Document/Exhibit Description Pages Size
1: 8-K Form 8-K Dated April 1, 1997 5 25K
2: EX-2.1 Debtor's First Amended Plan of Reorganization 49 126K
3: EX-2.2 First Modification to Plan of Reorganization 3 11K
4: EX-2.3 Asset Purchase Agreement 27 129K
5: EX-99.1 Engineering Services Agreement 10 35K
6: EX-99.2 Facilities and Equipment Agreement 8 29K
7: EX-99.3 License Agreement 11 38K
Exhibit 2.3
ASSET PURCHASE AGREEMENT
by and between
ROCKWELL SEMICONDUCTOR SYSTEMS, INC.
AND
WEITEK CORPORATION
Dated as of December 11, 1996
TABLE OF CONTENTS
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ARTICLE I - SALE AND PURCHASE OF ASSETS............................................................................... 1
SECTION 1.1 Sale and Purchase of Assets..................................................................... 1
ARTICLE II - ASSUMPTION OF LIABILITIES................................................................................ 2
SECTION 2.1 Assumed Liabilities............................................................................. 2
SECTION 2.2 Retained Liabilities............................................................................ 2
ARTICLE III - PURCHASE PRICE.......................................................................................... 3
SECTION 3.1 Purchase Price.................................................................................. 3
SECTION 3.2 Allocation of Purchase Price.................................................................... 3
SECTION 3.3 Purchase Price Adjustment....................................................................... 3
ARTICLE IV - CLOSING.................................................................................................. 4
SECTION 4.1 Closing......................................................................................... 4
SECTION 4.2 Closing Deliveries of Seller.................................................................... 4
SECTION 4.3 Closing Deliveries of Buyer..................................................................... 4
SECTION 4.4 Transfer Taxes.................................................................................. 4
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF SELLER.................................................................. 4
SECTION 5.1 Organization.................................................................................... 4
SECTION 5.2 Authority....................................................................................... 5
SECTION 5.3 No Breach....................................................................................... 5
SECTION 5.4 Subsidiaries.................................................................................... 5
SECTION 5.5 Taxes........................................................................................... 5
SECTION 5.6 Property; Assigned Agreements................................................................... 5
SECTION 5.7 Environmental Matters........................................................................... 6
SECTION 5.8 Governmental Approvals.......................................................................... 6
SECTION 5.9 Compliance With Applicable Law.................................................................. 6
SECTION 5.10 Licenses; Permits............................................................................... 7
SECTION 5.11 Employees; Labor Matters; Employee Benefit Plans; Employment,................................... 7
ARTICLE VI - REPRESENTATIONS AND WARRANTIES........................................................................... 8
SECTION 6.1 Organization and Standing....................................................................... 8
SECTION 6.2 Authority....................................................................................... 8
SECTION 6.3 No Breach....................................................................................... 8
SECTION 6.4 Governmental Approvals.......................................................................... 8
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE VII - COVENANTS.............................................................................................. 9
SECTION 7.1 Covenants of Seller............................................................................ 9
SECTION 7.2 Access to Information.......................................................................... 10
SECTION 7.3 Further Action................................................................................. 10
SECTION 7.4 Offer of Employment............................................................................ 11
SECTION 7.5 Post-Execution License Review.................................................................. 11
ARTICLE VIII - CONDITIONS............................................................................................ 11
SECTION 8.1 Conditions to Each Party's Obligations......................................................... 11
SECTION 8.2 Conditions to Obligations of Buyer............................................................. 12
SECTION 8.3 Conditions to Obligation of Seller............................................................. 13
ARTICLE IX - TERMINATION............................................................................................. 14
SECTION 9.1 Termination.................................................................................... 14
ARTICLE X - SURVIVAL................................................................................................. 15
SECTION 10.1 Survival...................................................................................... 15
ARTICLE XI - INDEMNIFICATION......................................................................................... 15
SECTION 11.1 Indemnification by Seller..................................................................... 15
SECTION 11.2 Indemnification by Buyer...................................................................... 15
SECTION 11.3 Notice of Circumstances....................................................................... 15
SECTION 11.4 Certain Limitations........................................................................... 16
SECTION 11.5 Termination of Indemnification Obligations.................................................... 16
ARTICLE XII - ASSIGNMENT; PARTIES IN INTEREST; AMENDMENT; WAIVER..................................................... 17
SECTION 12.1 Assignment.................................................................................... 17
SECTION 12.2 Parties in Interest........................................................................... 17
SECTION 12.3 Amendment..................................................................................... 17
SECTION 12.4 Waiver........................................................................................ 17
ARTICLE XIII - GENERAL PROVISIONS.................................................................................... 17
SECTION 13.1 Effect of Investigation....................................................................... 17
SECTION 13.2 Fees and Expenses............................................................................. 17
SECTION 13.3 Notices....................................................................................... 18
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TABLE OF CONTENTS
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SECTION 13.4 Brokers....................................................................................... 19
SECTION 13.5 Captions; Currency............................................................................ 19
SECTION 13.6 Entire Agreement.............................................................................. 20
SECTION 13.7 Specific Performance.......................................................................... 20
SECTION 13.8 Severability.................................................................................. 20
SECTION 13.9 Exhibits and Schedules........................................................................ 20
SECTION 13.10 Governing Law................................................................................. 20
SECTION 13.11 Counterparts.................................................................................. 20
SCHEDULES
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Schedule 1.1 - *Assets. Schedule sets forth in specific detail all
assets proposed to be sold to Rockwell under the
terms of this Agreement. [schedule omitted]
Schedule 2.1 - Assumed Liabilities
Schedule 3.2 - Allocation of Purchase Price
Schedule 5.3 - *No Breach [schedule omitted]
Schedule 5.6 - *Property; Assigned Agreements [schedule omitted]
Schedule 5.9 - *Compliance with Applicable Law [schedule omitted]
Schedule 5.11(a) - *Employees [schedule omitted]
Schedule 5.11(c) - *Employer Benefit Plans [schedule omitted]
Schedule 5.11(d) - *Employee Agreements [schedule omitted]
* Upon request of the Securities and Exchange Commission, the Company will
furnish supplementally a copy of any omitted schedule.
