the actual
knowledge of such Person, after reasonable inquiry. Without limiting the
generality of the foregoing, with respect to any Person that is a corporation,
limited liability company, partnership or other business entity, actual
knowledge shall be deemed to include the actual knowledge of all directors,
officers, partners and members of any such Person; PROVIDED that with respect to
Seller, actual knowledge shall be deemed to be the actual knowledge of the
individuals identified on SCHEDULE 1.01A; PROVIDED, further that with respect to
Purchaser, actual knowledge shall be deemed to be the actual knowledge of the
individuals identified on SCHEDULE 1.01B.
"LIABILITY" means, with respect to any Person, any liability
or obligation of such Person of any kind, character or description, whether
known or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise and whether
or not the same is required to be accrued on the financial statements of such
Person.
"LIEN" means, with respect to any asset, any mortgage, title
defect or objection, lien, pledge, charge, security interest, encumbrance or
hypothecation in respect of such asset.
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"MATERIAL ADVERSE EFFECT" means, with respect to any Person,
any circumstance of, change in, or effect on, or group of such circumstances of,
changes in or effects on, the operations, financial condition, earnings, or
results of operations, prospects, assets or Liabilities of the Person, that
results in or would reasonably be expected to result in, a material adverse
effect on, or a material adverse change in, the operations, financial condition,
earnings, results of operations, prospects, assets or Liabilities of such
Person.
"PERMITTED LIENS" means (a) Liens for Taxes or governmental
assessments, charges or claims the payment of which is not yet due and (b)
statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other similar Persons and other Liens imposed by Applicable Law
incurred in the ordinary course of business for sums not yet delinquent or
immaterial in amount and being contested in good faith.
"PERSON" means an individual, corporation, partnership,
association, limited liability company, trust, estate or other similar business
entity or organization, including a Governmental Authority.
"POST-CLOSING TAX PERIOD" means any Tax period (or portion
thereof) ending after the Closing Date.
"PRE-CLOSING TAX PERIOD" means any Tax period (or portion
thereof) ending on or before the close of business on the Closing Date.
"PRODUCTS" means flash memory components and cards
manufactured, distributed or sold by the Business.
"SELLER LICENSE" means that certain license, granted by Seller
to Purchaser in accordance with the terms of Article VI of this Agreement.
"SUBSIDIARY" means, with respect to any Person, (a) any
corporation as to which more than fifty percent (50%) of the outstanding stock
having ordinary voting rights or power (and excluding stock having voting rights
only upon the occurrence of a contingency unless and until such contingency
occurs and such rights may be exercised) is owned or controlled, directly or
indirectly, by such Person and/or by one or more of such Person's direct or
indirect Subsidiaries and (b) any partnership, joint venture or other similar
relationship between such Person (or any Subsidiary thereof) and any other
Person (whether pursuant to a written agreement or otherwise).
"SUPPLY AGREEMENT" means that certain Supply Agreement of even
date herewith, by and between Seller and Purchaser.
"TAXES" means (a) all foreign, federal, state, local and other
net income, gross income, gross receipts, sales, use, AD VALOREM, value added,
intangible, unitary, capital gain, transfer, franchise, profits, license, lease,
service, service use, withholding, backup withholding, payroll, employment,
estimated, excise, severance, stamp, occupation, premium, property, prohibited
transactions, windfall or excess profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or
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additional amounts with respect thereto, (b) any Liability for payment of
amounts described in clause (a) whether as a result of transferee Liability, of
being a member of an Affiliated, consolidated, combined or unitary group for any
period, or otherwise through operation of law and (c) any Liability for the
payment of amounts described in clause (a) or (b) as a result of any tax
sharing, tax indemnity or tax allocation agreement or any other express or
implied agreement to indemnify any other person for Taxes; and the term "TAX"
means any one of the foregoing Taxes.
"TAX RETURNS" means all returns, declarations, reports,
statements, information statement, forms or other documents filed or required to
be filed with respect to any Tax.
"TRANSITION SERVICES AGREEMENT" means that certain Transition
Services Agreement dated as of the Closing Date, executed by Seller and
Purchaser.
"TORT CLAIM" means any claim, on any grounds or basis, under
any statute or common law, for personal injury, wrongful death, defamation,
property damage, product liability, wrongful interference with economic
interests or other tortious conduct of a Person (whether or not Liability is
predicated on negligence, intentional or reckless conduct, breach of contract or
strict liability).
1.02 INDEX OF OTHER DEFINED TERMS. In addition to these terms
defined above, the following terms shall have the respective meanings given
thereto in the sections indicated below:
DEFINED TERM SECTION
Agreement Preamble
Assumed Contracts Section 2.01(f)
Assumed Liabilities Section 2.03
Audited Financial Information Section 5.05
Audited Purchaser Financial Statements Section 4.09(b)
Balance Sheet Date Section 4.09(b)
Cisco Section 2.06(a)
Certificate of Designation Section 2.07(c)
Closing Section 2.07
CNDA Section 5.01
Common Stock Section 4.05
Contingent Consideration Section 2.06(a)
Customer Contract Section 3.10(a)
Exchange Act Section 4.09(b)
Excluded Assets Section 2.02
Excluded Liabilities Section 2.03
Financial Information Date Section 3.05(a)
Financial Information Section 3.05(a)
Floor Section 10.2(d)
Indemnitee Section 10.2(b)
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Indemnitor Section 10.2(b)
Inventory Section 2.01(a)
Losses Section 10.2(c)
Measurement Period Section 2.06(a)
Non-Competition Period Section 5.04
Notice of Claim Section 10.3(b)
Proceedings Section 3.09
Purchase Price Section 2.06(a)
Purchased Assets Section 2.01
Purchased Intellectual Property Section 3.18(a)
Purchaser Preamble
Purchaser Approvals Section 4.03
Purchaser Indemnitees Section 10.2(a)
Required Contractual Consent Section 3.11(b)
Retained Marks Section 7.02
Sales Tax Section 8.03(e)
SEC Section 4.09(a)
SEC Documents Section 4.09(a)
Securities Act Section 3.17(a)
Seller Preamble
Seller Approvals Section 3.03
Seller Indemnitees Section 10.2(b)
Series B Preferred Stock Section 2.06(a)
ARTICLE II
PURCHASE AND SALE
2.01 PURCHASED ASSETS. Upon the terms and subject to the
conditions of this Agreement, at the Closing, Purchaser agrees to purchase from
Seller, and Seller agrees to sell, transfer, assign and deliver to Purchaser,
free and clear of all Liens other than Permitted Liens, the assets, properties
and business of the Business, of every kind and description, wherever located,
tangible or intangible, owned, held, licensed, leased or otherwise used in
connection with the Business and specified herein, as the same shall exist on
the Closing Date (collectively, the "PURCHASED ASSETS"). Without limiting the
generality of the foregoing, the Purchased Assets shall include all of Seller's
right, title and interest in, to and under:
(a) all items of inventory relating to the Business (the
"INVENTORY"), including all raw materials, finished goods and work-in-process,
as listed on SCHEDULE 2.01(a);
(b) all collateral materials, manuals, promotional materials,
sales materials, display materials and product information materials used in the
operation of the Business;
(c) all of the fixed and other tangible personal property used
in connection with the operation of the Business and all Equipment, all as
described on SCHEDULE 2.01(c);
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(d) all backlog of the Business, as set forth on
SCHEDULE 2.01(d);
(e) all board designs, tooling, fixtures, layouts, schematics
and product manufacturing documentation owned by Seller and used in connection
with the Business, as listed on SCHEDULE 2.01(e);
(f) all contracts listed on SCHEDULE 2.01(f) (the "ASSUMED
CONTRACTS"); and
(g) all Products.
2.02 EXCLUDED ASSETS. Subject to Section 2.01, Purchaser and
Seller expressly understand and agree that all assets of Seller, other than
those listed above (the "EXCLUDED ASSETS") shall be excluded from the Purchased
Assets, including but not limited to:
(a) all assets, tangible or intangible, real or personal, that
are not specifically identified in Section 2.01 and listed on the Schedules
thereto;
(b) all Contracts that are not Assumed Contracts, including
the Contracts relating to the Business listed on SCHEDULE 2.02(b);
(c) the minute books, stock ledgers, accounting records and
Tax Returns of Seller, PROVIDED that Purchaser shall have reasonable access to
and be provided with copies of all accounting records and Tax Returns relating
to the Business pursuant to Section 5.01;
(d) all cash and accounts receivable related to the Business;
(e) all employee benefit plans;
(f) all insurance contracts in effect as of the date of this
Agreement insuring the Purchased Assets; and
(g) all leasehold or ownership interests in real property or
any improvements thereon.
2.03 ASSUMPTION OF LIABILITIES. Upon the terms and subject to
the conditions of this Agreement, effective at the time of Closing, Purchaser
agrees to assume all Liabilities: (a) arising out of the Assumed Contracts; (b)
relating to any warranty or similar claims with respect to any Inventory
purchased by Purchaser hereunder; and (c) arising out of Purchaser's operation
of the Business and ownership of the Purchased Assets following the Closing,
but, in the case of this clause (c), only to the extent such Liabilities first
accrue after the Closing Date and are a result of actions taken or omitted to be
taken by Purchaser following the Closing (the "ASSUMED LIABILITIES"). The
assumption of said Liabilities by Purchaser shall not enlarge any rights of
third parties under contracts or arrangements with Seller and nothing herein
shall prevent Purchaser from contesting in good faith with any third party any
of said Liabilities. All other Liabilities are referred to herein as "EXCLUDED
LIABILITIES".
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2.04 EXCLUDED LIABILITIES. Except for those Liabilities
expressly assumed by Purchaser pursuant to Section 2.03 and Section 8.03, the
Purchaser shall not assume and shall not be liable for, and Seller shall retain
and remain solely liable for and obligated to discharge and indemnify and hold
Purchaser harmless for, all of the debts, expenses, contracts, agreements,
commitments, obligations and other Liabilities of any nature whatsoever of
Seller, the Business or the Purchased Assets through and on the Closing Date,
whether known or unknown, accrued or not accrued, fixed or contingent, including
the following:
(a) BREACHES OF CONTRACTS. Any Liability for breaches by
Seller or any Affiliates of Seller prior to the Closing Date of any instrument,
purchase order or Contract or any Liability for payments or amounts due under
any instrument, purchase order or Contract on or prior to the Closing Date;
(b) TAXES. Except as otherwise provided in Section 8.03, any
Liability for Taxes attributable to or imposed upon Seller or any Affiliates of
Seller, or attributable to or imposed upon the Business or the Purchased Assets
for any period (or portion thereof) through the Closing Date;
(c) INDEBTEDNESS. Any Liability for or in respect of any loan
or other indebtedness for money borrowed of Seller or any Affiliates or
Associates of Seller on or prior to the Closing Date; and
(d) EMPLOYEE OBLIGATIONS. Any Liability that may arise or have
arisen from the employment of employees with, or the termination of their
employment by, Seller on or prior to the Closing Date, including, without
limitation, accrued vacation pay, holiday pay, sick pay, bonuses earned, and/or
pensions or profit sharing.
