<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
DECEMBER 29, 1999
CENTENNIAL TECHNOLOGIES, INC.
--------------------------------------------------
(Exact name of registrant as specified in charter)
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<S> <C> <C>
Delaware 1-12912 04-2978400
- ---------------------------- ------------------------ -------------------
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
</TABLE>
7 LOPEZ ROAD, WILMINGTON, MA 01887
---------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (978) 988-8848
--------------
<PAGE>
4
ITEM 2 - ACQUISITION OF ASSETS
On December 29, 1999, Centennial Technologies, Inc. (the "Registrant"),
acquired the assets of the flash memory card business (the "Acquired Assets") of
Intel Corporation ("Intel") pursuant to an Asset Purchase Agreement (the "Asset
Purchase Agreement") dated as of December 29, 1999 by and between the Registrant
and Intel. A copy of the Asset Purchase Agreement is attached as Exhibit 2.1
hereto and is expressly incorporated in its entirety herein.
Intel is based in Santa Clara, California, and is the world's largest
chip maker as well as a leading manufacturer of computer, networking, and
communications products.
The Registrant paid cash and a note totaling $6 million, a payment of
up to $4.5 million due upon the occurrence of certain contingencies, and
approximately 16 percent of the outstanding shares of the Registrant, on an
as-converted basis, for the Acquired Assets. The amount of consideration for the
acquisition was determined through arm's length negotiations between the
parties. The Registrant used existing cash and cash equivalents to pay the
consideration for the acquisition.
The Acquired Assets include certain tangible and intangible assets of
the flash memory card business of Intel, including the PCMCIA card families
(Series 2, Value series 100 and 200) and the miniature card families (Series 100
and 200) along with equipment, inventory, contract rights, intellectual property
rights, and goodwill. The Company intends to use the Acquired Assets for
purposes that are consistent with the historical use of such assets by Intel.
ITEM 5 - OTHER EVENTS
The Registrant issued a press release on December 30, 1999 announcing
the asset acquisition described in Item 2 above.
A copy of the Registrant's press release described above is attached as
Exhibit 99.1 hereto and is expressly incorporated herein in its entirety.
ITEM 7 - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBIT
At the time of the filing of this Form 8-K, it is impracticable for the
Registrant to provide the financial information relating to the acquisition of
the Acquired Assets from Intel. Such required financial information , including
both historical and pro forma financial information, will be filed by amendment
not later than March 13, 2000, in accordance with Item 7, paragraphs (a) (4) and
(b) (2) of Form 8-K.
2
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(c) Exhibits
<TABLE>
<S> <C>
Exhibit 2.1 Asset Purchase Agreement dated December 29, 1999
between Centennial Technologies, Inc. and Intel
Corporation (excluding schedules and exhibits,
which the Registrant agrees to furnish
supplementally to the Commission upon request).
Exhibit 2.2 Rights Agreement dated December 29, 1999 between
Centennial Technologies, Inc. and Intel
Corporation.
Exhibit 2.3 Subordinated Secured Promissory Note dated December
29, 1999.
Exhibit 2.4 Security Agreement dated December 29, 1999 between
Centennial Technologies, Inc. and Intel
Corporation.
Exhibit 99.1 Press Release of Centennial Technologies, Inc.,
dated December 30, 1999.
</TABLE>
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTENNIAL TECHNOLOGIES, INC.
Date: January 12, 2000 By: /s/ Richard J. Pulsifer
-------------------
Richard J. Pulsifer
Chief Financial Officer, Secretary
and Treasurer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
Exhibit 2.1 Asset Purchase Agreement dated December 29, 1999
between Centennial Technologies, Inc. and Intel
Corporation (excluding schedules and exhibits, which
the Registrant agrees to furnish supplementally to
the Commission upon request).
Exhibit 2.2 Rights Agreement dated December 29, 1999 between
Centennial Technologies, Inc. and Intel Corporation.
Exhibit 2.3 Subordinated Secured Promissory Note dated December
29, 1999.
Exhibit 2.4 Security Agreement dated December 29, 1999 between
Centennial Technologies, Inc. and Intel Corporation.
Exhibit 99.1 Press Release of Centennial Technologies, Inc. dated
December 30, 1999.
</TABLE>
<PAGE>
EXHIBIT 2.1
-----------
CONFIDENTIAL
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
CENTENNIAL TECHNOLOGIES, INC.
AND
INTEL CORPORATION
DATED AS OF DECEMBER 29, 1999
<PAGE>
TABLE OF CONTENTS
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<S> <C>
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
</TABLE>
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<PAGE>
EXHIBITS
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Exhibit 1.01A Form of Assignment and Assumption Agreement
Exhibit 1.01B Form of Bill 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
---------
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
</TABLE>
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<PAGE>
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 Bill 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.
"BILL OF SALE" means that certain Bill 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
4
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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:
<TABLE>
<CAPTION>
DEFINED TERM SECTION
<S> <C>
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)
</TABLE>
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,
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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
Gibson, Dunn & Crutcher LLP, 1530 Page Mill Road, Palo Alto, California, 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 Bill 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:
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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;
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(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.
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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").
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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.
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(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.
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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.
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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.
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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
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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
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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
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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
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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
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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 bill 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 bill to Purchaser
who shall pay the same to the appropriate taxing authority, provided that if
such bill 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 bill 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,
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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
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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
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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 time Seller 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
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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 time Seller 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
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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
200 Mission College Boulevard
Santa Clara, California 95054
Attention: Treasurer
Telephone: (408) 765-8080
Telecopy: (408) 765-6038
with copies to:
Intel Corporation
200 Mission College Boulevard
Santa Clara, California 95054
Attention: General Counsel
Telephone: (408) 765-8080
Telecopy: (408) 765-1859
and
Gibson, Dunn & Crutcher LLP
1530 Page Mill Road
Palo Alto, California 94304
Attention: Lawrence Calof, Esq.
Telephone: (650) 849-5300
Telecopy: (650) 849-5333
if to Purchaser, to:
Centennial Technologies, Inc.
7 Lopez Road
Wilmington, Massachusetts 01887
Attention: President
Telephone: (978) 988-8848
Telecopy: (978) 988-7651
33
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with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Raymond C. Zemlin, P.C.
Telephone: (617) 570-1000
Telecopy: (617) 523-1231
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/ Noel S. Lazo
----------------------------------
Name: Noel S. Lazo
Title: Assistant Treasurer
PURCHASER:
CENTENNIAL TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Richard J. Pulsifer
----------------------------------
Name: Richard J. Pulsifer
Title: Chief Financial Officer, Secretary
and Treasurer
[Signature Page to Asset Purchase Agreement Between Intel Corporation
and Centennial Technologies, Inc.]
<PAGE>
EXHIBIT 2.2
================================================================================
RIGHTS AGREEMENT
CENTENNIAL TECHNOLOGIES, INC.
INTEL CORPORATION
DECEMBER 29, 1999
==============================================================================
<PAGE>
CONFIDENTIAL
------------
RIGHTS AGREEMENT
This Rights Agreement (this "AGREEMENT") is made and entered into as of
December 29, 1999 by and among Centennial Technologies, Inc., a Delaware
corporation (the "COMPANY"), and Intel Corporation, a Delaware corporation
("Intel").
RECITALS
A. The Company and Intel have entered into an Asset Purchase Agreement
of even date herewith (the "ASSET PURCHASE AGREEMENT"), pursuant to which Intel
has sold certain assets to the Company and the Company has, among other things,
issued shares of its Series B Preferred Stock to Intel.
B. It is a condition to the closing of the transactions contemplated by
the Asset Purchase Agreement that the Company enter into this Agreement
providing to Intel certain information rights, registration rights and other
rights, all as more fully set forth herein.
AGREEMENT
In consideration of the foregoing recitals, the mutual promises in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. INFORMATION RIGHTS.
The Company covenants and agrees that for so long as Intel and
its Affiliates hold at least twenty-five percent (25%) of the Series B Preferred
Stock of the Company acquired in connection with the transactions contemplated
by the Asset Purchase Agreement (or Common Stock issuable upon conversion
thereof), the Company shall:
(a) ANNUAL REPORTS. Furnish to Intel
promptly following the filing of such report with the SEC a copy of the
Company's Annual Report on Form 10-K for each fiscal year, which shall
include a consolidated balance sheet as of the end of such fiscal year, a
consolidated statement of income and a consolidated statement of cash flows
of the Company and its Subsidiaries for such year, setting forth in each case
in comparative form the figures from the Company's previous fiscal year, all
prepared in accordance with generally accepted accounting principles and
practices and audited by nationally recognized independent certified public
accountants. In the event the Company shall no longer be required to file
Annual Reports on Form 10-K, the Company shall, within ninety (90) days
following the end of each respective fiscal year, deliver to the Intel a copy
of such balance sheets, statements of income and statements of cash flows.