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated and effective as of 1:30 p.m., on
December 11, 1996 by and between ROCKWELL SEMICONDUCTOR SYSTEMS, INC., a
Delaware corporation ("Buyer"), and WEITEK CORPORATION, a California corporation
("Seller").
W I T N E S S E T H :
WHEREAS, Seller intends to file, in form and substance satisfactory to
Buyer and its counsel, (i) a voluntary petition for relief (the "Chapter 11
Case") under chapter 11 of Title 11 of the United States Code (the "Bankruptcy
Code"), in the United States Bankruptcy Court for the Northern District of
California (the "Bankruptcy Court"), (ii) a disclosure statement pursuant to
section 1125 of the Bankruptcy Code (the "Disclosure Statement") and (iii) a
plan of reorganization in compliance with section 1123 of the Bankruptcy Code
(the "Plan"), which will incorporate the terms of this Agreement, set forth the
proposed distributions to holders of Claims and Interests (as both are defined
in Section 1.1) and provide that the Buyer will acquire the Assets (as defined
in Section 1.1), free and clear of all Liens (as defined in Section 1.1), Claims
and Interests, pursuant to the terms of this Agreement;
WHEREAS, Seller desires to sell, and Buyer desires to purchase the
Assets (as defined in Section 1.1), and Seller desires to transfer and Buyer
desires to assume the Assumed Liabilities (as defined in Section 2.1), all
pursuant to the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements hereinafter contained, the parties hereto do hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF ASSETS
SECTION 1.1 Sale and Purchase of Assets. Subject to the terms and
conditions set forth herein, and in reliance upon the representations and
warranties contained herein, at the Closing (as defined in Section 4.1), for the
consideration specified in Section 3.1, Seller will sell, assign, convey,
transfer and deliver to Buyer, and Buyer will purchase and acquire from Seller,
all of Seller's right, title and interest in and to the following assets, as the
same shall exist as of the Closing Date (as defined in Section 4.1), free and
clear of all liens, mortgages, pledges, security interests, charges,
encumbrances, restrictions (collectively, "Liens"), equity interests of every
nature ("Interests") and claims of every nature, whether or not reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, known or unknown, secured or unsecured and arising at any
time ("Claims"):
(a) all machinery, equipment, tooling, vehicles, furniture and
fixtures, leasehold improvements, repair parts, tools, plant and office
equipment, computer hardware and software and other similar personal property
identified on Schedule 1.1, together with any rights or Claims of Seller arising
out of the maintenance or service contracts relating thereto or the breach of
any express or implied warranty by the manufacturers or sellers of any such
assets or any component part thereof;
(b) the United States government authorizations for B.
Chowdhuri, S. Goswami and R. Krishnaraj to work for Seller in the United States,
to the extent the same are transferable;
(c) all of Seller's rights and incidents of interest in and to
the lease identified on Schedule 1.1 (including the security deposit of $33,112
thereunder) (the "Lease");
(d) all of Seller's rights and incidents of interest in and to
the computer applications and operating programs identified on Schedule 1.1
(including, without limitation, the licenses and agreements under which Seller
obtained rights to such applications and operating programs); and
(e) all operating data and records (including payment and
maintenance histories) in the Seller's possession which relate to the Assets.
The assets to be sold, assigned, conveyed, transferred and
delivered to Buyer by Seller pursuant to this Agreement are hereinafter
collectively referred to as the "Assets". The term "Assets" will, to the extent
not prohibited by this Agreement, include all additions and replacements to any
of the items described in this Section 1.1 between the date of this Agreement
and the Closing Date, and will, to the extent not prohibited by this Agreement,
exclude all deletions, sales or other disposals of any of the foregoing between
the date of this Agreement and the Closing Date. The leases, license agreements,
contracts, agreements or other commitments and non-governmental licenses,
franchises, authorizations and approvals included in the Assets are hereinafter
referred to collectively as the "Assigned Agreements".
ARTICLE II
ASSUMPTION OF LIABILITIES
SECTION 2.1 Assumed Liabilities. Subject to the terms and conditions
set forth herein, and in reliance upon the representations and warranties
contained herein, at the Closing, in consideration for the sale, assignment,
conveyance, transfer and delivery of the Assets to Buyer, Seller will assign,
convey and transfer to Buyer, and Buyer will unconditionally assume and
undertake to pay, perform and discharge, in a timely manner and in accordance
with the terms thereof, the liabilities identified on Schedule 2.1 to the extent
such liabilities are incurred and become due at any time following the Closing
Date (the "Assumed Liabilities"), and no others. Without limiting the generality
of the foregoing, Buyer hereby agrees to assume, undertake and perform all
obligations of Seller under the Lease, to the extent that the lessor thereunder
determines that such obligations are applicable to Buyer. Buyer acknowledges
that Seller intends to terminate the letter of credit issued in favor of the
landlord under the Lease, effective upon the assignment of the Lease to Buyer,
and Buyer agrees to take such action as may be necessary to facilitate the
termination of such letter of credit, including providing substitute collateral
to the landlord under the Lease, if required.