2.05 ASSIGNMENT OF CONTRACTS AND RIGHTS. Anything in this
Agreement or any other Acquisition Document to the contrary notwithstanding,
this Agreement shall not constitute an agreement to assign any Purchased Asset
or any claim or right or any benefit arising thereunder or resulting therefrom
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 of Purchaser or Seller thereunder.
2.06 PURCHASE PRICE.
(a) The aggregate purchase price payable by Purchaser to
Seller for the Purchased Assets (the "PURCHASE PRICE") shall consist of: (i)
sixty thousand (60,000) shares of Purchaser's Series B Preferred Stock, having
rights, preferences and privileges as set forth in the Certificate of
Designation of Series B Preferred Stock attached as EXHIBIT 2.06A to this
Agreement (the "SERIES B PREFERRED STOCK"); (ii) cash in the amount of two
million dollars ($2,000,000); (iii) a subordinated promissory note in the
principal amount of four million dollars ($4,000,000), secured by the collateral
set forth in Exhibit A to the Security Agreement; and (iv) a future payment of
up to four million five hundred thousand dollars ($4,500,000) in cash (the
"CONTINGENT CONSIDERATION"), if Cisco Corporation ("CISCO") orders at least one
hundred thousand (100,000) flash cards for shipment during the period, net of
any quantities originally scheduled for shipment during the Measurement Period
cancelled by Cisco for its convenience, between the one hundred
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eighty-fifth (185th) day and the three hundred sixty-fifth (365th) day after the
Closing Date (the "MEASUREMENT PERIOD").
(b) The Contingent Consideration shall be payable in cash
within thirty (30) days after the one-year anniversary of the Closing Date. The
Contingent Consideration shall be payable based upon flash cards ordered for
shipment during the Measurement Period. If the quantity of flash cards ordered
for shipment during the Measurement Period is less than thirty thousand
(30,000), no Contingent Consideration shall be payable. If at least thirty
thousand (30,000) flash cards are ordered for shipment during the Measurement
Period then the amount of the Contingent Consideration payable shall be equal to
four million five hundred thousand dollars ($4,500,000) multiplied by a
fraction, the numerator of which shall be the number of flash cards over thirty
thousand (30,000) actually ordered for shipment and the denominator shall be
seventy thousand (70,000).
(c) Seller and Purchaser have agreed that the Business should
be transferred to Purchaser with a "Normal Inventory" which the parties have
agreed is an inventory as defined below with a value of approximately Five
Million Two Hundred Ten Thousand Dollars ($5,210,000) and have agreed that the
Purchase Price should be adjusted for certain fluctuations in the Normal
Inventory. For purposes of this paragraph 2.06(c), "NORMAL INVENTORY" means all
finished goods related to the Business owned by Seller at Seller's facilities,
any finished goods in transit between XeTel and Seller for which Seller has paid
XeTel, any finished goods at XeTel for which Seller has paid XeTel, and any
components related to the Business and owned by Seller and consigned to XeTel at
XeTel's facilities or in transit from Seller to XeTel, valued using the same
valuation methods as Seller used at the end of September 1999, including
reserves, costing, percentage complete for work-in-process and other standards.
The term "Normal Inventory" does not include raw materials, work-in-process or
finished goods which Purchaser would have to pay a third party for after the
Closing Date. Commencing on the Termination Date, as defined in the Transition
Services Agreement, Purchaser shall perform a physical inventory and test of the
Normal Inventory and shall allow a representative of Seller to be present at all
times. If it is determined (with such determination to be made no later than
ninety (90) days following the Termination Date) that the actual value of the
Normal Inventory as of the Closing Date is less than Five Million Sixty Thousand
Dollars ($5,060,000), then Seller shall, within thirty (30) days, pay the
difference between the actual value of the Normal Inventory and Five Million
Sixty Thousand Dollars ($5,060,000) to Purchaser; PROVIDED, HOWEVER, that if the
actual value of the Normal Inventory as of the Closing Date is less than Three
Million Sixty Thousand Dollars ($3,060,000), at Seller's option, (i) Seller
shall pay Two Million Dollars ($2,000,000) to Purchaser, and (ii) Seller and
Purchaser shall amend the Note to reduce Purchaser's obligations thereunder by
the difference between the actual value of the Normal Inventory and Three
Million Sixty Thousand Dollars ($3,060,000). If it is determined that the actual
value of the Normal Inventory as of the Closing Date is greater than Five
Million Three Hundred Sixty Thousand Dollars ($5,360,000), then Purchaser shall,
within thirty (30) days, pay the difference between the actual value of the
Normal Inventory and Five Million Three Hundred Sixty Thousand Dollars
($5,360,000) to Seller. No payment shall be made by either party if the actual
value of the Normal Inventory as of the Closing Date is between Five Million
Sixty Thousand Dollars ($5,060,000) and Five Million Three Hundred Sixty
Thousand Dollars ($5,360,000). Any dispute concerning the physical inventory,
9
testing methods or valuation procedures shall be resolved in accordance with the
provisions of this Agreement. The provisions of this Section 2.06(c) shall
provide the exclusive remedy with respect to fluctuations in the value of the
Normal Inventory.
2.07 CLOSING. The closing of the purchase and sale of the
Purchased Assets hereunder (the "CLOSING") shall take place at the offices of
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, as soon
as possible, but in no event later than five (5) days after satisfaction of the
conditions set forth in Article IX, or at such other time or place as the
parties may agree. At the Closing:
(a) Seller shall deliver to Purchaser the ▇▇▇▇ of Sale and
such other endorsements, consents, assignments, instruments of conveyance and
transfer documents (including the Assignment and Assumption Agreement) as
Purchaser may reasonably request to vest in Purchaser all right, title and
interest in, to and under the Purchased Assets and the Business. Simultaneously
with the consummation of the transactions contemplated hereby, Seller, through
its officers, agents and employees, will put Purchaser into full possession and
enjoyment of all tangible Purchased Assets, terms FOB Seller. Seller shall pay
all costs for packing the Purchased Assets for shipping to the Purchaser's
headquarters in Wilmington, Massachusetts. Purchaser shall pay all costs for
shipping the Purchased Assets to the Purchaser's headquarters in Wilmington,
Massachusetts.
(b) Seller and Purchaser shall execute and deliver the
Assignment and Assumption Agreement;
(c) Purchaser shall file the Certificate of Designation of
Series B Preferred Stock attached as EXHIBIT 2.06A to this Agreement (the
"CERTIFICATE OF DESIGNATION") with the Secretary of State of the State of
Delaware;
(d) Seller and Purchaser shall execute and deliver the Rights
Agreement, the Supply Agreement and the Transition Services Agreement; and
(e) Purchaser shall pay the Purchase Price to Seller, through
a wire transfer of the cash portion of the Purchase Price (other than the
Contingent Consideration), delivery of a certificate representing the Series B
Preferred Stock, and delivery of the Note, the Security Agreement and
appropriate UCC-1 financing statements.
2.08 EMPLOYEE MATTERS. No employees of Seller will be
transferred to Purchaser in connection with the transactions contemplated by
this Agreement and the Acquisition Documents.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement and
to consummate the transactions contemplated herein, Seller represents and
warrants to Purchaser as follows:
10
3.01 EXISTENCE AND GOOD STANDING. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all corporate power and authority required to carry on its
business as now conducted and to own and operate the businesses as now owned and
operated by it (including the Business). Seller is qualified to conduct business
in each state or states where the failure to be so qualified, whether singly or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect. Copies of Seller's Certificate of Incorporation as amended to date,
certified by the Secretary of State of the State of Delaware and of Seller's
by-laws as amended to date, certified by Seller's Assistant Secretary, have been
delivered to Purchaser and all such copies are complete and correct and no
amendments thereto are pending. Seller is not in violation of any term of its
Certificate of Incorporation or by-laws.
3.02 AUTHORIZATION AND ENFORCEABILITY. The execution, delivery
and performance by Seller of this Agreement and the other Acquisition Documents,
and the consummation of the transactions contemplated hereby and thereby, are
within Seller's powers and have been duly authorized by all necessary corporate
action on its part. This Agreement, the Rights Agreement and the Supply
Agreement have been and, when executed at the Closing, the other Acquisition
Documents will have been, duly and validly executed by Seller and, assuming the
due execution and delivery of this Agreement and the other Acquisition Documents
to which it is a party by Purchaser, as applicable, will constitute legal, valid
and binding obligations of Seller, enforceable against Seller in accordance with
their respective terms, subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally or to general principles of equity.
3.03 GOVERNMENTAL OR OTHER AUTHORIZATION. Except as set forth
on SCHEDULE 3.03, the execution, delivery and performance by Seller of this
Agreement and the other Acquisition Documents, and the consummation by it of the
transactions contemplated hereby and thereby, require no Governmental Approval
from any Governmental Authority or any consent, waiver or approval of any other
Person (such required consents and approvals, the "SELLER APPROVALS").
3.04 NON-CONTRAVENTION. Except as set forth on SCHEDULE 3.04,
the execution, delivery and performance of this Agreement and the other
Acquisition Documents by Seller, and the consummation of the transactions
contemplated hereby and thereby, do not and will not (a) contravene or conflict
with the certificate of incorporation or bylaws of Seller, (b) assuming receipt
of the Seller Approvals that are Governmental Approvals, contravene or conflict
with or constitute a material violation of any provision of any Applicable Law
binding upon or applicable to Seller, the Purchased Assets or the Business or
(c) assuming receipt of the Seller Approvals that are not Governmental Approvals
and of the Required Contractual Consents, constitute a default under, give rise
to any right of termination, cancellation, modification, or acceleration of, or
to a loss of any material benefit to which the Business is entitled, or result
in the creation or imposition of any Lien on the Purchased Assets (other than
Permitted Liens), or any permit relating to the Business or by which Seller, any
of the Purchased Assets or the Business may be bound or materially affected.