(b) QUARTERLY REPORTS. Furnish to Intel
promptly following the filing of such report with the SEC, a copy of each of
the Company's Quarterly Reports on Form 10-Q, which shall include a
consolidated balance sheet as of the end of the respective fiscal quarter,
consolidated statements of income and consolidated statements of cash flows
of the Company and its Subsidiaries for the respective fiscal quarter and for
the year to-date, setting forth in each case in comparative form the figures
from the comparable periods in the Company's immediately
<PAGE>
preceding fiscal year, all prepared in accordance with generally accepted
accounting principles and practices (except, in the case of any Form 10-Q, as
may otherwise be permitted by Form 10-Q), but all of which may be unaudited.
In the event the Company shall no longer be required to file Quarterly
Reports on Form 10-Q, the Company shall, within forty-five (45) days
following the end of each of the first three (3) fiscal quarters of each
fiscal year, deliver to Intel a copy of such balance sheets, statements of
income and statements of cash flows.
(c) SEC FILINGS. The Company shall deliver to
Intel copies of each other document filed with the SEC on a non-confidential
basis promptly following the filing of such document with the SEC.
2. REGISTRATION RIGHTS.
2.1 DEFINITIONS. For purposes of this Agreement:
(a) AFFILIATE. The term "AFFILIATE" means,
with respect to any person or entity, any person or entity directly or
indirectly controlling, controlled by or under direct or indirect common
control with such other person or entity.
(b) APPLICABLE LAW. The term "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.
(c) REGISTRATION. The terms "REGISTER,"
"REGISTERED," and "REGISTRATION" refer to a registration effected by
preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement
(d) REGISTRABLE SECURITIES. The term
"REGISTRABLE SECURITIES" means: (x) the shares of Common Stock issuable upon
conversion of the shares of Series B Preferred Stock issued to Intel in
connection with the transactions contemplated by the Asset Purchase Agreement
and (y) any shares of Common Stock of the Company or other securities of the
Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security that is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, any of
the securities described in the immediately preceding clause. Notwithstanding
the foregoing, "Registrable Securities" shall exclude any Registrable
Securities sold by a person in a transaction in which rights under this
Section 2 are not assigned in accordance with this Agreement or any
Registrable Securities sold in a public offering, whether sold pursuant to
Rule 144 promulgated under the Securities Act, or in a registered offering,
or otherwise.
(e) REGISTRABLE SECURITIES THEN OUTSTANDING.
The number of shares of "REGISTRABLE SECURITIES THEN OUTSTANDING" shall mean
the number of Purchased Shares, shares of Common Stock and other securities
that are Registrable Securities and are then issued and outstanding.
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(f) HOLDER. For purposes of this Section 2, the
term "HOLDER" means any person owning of record Registrable Securities that
have not been sold to the public or pursuant to Rule 144 promulgated under
the Securities Act or any permitted assignee of record of such Registrable
Securities to whom rights under this Section 2 have been duly assigned in
accordance with this Agreement.
(g) EXCHANGE ACT. The term "Exchange Act" means
the Securities Exchange Act of 1934, as amended.
(h) FORM S-3. The term "FORM S-3" means such form
under the Securities Act as is in effect on the date hereof or any successor
registration form under the Securities Act subsequently adopted by the SEC
that permits inclusion or incorporation of substantial information by
reference to other documents filed by the Company with the SEC.
(i) PERSON. The term "PERSON" means an
individual, corporation, partnership, association, limited liability company,
trust, estate or other similar business entity or organization, including a
governmental authority.
(j) SEC. The term "SEC" means the United States
Securities and Exchange Commission or any successor agency administering the
federal securities laws.
(k) SECURITIES ACT. THE TERM "SECURITIES ACT"
MEANS THE SECURITIES ACT OF 1933, AS AMENDED.
(l) SUBSIDIARY. The term "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).
2.2 DEMAND REGISTRATION.
(a) REQUEST BY HOLDERS. If the Company
shall, following the date hereof, receive a written request from the Holders
of twenty-five percent (25%) of the Registrable Securities, that the Company
file a registration statement under the Securities Act on Form S-3 or, if the
Company is not eligible to file a registration statement on Form S-3 such
other form as such Holders (upon the advice of the underwriters, if any,
engaged by such Holders) may request covering the registration of Registrable
Securities, then the Company shall, within ten (10) business days of the
receipt of such written request, give written notice of such request
("REQUEST NOTICE") to all Holders, and use commercially reasonable efforts to
effect, as soon as reasonably practicable, the registration under the
Securities Act of all Registrable Securities that Holders request to be
registered and included in such registration by written notice given such
Holders to the Company within twenty (20) days after receipt of the Request
Notice; PROVIDED that the Company shall not be obligated to effect any such
registration if the Company has, within the six (6) month period preceding
the date of such request, already effected a registration under the
Securities Act pursuant to Section 2.3, other than a registration from which
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the Registrable Securities of Holders have been excluded with respect to all
or any portion of the Registrable Securities the Holders requested be
included in such registration; PROVIDED, HOWEVER, that the Company shall have
no obligation to cause any registration statement contemplated by this
Section 2.1 to become effective prior to the three hundred and sixty-fifth
(365th) day after the date hereof. If requested by such Holders, upon the
advice of the underwriters, if any, engaged by such Holders, the Company
shall register such Registrable Securities on Form S-1 or any successor
registration form.
(b) UNDERWRITING. If the Holders initiating
the registration request under this Section 2.2 ("INITIATING HOLDERS") intend
to distribute the Registrable Securities covered by their request by means of
an underwriting, then they shall so advise the Company as a part of their
request, and the Company shall include such information in the written notice
referred to in Section 2.2(a). In such event, the right of any Holder to
include his or her Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the initiating Holders
and such Holder determined based on the number of Registrable Securities held
by such Holders being registered). All Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting
agreement in customary form with the managing underwriter or underwriters
selected for such underwriting by the Holders of a majority of the
Registrable Securities being registered and reasonably acceptable to the
Company (including a market stand-off agreement of up to ninety (90) days if
required by such underwriters). Notwithstanding any other provision of this
Section 2.2, if the underwriter(s) advise(s) the Company in writing that
marketing factors require a limitation of the number of securities to be
underwritten then the Company shall so advise all Holders of Registrable
Securities that would otherwise be registered and underwritten pursuant
hereto, and the number of Registrable Securities that may be included in the
underwriting shall be reduced as required by the underwriter(s) and allocated
among the Holders of Registrable Securities on a pro rata basis according to
the number of Registrable Securities then outstanding held by each Holder
requesting registration (including the initiating Holders); PROVIDED,
HOWEVER, that the number of shares of Registrable Securities to be included
in such underwriting and registration shall not be reduced unless all other
securities of the Company and any selling securityholder other than the
Holders are first entirely excluded from the underwriting and registration.
Subject to the proviso in the immediately preceding sentence, the Company and
other stockholders of the Company can include shares in any such underwritten
offering. Any Registrable Securities excluded and withdrawn from such
underwriting shall be withdrawn from the registration.
(c) MAXIMUM NUMBER OF DEMAND REGISTRATIONS.
The Company shall be obligated to effect only two (2) such registration
pursuant to this Section 2.2.
(d) EXPENSES. All expenses incurred in
connection with any registration pursuant to this Section 2.2, including all
federal and "blue sky" registration, filing and qualification fees, printer's
and accounting fees, and fees and disbursements of counsel for the Company
(but excluding underwriters' discounts and commissions relating to shares
sold by the Holders), shall be borne by the Company. Each Holder
participating in a registration pursuant to this Section 2.2 shall bear such
Holder's proportionate share (based on the total number of shares sold in
such registration other than for the account of the Company) of all
discounts, commissions or other amounts payable to underwriters or brokers in
connection with
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such offering by the Holders. Notwithstanding the foregoing, the Company
shall not be required to pay for any expenses of any registration proceeding
begun pursuant to this Section 2.2 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (and such expenses shall be paid on
demand by the Holders requesting such withdrawal), unless the Holders of such
majority agree that such registration constitutes the use by the Holders of
one (1) demand registration pursuant to this Section 2.2 (in which case such
registration shall also constitute the use by all Holders of Registrable
Securities of one (l) such demand registration); PROVIDED FURTHER, HOWEVER,
that if at the time of such withdrawal, the Holders have learned of a
material adverse change relating to the business, financial condition or
prospects of the Company not known to the Holders at the time of their
request for such registration and have withdrawn their request for
registration after learning of such material adverse change, then the Holders
shall not be required to pay any of such expenses and such registration shall
not constitute the use of a demand registration pursuant to this Section 2.2.