SECTION 2.2 Retained Liabilities. Anything contained herein to the
contrary notwithstanding, it is expressly understood and agreed that none of
Buyer or any of Buyer's Subsidiaries (which, for purposes of this Agreement,
shall mean any person, partnership, joint venture, trust, corporation or other
entity (a "Person") in which a Person owns or controls, directly or
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indirectly, capital stock or other equity interests representing in excess of
50% of the outstanding voting stock or other equity interests) or Affiliates (as
defined in Rule 12b-2 of the regulations promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) has assumed, undertaken
to pay, perform or discharge and none thereof shall be liable for any Claim
against or Interest in Seller, unless such Claim against Seller is expressly
assumed by Buyer under Section 2.1 hereof. Under the Plan and subject to the
provisions of the Bankruptcy Code, Seller shall pay or make adequate provision
for the payment of all Claims against and Interests in Seller not so assumed by
Buyer and the discharge and satisfaction of all Liens upon the Assets.
ARTICLE III
PURCHASE PRICE
SECTION 3.1 Purchase Price. Subject to the terms and conditions set
forth herein, in consideration for the sale, assignment, conveyance, transfer
and delivery of the Assets, Buyer will, at the Closing (i) pay to Seller, by
wire transfer of immediately available U.S. Dollars to Seller's bank account, an
amount equal to $3,124,050 (the "Purchase Price") and (ii) assume the Assumed
Liabilities. The Purchase Price is subject to adjustment in accordance with
Section 3.3 hereof.
SECTION 3.2 Allocation of Purchase Price. Schedule 3.2 sets forth an
allocation of the Purchase Price and the Assumed Liabilities among the Assets in
accordance with Treas. Reg. 1.1060-1T (or any comparable provisions of state or
local tax law) or any successor provision. Except to the extent otherwise
required by applicable law, Seller and Buyer shall make all tax returns,
reports, forms, declarations, claims and other statements in a manner consistent
with Schedule 3.2 and shall not make any inconsistent statement or adjustment on
any returns or during the course of any Internal Revenue Service or other tax
audit.
SECTION 3.3 Purchase Price Adjustment. In the event that, for any
reason, Seller's right, title and interest in all or any of the software license
agreements set forth on Schedule 3.2 hereof under the heading "Key Software
Agreements" are not assigned to Buyer at the Closing, the Purchase Price shall
be reduced by an amount equal to the value of all such non-transferred Assets as
set forth on Schedule 3.2 hereof. The purchase price adjustment provided by this
Section 3.3 shall be Buyer's sole remedy with respect to Seller's inability to
deliver such Key Software Agreements, and such failure to deliver shall not
constitute a breach of this Agreement. In addition, in the event that Buyer
elects, pursuant to Section 7.5 hereof, either (a) to terminate the License
Agreement (as defined in Section 8.2(j) hereof), or (b) to reduce the technology
licensed thereunder, the Purchase Price shall be reduced by an amount equal to
(i) in the case of clause (a), the value of such License Agreement as set forth
on Schedule 3.2 hereof, or (ii) in the case of clause (b), the difference
between the value of such License Agreement as set forth on Schedule 3.2 hereof,
and the lowest aggregate price at which the Selected Technology (as defined in
Section 7.5 hereof) has been licensed by Seller during the three (3) year period
preceding the date hereof (which in any event will not exceed, in the aggregate,
$500,000). In addition, in the event that payment is made by Buyer pursuant to
the Facilities and Equipment Agreement (as defined in Section 13.2 hereof) of an
amount equal to the value set forth on Schedule 3.2 for "Workforce in Place,"
then the Purchase Price shall be reduced by such amount.
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ARTICLE IV
CLOSING
SECTION 4.1 Closing. The closing of the purchase and sale of the Assets
(the "Closing") will take place (i) at the offices of Seller's counsel, at 10:00
a.m. California time, on the business day immediately following the date on
which the Order becomes Final (each as defined below) and the satisfaction or
waiver of all other conditions set forth in Article VIII or (ii) at such other
place, date and time as Seller and Buyer may agree. The date of the Closing is
referred to herein as the "Closing Date". For purposes hereof, the term "Order"
shall mean an Order of the Bankruptcy Court, in form and substance satisfactory
to Buyer, entered after adequate and sufficient notice to all holders of Claims,
Interests and all other parties-in-interest, and an opportunity for a hearing,
pursuant to the applicable sections of the Bankruptcy Code, confirming the Plan
and duly authorizing the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof, and the term "Final" shall mean
that the Order shall have been entered on the docket maintained by the Clerk of
the Bankruptcy Court and (i) it shall not have been reversed, stayed, modified
or amended and the time to appeal, or seek review or rehearing, shall have
expired and as to which no appeal or petition for review, rehearing or
certiorari is pending, or (ii) if appealed, it shall have been affirmed (or the
appeal dismissed) and the time to appeal from such affirmance (or dismissal) or
seek review or rehearing thereof shall have expired or no further rehearing,
appeal, or petition for certiorari can be taken or granted.
SECTION 4.2 Closing Deliveries of Seller. At the Closing, Seller will
deliver or cause to be delivered to Buyer (i) such deeds, bills of sale and
instruments of assignment as shall reasonably be requested by Buyer to effect or
evidence the sale, assignment, conveyance, transfer and delivery of the Assets
to Buyer, and (ii) all closing certificates, opinions of counsel and other
documents required to be delivered by Seller to Buyer at the Closing pursuant to
this Agreement.
SECTION 4.3 Closing Deliveries of Buyer. At the Closing, Buyer will
deliver or cause to be delivered to Seller (i) the Purchase Price pursuant to
Section 3.1, (ii) such instruments of assumption as shall reasonably be
requested by Seller to effect or evidence the assumption by Buyer of the Assumed
Liabilities and (iii) all closing certificates and other documents required to
be delivered by Buyer to Seller at the Closing pursuant to this Agreement.