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3.05 FINANCIAL INFORMATION; UNDISCLOSED LIABILITIES; BOOKS AND
RECORDS.
(a) Attached hereto as EXHIBIT 3.05 is financial data and
other financial information of the Business as of December 25, 1999 (the
"FINANCIAL INFORMATION DATE") and for the twenty-four (24) month period then
ended (collectively, the "FINANCIAL INFORMATION"). The Financial Information has
been prepared internally by Seller and has not been audited by any independent
certified public accountants or auditors.
(b) The Financial Information has been prepared based on the
books and records of Seller and includes items accounted for in accordance with
GAAP consistent with the methods used for the purpose of preparing the
accounting for such items in connection with the Seller's financial statements
for prior periods and presents fairly the financial condition and results of
operations of the Business as of the dates indicated or for the periods
indicated.
3.06 ABSENCE OF CERTAIN CHANGES. Except as set forth on
SCHEDULE 3.06, since the Financial Information Date, the Business has been
conducted in the ordinary course consistent with past practice, and there has
not been:
(a) any event, occurrence, state of circumstances or facts or
change in the Business that has had or that may be reasonably expected to have,
either alone or together, a Material Adverse Effect on the Business;
(b) any change in any Liabilities of Seller that has had, or
that may be reasonably expected to have, a Material Adverse Effect on the
Business;
(c) any creation, assumption or sufferance of (whether by
action or omission) the existence of any Lien on any of the Purchased Assets,
other than Permitted Liens;
(d) any waiver, amendment, termination or cancellation of any
Assumed Contract or any relinquishment of any material rights thereunder by
Seller, other than, in each such case, actions taken in the ordinary course of
business consistent with past practice that are not material with respect to any
such Assumed Contract;
(e) any change by Seller in its accounting principles, methods
or practices or in the manner it keeps its accounting books and records relating
to the Business, except any such change required by a change in GAAP;
(f) any sale, assignment, transfer, lease or other disposition
of or agreement to sell, assign, transfer, lease or otherwise dispose of, any
Purchased Asset, other than sales of Inventory in the ordinary course of
business consistent with past practice;
(g) any material damage, destruction or other casualty loss
with respect to any Purchased Asset or any other material asset or property
owned, leased or otherwise used by Seller in the Business, whether or not
covered by insurance;
12
(h) any adverse business or regulatory condition presently
existing or threatened in connection with the Business or the Purchased Assets;
(i) any write-down or write-up of the value of any inventory
of the Business or of the Purchased Assets;
(j) any change in Seller's pricing, delivery or other terms to
any customer of Products;
(k) any material change or amendment to, or any waiver of any
material right under a material contract, license or arrangement which the
Business or the Purchased Assets is bound by or subject to, except for changes,
amendments or waivers that are expressly provided for or disclosed in this
Agreement;
(l) any other Business-related transaction entered into by
Seller other than transactions in the ordinary course of business; or
(m) any agreement or understanding, whether in writing or
otherwise, for Seller to take any of the actions specified in paragraphs (a)
through (l) above.
3.07 PERSONAL PROPERTY. Seller has good and marketable title
to all of its tangible personal property and assets that are Purchased Assets.
None of such personal property or assets is subject to any mortgage, pledge,
lien, conditional sale agreement, security agreement, encumbrance or other
charge. Except for inventory and as otherwise specified on SCHEDULE 2.01(c), all
of such personal property and assets are in good operating condition and repair
(subject, only in the case of the property listed on SCHEDULES 2.01(c) and
2.01(e), to normal wear and tear), are adequate for the uses to which they are
put. Other than inventory, no material personal properties or assets necessary
for the conduct of the Business in substantially the same manner as the Business
has heretofore been conducted are in need of replacement, maintenance or repair
except, only in the case of the property listed on SCHEDULES 2.01(c) and
2.01(e), for routine replacement, maintenance and repair. SCHEDULE 2.01(c) sets
forth a correct and complete list of all Equipment owned by Seller and used in
connection with the Business.
3.08 INVENTORIES. SCHEDULE 2.01(a) sets forth all inventories
of raw materials, work-in-process and finished goods included in the Purchased
Assets as of the Closing Date. The value at which Inventories are carried in the
Financial Information reflect the normal inventory valuation policy of Seller in
accordance with GAAP and on a basis consistent with that of preceding periods.
All finished goods inventory is free from defects, is in good operating
condition and meets all applicable product specifications, requirements and
performance criteria. Except as disclosed in SCHEDULE 2.01(a), said inventories
do not include items which are below standard quality or have become obsolete,
slow moving or unsaleable (except at prices less than cost) through regular
distribution channels in the ordinary course of the Business as conducted by
Seller. Since October 31, 1999, no inventory items have been sold or disposed of
except through sales in the ordinary course of business.
13
3.09 LITIGATION. There are no actions, suits, claims, charges,
hearings, arbitrations, audits, proceedings (public or private) or, to the
Knowledge of Seller, investigations (collectively, "PROCEEDINGS") that have been
brought or initiated by or against any Governmental Authority or any other
Person, or are pending or, to the Knowledge of Seller, threatened (a) by or
against Seller relating to any of the Purchased Assets or the Business or (b)
that seeks to prevent, enjoin, alter or delay the transactions contemplated by
this Agreement or any of the other Acquisition Documents. There are no existing
orders, judgments or decrees of any Governmental Authority relating to the
Business or any of the Purchased Assets.
3.10 CONTRACTS.
(a) SCHEDULE 3.10 lists each contract, agreement, lease,
license, or commitment (other than contracts with distributors of the products),
written or oral, including, without limitation, Seller's contracts with its
customers (the "CUSTOMER CONTRACTS"), requiring payments in excess of $25,000
annually and related exclusively to the Business to which Seller is a party or
by which the assets of the Business are bound. True and complete copies of each
of such contracts have been delivered to Purchaser.
(b) Each Assumed Contract is a legal, valid and binding
obligation of Seller and, to the Knowledge of Seller, each other Person who is a
party thereto, enforceable against Seller and each such Person in accordance
with its terms, and neither Seller nor, to the Knowledge of Seller, any other
party thereto is in material default thereunder.
(c) Except for sales where the terms and conditions are
determined to be made, in whole or in part, upon the terms and conditions
contained in a customer's purchase order and supporting documents, all sales to
be made by Purchaser with respect to the Business pursuant to the Assumed
Contracts for any period beginning after July 1, 2000 will be made pursuant to
standard terms and conditions set forth in the Form of Customer Contract
attached to this Agreement as EXHIBIT 3.10 without material modification as to
assignability, return rights, discounts, volume incentives or other material
modifications.
3.11 REQUIRED CONSENTS.
(a) SCHEDULE 3.11(a) sets forth all approvals, authorizations,
certificates, consents, licenses, orders and permits and other similar
authorizations of all Governmental Authorities (and all other Persons) necessary
for the operation of the Business in substantially the same manner as currently
operated by Seller. Seller holds all material Permits and approvals of
Governmental Authorities necessary for the lawful conduct of the Business.
(b) SCHEDULE 3.11(b) lists each contract with respect to which
the consent of the other party or parties thereto must be obtained by Seller by
virtue of the execution and delivery of this Agreement and the other Acquisition
Documents, or the consummation of the transactions contemplated hereby and
thereby to avoid the loss of any material benefit under, or any material
modification to, any such contract ("REQUIRED CONTRACTUAL CONSENT").
14
3.12 COMPLIANCE WITH APPLICABLE LAWS. Seller has no Knowledge
that it has not complied in all material respects with any Applicable Laws
relating to the Business or the Purchased Assets, except where the failure to
comply would not, singly or in the aggregate, have a Material Adverse Effect on
the Business. Seller is not subject to any order, writ, injunction or decree of
any Governmental Authority relating to the Business or the Purchased Assets.
3.13 ADVISORY FEES. There is no investment banker, broker,
finder or other intermediary or advisor that has been retained by or is
authorized to act on behalf of Seller, who might be entitled to any fee,
commission or reimbursement of expenses from Seller, or any Affiliate or
Associate of Seller, upon consummation of the transactions contemplated by this
Agreement.
3.14 TAX MATTERS. Seller has filed on a timely basis all Tax
Returns required to have been filed by it with respect to the Business or the
Purchased Assets and has paid on a timely basis all Taxes required to be shown
thereon as due. Seller has not received any notice that it is or may be subject
to additional Tax with respect to the Business or the Purchased Assets There are
no Liens for Taxes (other than for current Taxes not yet due and payable) upon
any of the Purchased Assets.
3.15 PRODUCT WARRANTIES. SCHEDULE 3.15 sets forth copies of
Seller's standard Product warranties currently in effect with respect to the
Products. To the Knowledge of Seller, no Tort Claims, claims with respect to
Product warranties or facts upon which a claim of such nature could be based
exist or are threatened.
3.16 CUSTOMERS. SCHEDULE 3.16 sets forth all customers of the
Business as conducted by Seller. The accounts of all such customers with Seller
are in good standing and all Customer Contracts are valid contracts entered into
in the ordinary course of business. To the Knowledge of Seller, Seller has not
received written notice from any of the customers listed on SCHEDULE 3.16
indicating that they intend to stop purchasing flash cards from Seller. Seller
has not been paid nor does it hold deposits relating to any Customer Contract.
3.17 INVESTMENT REPRESENTATIONS.
(a) PURCHASE FOR OWN ACCOUNT. The Series B Preferred Stock is
being acquired for investment for Seller's own account, not as a nominee or
agent, and not with a view to the public resale or distribution thereof within
the meaning of the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and Seller has no present intention of selling, granting any participation in,
or otherwise distributing the same. Seller also represents that it has not been
formed for the specific purpose of acquiring the Series B Preferred Stock.
(b) INVESTMENT EXPERIENCE. Seller understands that the
acquisition of the Series B Preferred Stock involves substantial risk. Seller
has experience as an investor in securities of companies and acknowledges that
it is able to fend for itself, can bear the economic risk of its investment in
the Series B Preferred Stock and has such knowledge and experience in financial
or business matters that it is capable of evaluating the merits and risks of
this investment in the Series B Preferred Stock and protecting its own interests
in connection with this investment.
15
(c) ACCREDITED INVESTOR STATUS. Seller is an "accredited
investor" within the meaning of Regulation D promulgated under the Securities
Act.