2.3 PIGGYBACK REGISTRATIONS. The Company shall notify
all Holders of Registrable Securities in writing at least thirty (30) days
prior to filing any registration statement under the Securities Act for
purposes of effecting a public offering of securities of the Company
(including registration statements relating to secondary offerings of
securities of the Company, but excluding registration statements relating to
any employee benefit plan, any dividend reinvestment plan or any merger or
other corporate reorganization) and will afford each such Holder an
opportunity to include in such registration statement all or any part of the
Registrable Securities then held by such Holder. Each Holder desiring to
include in any such registration statement all or any part of the Registrable
Securities held by such Holder shall within twenty (20) days after receipt of
the above-described notice from the Company, so notify the Company in
writing, and in such notice shall inform the Company of the number of
Registrable Securities such Holder wishes to include in such registration
statement. If a Holder decides not to include all of its Registrable
Securities in any registration statement thereafter filed by the Company,
such Holder shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth
herein.
(a) UNDERWRITING. If a registration statement
under which the Company gives notice under this Section 2.3 is for an
underwritten offering, then the Company shall so advise the Holders of
Registrable Securities. In such event, the right of any such Holder's
Registrable Securities to be included in such a registration pursuant shall
be conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting
agreement in customary form with the managing underwriter or underwriters
selected for such underwriting (including a market stand-off agreement of up
to ninety (90) days if required by such underwriters); PROVIDED, HOWEVER,
that it shall not be considered customary to require any of the Holders to
provide representations and warranties regarding the Company or
indemnification of the underwriters for material misstatements or omissions
regarding the Company in the registration statement or prospectus for such
offering. Notwithstanding any other provision of this Agreement, if the
managing underwriter determine(s) in good faith that marketing factors
require a limitation of the number of shares to be underwritten, then the
managing underwriter(s) may exclude shares from the registration and the
underwriting;
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PROVIDED; HOWEVER, that the securities to be included in the registration and
the underwriting shall be allocated, (1) FIRST to the Company (PROVIDED,
HOWEVER, that a minimum of twenty percent (20%) of the number of Registrable
Securities held by each Holder (where any Registrable Securities that are not
shares of Common Stock but are exercisable or exchangeable for, or
convertible into, shares of Common Stock, shall be deemed to have been so
exercised, exchanged or converted for such purpose) must also in any event be
included if requested by any such Holder), (2) SECOND, to the extent the
managing underwriter determines additional securities can be included after
compliance with clause (1), to each of the Holders (to the extent not
included pursuant to clause (1)) requesting inclusion of their Registrable
Securities in such registration statement on a pro rata basis based on the
total number of Registrable Securities and other securities entitled to
registration then held by each such Holder, and (3) THIRD, to the extent the
managing underwriter determines additional securities can be included after
compliance with clauses (1) and (2), any other shares of Common Stock or
other securities of the Company. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration. For any Holder that is a partnership, the Holder and the
partners and retired partners of such Holder, or the estates and family
members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons, and for any Holder that is a
corporation, the Holder and all corporations that are affiliates of such
Holder, shall be deemed to be a single "Holder," and any pro rata reduction
with respect to such "Holder" shall be based upon the aggregate amount of
shares carrying registration rights owned by all entities and individuals
included in such "Holder," as defined in this sentence.
(b) EXPENSES. All expenses incurred in
connection with a registration pursuant to this Section 2.3 (excluding
underwriters' and brokers' discounts and commissions relating to shares sold
by the Holders), including all federal and "blue sky" registration, filing
and qualification fees, printers' and accounting fees, and fees and
disbursements of counsel for the Company, shall be borne by the Company.
(c) NOT DEMAND REGISTRATION. Registration
pursuant to this Section 2.3 shall not be deemed to be a demand registration
as described in Section 2.2 above. Except as otherwise provided herein, there
shall be no limit on the number of times the Holders may request registration
of Registrable Securities under this Section 2.3.
2.4 FORM S-3 REGISTRATION. If requested by Intel, the
Company shall use all reasonable commercial efforts to cause to be filed and
become effective with the SEC a Registration Statement on Form S-3 relating
to all of the Registrable Securities (in the event such registration
statement is not effective on such date, the Company shall continue to use
all reasonable commercial efforts to cause it to become effective until it
becomes effective), such Registration Statement to be effected only for sales
or other transfers by Intel in connection with offerings, sales and transfers
not constituting an underwritten public offering; PROVIDED, HOWEVER, that the
Company shall not be obligated to cause such registration statement to become
effective before the one hundred eighty-first (181st) day following the date
hereof. The Company shall use commercially reasonable efforts to cause any
such Registration Statement to become effective as promptly as possible after
such filing (but shall not be required to cause such Registration Statement
to become effective prior to the one hundred eighty-first (181st) day
following the date hereof) and shall also use its best efforts to obtain any
related qualifications, registrations or other compliances that may be
necessary under any applicable "blue sky" laws. In connection with such
registration, the Company will:
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(a) NOTICE. Promptly give written notice to
the Holders of the proposed registration and any related qualification or
compliance; and
(b) REGISTRATION. Effect such registration
and all such qualifications and compliances and as would permit or facilitate
the sale and distribution of all or such portion of such Holders or Holders'
Registrable Securities on and after the one hundred and eighty first (181st)
day following the date hereof; PROVIDED, HOWEVER, that the Company shall not
be obligated to effect any such registration, qualification or compliance
pursuant to this Section 2.4 in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification
or compliance.
(c) EXPENSES. The Company shall pay all
expenses incurred in connection with the first two (2) registrations
requested pursuant to this Section 2.4, excluding brokers' discounts and
commissions relating to shares sold by the Holders, including federal and
"blue sky" registration, filing and qualification fees, printers' and
accounting fees, and fees and disbursements of counsel. Intel shall pay all
expenses for subsequent registrations it requests pursuant to this Section
2.4.
(d) NOT DEMAND REGISTRATION. Form S-3
registrations pursuant to this Section 2.4 shall not be deemed to be demand
registrations as described in Section 2.2 above.
(e) MAINTENANCE. The Company shall use all
reasonable commercial efforts to maintain the effectiveness of any Form S-3
registration statement filed under this Section 2.4 until the earlier of: (a)
the date on which all of the Registrable Securities have been sold; and (b)
one hundred eighty (180) days after the effective date of such registration
statement.
(f) MAXIMUM NUMBER OF FORM S-3 REGISTRATIONS.
The Company shall be obligated to effect only one such registration pursuant
to this Section 2.4 in any six (6) month period, without limitation of the
total number of registrations on Form S-3.
2.5 OBLIGATIONS OF THE COMPANY. Whenever required to
effect the registration of any Registrable Securities under this Agreement
the Company shall, as expeditiously as reasonably possible:
(a) REGISTRATION STATEMENT. Prepare and file
with the SEC a registration statement with respect to such Registrable
Securities and use commercially reasonable efforts to cause such registration
statement to become effective; PROVIDED, HOWEVER, that, except as otherwise
required by this Section 2, the Company shall not be required to keep any
such registration statement effective for more than ninety (90) days.
(b) AMENDMENTS AND SUPPLEMENTS. Prepare and
file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement.
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(c) PROSPECTUSES. Furnish to the Holders
such number of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by them that are included in
such registration.
(d) BLUE SKY. Use commercially reasonable
efforts to register and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such jurisdictions
as shall be reasonably requested by the Holders, provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in
any such states or jurisdictions.
(e) UNDERWRITING. In the event of any
underwritten public offering, enter into and perform its obligations under an
underwriting agreement in usual and customary form (including customary
indemnification of the underwriters by the Company), with the managing
underwriter(s) of such offering. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such an
agreement; PROVIDED, HOWEVER, that it shall not be considered customary to
require any of the Holders to provide representations and warranties
regarding the Company or indemnification of the underwriters for material
misstatements or omissions regarding the Company in the registration
statement or prospectus for such offering.
(f) NOTIFICATION. Notify each Holder of
Registrable Securities covered by such registration statement at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing. In
such event, the Company shall prepare a supplement or post-effective
amendment to such registration statement or related prospectus or file any
other required document so that, as thereafter delivered to the purchasers of
Registrable Securities sold thereunder, the prospectus will not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading or, if
appropriate, issue a Suspension Notice as provided in Section 2.10
hereinafter.
(g) OPINION AND COMFORT LETTER. Furnish, at
the request of any Holder requesting registration of Registrable Securities,
on the date that such Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through
underwriters, (i) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) in the
event that such securities are being sold through underwriters, a "comfort"
letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters requesting
registration of Registrable Securities.
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2.6 FURNISH INFORMATION. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to Sections
2.2, 2.3 or 2.4 that the selling Holders shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them,
and the intended method of disposition of such securities as shall be
required to timely effect the registration of their Registrable Securities.