SECTION 4.4 Transfer Taxes. All applicable sales and transfer taxes
(including taxes, if any, imposed upon the transfer of real and personal
property) and filing, recording, registration, stamp, documentary and other
taxes and fees ("Transfer Taxes") that are payable (notwithstanding Section
1146(c) of the Bankruptcy Code) in connection with this Agreement, the
transactions contemplated by this Agreement or the documents giving effect to
such transactions, shall be paid by Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
SECTION 5.1 Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of California
with all requisite corporate power and authority to own its properties and to
carry on its business as presently conducted.
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SECTION 5.2 Authority. Seller has all requisite corporate power and
authority to execute and deliver this Agreement and, subject to entry of the
Order, to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by Seller and the consummation by
Seller of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Seller subject to entry of the Order
and except for any approvals of Seller's stockholders which would be required in
the absence of the Order. This Agreement has been duly executed and delivered by
Seller and constitutes the valid and binding obligation of Seller enforceable
against Seller in accordance with its terms, except as such enforceability may
be limited at any time prior to entry of the Order by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights in general and by general principles of equity
and except for any approvals of Seller's stockholders which would be required in
the absence of the Order.
SECTION 5.3 No Breach. The execution and delivery of this Agreement by
Seller and the performance thereof by Seller prior to commencement of the
Chapter 11 Case (to the extent any performance on the part of Seller is required
hereunder prior to the commencement of the Chapter 11 Case) or after entry of
the Order do not, and the consummation of the transactions contemplated hereby
and compliance with the provisions hereof will not, with or without the giving
of notice or the lapse of time, or both, conflict with, or result in a breach or
violation of or a default under, or give rise to a right of amendment,
termination, cancellation or acceleration of any obligation or to a loss of a
benefit under (i) the Articles of Incorporation or By-laws of Seller, or (ii)
except as set forth in Schedule 5.3, any contract, agreement, note, bond,
mortgage, indenture, lease, license, franchise, permit, concession, instrument,
obligation, commitment, covenant, understanding or arrangement to which Seller
is a party or by which any of its assets may be affected, or (iii) any order,
ruling, decree, judgment, arbitration award, statute, law, ordinance, rule,
regulation or stipulation to which Seller or its properties or assets is subject
except, in the case of items (ii) and (iii) above, for those which would not
have, individually or in the aggregate, a Material Adverse Effect (as defined
below). For purposes of this Agreement, "Material Adverse Effect" shall mean a
material adverse effect on the Assets, or on the ability of the Seller to
consummate the transactions contemplated by this Agreement.
SECTION 5.4 Subsidiaries. There are no companies, partnerships, joint
ventures or other entities or organizations in which Seller directly or
indirectly owns any equity or debt securities or has any other ownership
interest.
SECTION 5.5 Taxes. No Liens for taxes exist with respect to any of the
Assets, except for statutory Liens for taxes not yet due or payable.
SECTION 5.6 Property; Assigned Agreements. Seller has good and
marketable title to the Assets, free and clear of all Liens, except for those
set forth on Schedule 5.6 and statutory Liens for taxes not yet due or payable.
Seller is in full compliance with the terms of all Assigned Agreements, and no
breach or default on the part of Seller has occurred or, with notice or lapse of
time or both, will occur, under any of the Assigned Agreements. To the best
knowledge of Seller, each other party to each Assigned Agreement is in full
compliance with the terms of any applicable Assigned Agreements, and no breach
or default on the part of any such other party has occurred or, with notice or
lapse of time or both, will occur thereunder. Except as set forth on Schedule
5.6, all fees, royalties and maintenance payments in respect of each of the
software licenses described in Section 1.1(d) hereof have been paid through the
date of this Agreement, and all such software licenses are current and in full
force and effect. Pursuant to the Bankruptcy Code, the act of filing of the
Chapter 11 Case by Seller will not give rise to an enforceable claim for damages
from Seller or Buyer (as assignee thereof) under any Assigned Agreement. For
purposes of this Section 5.6 only, the term "Assigned
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Agreements" shall be deemed to exclude any service contracts and warranties
included among the Assigned Agreements by virtue of Section 1.1(a) and 1.1(b)
hereof.
SECTION 5.7 Environmental Matters. The premises demised under the Lease
have not, to the knowledge of Seller, been used at any time: (i) as a site for
the storage, except as authorized under applicable Environmental Laws (as
defined below), or disposal of any Hazardous Material (as defined below); or
(ii) so as to cause a violation of or to give rise to a removal, restoration or
reimbursement liability under any Environmental Law, and Seller has no liability
under applicable Environmental Law with respect to or as a result of (A) the
handling or removal by or at the request of Seller or any predecessor of Seller,
of any Hazardous Material at or from such leased properties, (B) the disposition
of such removed Hazardous Materials at any other locations, (C) the Release (as
defined below) or presence of Hazardous Materials or (D) the discontinuance,
sale or transfer of operations of any business conducted at the premises demised
under the Lease. Seller has complied in all material respects with all, and has
not violated in any material respect any, Environmental Laws in connection with
its business or operations, including the acquisition, storage, handling,
transportation, processing, use or disposal of any goods or materials, whether
as raw materials, work-in-process or finished goods.
As used in this Agreement, the term "Environmental Laws" means any and
all applicable treaties, laws, common law, regulations, enforceable
requirements, binding determinations, orders, decrees, judgments, injunctions,
permits, approvals, authorizations, licenses, variances, permissions, notices or
binding agreements issued, promulgated or entered into by any Governmental
Entity, relating to the environment, protection or preservation of human health
or safety, including the health and safety of employees, preservation or
reclamation of natural resources, or the management, Release or threatened
Release of Hazardous Materials in each case as in effect on the date hereof. As
used in this Agreement, the term "Hazardous Materials" means those materials,
substances or wastes that are regulated by, or form the basis of liability
under, any Environmental Law, including PCBs, pollutants, solid wastes,
explosive or regulated radioactive materials or substances, hazardous or toxic
materials, substances, wastes or chemicals, petroleum (including crude oil or
any fraction thereof) or petroleum distillates, asbestos or asbestos containing
materials, materials listed in 49 C.F.R. Section 172.101 and materials defined
as hazardous substances pursuant to Section 101(14) of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended to
the date hereof ("CERCLA"). As used in this agreement, the term "Release" shall
have the meaning set forth in Section 101(22) of CERCLA.