(d) RESTRICTED SECURITIES. Seller understands that the Series
B Preferred Stock and the Common Stock issued upon conversion thereof are
characterized as "restricted securities" under the Securities Act, inasmuch as
they are being acquired from Purchaser in a transaction not involving a public
offering and that under the Securities Act and applicable regulations thereunder
such securities may be resold without registration under the Securities Act only
in certain limited circumstances. Seller is familiar with Rule 144 of the
Securities Act, as presently in effect, and understands the resale limitations
imposed thereby and by the Securities Act.
(e) LEGENDS. Seller agrees that the certificates for the
Series B Preferred Stock and the Common Stock issuable upon conversion thereof
may bear a legend in substantially the following form:
"The shares represented by this certificate
have not been registered under the Securities Act of 1933 or
with any state securities commission, and may not be
transferred or disposed of by the holder in the absence of a
registration statement which is effective under the Securities
Act of 1933 and applicable state laws and rules, or, unless,
immediately prior to the time set for transfer, such transfer
may be effected without violation of the Securities Act of
1933 and other applicable state laws and rules."
In addition, Seller agrees that Purchaser may place stop
transfer orders with its transfer agents with respect to such certificates. The
appropriate portion of the legend and the stop transfer orders will be removed
promptly upon delivery to Purchaser of such satisfactory evidence as reasonably
may be reasonably required by Purchaser that such legend or stop orders are not
required to ensure compliance with the Securities Act.
3.18 INTELLECTUAL PROPERTY.
(a) OWNERSHIP OR RIGHT TO USE. Except as set forth on Schedule
3.18(a), Seller has sole title to and owns the items listed on SCHEDULE 2.01(e)
to this Agreement (the "PURCHASED INTELLECTUAL PROPERTY").
(b) NO INFRINGEMENT. Seller's flash products division
operations counsel has not received any written communications alleging that the
Purchased Intellectual Property violates or infringes any Intellectual Property
of any other Person.
3.19 LICENSE AGREEMENTS. SCHEDULE 3.19 sets forth, to the best
of Seller's Knowledge, all parties to whom Seller has granted a license to any
Purchased Intellectual Property owned by Seller that is specific to the
Business. True and complete copies of each of the license agreements referenced
in this Section 3.19 have been provided to Purchaser.
16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated herein, Purchaser hereby represents and
warrants to Seller as follows:
4.01 EXISTENCE AND GOOD STANDING. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all corporate power and authority required to carry on
its business as now conducted and to own and operate its businesses as now owned
and operated by it. Purchaser is qualified to conduct business in each state or
states where the failure to be so qualified, whether singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. Purchaser has
heretofore delivered to Seller complete and correct copies of its certificate of
incorporation and bylaws as currently in effect.
4.02 AUTHORIZATION AND ENFORCEABILITY. The execution, delivery
and performance by Purchaser of this Agreement and the other Acquisition
Documents, and the consummation of the transactions contemplated hereby and
thereby, are within Purchaser's powers and have been duly authorized by all
necessary corporate action on its part. This Agreement, the Rights Agreement and
the Supply Agreement have been and, when executed at the Closing, the other
Acquisition Documents to which it is a party will have been, duly and validly
executed by Purchaser, and, assuming the due execution and delivery of this
Agreement and the other Acquisition Documents by Seller, will constitute legal,
valid and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their respective terms, subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally or to general principles of
equity.
4.03 GOVERNMENTAL OR OTHER AUTHORIZATION. Except as set forth
on SCHEDULE 4.03, the execution, delivery and performance by Purchaser of this
Agreement and the other Acquisition Documents to which it is a party, and the
consummation by it, respectively, of the transactions contemplated hereby and
thereby, require no Governmental Approval from any Governmental Authority or any
consent, waiver or approval of any other Person (such required consents and
approvals, the "PURCHASER APPROVALS").
4.04 NON-CONTRAVENTION. Except as set forth on SCHEDULE 4.04,
the execution, delivery and performance of this Agreement and the other
Acquisition Documents by Purchaser, where applicable, and the consummation of
the transactions contemplated hereby and thereby, do not and will not (a)
contravene or conflict with the certificate of incorporation or bylaws of
Purchaser, (b) assuming receipt of the Purchaser Approvals that are Governmental
Approvals, contravene or conflict with or constitute a material violation of any
provision of any Applicable Law binding upon or applicable to Purchaser,
respectively, or (c) assuming receipt of the Purchaser Approvals that are not
Governmental Approvals, contravene or constitute a default under any material
agreement to which Purchaser is a party.
17
4.05 CAPITALIZATION. The capitalization of Purchaser, without
giving effect to the transactions contemplated by this Agreement, is as follows.
The authorized stock of Purchaser consists only of 6,250,000 shares of Common
Stock, par value $.01 per share, (the "COMMON STOCK") of which 3,167,529 shares
were issued and outstanding as of December 15, 1999, and 1,000,000 shares of
preferred stock, par value $.01 per share, none of which is issued or
outstanding on the date hereof. All such shares of Common Stock have been duly
authorized, and all such issued and outstanding shares of Common Stock have been
validly issued, are fully paid and nonassessable and are free and clear of all
liens, claims and encumbrances, other than any liens, claims or encumbrances
created by or imposed upon the holders thereof. As of the date hereof, Purchaser
also has reserved 1,787,500 shares of Common Stock for issuance upon exercise of
options or other stock awards granted to officers, directors, employees or
independent contractors or Affiliates of Purchaser under Purchaser's employee
benefit or incentive plans. As of December 15, 1999, of the shares of Common
Stock reserved for issuance upon exercise of options, 1,311,974 shares remained
subject to outstanding options and 475,526 shares were reserved for future
grants. All shares of Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. Except as disclosed in SEC Documents, there are no other equity
securities, options, warrants, calls, rights, commitments or agreements of any
character to which Purchaser is a party or by which it is bound obligating
Purchaser to issue, deliver, sell, repurchase or redeem, or cause to be issued,
delivered, sold, repurchased or redeemed, any shares of the capital stock of
Purchaser or obligating Purchaser to grant, extend or enter into any such equity
security, option, warrant, call, right, commitment or agreement.
4.06 VALID ISSUANCE OF STOCK.
(a) VALID ISSUANCE. The Series B Preferred Stock will be,
upon delivery of the consideration specified herein by Seller, duly authorized,
validly issued, fully paid and non-assessable. The Common Stock issuable upon
conversion of the Series B Preferred Stock has been duly reserved for issuance
and, when issued upon conversion of the Series B Preferred Stock will be duly
authorized, validly issued, fully paid and non-assessable.
(b) COMPLIANCE WITH SECURITIES LAWS. Assuming the
correctness of the representations made by Seller in Section 3.17 hereof, the
Series B Preferred Stock will be issued to Seller in compliance with applicable
exemptions from (i) the registration and prospectus delivery requirements of the
Securities Act and (ii) the registration and qualification requirements of all
applicable securities laws of the states of the United States.
4.07 LITIGATION. Except as disclosed in SEC Documents or as
set forth on SCHEDULE 4.07, there are no Proceedings pending or, to Purchaser's
Knowledge, threatened: (a) against Purchaser, its respective activities,
properties or assets, that Purchaser believes is reasonably likely to have a
Material Adverse Effect; or (b) that seeks to prevent, enjoin, alter or delay
the transactions contemplated by this Agreement. Neither Purchaser nor any of
its Subsidiaries is a party to or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality.
18
4.08 COMPLIANCE WITH APPLICABLE LAWS. To Purchaser's
Knowledge, it has complied in all material respects with any Applicable Laws
relating to its business and properties, except where the failure to comply
would not, singly or in the aggregate, have a Material Adverse Effect. Except as
disclosed in SEC Documents, Purchaser is not subject to any order, writ,
injunction or decree of any Governmental Authority relating to its business or
properties.
4.09 SEC DOCUMENTS.
(a) REPORTS. Purchaser has furnished to Seller prior to
the date hereof a complete and correct list of all registration statements,
reports and proxy statements filed by Purchaser with the Securities and Exchange
Commission (the "SEC") on or after March 31, 1999 (Purchaser's Annual Report on
Form 10-K for the fiscal year ended March 31, 1999, its Quarterly Reports on
Form 10-Q for the quarterly periods ended June 26, 1999 and September 25, 1999
and all such other registration statements, reports and proxy statements are
collectively referred to herein as the "SEC DOCUMENTS"). Each of the SEC
Documents, as of the respective date thereof (or if amended or superseded by a
filing prior to the Closing Date, then on the date of such filing), did not, and
each of the registration statements, reports and proxy statements filed by
Purchaser with the SEC after the date hereof and prior to the Closing will not,
as of the date thereof (or if amended or superseded by a filing after the date
of this Agreement, then on the date of such filing), contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. Purchaser is not a party to any material
contract, agreement or other arrangement that was required to have been filed as
an exhibit to the SEC Documents that was not so filed.
(b) FINANCIAL STATEMENTS. Purchaser has provided Seller
with copies of its audited financial statements (the "AUDITED PURCHASER
FINANCIAL STATEMENTS") for the fiscal year ended March 31, 1999, and its
unaudited financial statements for the six-month period ended September 25, 1999
(the "BALANCE SHEET DATE"). Since the Balance Sheet Date, Purchaser has duly
filed with the SEC all registration statements, reports and proxy statements
required to be filed by it under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), and the Securities Act. The audited and unaudited
consolidated financial statements of Purchaser included in the SEC Documents
filed prior to the date hereof fairly present, in conformity with GAAP (except,
in the case of the Form 10-Q's, as may otherwise be permitted by Form 10-Q)
applied on a consistent basis (except as otherwise may be stated in the notes
thereto), the consolidated financial position of Purchaser and its consolidated
Subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject to normal year-end
audit adjustments in the case of unaudited interim financial statements).
4.10 ABSENCE OF CERTAIN CHANGES SINCE BALANCE SHEET DATE.
Except as set forth on SCHEDULE 4.10, since the Balance Sheet Date, the business
and operations of Purchaser have been conducted in the ordinary course
consistent with past practice, and there has not been:
(a) any declaration, setting aside or payment of any
dividend or other distribution of the assets of Purchaser with respect to any
shares of capital stock of Purchaser or
19
any repurchase, redemption or other acquisition by Purchaser or any Subsidiary
of any outstanding shares of Purchaser's capital stock;
(b) any damage, destruction or loss, whether or not
covered by insurance, except for such occurrences, individually and
collectively, that are not material to Purchaser;
(c) any waiver by Purchaser of a valuable right or of a
material debt owed to it, except for such waivers, individually and
collectively, that are not material;
(d) any material change or amendment to, or any waiver
of any material right under a material contract, license or arrangement which
Purchaser or any of its assets or properties is bound by or subject to, except
for changes, amendments or waivers that are expressly provided for or disclosed
in this Agreement;
(e) any change by Purchaser in its accounting principles,
methods or practices or in the manner it keeps its accounting books and records,
except any such change required by a change in GAAP; or
(f) any other event or condition of any character, except
for such events and conditions that have not resulted, and could not reasonably
be expected to result, either individually or collectively, in a Material
Adverse Effect.