2.7 INDEMNIFICATION. In the event any Registrable
Securities are included in a registration statement under Sections 2.2, 2.3
or 2.4:
(a) BY THE COMPANY. To the extent permitted
by law, the Company will indemnify and hold harmless each Holder, the
partners, officers, shareholders, employees, representatives and directors of
each Holder, any underwriter (as determined in the Securities Act) for such
Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a "VIOLATION"):
(x) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto;
(y) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or
(z) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any federal
or state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any federal or state securities law in
connection with the offering covered by such registration statement;
and the Company will reimburse each such Holder, partner, officer,
shareholder, employee, representative, director, underwriter or controlling
person for any legal or other expenses reasonably incurred by them, as
incurred, in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the indemnity agreement
contained in this subsection shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company, nor shall the Company be liable
in any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation that occurs in
reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by such Holder, partner,
officer, shareholder, employee, representative, director, underwriter or
controlling person of such Holder.
(b) BY SELLING HOLDERS. To the extent
permitted by law, each selling Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
registration statement, each person, if any, who controls the Company within
the meaning of the Securities Act, any underwriter and any other Holder
selling securities under such registration statement or any of such other
Holder's partners, officers, shareholders, employees, representatives and
directors and any person who controls such Holder within the
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meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities (joint or several) to which the Company or any
such officer or director, controlling person, underwriter or other such
Holder, partner, officer, shareholder, employee, representative, director or
controlling person of such other Holder may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by the Company or any such
officer or director, controlling person, underwriter or other Holder,
partner, officer, shareholder, employee, representative, director or
controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action: PROVIDED,
HOWEVER, that the indemnity agreement contained in this subsection shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder; and PROVIDED FURTHER, that the total amounts payable in indemnity by
a Holder under this subsection or otherwise in respect of any and all
Violations shall not exceed in the aggregate the net proceeds received by
such Holder in the registered offering out of which such Violations arise.
(c) NOTICE. Promptly after receipt by an
indemnified party under of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim
in respect thereof is to be made against any indemnifying party under this
section, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; PROVIDED, HOWEVER,
that an indemnified party shall have the right to retain its own counsel,
with the fees and expenses of one such additional counsel in the aggregate to
be paid by the indemnifying party, to the extent that representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential conflict of interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of liability except to the extent the
indemnifying party is prejudiced as a result thereof.
(d) DEFECT ELIMINATED IN FINAL PROSPECTUS.
The foregoing indemnity agreements of the Company and Holders are subject to
the condition that, insofar as they relate to any Violation made in a
preliminary prospectus but eliminated or remedied in the amended prospectus
on file with the SEC at the time the registration statement in question
becomes effective or the amended prospectus filed with the SEC pursuant to
SEC Rule 424(b) (the "FINAL PROSPECTUS"), such indemnity agreement shall not
inure to the benefit of any person if a copy of the Final Prospectus was
timely furnished to the indemnified party and was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time such
action is required by the Securities Act.
(e) CONTRIBUTION. In order to provide for
just and equitable contribution to joint liability under the Securities Act
in any case in which either (i) any Holder exercising rights under this
Agreement, or any controlling person of any such Holder, makes a
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claim for indemnification pursuant to this section, but it is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in
such case notwithstanding the fact that this section provides for
indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any such selling Holder or any such
controlling person in circumstances for which indemnification is provided
under this section; then, and in each such case, the Company and such Holder
will contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (after contribution from others) in such proportion
so that such Holder is responsible for the portion represented by the
percentage that the public offering price of its Registrable Securities
offered by and sold under the registration statement bears to the public
offering price of all securities offered by and sold under such registration
statement, and the Company and other selling Holders are responsible for the
remaining portion; PROVIDED, HOWEVER, that, in any such case: (A) no such
Holder will be required to contribute any amount in excess of the public
offering price of all such Registrable Securities offered and sold by such
Holder pursuant to such registration statement; and (B) no person or entity
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.
(f) SURVIVAL. The obligations of the Company
and Holders under this Section 2.7 shall survive until the fifth anniversary
of the completion of any offering of Registrable Securities in a registration
statement, regardless of the expiration of any statutes of limitation or
extensions of such statutes.
2.8 TERMINATION OF THE COMPANY'S OBLIGATIONS. The
Company shall have no obligations pursuant to this Section 2 with respect to
any Registrable Securities proposed to be sold by a Holder in a registration
pursuant to Section 2.2, 2.3 or 2.4 more than five (5) years after the date
hereof.
2.9 NO SUPERIOR REGISTRATION RIGHTS TO THIRD PARTIES.
Without the prior written consent of Intel, the Company covenants and agrees
that it shall not grant, or cause or permit to be created, for the benefit of
any person or entity any registration rights of any kind (whether similar to
the demand, "piggyback" or Form S-3 registration rights described in this
Section 2, or otherwise) relating to shares of the Company's Common Stock or
any other securities of the Company that are superior to the rights granted
under this Section 2.
2.10 SUSPENSION PROVISIONS. Notwithstanding the
foregoing subsections of this Section 2, the Company shall not be required to
take any action with respect to the registration or the declaration of
effectiveness of the registration statement following written notice to the
Holders from the Company (a "SUSPENSION NOTICE") of the existence of any
state of facts or the happening of any event (including pending negotiations
relating to, or the consummation of, a transaction, or the occurrence of any
event that the Company believes, in good faith, requires additional
disclosure of material, non-public information by the Company in the
registration statement that the Company believes it has a bona fide business
purpose for preserving confidentiality or that renders the Company unable to
comply with the published rules and regulations of the SEC promulgated under
the Securities Act or the Exchange Act, as in effect at any relevant time
(the "RULES AND REGULATIONS")) that would result in (1) the registration
statement, any amendment or post-effective amendment thereto, or any document
incorporated
12
<PAGE>
therein by reference containing an untrue statement of a material fact or
omitting to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (2) the prospectus issued
under the registration statement, any prospectus supplement, or any document
incorporated therein by reference including an untrue statement of material
fact or omitting to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, PROVIDED that the Company (1) shall not issue a
Suspension Notice more than twice in any twelve (12) month period, (2) shall
use its best efforts to remedy, as promptly as practicable, but in any event
within ninety (90) days of the date on which the Suspension Notice was
delivered, the circumstances that gave rise to the Suspension Notice and
deliver to the Holders notification that the Suspension Notice is no longer
in effect and (3) shall not issue a Suspension Notice for any period during
which the Company's executive officers are not similarly restrained from
disposing of shares of the Company's Common Stock. Upon receipt of a
Suspension Notice from the Company, all time limits applicable to the Holders
under this Section 2 shall automatically be extended by an amount of time
equal to the amount of time the Suspension Notice is in effect, the Holders
will forthwith discontinue disposition of all such shares pursuant to the
registration statement until receipt from the Company of copies of prospectus
supplements or amendments prepared by or on behalf of the Company (which the
Company shall prepare promptly), together with a notification that the
Suspension Notice is no longer in effect, and if so directed by the Company,
the Holders will deliver to the Company all copies in their possession of the
prospectus covering such shares current at the time of receipt of any
Suspension Notice.
3. OBLIGATIONS REGARDING CONFIDENTIAL INFORMATION.
3.1 CONFIDENTIAL INFORMATION. Confidential Information
(as defined below) shall not be disclosed by any party hereto to any third
party except in accordance with the provisions set forth below. For purposes
of this Agreement, the term "CONFIDENTIAL INFORMATION" refers to the
following items: (i) the existence of this Agreement and the Asset Purchase
Agreement, and (ii) the terms and provisions of this Agreement and the Asset
Purchase Agreement; PROVIDED, HOWEVER, that Confidential Information shall
not include any information that was (i) publicly known and generally
available in the public domain prior to its disclosure by the Company, (ii)
becomes publicly known and generally available in the public domain through
no action or inaction on the part of the Company or (iii) becomes publicly
known by written consent or other action of Intel.
3.2 PUBLIC ANNOUNCEMENTS. Neither the Company nor
Intel shall issue any press release or otherwise make any public statements
with respect to the transactions contemplated by this Agreement and the Asset
Purchase Agreement, without the prior consent of the other party, 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. The Company and
Intel agree there shall be no public announcement of this Agreement or the
Asset Purchase Agreement 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 the transactions contemplated by this
Agreement and the Asset Purchase Agreement to Intel's employees, customers,
vendors and strategic partners at such time and in such form as is mutually
agreed upon by the parties.