SECTION 5.8 Governmental Approvals. Except (a) for the Order and (b)
where the failure to obtain such consent, approval, order, authorization or
allowance, or to make any such filing, registration or notification, would not
have, individually or in the aggregate, a Material Adverse Effect, no approval,
order or authorization of, or filing or registration with, allowance by, or
consent of or notification to any federal, state or local government or any
court, administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity"), is required
to be obtained or made by Seller in connection with the execution and delivery
by Seller of this Agreement, the performance of obligations of Seller hereunder
or the consummation by Seller of the transactions contemplated hereby or for
preventing the termination of any material right, privilege or contract of
Seller included among the Assets.
SECTION 5.9 Compliance With Applicable Law. Except as set forth in
Schedule 5.9, (i) Seller is in compliance with all applicable laws, ordinances
and regulations of any Governmental Entity, including those relating to
occupational health and safety, (ii) no Claims or complaints from any
Governmental Entities or other parties have been asserted or received by Seller
during the past five years, and, to the knowledge of Seller, no Claims or
complaints are threatened, alleging that Seller is in violation of any such law,
ordinance or regulation, and (iii) Seller has not received notice
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from any Governmental Entity of any pending proceedings to take all or any part
of the properties of Seller leased under the Lease by condemnation or right of
eminent domain and, to the knowledge of Seller, no such proceedings are
threatened, except, in the case of clause (i), clause (ii) or clause (iii) of
this Section 5.9, for such noncompliance, Claims, complaints or proceedings
which would not have, individually or in the aggregate, a Material Adverse
Effect. This Section 5.9 does not relate to environmental matters, which are the
subject of Section 5.7.
SECTION 5.10 Licenses; Permits. Except for the City of San Jose,
California business license, there are no licenses, permits, approvals and other
authorizations from any Governmental Entities which are necessary for the
operation of the Assets in a manner consistent with good business practice and
in compliance with all laws applicable to such operation (including
Environmental Laws).
SECTION 5.11 Employees; Labor Matters; Employee Benefit Plans;
Employment, Termination and Severance Agreements.
(a) Schedule 5.11(a) sets forth a true, accurate and complete
list of the employees of Seller to whom Buyer has offered employment pursuant to
an employee retention agreement, conditioned upon closing under this Agreement
or the prior approval of such employment by the Bankruptcy Court (the
"Employees").
(b) Seller is not a party to any collective bargaining
agreement or other contract with or commitment to any labor union or association
representing any employee of Seller listed under subsections A and B of Schedule
5.11(a) (the "Employees"), nor does any labor union or collective bargaining
agent represent any Employee. No such agreement, contract or other commitment
has been requested by, or is under discussion by management of Seller (or any
management group or association of which Seller is a member or otherwise a
participant) with, any group of Employees or others, nor are there any
representation proceedings or petitions seeking a representation proceeding
presently pending against Seller with the National Labor Relations Board or any
labor relations tribunal, nor are there any other current activities known to
Seller to organize any of the Employees into a collective bargaining unit. There
is no unfair labor practice charge or complaint pending or, to the knowledge of
Seller, threatened against Seller. During the past five years, there has been no
labor strike, slow-down, work stoppage, arbitration or other work-related
dispute involving Seller and no such dispute is now pending or, to the knowledge
of Seller, threatened against Seller.
(c) Except as set forth on Schedule 5.11(c), there are not
currently in effect any pension, retirement, savings, profit sharing, deferred
compensation, bonus, stock option, incentive or special compensation or other
plan or any other employee benefit plan program, contract, arrangement,
agreement or understanding (whether written or oral) to which Seller contributes
or is required to contribute, or which Seller sponsors, maintains or administers
or which is otherwise applicable to Employees or retirees or categories of
Employees or retirees of Seller generally.
(d) Schedule 5.11(d) sets forth a true, accurate and complete
list of each employment, termination and severance agreement, contract,
arrangement and understanding (whether written or oral) with any of the
Employees. All such agreements, contracts, arrangements or understandings are
valid and enforceable, and neither Seller nor, to the knowledge of Seller, any
Employee is in default in any material respect under any thereof. Except as
separately set forth Schedule 5.11(d), Seller is not a party to any employment,
termination or severance agreement, contract, arrangement or understanding with
any Employee that is not terminable by its terms at will by Seller without
liability. Except as set forth on Schedule 5.11(d), this Agreement and the
transactions contemplated hereby will not result in any obligation to pay any
Employee severance pay or termination benefits.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer hereby represents and warrants to Seller as follows:
SECTION 6.1 Organization and Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
SECTION 6.2 Authority. Buyer has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution, delivery and
performance of this Agreement by Buyer and the consummation by Buyer of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditors' rights in general and by general principles of equity.