4.11 INTELLECTUAL PROPERTY.
(a) OWNERSHIP OR RIGHT TO USE. Purchaser has sole title
to and owns, or is licensed or otherwise possesses legally enforceable rights to
use, all patents or patent applications, software, know-how, registered or
unregistered trademarks and service marks and any applications therefor,
registered or unregistered copyrights, trade names, and any applications
therefor, trade secrets or other confidential or proprietary information
necessary to enable Purchaser and its Subsidiaries to carry on their respective
businesses as currently conducted, except where any deficiency, or group of
deficiencies, would not have a Material Adverse Effect.
(b) NO INFRINGEMENT. Purchaser's general counsel has not
received any written communications alleging that Purchaser (or any of its
employees or consultants) has violated or infringed, any Intellectual Property
of any other Person.
4.12 ADVISORY FEES. There is no investment banker, broker,
finder or other intermediary or advisor that has been retained by or is
authorized to act on behalf of Purchaser, who might be entitled to any fee,
commission or reimbursement of expenses from Purchaser or its Affiliates or
Associates, upon consummation of the transactions contemplated by this
Agreement.
4.13 PURCHASER RIGHTS AGREEMENT. Purchaser has taken all
necessary action to ensure that neither its entering into this Agreement, nor
the consummation of the transactions contemplated hereby, will cause the
"Rights" to become exercisable, cause Seller to become an "Acquiring Person" or
cause there to occur a "Triggering Event" or a "Distribution Date" (as such
terms are defined in Purchaser's Stockholder Rights Agreement dated as of March
16, 1999). The
20
Board of Directors of Purchaser has taken all actions required to be taken by it
so that the restrictions contained in Section 203 of the Delaware General
Corporation Law or other similar statute or regulation of any other jurisdiction
applicable to the transactions contemplated hereby, will not apply to the
execution, delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.
ARTICLE V
COVENANTS OF SELLER
5.01 ACCESS TO INFORMATION. Seller agrees to provide to
Purchaser and its authorized agents (including its attorneys and accountants and
auditors) reasonable access to the offices, properties, books and records of
Seller relating to the Business and the Purchased Assets, upon reasonable prior
notice, in order to conduct a review of the Purchased Assets and the Business.
Seller shall, and shall cause its employees, agents and representatives to,
reasonably cooperate with such examination and shall make full and complete
disclosure to Purchaser and their representatives of all facts relating to the
Purchased Assets and the Business, including the business, operations,
prospects, condition (financial or otherwise) of the Business. Each of the
parties hereto will hold, and will cause its consultants and advisers to hold,
in confidence all documents and information furnished to it by or on behalf of
another party to this Agreement in connection with the transactions contemplated
by this Agreement pursuant to the terms of that certain Corporate Nondisclosure
Agreement Number 4433777 entered into between Seller and Purchaser dated
September 30, 1999 (the "CNDA").
5.02 TRANSITION; CUSTOMER INTRODUCTIONS. As soon as possible
after the execution of this Agreement, Seller shall, subject to receipt of any
required consent of the applicable customer, accompany representatives of
Purchaser on joint visits to the five most important flash memory card customers
of the Business for the purpose of explaining the proposed transfer of ownership
of the Business.
5.03 POST-CLOSING TRANSITION SERVICES. Seller shall provide
certain services to Purchaser after the Closing Date as set forth in the
Transition Services Agreement.
5.04 NON-COMPETITION. As a material inducement and
consideration for Purchaser to enter into the transactions contemplated in the
Purchase Agreement and the other Acquisition Documents and the agreements made
therein, Seller agrees that for a period of three (3) years following the
Closing Date (the "NON-COMPETITION PERIOD"), neither Seller nor its Subsidiaries
shall manufacture, distribute or sell PCMCIA or Miniature flash memory cards.
Notwithstanding the foregoing, Seller may make acquisitions of Persons that may
compete with the Business so long as the revenues from competing activities are
less than twenty percent (20%) of the reported revenues of such Person for its
most recently completed fiscal year.
5.05 AUDITED FINANCIAL INFORMATION. Within sixty (60) days
after the Closing Date and at Seller's cost and expense up to $55,000, Seller
shall prepare and deliver, or cause to be prepared and delivered, to Purchaser
the audited financial information, including a manually signed accountants'
report from nationally recognized independent certified public accountants,
required
21
to be filed by Purchaser with the SEC pursuant to Item 7 of Form 8-K (the
"AUDITED FINANCIAL INFORMATION"). The Audited Financial Information will be
prepared based on the books and records of Seller and will include items
accounted for in accordance with GAAP consistent with the methods used for the
purpose of preparing the accounting for such items in connection with the
Seller's financial statements for prior periods and will present fairly the
financial condition and results of operations of the Business as of the dates
indicated or for the periods indicated.
5.06 FUTURE LICENSES. From and after the Closing Date,
Seller shall not grant any license to any Purchased Intellectual Property.
ARTICLE VI
SELLER LICENSE
6.01 GRANT OF LICENSE. Seller hereby grants to Purchaser,
subject to existing licenses of Seller and its Subsidiaries, a non-exclusive,
worldwide, fully paid-up, perpetual (except upon a material breach of the
provisions of this Article VI) license to any and all Intellectual Property
owned by Seller solely and only to the extent necessary to make, have made, use,
sell, offer to sell and import Products. Purchaser may not grant sublicenses
hereunder. The license granted is assignable only in connection the sale, by
merger, sale of assets or similar transaction, of the entire business of
Purchaser and only with the written consent of Seller, which consent shall not
be unreasonably withheld.
6.02 NO OTHER RIGHTS. No other rights are granted hereunder,
by implication, estoppel, statute or otherwise, except as expressly provided
herein. Specifically, (a) except as expressly provided herein, nothing in the
license granted hereunder or otherwise contained in this Agreement shall
expressly or by implication, estoppel or otherwise give Purchaser any right to
license Seller's Intellectual Property to others and (b) no license or immunity
is granted by Seller directly or by implication, estoppel or otherwise to any
third parties acquiring items from Purchaser for the combination of Products
with other items or for the use of such combination.
6.03 NO IMPLIED OBLIGATION. Nothing contained in this Article
VI shall be construed as: (a) a warranty or representation by Seller as to the
validity, enforceability or scope of any class or type of patents; (b) a
warranty or representation that any manufacture, sale, lease, use or other
disposition of Products hereunder will be free from infringement of any patents
or other intellectual property rights of others; (c) an agreement to bring or
prosecute proceedings against third parties for infringement or misappropriation
of any Intellectual Property rights or conferring any right to bring or
prosecute proceedings against third parties for infringement or misappropriation
of any Intellectual Property rights; (d) conferring any right to use in
advertising, publicity, or otherwise, any trademark, trade name or names, or any
contraction, abbreviation or simulation thereof, of Seller; (e) an obligation to
furnish any technical information or know-how; or (f) requiring Seller to defend
any proceeding brought by a third party challenging or concerning the validity
of any licensed Intellectual Property.
6.04 NO IMPLIED WARRANTIES OR CONSEQUENTIAL DAMAGES.
NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, PURCHASER
HEREBY
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DISCLAIMS ANY IMPLIED WARRANTIES WITH RESPECT TO THE LICENSED INTELLECTUAL
PROPERTY HEREUNDER, INCLUDING WITHOUT LIMITATION, THE WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. IN NO
EVENT SHALL SELLER BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL,
PUNITIVE, OR SPECIAL DAMAGES WHATSOEVER, INCLUDING WITHOUT LIMITATION, DAMAGES
FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS
INFORMATION, AND THE LIKE, ARISING OUT OF THE LICENSE GRANTED HEREUNDER OR THE
USE OF OR INABILITY TO USE THE LICENSED INTELLECTUAL PROPERTY, OR ANY
CONFIDENTIAL INFORMATION, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
ARTICLE VII
COVENANTS OF PURCHASER
Purchaser agrees that:
7.01 COMPLIANCE WITH TERMS OF GOVERNMENTAL APPROVALS AND
CONSENTS. From and after the Closing Date, Purchaser shall comply at its own
expense with all conditions and requirements imposed on Purchaser prior to the
Closing as set forth in (a) the Purchaser Approvals that are Governmental
Approvals, to the extent necessary such that all such Governmental Approvals
will remain in full force and effect assuming, if applicable, continued
compliance of the terms thereof by Seller and (b) all Purchaser Approvals of
Persons other than Governmental Authorities, to the extent necessary such that
all such consents and approvals will remain effective and enforceable against
the Persons giving such consents and approvals, assuming, if applicable,
continued compliance with the terms thereof by Seller.
7.02 USE OF MARKS. Notwithstanding any other provision herein,
no interest in or right to use the name "Intel" or any derivation thereof or any
other trademarks, service marks or tradenames of Seller (the "RETAINED MARKS")
is being transferred to Purchaser pursuant to the transactions contemplated by
this Agreement. Purchaser agrees not to use any materials bearing Retained Marks
or sell, transfer or ship any Inventory or Products bearing Retained Marks (a)
unless requested to do so by Seller, (b) to the extent displayed on any of the
Purchased Assets at the Closing Date or (c) as required under Assumed Contracts
with customers until such time as Purchaser shall have qualified the use of its
logo, trademark or tradenames with each such customer.
7.03 AUDIT RIGHTS. Purchaser shall make available to an
independent public accounting firm engaged by Seller, upon reasonable prior
written notice from Seller on or before the first anniversary of the Closing,
the books and records of Purchaser that relate to sales of Flash memory products
for purposes of verifying the amount, if any, of the Contingent Consideration
which is due and payable to Seller hereunder. If any such audit reveals an
underpayment by Purchaser, Purchaser shall promptly pay the amount of such
underpayment, and, if the amount thereof exceeds five percent (5%) of the total
Contingent Consideration due to Seller, Purchaser
23
shall reimburse Seller for the aggregate amount of all fees and expenses
incurred by Seller in connection with such audit.