3.3 LEGALLY COMPELLED DISCLOSURE. The Company agrees
that it will provide Intel with drafts of any documents, press releases or
other filings in which the Company desires
13
<PAGE>
to disclose this Agreement and the Asset Purchase Agreement, the transactions
contemplated hereby or thereby, or any other Confidential Information is
disclosed at least three (3) business days prior to the filing or disclosure
thereof, and that it will make any changes to such materials as requested by
Intel unless advised by counsel that the Rules and Regulations require
otherwise.
3.4 OTHER INFORMATION. The provisions of this Section
3 shall be in addition to, and not in substitution for, the provisions of any
separate nondisclosure agreement executed by any of the parties hereto with
respect to the transactions contemplated hereby. Additional disclosures and
exchange of confidential information between the Company and Intel shall be
governed by the terms of the CNDA. In addition, the terms of the Supply
Agreement of even date herewith between the Company and Intelshall be
governed by the confidentiality provisions therein.
4. ASSIGNMENT AND AMENDMENT.
4.1 ASSIGNMENT OF RIGHTS. The rights of Intel under
Sections 2.2 and 2.3 are transferable to a Person who acquires at least
twenty percent (20%) of the Preferred Stock owned by Intel on the date of
this Agreement; provided, however, that such transferred rights are not
subject to further assignment. No assignment permitted by this Section 4
shall be effective until the Company is given written notice by the assigning
party, stating the name and address of the assignee and identifying the
securities of the Company as to which the rights in question are being
assigned. In all cases, any such assignee shall receive such assigned rights
subject to all the terms and conditions of this Agreement.
4.2 AMENDMENT OF RIGHTS. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Intel (or,
in the case of an amendment or waiver of any provision of Section 2 hereof,
only with the written consent of the Company and the Holders of a majority of
the Registrable Securities then outstanding and entitled to the registration
rights set forth in Section 2 hereof). Any amendment or waiver effected in
accordance with this Section 4.2 shall be binding upon Intel, each Holder,
each permitted successor or assignee of Intel or such Holder and the Company.
5. RIGHT OF FIRST OFFER
If at any time Intel shall desire to sell, transfer or
otherwise dispose of ten percent (10%) or more of its shares of Preferred
Stock in a single transaction or series of related transactions (the "Offered
Shares"), Intel shall deliver written notice of its desire to do so (the
"Sale Notice") to the Company. The Company then shall have ten (10) days to
submit to Intel an offer to purchase the Offered Shares for cash payable not
later than ten (10) days after acceptance (the "Company Offer"). Intel shall
have the right and option, within ten (10) days after the Company Offer, to
accept irrevocably such offer. If, after the end of the ten (10) day period
following the Company Offer, Intel shall not have accepted the Company Offer,
Intel shall have one hundred twenty (120) days in which to sell the Offered
Shares to any bona fide third party, at a price not less than ninety five
percent (95%) of that contained in the Company Offer.
14
<PAGE>
6. GENERAL PROVISIONS.
6.1. NOTICES. Except as may be otherwise provided
herein, all notices, requests, waivers and other communications made pursuant
to this Agreement shall be in writing and shall be conclusively deemed to
have been duly given: (a) when hand delivered to the other party; (b) when
received when sent by facsimile at the address set forth below; (c) three
business days after deposit in the U.S. mail with first class or certified
mail receipt requested postage prepaid and addressed to the other party as
set forth below; or (d) the next business day after deposit with a national
overnight delivery service, postage prepaid, addressed to the parties as set
forth below with next-business-day delivery guaranteed, provided that the
sending party receives a confirmation of delivery from the delivery service
provider.
To the Company:
Centennial Technologies, Inc.
7 Lopez Road
Wilmington, Massachusetts 01887
Attn: President
Fax: (978) 988-7651
With copies to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Raymond C. Zemlin, P.C.
Fax: (617) 523-1231
To Intel: as provided on the signature page hereto
Each person making a communication hereunder by facsimile shall
promptly confirm by telephone to the person to whom such communication was
addressed each communication made by it by facsimile pursuant hereto but the
absence of such confirmation shall not affect the validity of any such
communication. A party may change or supplement the addresses given above, or
designate additional addresses, for purposes of this Section 5.1 by giving the
other party written notice of the new address in the manner set forth above.
6.2 ENTIRE AGREEMENT. This Agreement and the Asset
Purchase Agreement, together with all the schedules and exhibits hereto,
constitutes and contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties respecting the subject matter hereof.
6.3 GOVERNING LAW. This Agreement shall be governed in
all respects by the laws of the State of Delaware without regard to
provisions regarding conflict of laws.
6.4 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, then such
provision(s) shall be excluded from this
15
<PAGE>
Agreement and the balance of this Agreement shall be interpreted as if such
provision(s) were so excluded and shall be enforceable in accordance with its
terms.
6.5 THIRD PARTIES. Nothing in this Agreement, express
or implied, is intended to confer upon any person, other than the parties
hereto and their permitted successors and assigns, any rights or remedies
under or by reason of this Agreement.
6.6 SUCCESSORS AND ASSIGNS. Subject to the provisions
of Section 4.1, the provisions of this Agreement shall inure to the benefit
of, and shall be binding upon, the successors and permitted assigns of the
parties hereto.
6.7 CAPTIONS. The captions to sections of this
Agreement have been inserted for identification and reference purposes only
and shall not be used to construe or interpret this Agreement.
6.8 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.9 ADJUSTMENTS FOR STOCK SPLITS, ETC. Wherever in
this Agreement there is a reference to a specific number of shares of stock,
then, upon the occurrence of any subdivision, combination or stock dividend,
the specific number of shares so referenced in this Agreement shall
automatically be proportionally adjusted to reflect the affect on the
outstanding shares of such class or series of stock by such subdivision,
combination or stock dividend.
{Balance of this page intentionally left blank}
16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year herein above first written.
CENTENNIAL TECHNOLOGIES, INC.
By: /s/ Richard J. Pulsifer
------------------------------------------
Richard J. Pulsifer
Chief Financial Officer,
Secretary and Treasurer
INTEL CORPORATION
By: /s/ Noel S. Lazo
------------------------------------------
Name: Noel S. Lazo
Title: Assistant Treasurer
Address: 2200 Mission College Boulevard
Santa Clara, California 95052
[Signature Page to Rights Agreement between Centennial Technologies, Inc.
and Intel Corporation]
17
<PAGE>
EXHIBIT 2.3
SUBORDINATED SECURED PROMISSORY NOTE
$4,000,000 Santa Clara, California
December 29, 1999
FOR VALUE RECEIVED, Centennial Technologies, Inc., a Delaware
corporation ("CENTENNIAL"), promises to pay to Intel Corporation, a Delaware
corporation ("INTEL"), the principal sum of Four Million Dollars ($4,000,000),
together with interest on the outstanding principal of this Subordinated Secured
Promissory Note (this "NOTE") in accordance with Sections 1 and 2 of this Note.
This Note is delivered pursuant to that certain Asset Purchase Agreement, dated
as of the date of this Note, by and between Centennial and Intel (the "PURCHASE
AGREEMENT"). Except as otherwise specified herein, all capitalized terms that
are not defined herein shall have the meanings ascribed to them in the Purchase
Agreement.
This Note is subject to the terms and entitled to the benefits
of the Purchase Agreement and a Security Agreement, dated as of the date of this
Note, between Centennial and Intel (the "SECURITY AGREEMENT").
1. MATURITY.
(a) Subject to the provisions of the Purchase Agreement and the
provisions of Section 3 of this Note, Centennial shall repay the unpaid
principal outstanding balance plus all interest accrued thereon on December 29,
2000 (the "REPAYMENT DATE"). All payments received shall be applied first
against costs of collection (if any), then against accrued and unpaid interest,
then against principal.
(b) Notwithstanding the provisions of Section 1(a), this outstanding
principal of and accrued interest on this Note shall become immediately due and
payable, at the option of Intel, upon consummation of a Change of Control
Transaction. A Change of Control Transaction shall mean: (i) a consolidation or
merger of Centennial with or into any other corporation or corporations, in
which the holders of Centennial's voting securities immediately prior to the
transaction do not hold a majority of the voting securities of the ultimate
surviving entity; (ii) a transaction or series of transactions in which fifty
percent (50%) or more of the voting shares of the Company are disposed of or
conveyed to a single person or Group (as defined in the Securities Exchange Act
of 1934, as amended); or (iii) a sale, lease, exchange or other disposition of
all or substantially all of the assets of Centennial.
2. INTEREST. Interest shall accrue at a rate equal to Nine Percent (9%)
per annum. Interest accrued on this Note shall be paid on the Repayment Date in
accordance with the provisions of Section 1.