SECTION 6.3 No Breach. The execution, delivery and performance of this
Agreement by Buyer does not, and consummation of the transactions contemplated
hereby and compliance with the provisions hereof will not, with or without the
giving of notice or the lapse of time, or both, conflict with or result in a
breach or violation of or a default under, or give rise to a right of amendment,
termination, cancellation or acceleration of any obligation or to a loss of a
material benefit under, (i) the Certificate of Incorporation or By-laws of
Buyer, or (ii) any material contract, agreement, note, bond, mortgage,
indenture, lease, license, franchise, permit, concession, instrument,
obligation, commitment, covenant, understanding or arrangement to which it is a
party or by which any of its assets may be affected, or (iii) any order, ruling,
decree, judgment, arbitration award, statute, law, ordinance, rule, regulation
or stipulation to which Buyer or its properties or assets is subject, or result
in the creation of any Lien upon any of its properties or assets, except, in the
case of items (ii) and (iii) above, for those, which would not have,
individually or in the aggregate, a material adverse effect on the ability of
Buyer to consummate the transactions contemplated by this Agreement.
SECTION 6.4 Governmental Approvals. Except (a) for the Order and (b)
where the failure to obtain such consent, approval, order, authorization or
allowance, or to make any such filing, registration or notification, would not
have, individually or in the aggregate, a material adverse effect on the ability
of Buyer to consummate the transactions contemplated by this Agreement, no
approval, order or authorization of, or filing or registration with, allowance
by, or consent of or notification to any Governmental Entity is required to be
obtained or made by Buyer in connection with the execution and delivery by Buyer
of this Agreement, the performance of obligations of Buyer hereunder or the
consummation by Buyer of the transactions contemplated hereby.
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ARTICLE VII
COVENANTS
SECTION 7.1 Covenants of Seller.
(a) Maintenance of Licenses and Permits. Prior to the Closing
Date and subject to provisions of the Bankruptcy Code, Seller shall use its best
efforts to maintain in effect all existing qualifications, licenses, permits,
approvals and other authorizations referred to in Section 5.1. In addition, to
the extent that prior to the Closing Date Seller intends to allow maintenance or
support agreements with respect to any software licenses included among the
Assigned Agreements (but not the Assigned Agreements themselves) to lapse
through nonpayment, Seller shall promptly (and in any event at least fifteen
(15) business days prior to the date on which any such payment is due) notify
Buyer of the requirement to make such payment in order to preserve rights. If
Buyer so elects, it shall have the right at its own expense to make such
payment(s) on behalf of Seller in order to maintain in full force and effect
such maintenance or similar agreements. Buyer's election to make any such
payments shall be in its sole discretion, and neither party shall have any
liability to the other for the making of, or failure to make, any such payment.
(b) Chapter 11 Case. On the date hereof or on the business day
immediately following execution of this Agreement, Seller will file a petition
pursuant to Section 301 of the Bankruptcy Code and a motion seeking an order
from the Bankruptcy Court authorizing the post-petition payment, as an expense
of administration, of any amounts payable by Seller to Buyer pursuant to Section
13.2, all in form and substance satisfactory to Buyer and its counsel. Promptly
following action with respect to any interim relief, Seller will file the Plan
and Disclosure Statement all in form and substance satisfactory to Buyer and its
counsel. Seller agrees that until the Order becomes Final, Seller shall (i) use
diligent efforts to prosecute the Chapter 11 Case and (ii) not itself take any
action and shall oppose (to the extent reasonable and appropriate under the
circumstances) any action taken by others that in either case would be
reasonably likely to cause the Bankruptcy Court to dismiss, suspend or abstain
from exercising jurisdiction over the Chapter 11 Case. Until the Order becomes
Final, Buyer and its counsel shall be given a reasonable opportunity to review
and comment on any other pleading, petition, motion, filing or other document
proposed to be filed with or otherwise submitted to the Bankruptcy Court by
Seller in connection with the Chapter 11 Case prior to the filing with or
submission thereof to the Bankruptcy Court; provided, however, that in emergency
circumstances the Seller shall only be required to serve Buyer and its counsel
with such pleadings, petitions, motions, filings or other documents submitted to
the Bankruptcy Court concurrently with filing the same with the Bankruptcy
Court. The determination of the existence of an emergency circumstance shall be
made by bankruptcy counsel to the Seller, in its sole reasonable discretion.
Subject to the foregoing provisions regarding emergency circumstances, Seller
will not make any such filing or submission to which Buyer or its counsel
reasonably objects. Seller will otherwise keep Buyer and its counsel apprised of
the status of the Chapter 11 Case.
(c) Negative Covenants. Prior to the Closing Date, Seller will
not (except with the prior written approval of Buyer):
(i) (1) grant any general increase in wage or salary
rates or in employee benefits of any of the Employees, or (2) enter into any
employment contract with any Employee which Seller does not have the
unconditional right to terminate without liability, or (3) adopt (or amend or
modify in any manner which would, individually or in the aggregate, materially
increase the benefits under) any bonus, profit sharing, compensation, stock
option, employment or other employee benefit plan, agreement, trust, plan fund,
award agreement or other arrangement for the benefit or welfare of any Employee
of Seller; or
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(ii) issue any press release or make any other public
announcements without providing Buyer with a reasonable opportunity to review
such release or announcement and comment thereon prior to its dissemination.
(d) [Intentionally Omitted].
(e) Advice of Changes. Seller shall give notice to Buyer
within ten (10) days (and in all circumstances prior to the Closing) after
becoming aware of (i) any representation or warranty of Seller contained in this
Agreement becoming untrue or inaccurate, or (ii) the failure by Seller to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, and, shall use its best efforts to prevent
or promptly remedy the same.
(f) Compliance with Bankruptcy Law. In connection with the
commencement and the prosecution of the Chapter 11 Case, Seller shall comply
(unless excused from such compliance by an order of the Bankruptcy Court) with
all applicable provisions of the Bankruptcy Code, the Federal Rules of
Bankruptcy Procedure, the Local Rules of the Bankruptcy Court and all orders of
the Bankruptcy Court, including, without limitation, those pertaining to the
identification of and notice to all holders of Claims and Interests and all
other parties-in-interest with respect to the Chapter 11 Case.