ARTICLE VIII
COVENANTS OF ALL PARTIES
8.01 FURTHER ASSURANCES. Each party hereto agrees from time to
time after the Closing at the request of the other party and without further
consideration to execute and deliver such other documents, certificates,
agreements and other writings and to take such other commercially reasonable
actions as may be reasonably necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement and the
other Acquisition Documents. Notwithstanding the foregoing, no party hereto
shall have any obligation to expend any funds or to incur any other obligation
in connection with the consummation of the transactions contemplated hereby
(including, by way of illustration only, any payment in connection with
obtaining the Required Contractual Consents or Purchaser Approvals) other than
normal out-of-pocket expenses (such as fees of counsel, accountants and
auditors) reasonably necessary to consummate such transactions.
8.02 PUBLIC ANNOUNCEMENTS. Neither Purchaser nor Seller shall
issue any press release or otherwise make any public statements with respect to
the transactions contemplated by this Agreement and the other Acquisition
Documents, without the prior consent of Purchaser (in the case of Seller) or
Seller (in the case of Purchaser), except as may be required by Applicable Law,
or by the rules and regulations of, or pursuant to any agreement with, the
Nasdaq National Market. If any party determines, with the advice of counsel,
that it is required by Applicable Law to make this Agreement, the other
Acquisition Documents or any terms hereof or thereof public, it shall, a
reasonable time before making any public disclosure, consult with the other
parties regarding such disclosure and seek confidential treatment for such terms
or portions of this Agreement or other Acquisition Documents as may be requested
by the other parties. The parties agree there shall be no public announcement of
this Agreement or the other Acquisition Documents or the transactions
contemplated hereby or thereby except as may be required by Applicable Law or as
mutually agreed by the parties. The parties agree to announce this Agreement or
the other Acquisition Documents or the transactions contemplated hereby or
thereby to Seller's employees, customers, vendors and strategic partners at such
time and in such form as is mutually agreed upon by the parties.
8.03 TAX MATTERS.
(a) COOPERATION. From and after the Closing Date, the
parties hereto agree to furnish or cause to be furnished to one another, upon
request, as promptly as practicable, such information and assistance relating to
the Purchased Assets and the Business as is reasonably necessary for the filing
of all Tax Returns, and making of any election related to Taxes, the preparation
for any audit by any taxing authority, and the prosecution or defense of any
claim or Proceeding relating to any Tax Return. The parties hereto shall
cooperate with each other in the conduct of any audit or other Proceeding
related to Taxes involving the Business and each shall
24
execute and deliver such powers of attorney and other documents as are necessary
to carry out the intent of this Section 8.03(a).
(b) ALLOCATION OF PROPERTY TAXES. All personal property
taxes and similar AD VALOREM obligations levied with respect to the Purchased
Assets for a taxable period that includes (but does not end on) the Closing Date
shall be apportioned between Seller and Purchaser as of the Closing Date based
on the number of days of such taxable period included in the Pre-Closing Tax
Period and the number of days of such taxable period included in the
Post-Closing Tax Period. Seller shall be liable for the proportionate amount of
such Taxes that is attributable to the Pre-Closing Tax Period, and Purchaser
shall be liable for the proportionate amount of such Taxes that is attributable
to the Post-Closing Tax Period. Within a reasonable period after the Closing,
Seller and Purchaser shall present a statement to the other setting forth the
amount of reimbursement to which each is entitled under this Section 8.03(b),
together with such supporting evidence as is reasonably necessary to calculate
the proration amount. The proration amount shall be paid by the party owing it
to the other within ten (l0) days after delivery of such statement. Thereafter,
Seller shall notify Purchaser upon receipt of any ▇▇▇▇ for personal property
taxes relating to the Purchased Assets, part or all of which are attributable to
the Post-Closing Tax Period, and shall promptly deliver such ▇▇▇▇ to Purchaser
who shall pay the same to the appropriate taxing authority, provided that if
such ▇▇▇▇ covers any part of the Pre-Closing Tax Period, Seller shall also remit
prior to the due date of assessment to Purchaser payment for the proportionate
amount of such ▇▇▇▇ that is attributable to the Pre-Closing Tax Period. In the
event that either Seller or Purchaser shall thereafter make a payment for which
it is entitled to reimbursement under this Section 8.03(b), the other party
shall make such reimbursement promptly, but in no event later than thirty (30)
days after the presentation of a statement setting forth the amount of
reimbursement to which the presenting party is entitled along with such
supporting evidence as is reasonably necessary to calculate the amount of
reimbursement. Any payment required under this Section 8.03(b) and not made when
due shall bear interest at the rate of ten percent (10%) per annum.
(c) OTHER TAXES. To the extent that there are any Taxes
attributable to the Purchased Assets or the Business other than those treated
specifically in Section 8.03(b), (d) and (e), this Section 8.03(c) shall apply.
Seller shall prepare and file (or cause to be prepared and filed) on a timely
basis (to the extent not filed on or before the date of this Agreement) all Tax
Returns for all taxable periods ending on or before the Closing Date, shall
(subject to Section 8.03(e)), pay all Taxes shown to be due on such Tax Returns,
and shall indemnify and hold Purchaser harmless against, from and in respect of
(i) all Taxes of Seller attributable to the Purchased Assets or the operation of
the Business (the "SELLER TAXES") for all taxable periods (or any portion
thereof) which end on or before the Closing Date, and (ii) with respect to any
taxable period commencing before the Closing Date and ending on the Closing
Date, all Seller Taxes attributable to the Pre-Closing Period. For purposes of
this Agreement, the portion of any Tax that is attributable to the Pre-Closing
Period shall be (i) in the case of a Tax that is not based on net income, gross
income, premiums or gross receipts, the total amount of such Tax for the Period
in question multiplied by a fraction, the numerator of which is the number of
days in the Pre-Closing Period, and the denominator of which is the total number
of days in such taxable period, and (ii) in the gross income, premiums or gross
receipts, the Tax that would be due with respect to the Pre-Closing Period if
such Pre-Closing Period were a separate taxable period, except that exemptions,
25
allowances, deductions or credits that are calculated on an annual basis (such
as the deduction for depreciation or capital allowances) shall be apportioned on
a PER DIEM basis. For purposes hereof, all Taxes which are the subject of this
Section 8.03(c) arising from this transaction, except as set forth in Section
8.03(e), shall be deemed to be Taxes attributable to the Pre-Closing Period and
shall be the responsibility of Seller (including any transfer, documentary,
sales, use or other Taxes assessed upon or with respect to the transfer of the
Purchased Assets to Purchaser, and any recording or filing fees with respect
thereto). Purchaser shall prepare and file (or cause to be prepared and filed)
on a timely basis all Tax Returns for all taxable periods beginning after the
Closing Date, shall pay all taxes shown to be due on such Tax Returns, and shall
indemnify and hold Seller harmless against, from and respect of all Taxes (i)
for any taxable year or period commencing after the Closing Date, and (ii) for
any taxable period beginning before and ending after the Closing Date, other
than Taxes attributable to the Pre-Closing Period. The provisions of Section
8.03(b) regarding payment, verification, and interest shall apply to the Taxes
that are subject to this Section 8.03(c).
(d) SALES TAX CERTIFICATES. Purchaser will provide Seller
with an appropriate resale certificate for sales tax purposes.
(e) SALES AND USE TAXES. The sales and use Taxes arising
out of the transfer of the Purchased Assets (the "SALES TAX") shall be
determined at Closing based on the allocation described in Section 8.04 and
shall be paid by Purchaser. To the extent permitted by Applicable Law, Purchaser
and Seller shall cooperate fully in minimizing the Sales Tax. To the extent a
taxing authority provides notice to Seller of an audit of the Sales Tax, Seller
shall immediately notify Purchaser and Purchaser shall assume responsibility for
such audit and shall pay when due any additional Sales Tax ultimately assessed
with respect to the transactions contemplated by this Agreement. Purchaser shall
have complete authority to control, settle or defend any proposed adjustment to
the Sales Tax, and Seller shall cooperate fully with Purchaser, in its defense
or settlement of any proposed adjustment to the Sales Tax.
8.04 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated in accordance with SCHEDULE 8.04 (as such allocation of Purchase Price
Schedule shall be determined prior to Closing and attached hereto). Each of the
parties hereto agrees to report the transactions contemplated hereby for state
and federal Tax purposes in accordance with such allocation of the Purchase
Price. Purchaser shall prepare SCHEDULE 8.04 subject to Seller's approval, which
approval shall not be unreasonably withheld.
8.05 CONFIDENTIALITY. The parties understand and agree that
this Agreement is subject to the terms and conditions of the CNDA. In the event
that any party hereto receives a request to disclose all or any part of any
confidential information under the terms of a subpoena, order, civil
investigative demand or similar process issued by a court of competent
jurisdiction or by another Governmental Authority, such party agrees to: (a)
immediately notify the party to whom such confidential information relates of
the existence, terms and circumstances surrounding such request, (b) consult
with such party to whom the information relates on the advisability of taking
legally available steps to resist or narrow such request; and (c) if disclosure
of such information is required, furnish only that portion of the confidential
information that, in the opinion
26
of counsel to the party who has received the request, such party is legally
compelled to disclose and advise the party to whom such confidential information
relates as far in advance of such disclosure as possible so that such party to
whom the confidential information relates may seek an appropriate protective
order or other reliable assurance that confidential treatment will be accorded
such confidential information. In any event, the party who receives the request
shall not oppose actions by the party to whom the confidential information
relates to obtain an appropriate protective order or other reliable assurance
that confidential treatment will be accorded such confidential information.
8.06 WAIVER OF BULK SALES LAWS. Purchaser and Seller hereby
waive compliance with all applicable "BULK SALES" laws in respect of the
transactions contemplated by this Agreement.
ARTICLE IX
CONDITIONS TO CLOSING
9.01 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations
of Purchaser to consummate the Closing are subject to the satisfaction or waiver
of each of the following conditions:
(a) PERFORMANCE BY SELLER. (i) Seller shall have
performed and satisfied in all material respects each of its obligations
hereunder required to be performed and satisfied by it on or prior to the
Closing Date, (ii) each of the representations and warranties of Seller
contained herein or in any of the other Acquisition Documents and in any
Schedules or Exhibits hereto or thereto shall have been true and correct in all
material respects and contained no misstatement or omission that would make any
such representation or warranty misleading when made and shall be true and
correct in all material respects and contain no misstatement or omission that
would make any such representation or warranty materially misleading at and as
of the Closing with the same force and effect as if made as of the Closing and
(iii) Purchaser shall have received a certificate signed by a duly authorized
executive officer of Seller to the foregoing effect and to the effect that the
conditions specified within this Section 9.01(a) have been satisfied.