3. SUBORDINATION. Intel subordinates the indebtedness evidenced by this
Note (the "LOAN AMOUNT") to: (a) any amounts outstanding under the Seven Million
Dollar ($7,000,000) working capital line of credit by and between Fleet Bank and
Centennial and any refinancing, replacement, modification or restatement of such
Line of Credit with Fleet Bank or any other replacement senior working capital
lender (the "Senior Lender") (the "LINE OF CREDIT"); and (b) capital equipment
leases not to exceed Seven Hundred Fifty Thousand Dollars ($750,000) in the
<PAGE>
aggregate; PROVIDED, HOWEVER, that the Loan Amount shall rank senior to any and
all other Indebtedness owing from Centennial (including but not limited to
interest thereon which may accrue subsequent to Centennial becoming subject to
any state or federal debtor-relief statute). For purposes of this Section 3, the
term Indebtedness is used in its most comprehensive sense and includes any and
all advances, debts, obligations and liabilities of Centennial heretofore, now,
or hereafter made, incurred or created, whether voluntary or involuntary, and
however arising, whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether Centennial may be liable
individually or jointly with others, including without limitation, obligations
and liabilities arising from notes repurchase agreements and trust receipts.
Centennial shall not make, and Intel shall not accept or receive, any payment on
account of principal, interest or any other amounts owing on this Note if
Centennial shall have received written notice from the Senior Lender that a
default has occurred under the terms of the Line of Credit. If any payment is
made violation of this Section 3, Intel shall promptly redeliver the same to
Senior Lender in the form received. So long as no written notice of default has
been received by Centennial, Centennial may make payments on this Note as
required by Section 1.
4. OBLIGATION TO PAY. Nothing contained herein shall impair, as between
Centennial and the holder of this Note, the obligation of Centennial, which is
absolute and unconditional, to pay the holder of this Note all principal and
accrued interest under this Note when the same become due and payable, or shall
prevent the holder of this Note, upon an Event of Default (as defined in Section
6 of this Note), from exercising all rights, powers and remedies otherwise
provided herein or by applicable law.
5. PREPAYMENT. The unpaid principal balance and all accrued interest
and any and all other sums payable to Intel hereunder may be prepaid by
Centennial prior to the Repayment Date upon ten (10) business days' prior
written notice to Intel. All prepayments shall be applied in the order provided
in Section 1.
6. DEFAULT. Each of the following events shall constitute an Event of
Default hereunder: (a) Centennial fails to pay the principal and interest due on
this Note on the Repayment Date; (b) there occurs any receivership, insolvency,
assignment for the benefit of creditors, bankruptcy, dissolution, liquidation,
or other winding up or similar proceeding with respect to Centennial (whether or
not involving insolvency or bankruptcy proceedings); (c) Centennial files a
petition in bankruptcy or if an involuntary petition in bankruptcy is filed
against Centennial and such involuntary petition is not dismissed within THIRTY
(30) DAYS; (d) Centennial is in material breach of any agreement with Intel,
including but not limited to the Purchase Agreement, the Security Agreement, the
Supply Agreement and this Note; and (e) an event of default occurs which results
in the acceleration of any Indebtedness of Centennial for borrowed money. Upon
the occurrence of an Event of Default under Section 6(d), Centennial shall have
thirty (30) days to cure such default after receipt of written notice of default
from Intel specifying the nature of Centennial's default; PROVIDED, HOWEVER,
that if the occurrence of any such Event of Default under Section 6(d) is in
dispute, Centennial's time and obligation to cure shall be extended pending the
resolution of such dispute. Upon the occurrence of an Event of Default under
Sections 6(a), 6(b), 6(c) or 6(e) (whether such occurrence shall come about
through the voluntary or involuntary actions by Centennial, by operation of law
or otherwise), or if Centennial is unable to cure its default under Section 6(d)
within such thirty (30) day period,
<PAGE>
including any extensions pursuant to the proviso of such Section 6(d), the
unpaid principal balance of this Note, together with all accrued interest
thereon, will become immediately due and payable. Following any such default,
Intel may pursue any legal or equitable remedies that it has available to it
under this Note and the Security Agreement.
7. MISCELLANEOUS.
(a) Centennial hereby waives presentment, demand, protest, notice of
dishonor, diligence and all other notices, any release or discharge arising from
any extension of time, discharge of a prior party, release of any or all of any
security given from time to time for this Note, or other cause of release or
discharge other than actual payment in full hereof.
(b) Intel shall not be deemed, by any act or omission, to have waived
any of his rights or remedies hereunder unless such waiver is in writing and
signed by Intel and then only to the extent specifically set forth in such
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a subsequent
event. No delay or omission of Intel to exercise any right, whether before or
after a default hereunder, shall impair any such right or shall be construed to
be a waiver of any right or default, and the acceptance at any time by Intel of
any past-due amount shall not be deemed to be a waiver of the right to require
prompt payment when due of any other amounts then or thereafter due and payable.
(c) Time is of the essence hereof. Upon any default hereunder, Intel
may exercise all rights and remedies provided for herein and by law or equity,
including, but not limited to, the right to immediate payment in full of this
Note.
(d) The remedies of Intel as provided herein, or any one or more of
them, or in law or in equity, shall be cumulative and concurrent, and may be
pursued singularly, successively or together at Intel's sole discretion, and may
be exercised as often as occasion therefor shall occur.
(e) In the event of any action at law, suit in equity or arbitration
proceeding in relation to this Note the prevailing party shall be paid by the
other party a reasonable sum for attorney's fees and expenses for such
prevailing party.
(f) If any provisions of this Note would require Centennial to pay
interest hereon at a rate exceeding the highest rate allowed by applicable law,
Centennial shall instead pay interest under this Note at the highest rate
permitted by applicable law.
(g) This Note shall be governed by and construed in accordance with and
the laws of the State of Delaware applicable to contracts wholly made and
performed in the State of Delaware.
(h) Upon receipt by Centennial of satisfactory evidence of the loss,
theft, destruction or mutilation of this Note, satisfactory indemnity, and
reimbursement for all reasonable expenses incidental to the replacement of this
Note, and upon surrender and cancellation of this Note, if mutilated, Centennial
will make and deliver a new Note identical in form and substance to this Note
(with a notation thereon indicating whether there has been any
<PAGE>
prepayment pursuant to Section 5 of this Note), and the lost, stolen, destroyed
or mutilated Note shall thereupon become void.
(i) Any notice or other communication (except payment) required or
permitted under this Note shall be in writing and shall be given in accordance
with the provisions of Section 11.01 of the Purchase Agreement.
(j) All headings and captions in this Note are for convenience only and
shall be disregarded for the purposes of construing or interpreting the
provisions of this Note.
Payment of this Note is subject to the terms and conditions of a
Subordination Agreement dated December 29, 1999 between the payee and Fleet
National Bank. A copy of said Subordination Agreement may be obtained, upon
written request of any holder of this Note, from Fleet National Bank, 100
Federal Street, Boston, MA 02110.
<PAGE>
IN WITNESS WHEREOF, Centennial has executed this Subordinated Secured
Promissory Note as of the date first above written.
CENTENNIAL TECHNOLOGIES, INC.
By: /s/ Richard J. Pulsifer
-----------------------
Name: Richard J. Pulsifer
-----------------------
Title: CFO
-----------------------
{Signature Page to Centennial Technologies, Inc. Note}
<PAGE>
EXHIBIT 2.4
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (hereinafter referred to as the "AGREEMENT") is
made effective as of December 29, 1999, by Centennial Technologies, Inc., a
Delaware corporation (hereinafter referred to as "DEBTOR") in favor of Intel
Corporation, a Delaware corporation (hereinafter referred to as "SECURED
PARTY").
WHEREAS, Debtor and Secured Party have entered into that certain Asset
Purchase Agreement, dated of even date herewith (the "PURCHASE AGREEMENT"),
pursuant to which Secured Party has agreed to sell to Debtor, and Debtor has
agreed to purchase from Secured Party, certain assets of Secured Party specified
therein;
WHEREAS, Debtor has executed that certain Subordinated Secured Promissory
Note, of even date herewith, as may be from time to time amended or extended
(the "NOTE"), in favor of Secured Party pursuant to Section 2.06 of the Purchase
Agreement; and
WHEREAS, in connection with the Note, Debtor has agreed to grant Secured
Party a security interest in the collateral described on SCHEDULE A hereto (the
"COLLATERAL"), on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. CREATION OF SECURITY INTEREST. Debtor hereby grants to Secured Party a
continuing security interest in the Collateral, and in all of Debtor's present
and hereafter acquired right, title and interest in and to the Collateral, for
the purpose of securing payment of all indebtedness, obligations and liabilities
of Debtor to Secured Party arising under the Note.