(g) Other Actions. Except as contemplated by this Agreement,
Seller will not take or agree or commit to take any action that would result in
any of the Seller's representations or warranties hereunder being untrue such
that the condition in Section 8.2(a) will not be satisfied.
SECTION 7.2 Access to Information. Seller shall, on and after the date
of this Agreement, give to Buyer, its Subsidiaries and Affiliates and the
attorneys, accountants or other representatives of Buyer, its Subsidiaries and
Affiliates, upon reasonable notice, full access during normal business hours to
make or cause to be made such investigation of the Assets as Buyer deems
necessary or advisable to familiarize itself with such Assets and to investigate
the representations, warranties, covenants and agreements of Seller set forth
herein, provided that such investigation shall not interfere unreasonably with
normal operations, and Seller shall furnish such operating data and other
information with respect to the Assets as Buyer shall from time to time
reasonably request. The Confidentiality Agreement, dated as of September 30,
1996, between Rockwell International Corporation and Seller (the
"Confidentiality Agreement") shall apply with respect to the information
furnished thereunder or hereunder.
SECTION 7.3 Further Action. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable best efforts
to take promptly all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement, including using its reasonable best
efforts to obtain all necessary waivers, consents and approvals, effecting all
necessary registrations and filings, and defending any lawsuits or other
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of any of the transactions contemplated hereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed, provided that neither Buyer nor
Seller shall be required to divest any business or assets. Without limiting the
generality of the foregoing, Seller shall, promptly following execution hereof
and in any event prior to the Closing, use commercially reasonable efforts as
requested by Buyer, and Buyer shall cooperate in all reasonable respects with
Seller, to obtain all required consents and waivers (including, without
limitation, under any software licenses included among the Assets), to provide
all required notices and to resolve all impracticalities of assignments or
transfers necessary to convey the Assets to Buyer. In addition, Buyer and Seller
shall, within one (1) business day following the
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execution and delivery of this Agreement, execute and deliver the License
Agreement and the Facilities and Equipment Agreement.
SECTION 7.4 Offer of Employment. Seller acknowledges that Buyer intends
to offer employment to the Employees and, without limiting the obligations of
the parties under Section 7.3 hereof, Seller agrees to use commercially
reasonable efforts (it being understood that such efforts shall not include any
requirement of Seller to expend any money or to offer or grant any financial
accommodation, except for salary, benefits and other compensation now provided
to the Employees, which Seller hereby covenants and agrees to pay on a timely
basis, consistent with past practice) to (i) take promptly all actions and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to retain the services of the Employees and (ii)
assist Buyer in its efforts to retain and hire such employees of Seller. If
applicable, pursuant to Rev. Proc. 84-77, 1984-2 C.B. 753, Buyer and Seller will
execute and deliver to each other a Successor/Predecessor Tax Withholding
Agreement with respect to any such employee who is employed by Buyer.
SECTION 7.5 Post-Execution License Review. Seller shall, as promptly as
practicable following execution hereof and in any event within forty-five (45)
days following execution hereof, determine and disclose to Buyer all technology
which is necessary for the utilization or commercialization of any of the
Seller's technology to be licensed to Buyer under the License Agreement and
which Buyer does not own. In the event that Buyer desires to obtain rights from
Seller to any such technology, Buyer and Seller shall determine in good faith
the amount (if any) to be paid by Buyer to Seller in consideration therefor. In
addition, following such disclosure by Seller, Buyer shall have the right, in
its sole and reasonable discretion, (a) to terminate the License Agreement, or
(b) to reduce the technology licensed thereunder. In the case of clause (b),
Buyer shall have the right to specify such items of such technology under which
it wishes to continue to hold a license (the "Selected Technology"), in which
event the License Agreement shall be modified in accordance with the provisions
thereof. In addition, in the case of clause (a) or (b) hereof, the Purchase
Price shall be reduced in accordance with Section 3.3 hereof.
ARTICLE VIII
CONDITIONS
SECTION 8.1 Conditions to Each Party's Obligations. The respective
obligations of each party to effect the transactions contemplated by this
Agreement is subject to the satisfaction at or prior to the Closing Date of each
of the following conditions:
(a) Governmental Approvals. All filings required to be made
prior to the Closing Date by Seller or Buyer with, and all consents, approvals
and authorizations required to be obtained prior to the Closing Date by Seller
or Buyer from, any Governmental Entity in connection with the execution,
delivery and performance of this Agreement shall have been made or obtained,
except where the failure to make or obtain the same would not have a Material
Adverse Effect or a material adverse effect on the ability of Buyer to
consummate the transactions contemplated by this Agreement and could not
reasonably be expected to subject Seller or Buyer or any of their respective
Affiliates or any directors or officers of any of the foregoing to the risk of
criminal liability; and
(b) No Injunctions or Restraints. No statute, law, rule,
regulation, decree, judgment, temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other Governmental Entity or other legal restraint or
prohibition preventing the consummation of the transactions contemplated by this
Agreement shall be in effect; provided, however, that each of the parties shall
have used reasonable best efforts to prevent
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the entry of any such injunction or other order and to appeal as promptly as
possible any injunction or other order that may be entered.