(b) REQUIRED CONTRACTUAL CONSENTS. All Required
Contractual Consents and Seller Approvals and Purchaser Approvals that are not
Governmental Approvals set forth on SCHEDULE 9.01(b) shall have been obtained
without the imposition of any conditions that are or would become applicable to
any of the Purchased Assets, the Business or Purchaser (or any Affiliate or
Associate of Purchaser) after the Closing that would be materially burdensome on
any such Purchased Assets, the Business or Purchaser. All Required Contractual
Consents, Seller Approvals and Purchaser Approvals set forth on SCHEDULE 9.01(b)
shall be in effect as of the Closing Date.
(c) NO VIOLATION. The transactions contemplated by this
Agreement and the other Acquisition Documents and the consummation of the
Closing shall not violate any Applicable Law. No temporary restraining order,
preliminary or permanent injunction, cease and desist order or other order
issued by any court or other Governmental Authority or any other legal restraint
or prohibition preventing the transfers contemplated hereby or the consummation
of the
27
Closing, or imposing Damages in respect thereto, shall be in effect as of the
Closing Date, and there shall be no pending or threatened actions or proceedings
by any Governmental Authority (or determinations by any Governmental Authority)
or by any other Person having jurisdiction with respect to such matter
challenging or in any manner seeking to restrict or prohibit the transfer and
exchange contemplated hereby or the consummation of the Closing, or to impose
conditions that would be materially burdensome on the Purchased Assets, the
Business or Purchaser (or any Affiliate or Associate of Purchaser) or their
respective businesses substantially as such businesses have been conducted prior
to the Closing Date or as said businesses, as of the date hereof, would be
reasonably expected to be conducted after the Closing Date.
(d) ALLOCATION OF PURCHASE PRICE. Purchaser and Seller
shall have agreed on the allocation of the Purchase Price pursuant to Section
8.04.
(e) TRANSITION SERVICES AGREEMENT. Purchaser and Seller
shall have agreed upon, executed and delivered the Transition Services
Agreement, pursuant to which for a limited period of ▇▇▇▇ ▇▇▇▇▇▇ will provide
certain services for Purchaser's benefit in connection with the operation of the
Business.
(f) ACQUISITION DOCUMENTS. Seller shall have executed and
delivered to Purchaser all Acquisition Documents to which Seller is a party.
(g) OPINION OF COUNSEL. Purchaser shall have received an
opinion of counsel to Seller, dated the Closing Date, in substantially the form
attached hereto as EXHIBIT 9.01.
(h) SUBORDINATION AGREEMENT. Seller and Fleet Bank shall
have executed and delivered a Subordination Agreement in a form acceptable to
Purchaser and subject to Purchaser's approval.
(i) XETEL CORPORATION CONSENT. XeTel Corporation shall
have executed and delivered to Seller a Consent to Assignment and Assumption, in
a form acceptable to Seller and Purchaser and subject to Seller's and
Purchaser's approval, of that certain Manufacturing Agreement dated April 13,
1998 by and between XeTel Corporation and Intel Flash Products Division, a
division of Seller.
9.02 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of
Seller to consummate the Closing are subject to the satisfaction or waiver of
each of the following conditions:
(a) PERFORMANCE BY PURCHASER. (i) Purchaser shall have
performed and satisfied in all material respects each of its obligations
hereunder required to be performed and satisfied by it on or prior to the
Closing Date, (ii) each of the representations and warranties of Purchaser
contained herein or in any of the other Acquisition Documents and in any
Schedules or Exhibits hereto or thereto shall have been true and correct in all
material respects and contained no misstatement or omission that would make any
such representation or warranty misleading when made and shall be true and
correct in all material respects and contain no misstatement or omission that
would make any such representation or warranty materially misleading at and as
of the Closing
28
with the same force and effect as if made as of the Closing and (iii) Seller
shall have received a certificate signed by a duly authorized executive officer
of Purchaser to the foregoing effect and to the effect that the conditions
specified within this Section 9.02(a) have been satisfied.
(b) REQUIRED CONTRACTUAL CONSENTS. All Required
Contractual Consents set forth on SCHEDULE 9.02(b) shall have been obtained
without the imposition of any conditions that are or would become applicable to
Seller (or any Affiliate or Associate of Seller) after the Closing that would be
materially burdensome on Seller (or any Affiliate or Associate of Seller). All
Required Contractual Consents shall be in effect as of the Closing Date.
(c) NO VIOLATION. The transactions contemplated by this
Agreement and the other Acquisition Documents and the consummation of the
Closing shall not violate any Applicable Law. No temporary restraining order,
preliminary or permanent injunction, cease and desist order or other order
issued by any court or other Governmental Authority or any other legal restraint
or prohibition preventing the transfer and exchange contemplated hereby or the
consummation of the Closing, or imposing Damages in respect thereto, shall be in
effect as of the Closing Date, and there shall be no pending or threatened
actions or proceedings by any Governmental Authority (or determinations by any
Governmental Authority) or by any other Person challenging or in any manner
seeking to materially restrict, prohibit or condition the transfer and exchange
contemplated hereby or the consummation of the Closing, or to impose conditions
that would be materially burdensome on Seller (or any Affiliate or Associate of
Seller) or their respective businesses substantially as such businesses have
been conducted prior to the Closing Date or as said businesses, as of the date
hereof, would reasonably be expected to be conducted after the Closing Date.
(d) ALLOCATION OF PURCHASE PRICE. Purchaser and Seller
shall have agreed on the allocation of the Purchase Price pursuant to Section
8.04.
(e) TRANSITION SERVICES AGREEMENT. Purchaser and Seller
shall have agreed upon, executed and delivered the Transition Services
Agreement, pursuant to which for a limited period of ▇▇▇▇ ▇▇▇▇▇▇ will provide
certain services for Purchaser's benefit in connection with the operation of the
Business.
(f) ACQUISITION DOCUMENTS. Purchaser shall have executed
and delivered to Seller all Acquisition Documents to which Purchaser is a party,
including the Note and the Security Agreement and any UCC-1 financing statements
required to perfect the security interest being granted to Seller.
(g) OPINION OF COUNSEL. Seller shall have received an
opinion of counsel from counsel to Purchaser, dated the Closing Date, in
substantially the form attached hereto as EXHIBIT 9.02.
(h) XETEL CORPORATION CONSENT. XeTel Corporation shall
have executed and delivered to Seller a Consent to Assignment and Assumption, in
a form acceptable to Seller and Purchaser and subject to Seller's and
Purchaser's approval, of that certain Manufacturing
29
Agreement dated April 13, 1998 by and between XeTel Corporation and Intel Flash
Products Division, a division of Seller.
ARTICLE X
INDEMNIFICATION
Section 10.1. GENERAL SURVIVAL. The parties agree that,
regardless of any investigation made by the parties, the representations,
warranties, covenants and agreements (in the case of covenants and agreements,
to the extent of performance or non-performance prior to the Closing Date) of
the parties contained in this Agreement shall survive the execution and delivery
of this Agreement for a period beginning on the date hereof and ending at 5:00
p.m., California time, on the first anniversary of the Closing Date; PROVIDED,
HOWEVER, that the representations and warranties contained in Section 3.17,
Investment Representations, shall survive until the sixtieth (60th) day
following the expiration of the statute of limitations (if any) applicable to a
claim based upon such representation or warranty.
Section 10.2. INDEMNIFICATION.
(a) INDEMNIFICATION PROVISIONS FOR PURCHASER. Subject to the
provisions of Section 10.1, from and after the Closing Date, Purchaser and their
respective affiliates, officers, directors, stockholders, representatives and
agents (collectively the "PURCHASER INDEMNITEES") shall be indemnified and held
harmless by Seller from and against and in respect of any and all Losses (as
defined below) incurred by, resulting from, arising out of, relating to, imposed
upon or incurred by Purchaser or any other Purchaser Indemnitee by reason of:
(i) any inaccuracy in or breach of any of Seller's
representations, warranties, covenants or agreements (to the extent of
performance or non-performance prior to the Closing Date) contained in
this Agreement;
(ii) any misrepresentation contained in written any statement
or certificate furnished to Purchaser by or on behalf of Seller in
connection with the transactions contemplated by this Agreement; and
(iii) Liabilities (other than Assumed Liabilities) arising
from the conduct of the Business prior to the Closing.
(b) INDEMNIFICATION PROVISIONS FOR SELLER. Subject to the
provisions of Section 10.1, from and after the Closing Date, Seller and its
affiliates, officers, directors, stockholders, representatives and agents
(collectively, the "SELLER INDEMNITEES") shall be indemnified and held harmless
by Purchaser from and against and in respect of any and all Losses (as defined
below) incurred by, resulting from, arising out of, relating to, imposed upon or
incurred by any Seller Indemnitee by reason of:
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(i) any inaccuracy in or breach of any of Purchaser's
representations, warranties, covenants or agreements (to the extent of
performance or non-performance prior to the Closing Date) contained in
this Agreement;
(ii) any misrepresentation contained in any written
statement or certificate furnished to Seller by or on behalf of
Purchaser in connection with the transactions contemplated by this
Agreement; and
(iii) Liabilities arising from the conduct of the Business
subsequent to the Closing.
For purposes of this Agreement, the term "INDEMNITEE" shall
mean either a Purchaser Indemnitee or a Seller Indemnitee, as the case may be,
and the term "INDEMNITOR" shall mean either a Purchaser Indemnitor or a Seller
Indemnitor, as the case may be.
(c) For purposes of this Agreement, the term, "LOSSES" means
any and all deficiencies, judgments, settlements, demands, claims, suits,
actions or causes of action, assessments, liabilities, losses, damages
(excluding indirect, incidental or consequential damages), interest, fines,
penalties, costs and expenses (including reasonable legal, accounting and other
costs and expenses) incurred in connection with investigating, defending,
settling or satisfying any and all demands, claims, actions, causes of action,
suits, proceedings, assessments, judgments or appeals, and in seeking
indemnification therefor, and interest on any of the foregoing from the date a
claim is made until paid at the reference rate of Bank of America NT&SA.
Notwithstanding the above, Losses shall not include (i) expenses incurred in
connection with investigations unless a claim is made or (ii) Losses
specifically identified in the Schedules or Exhibits hereto.