2. WARRANTIES, REPRESENTATIONS AND COVENANTS OF DEBTOR. Debtor hereby
warrants, represents and covenants, as of the date hereof and as of all dates
hereafter, as follows:
(a) Debtor is the sole owner of the Collateral, free from any lien,
security interest, encumbrance or adverse claim of any kind whatsoever, except
those existing on the date hereof and any future liens securing the Debtor's
Line of Credit (as defined in the Note) ("PERMITTED LIENS"). Debtor will notify
the Secured Party of, and will defend the Collateral against, all claims and
demands of all other persons at any time claiming any interest therein, other
than Permitted Liens;
(b) To the extent a security interest may be perfected in the Collateral
by the filing of a financing statement in accordance with the provisions of the
Massachusetts and other applicable U.S. jurisdictions' Uniform Commercial Code,
Secured Party will have a first priority security interest in the Collateral,
subject only to any financing statements filed with respect to Permitted Liens;
<PAGE>
(c) Debtor shall keep the Collateral in good condition and repair,
ordinary wear and tear excepted, and will not allow any Liens to be created on
the Collateral as a result of any repairs thereto;
(d) Debtor shall maintain insurance with respect to the Collateral in
accordance with the insurance standards and practices adhered to generally by
owners of like collateral;
(e) At the request of Secured Party, Debtor has or will join Secured
Party in executing one or more financing statements pursuant to the
Massachusetts and other applicable U.S. jurisdictions' Uniform Commercial Code
in form reasonably satisfactory to the Secured Party and necessary to perfect
the security interest of Secured Party in the Collateral, and, additionally,
Debtor shall prepare and file all of the same, if Secured Party so requests, at
the expense of Debtor;
(f) If the Collateral or any part thereof is sold, transferred, exchanged
or otherwise disposed of, the security interest of Secured Party shall extend to
the proceeds of such sale, transfer, exchange or other disposition.
(g) Debtor will pay prior to delinquency all taxes and assessments
assessed against, levied upon or placed against the Collateral, or upon this
Agreement or the Note ("IMPOSITIONS") and shall deliver to Secured Party, within
twenty (20) business days after receipt of a written request from Secured Party,
a receipt or other evidence satisfactory to Secured Party of the payment
thereof.
(h) Debtor will to the extent commercially reasonable execute, alone or
with Secured Party, any document, will procure any document and will do all
other acts and pay all connected costs in a timely and proper manner, which may
be reasonably necessary to protect the Collateral against the rights, claims or
interests of third persons with the exception of Permitted Liens. The specific
undertakings required of Debtor in this Agreement shall not be construed to
exclude the aforementioned general obligation.
3. PRESERVATION OF COLLATERAL BY SECURED PARTY. Should Debtor refuse to
make any payment, refuse to perform or observe any other covenant, condition or
obligation, or fail to take any action which Debtor is obligated hereunder to
make, perform, observe, take or do, at the time or in the manner herein
provided, then Secured Party may, at its sole discretion, upon ten (10) business
days' prior written notice to Debtor, without releasing Debtor from any
obligation, covenant or condition hereof, make, perform, observe, take or do the
same in such manner and to such extent as Secured Party may deem necessary to
protect its security interest in and the value of the Collateral. Furthermore,
Secured Party may commence, defend, appeal or otherwise participate in any
action or proceeding purporting to affect its security interest in and the value
of the Collateral. Debtor hereby agrees to reimburse Secured Party on demand for
any payment made, or any reasonable expense incurred, by Secured Party pursuant
to the foregoing authorization (including court costs and reasonable attorneys'
fees and disbursements), and agrees further to pay interest thereon, at the rate
provided in the Note, from the date of said payment or expenditure. Debtor may
sell its shares of stock in Century Electronics
2
<PAGE>
Manufacturing, Inc. but the Secured Party's security interest in the stock
shall extend to the proceeds thereof.
4. USE OF COLLATERAL BY DEBTOR. Except during any period in which an Event
of Default (as defined in Section 5) has occurred and is continuing, Debtor may
have possession of the Collateral and use it in any lawful manner not
inconsistent with this Agreement or applicable law. In connection therewith,
Debtor may dispose of Collateral in the ordinary course of its business.
5. DEFAULT. The occurrence of any of the following shall constitute an
event of default (hereinafter referred to as an "EVENT OF DEFAULT") hereunder:
(a) any "Event of Default" occurs under the Note;
(b) any representation or warranty of Debtor in this Agreement is false
in any material respect, and the condition resulting in such representation or
warranty being false is not cured within thirty (30) days after written notice
from Secured Party; or
(c) Debtor fails to perform or observe in any material respect any
agreement or covenant under this Agreement and such failure is not cured within
thirty (30) business days after written notice from Secured Party.
6. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default,
Secured Party may, in addition to exercising those remedies specified in the
Note, at any time, at its election, without further notice, and to the extent
permitted by law:
(a) Foreclose this Agreement and the security interest granted hereby,
as herein provided, or in any manner permitted by law, either personally,
through agents or by means of a court appointed receiver, in its sole
discretion, and take possession of all or any of the Collateral and exclude
therefrom Debtor and all others claiming through or under Debtor, and exercise
any and all of the rights and remedies conferred upon Secured Party by the Note
or by applicable law, either concurrently or in such order as Secured Party may
determine, and sell, lease or otherwise dispose of, or cause to be sold, leased
or otherwise disposed of, in such order as Secured Party may determine, as a
whole or in such parcels as Secured Party may determine, the Collateral;
(b) Make such payments and do such acts as Secured Party may deem
necessary to protect its security interest in the Collateral, including, without
limitation, paying, purchasing, contesting or compromising any encumbrance,
charge, claim or lien which is prior to or superior to the security interest
granted hereunder, and, in exercising any such powers or authority, pay all
expenses incurred in connection therewith, and all funds expended by Secured
Party in protecting their security interest, with interest thereon at the rate
provided in the Note, shall be deemed additional indebtedness secured by this
Agreement;
(c) Publicly or privately sell, lease or otherwise dispose of the
Collateral in accordance with the requirements of the Massachusetts or other
applicable U.S.
3
<PAGE>
jurisdictions' Uniform Commercial Code, and upon such terms and in such
manner as Secured Party may in its sole discretion determine. Secured Party may
be a purchaser at any public sale. Secured Party will give Debtor reasonable
notice of the time and place of any public sale of the Collateral or of the time
after which any private sale or any other intended disposition of the Collateral
is to be made, and such notice, if given to Debtor pursuant to the provisions of
Section 9 hereof at least ten (10) business days prior to the date of any public
sale or disposition or the date after which any private sale or disposition may
occur, shall constitute reasonable notice of such sale, lease or other
disposition. Unless otherwise required by applicable law, the Collateral shall
not be required to be exhibited, presented or displayed at any sale;
(d) Require Debtor to assemble the Collateral and deliver or make it
available to Secured Party at a place, to be designated by Secured Party, which
is reasonably convenient to both parties; and
(e) Exercise any remedies of a secured party under the laws of the
states in which the Collateral is located and under the Delaware Uniform
Commercial Code or any other applicable law.
In addition to the payment of the indebtedness secured hereby, the
Debtor agrees to pay to Secured Party all reasonable expenses incurred by
Secured Party, after the occurrence of an Event of Default hereunder, in
connection with the retaking, holding, preparing for sale or sale of the
Collateral including reasonable attorneys' fees and costs.
The proceeds of any sale under this Section 6 shall be applied as
follows: First: To the payment of all of the costs and expenses of any sale or
collection incurred by Secured Party, including, without limitation, reasonable
attorneys' fees; Second: To the payment in full of the obligations evidenced by
the Note; and Third: Any surplus then remaining to Debtor, its successors or
assigns, or to whomever may be lawfully entitled to receive the same, or as a
court of competent jurisdiction may direct.
7. OTHER REMEDIES. The remedies hereunder are cumulative and not exclusive
and Secured Party shall have the right to enforce one or more remedies
hereunder, successively or concurrently, and such action shall not operate to
estop or prevent Secured Party from pursuing any further remedy which they may
have, and any repossession or retaking or sale of the Collateral pursuant to the
terms hereof shall not operate to release Debtor until full payment of all
obligations evidenced by the Note has been made.
8. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware, excluding
laws regarding choice or conflicts of laws. The laws of the states in which
Collateral is located shall govern perfection and enforcement of the security
interest granted hereby.
9. NOTICES. Unless otherwise specified herein, all notices hereunder shall
be in writing and shall be deemed to have been given when delivered by hand,
when properly deposited in the mails postage prepaid or when delivered by
overnight courier to Debtor at Centennial Technologies, Inc., 7 Lopez Road,
Wilmington, Massachusetts 01887, Attention:
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President, or to Secured Party at Intel Corporation, 200 Mission College
Boulevard, Santa Clara, California 95054, Attention: Treasurer.