(d) No Indemnitee shall be entitled to indemnification for any
Losses arising from the breach of any representations and warranties until the
aggregate amount of all Losses under all claims of all Indemnities for all such
breaches shall exceed Two Hundred Thousand Dollars ($200,000) (the "FLOOR"), at
which time all Losses incurred shall be subject to indemnification hereunder.
The Floor shall not apply to Losses covered by Section 10.2(a)(iii) and Section
10.2(b)(iii).
(e) The amount of any Losses otherwise recoverable under this
Section 10.2 by shall be reduced by any amounts actually received by an
Indemnitees under insurance policies (net of any costs incurred in connection
with the collection thereof).
Section 10.3. MANNER OF INDEMNIFICATION.
(a) Each Indemnification claim shall be made only in
accordance with this Article X.
(b) In the event that an Indemnitee wishes to make a claim for
Losses under Article X of this Agreement, Indemnitee shall deliver a written
notice (a "NOTICE OF CLAIM") to the applicable Indemnitor. The Notice of Claim
shall (i) specify in reasonable detail the nature of the claim being made, and
(ii) state the aggregate dollar amount of such claim.
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(c) If the Indemnitor wishes to object to the allowance of the
claim made in a Notice of Claim, the Indemnitor shall deliver a written
objection to the Indemnitee within twenty (20) calendar days after receipt of
such Notice of Claim by the Indemnitor expressing such objection and explaining
in reasonable detail and in good faith the basis therefor. Following receipt by
Indemnitee of the Indemnitor's written objection, if any, the parties shall
promptly meet to agree on the rights of the respective parties with respect to
each of such claims. If the parties should so agree, a memorandum setting forth
such agreement shall be prepared and signed by both parties and amounts agreed
upon shall be promptly paid. Any unresolved dispute between the parties shall be
resolved in accordance with Sections 11.11 and 11.12 and the other applicable
provisions of this Agreement.
Section 10.4. THIRD-PARTY CLAIMS. If Purchaser becomes aware
of a third-party claim that Purchaser believes, in good faith, may result in a
claim by it against Seller, Purchaser shall notify Seller of such claim. Seller
shall have the right to assume and conduct the defense of such claim. Seller
shall conduct such defense in a commercially reasonable manner, and shall be
authorized to settle any such claim without the consent of the Purchaser,
provided, however, that: (a) Seller shall not be authorized to encumber any
assets of Purchaser or agree to any restriction that would apply to Purchaser or
the conduct of Purchaser's business; (b) Seller shall have paid or caused to be
paid any amounts arising out of such settlement; and (c) that a condition to any
such settlement shall be a complete release of the Purchaser with respect to
such third party claim. Purchaser shall be entitled to participate in (but not
control) the defense of any third party claim, with its own counsel and at its
own expense. Purchaser shall cooperate fully with Seller in the defense of any
third party claim. If Seller does not assume the defense of any third party
claim in accordance with the provisions hereof, Purchaser may defend such third
party claim and may settle such third party claim after giving written notice of
the terms thereof to Seller.
Section 10.5. EXCLUSIVE REMEDY. Notwithstanding any other
provision of this Agreement to the contrary, the provisions of this Article X
shall be the sole and exclusive remedy of the Indemnitees from and after the
Closing Date for any claims arising under this Agreement, including claims of
breach of any representation, warranty or covenant in this Agreement; PROVIDED,
HOWEVER, that the foregoing clause of this sentence shall not be deemed a waiver
by any party of any right to specific performance or injunctive relief, or any
remedy arising by reason of any claim of fraud with the respect to this
Agreement. In that regard, other than claims arising out of fraud, the total
liability to Indemnitees shall be limited to Three Million Dollars ($3,000,000).
ARTICLE XI
MISCELLANEOUS
11.01 NOTICES. All notices and other communications pursuant
to this Agreement shall be in writing and shall be deemed given if delivered
personally, telecopied, sent by nationally-recognized overnight courier or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the addresses set forth below or to such other
address as the party to whom notice is to be given may have furnished to the
other parties hereto in writing in accordance herewith. Any such notice or
communication shall be deemed to have been delivered
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and received (a) in the case of personal delivery, on the date of such delivery,
(b) in the case of telecopier, on the date sent if confirmation of receipt is
received and such notice is also promptly mailed by registered or certified mail
(return receipt requested), (c) in the case of a nationally-recognized overnight
courier in circumstances under which such courier guarantees next Business Day
delivery, on the next Business Day after the date when sent and (d) in the case
of mailing, on the third Business Day following that on which the piece of mail
containing such communication is posted:
if to Seller, to:
Intel Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Intel Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to Purchaser, to:
Centennial Technologies, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given
may have previously furnished to the others in writing in the manner set forth
above. Any party hereto may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended.
11.02 AMENDMENTS; WAIVERS.
(a) Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by all parties hereto, or in the
case of a waiver, by the party against whom the waiver is to be
effective.
(b) No waiver by a party of any default,
misrepresentation or breach of a warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation or breach of a warranty or
covenant hereunder or affect in any way any rights arising by virtue of
any prior or subsequent occurrence. No failure or delay by a party
hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided under Applicable Law.
11.03 EXPENSES. All costs and expenses incurred in connection
with this Agreement and the other Acquisition Documents and in closing and
carrying out the transactions contemplated hereby and thereby shall be paid by
the party incurring such cost or expense.
11.04 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, heirs, personal representatives and permitted assigns. No party
hereto may assign either this Agreement or any of its rights, interests or
obligations hereunder without the prior written approval of each other party,
which approval shall not be unreasonably withheld. No such assignment shall
relieve the assigning party of its obligations hereunder if such assignee does
not perform such obligations.
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11.05 GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the internal laws (without reference to choice
or conflict of laws) of the State of Delaware.
11.06 COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts and the signatures delivered by telecopy,
each of which shall be an original, with the same effect as if the signatures
were upon the same instrument and delivered in person. This Agreement shall
become effective when each party hereto shall have received a counterpart hereof
signed by the other parties hereto.
11.07 ENTIRE AGREEMENT. This Agreement (including the
Schedules and Exhibits referred to herein, which are hereby incorporated by
reference), the other Acquisition Documents and the CNDA constitute the entire
agreement between and among the parties with respect to the subject matter
hereof and thereof and supersede all prior and contemporaneous agreements,
understandings and negotiations, both written and oral, between and among the
parties with respect to the subject matter of this Agreement. Neither this
Agreement nor any provision hereof is intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.
11.08 CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof. All references to an Article, Section, Exhibit or
Schedule are references to an Article, Section, Exhibit or Schedule of this
Agreement, unless otherwise specified, and include all subparts thereof.
11.09 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the date
this Agreement was executed or last amended.
11.10 CONSTRUCTION. The parties hereto intend that each
representation, warranty, and covenant contained herein shall have independent
significance. If any party has breached any representation, warranty or covenant
contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) that the party has not
breached shall not detract from or mitigate the fact that the party is in breach
of the first representation, warranty or covenant.
11.11 DISPUTE RESOLUTION.
(a) All disputes arising directly under the express terms of
this Agreement or the grounds for termination thereof shall be resolved as
follows: The senior management of all parties to the dispute shall meet to
attempt to resolve such disputes. If the disputes cannot be resolved by such
senior management, any party may make a written demand for formal dispute
resolution and specify therein the scope of the dispute. Within thirty (30) days
after such written notification, the parties agree to meet for one (1) day with
an impartial mediator and consider dispute resolution
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alternatives other than litigation. If an alternative method of dispute
resolution is not agreed upon within thirty (30) days after the one (1) day
mediation, either party may begin litigation Proceedings.
(b) Notwithstanding the provisions of Section 11.11(a) above,
each party shall have the right, without the requirement of first seeking a
remedy through arbitration, to seek preliminary injunctive or other equitable
relief in any proper court in the event that such party determines that eventual
redress through arbitration will not provide a sufficient remedy for any
violation of this Agreement by any other party.
(c) In the event a Proceeding is brought to enforce or
interpret any provision of this Agreement, the prevailing party shall be
entitled to recover reasonable attorney's fees and costs in an amount to be
fixed by the court or arbitrator, as applicable.
11.12 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) The parties hereby irrevocably submit to the jurisdiction
of the courts of the State of Delaware and the Federal courts of the United
States of America located in the State of Delaware solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any Proceeding for the interpretation or enforcement hereof or of any such
document, that it is not subject thereto or that such Proceeding may not be
brought or is not maintainable in said courts or that the venue thereof may not
be appropriate or that this Agreement or any such document may not be enforced
in or by such courts, and the parties hereto irrevocably agree that all claims
with respect to such Proceeding shall be heard and determined in such a Delaware
State or Federal court. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of such
dispute and agree that mailing of process or other papers in connection with any
such action or proceeding in the manner provided in Section 11.12 or in such
other manner as may be permitted by Applicable Law, shall be valid and
sufficient service thereof.
(b) The parties agree that irreparable damage may occur and
that the parties would not have any adequate remedy at law in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any Federal court located in the State of Delaware or in
Delaware state court, this being in addition to any other remedy to which they
are entitled at law or in equity.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
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CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11.12.
11.13 MEANING OF INCLUDE AND INCLUDING. Whenever in this
Agreement the word "INCLUDE" or "INCLUDING" is used, it shall be deemed to mean
"INCLUDE, WITHOUT LIMITATION" or "INCLUDING, WITHOUT LIMITATION," as the case
may be, and the language following "INCLUDE" or "INCLUDING" shall not be deemed
to set forth an exhaustive list.
11.14 CUMULATIVE REMEDIES. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided under Applicable Law.
11.15 THIRD PARTY BENEFICIARIES. No provision of this
Agreement shall create any third party beneficiary rights in any Person,
including any employee or former employee of Seller or any Affiliate or
Associate thereof (including any beneficiary or dependent thereof).
11.16 SPECIFIC PERFORMANCE. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the transactions contemplated herein, may cause
irreparable injury to the other parties, for which Damages, even if available,
may not be an adequate remedy. Accordingly, each party hereby consents to the
issuance of injunctive relief by any court of competent jurisdiction to compel
performance of such party's obligations and to the granting by any court of the
remedy of specific performance of its obligations hereunder.
11.17 SURVIVAL. The representations and warranties and
covenants of the parties shall survive the Closing for the period set forth in
Section 10.1.
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IN WITNESS WHEREOF, the parties hereto here caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
SELLER:
INTEL CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Treasurer
PURCHASER:
CENTENNIAL TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer, Secretary
and Treasurer
[Signature Page to Asset Purchase Agreement Between Intel Corporation
and Centennial Technologies, Inc.]