10. SUCCESSORS AND ASSIGNS. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof may be assigned by
any party without the consent of the other party, which consent shall not be
unreasonably withheld. Nothing contained herein, express or implied, is intended
to confer upon any person or entity other than the parties hereto and their
successors in interest and permitted assignees any rights or remedies under or
by reason of this Agreement unless so stated herein to the contrary.
11. MODIFICATION. This Agreement may not be changed, modified, released,
discharged, abandoned or otherwise amended, in whole or in part, except by an
instrument in writing signed by Debtor and Secured Party.
12. WAIVER. By exercising or failing to exercise any of their rights,
options or elections hereunder, Secured Party shall not be deemed to have waived
any breach or default on the part of Debtor or to have released Debtor from any
of its obligations hereunder, unless such waiver or release is in writing and
signed by Secured Party. In addition, the waiver by Secured Party of any breach
hereof or default in payment of any indebtedness secured hereby shall not be
deemed to constitute a waiver of any succeeding breach or default.
13. ENTIRE AGREEMENT. This Agreement together with the Note represent the
entire agreement of the parties relating to the subject matter hereof. All prior
or contemporaneous agreements, understandings, representations and statements,
oral or written, are merged herein.
14. SEVERABILITY. Any provision of this Agreement which is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.
15. COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
16. HEADINGS. The headings to the sections contained in this Agreement are
for the convenience of the parties only and shall not be applied in interpreting
or construing the meaning of this Agreement.
17. ATTORNEYS' FEES. If any party institutes litigation or arbitration to
interpret or enforce this Agreement, or to recover damages for breach of this
Agreement, the prevailing party shall be entitled to recover costs of suit or
arbitration and to recover actual and reasonable attorneys' fees. A party can be
the prevailing party if the proceedings are brought to a final judgment or award
only if the party recovers a judgment or award in excess of the amount, if any,
offered in compromise by the other party. No sum of attorneys' fees shall be
included in
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any computation of the amount of judgment or award for the purpose
of determining whether a party is entitled to recover costs or attorneys' fees.
6
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day of the year first above written.
CENTENNIAL TECHNOLOGIES, INC.
By: /s/ Richard J. Pulsifer
---------------------------------
Name: Richard J. Pulsifer
Title: Chief Financial Officer,
Secretary and Treasurer
INTEL CORPORATION
By: /s/ Noel S. Lazo
---------------------------------
Name: Noel S. Lazo
Title: Assistant Treasurer
[Signature Page to Security Agreement between
Centennial Technologies, Inc. and Intel Corporation]
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SCHEDULE A
Debtor: CENTENNIAL TECHNOLOGIES, INC.
Secured Party: INTEL CORPORATION
DESCRIPTION OF COLLATERAL
The collateral consists of all of Debtor's right, title and interest
in and to the accounts, receivables, cash, inventory and equipment now owned or
hereafter acquired by Debtor including without limitation the following assets:
(a) FIXTURES, FURNITURE, EQUIPMENT, ETC. All fixed assets, fixtures,
furniture, furnishings, machinery, accessories, computers and peripheral
devices, and office and other equipment of Debtor;
(b) INVENTORY AND SUPPLIES. All inventory, office supplies and similar
materials, all customer lists, all files and documents (including credit
information), marketing materials and other business and financial records,
files and documents (whether in hard copy or computer format) of Debtor;
(c) CONTRACTS AND AGREEMENTS, ETC. All contracts and agreements entered
into by Debtor in the ordinary course of business or otherwise;
(d) SECURITY DEPOSITS AND CLAIMS AGAINST THIRD PARTIES. All security
deposits with third parties, all claims against third parties, and all defenses
against third parties for claims;
(e) PREPAID EXPENSES, ETC. All prepaid expenses and rentals; and
(f) CASH, BANK ACCOUNTS AND ACCOUNTS RECEIVABLE. All cash, bank deposits,
investments securities, accounts and notes receivable of Debtor.
<PAGE>
EXHIBIT 99.1
------------
FOR IMMEDIATE RELEASE Contacts:
For Centennial Technologies:
Media: Karen Schwartzman (617) 437-9990
Investors: Richard Pulsifer (978) 805-2323
CENTENNIAL TECHNOLOGIES BUYS INTEL FLASH CARD BUSINESS;
CAPITAL EXPENDITURES IN PLANT READIED OPERATION FOR ACQUISITION
DECEMBER 30, 1999 -- Boston, MA - Centennial Technologies, Inc. (OTC:
CENL) today announced that it has acquired the flash memory card business of
Intel Corporation a business with ongoing annual revenues of approximately $25
million. The acquisition allows Centennial the opportunity to increase
significantly its current annual revenue stream and build on its customer base
in the networking and telecommunications industries.
Centennial's acquisition includes the PCMCIA card families (Series 2, Value
series 100 and 200) and the miniature card families (Series 100 and 200).
Already a global leader in the manufacture and sale of custom and industry
standard PC cards to original equipment manufacturers (OEMs), this acquisition
positions Centennial as one of the world's leading suppliers of linear flash
memory cards to the OEM market. Centennial posted revenues of $14.3 million for
the two quarters completed this fiscal year to date, all from its PC card
business.
"During the past year, we invested heavily in new equipment to expand our
manufacturing capabilities, to increase efficiencies and production capacity,
and to ready ourselves for growth. The planning and investments we made then are
paying off now," said Centennial President and Chief Executive Officer L.
Michael Hone. "We also believe that our consistent commitment to product quality
and customer service are well known throughout the industry and help put us in
the position to assume this business"
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"Intel is a recognized leader in the booming flash market segment," said
Curt Nichols, general manager of Intel's Flash Products Division, based in
Folsom, Calif. "Intel's leadership position is a result of customer demand
driven by a forward-looking silicon strategy that includes an investment of over
$1 billion in new products, packages and technologies.
"From an internal and market perspective, the timing was right for Intel to
find a buyer for our flash card line. Centennial Technologies, as a world leader
in providing PC cards and memory modules to OEMs, is ideally suited to maximize
and expand on this piece of Intel's successful flash business."
INVESTMENT IN PHILIPS EQUIPMENT A KEY FACTOR IN ACQUISITION READINESS
Centennial's investment in new Philips equipment last year included six
surface mount assembly machines that can handle a myriad of applications
including chip shooting capabilities for medium volume and ultra-fine pitch
demand. The combined output specifications include the placement of 100,000
components per hour, high reliability and exceptional accuracy.
"Our newest investment improves efficiency and maximizes productivity by
allowing us to respond to customer orders with additional lines of
high-precision surface mount equipment," said Jacques Assour, Centennial's
Senior Vice President Operations. "This equipment prepares us for the dramatic
growth we expect to see as we integrate Intel's customers. It also allows us to
bring on that business without compromising quality and customer satisfaction
standards that our long-standing customers have come to expect from us."
Centennial also intends to add staff to get the full benefit of this new
capability and to support the Intel purchase.
This is the first acquisition by Centennial under Hone and his management
team, who were brought on in 1997 to steward the Company's financial turnaround
following a well-publicized scandal involving Centennial's former senior
management and resulting in the restatement of the Company's reported financial
results. Centennial (Ticker: CENL), which reported its sixth straight profitable
quarter this fall, is traded on the Over the Counter Electronic Bulletin Board.
This press release contains forward-looking statements. The matters
expressed in such statements are subject to numerous risks and uncertainties,
including, without limitation, the continued development and utilization of
computing and electronic equipment that utilize the Company's PC Cards, the
Company's ability to compete with other manufacturers of PC Cards, the Company's
ability to adapt to increased pricing pressures, the Company's ability to keep
pace with rapid technological changes, evolving industry standards and rapid
product obsolescence, the Company's ability to obtain sufficient quantities of
computer memory chips and other electronic components used in its PC Cards at
competitive prices, the Company's dependence on a limited number of customers
for significant revenues and other risks identified in filings made by
Centennial Technologies, Inc. with the Securities and Exchange Commission (the
<PAGE>
"Commission") including Centennial's Form 10-Q filed with the Commission on
August 12, 1999 under the heading "Risk Factors."
Centennial Technologies, Inc. provides custom and industry standard PC
Cards for original equipment manufacturers. Centennial is a global leader in the
integration of patented and proprietary technology into application-specific
cards for commercial, industrial and military markets. The Company's
headquarters and ISO 9001 certified engineering and manufacturing facility are
located in Wilmington, Massachusetts, just north of Boston, with sales and
services offices in California, Florida, North Carolina, Indiana and
Pennsylvania. The Company's international sales and service operations are
headquartered in the United Kingdom. More information about Centennial is
available at http://www.cent-tech.com.
Intel, the world's largest chip maker, is also a leading manufacturer of
computer, networking, and communications products. Additional information is
available at http://www.intel.com/pressroom/.