SECTION 8.2 Conditions to Obligations of Buyer. The obligations of
Buyer to effect the transactions contemplated by this Agreement are subject to
the satisfaction at or prior to the Closing Date of each of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Seller set forth in this Agreement shall be true and correct in
all respects (provided, in the case of the representation set forth in the first
sentence of Section 5.6, to the extent it relates to Assets described in Section
1.1(a), that such representation shall not be deemed to be incorrect if it is
incorrect as to such Assets having a fair market value of less than $15,000 in
the aggregate) as of the date of this Agreement and, except for the effect of
any activities or transactions which are specifically contemplated by this
Agreement, shall be true and correct in all material respects at the Closing
Date with the same effect as though all such representations and warranties had
been made at such time, and Seller shall have delivered to Buyer a certificate
signed by an authorized executive officer of Seller confirming the foregoing as
of the Closing Date;
(b) Performance of Obligations of Seller. Each and all of the
covenants and agreements of Seller to be performed or complied with pursuant to
this Agreement prior to the Closing Date shall have been fully performed and
complied with in all material respects, and Seller shall have delivered to Buyer
a certificate signed by an authorized executive officer of Seller confirming the
foregoing as of the Closing Date;
(c) Litigation, Etc. On or after the date hereof, there shall
not exist or have been instituted or pending any suit, action or proceeding by
or before any court of competent jurisdiction or other Governmental Entity
against Seller, which is not stayed, or against Buyer, and in either case (i)
which is reasonably likely to make illegal, or to delay or otherwise directly or
indirectly restrain or prohibit the consummation of the transactions
contemplated by this Agreement, or which is reasonably likely to result in
material damages in connection with the transactions contemplated by this
Agreement, (ii) which is reasonably likely to result in (x) the prohibition of
ownership or the operation by Buyer of all or a material portion of the Assets
or (y) the compelling of Buyer to dispose of or to hold separately all or a
material portion of the business or assets of Buyer or its Affiliates or
Subsidiaries as a result of the transactions contemplated by this Agreement,
(iii) which is reasonably likely to result in any material diminution in the
benefits expected to be derived by Buyer as a result of the transactions
contemplated by this Agreement or (iv) which otherwise has had or may reasonably
be expected to have a Material Adverse Effect or a material adverse effect on
Buyer or its Affiliates taken as a whole;
(d) Laws, Etc. On or after the date of this Agreement, there
shall not exist or have been enacted, entered, enforced, promulgated or deemed
applicable to the transactions contemplated by this Agreement, any statute, law,
rule, regulation, judgment, order or injunction or any other action taken by any
court or other Governmental Entity that has resulted, or may reasonably be
expected to result, directly or indirectly, in any of the consequences referred
to in clauses (i) through (iv) of paragraph (c) above;
(e) No Material Adverse Change. On or after the date of this
Agreement, there shall not have occurred (or reasonably be expected to occur)
any event, change or development which has had or may reasonably be expected to
have a Material Adverse Effect;
(f) Third Party Consents. All consents or approvals of all
persons and entities (other than Governmental Entities) required to be obtained
prior to the Closing Date in connection
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with the execution, delivery and performance of this Agreement (i) by Seller
shall have been obtained and shall be in full force and effect and (ii) by Buyer
shall have been obtained and shall be in full force and effect;
(g) Agreements With Employees. Buyer shall have either already
employed or entered into agreements in substantially the form previously agreed
to by the parties with (i) 90% of the Employees of Seller set forth in
subsection A of Schedule 5.11(a) and (ii) 75% of the Employees of Seller set
forth in subsection B of Schedule 5.11(a) and, if such Employees are not already
employees of Buyer, the requisite percentages of such Employees set forth in
clauses (i) and (ii) are employees of Seller immediately prior to the Closing;
it being understood and agreed that (1) any employees listed on Schedule 5.11(a)
hired by Buyer at any time after the date of this Agreement shall be counted
toward achieving the foregoing minimum percentages and (2) this Section 8.2(g)
shall be deemed to have been irrevocably satisfied in the event that (a) the
Bankruptcy Court approves the Facilities and Equipment Agreement and (b) in
connection with such agreement, a number of Employees sufficient to satisfy the
requisite percentage of Employees set forth in clauses (i) and (ii) hereof are
hired by Buyer pursuant thereto.
(h) Final Order. The Order shall have become Final;
(i) Tax Certificates. Seller shall have furnished to Buyer all
tax clearance certificates or similar documents which may be required by any
state taxing authority in order to relieve Buyer of any obligation to withhold
any portion of the Purchase Price;
(j) Intellectual Property License. Seller shall have delivered
to Buyer an agreement substantially in the form attached hereto as Annex A (the
"License Agreement") granting to Buyer a license to certain intellectual
property (provided, if Buyer shall elect to terminate the License Agreement in
accordance with the provisions of Section 7.5 hereof, Buyer shall be deemed to
have waived this condition); and
(k) Opinion of Company's Counsel. Buyer shall have received
the opinion of Wilson, Sonsini, Goodrich & Rosati, counsel for Seller, in the
form of Annex B hereto and a letter from Murray & Murray, special bankruptcy
counsel for Seller, in the Form of Annex C hereto.
SECTION 8.3 Conditions to Obligation of Seller.. The obligation of
Seller to effect the transactions contemplated by this Agreement is subject to
the satisfaction at or prior to the Closing Date of each of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Buyer set forth in this Agreement shall be true and correct in all
respects as of the date of this Agreement and, except for the effect of any
activities or transactions which are specifically contemplated by this
Agreement, shall be true and correct in all material respects at the Closing
Date with the same effect as though all such representations and warranties had
been made at such time, and Buyer shall have delivered to Seller a certificate
signed by an authorized executive officer of Buyer confirming the foregoing as
of the Closing Date; and
(b) Performance of Obligations of Buyer. Each and all of the
covenants and agreements of Buyer to be performed or complied with pursuant to
this Agreement on or prior to the Closing Date shall have been fully performed
and complied with in all material respects, and Buyer shall have delivered to
Seller a certificate signed by an authorized executive officer of Buyer
confirming the foregoing as of the Closing Date.
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ARTICLE IX
TERMINATION
SECTION 9.1 Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement abandoned at any time prior to the
Closing Date:
(a) by the mutual written agreement of Buyer and Seller;
(b) by either Buyer or Seller, if the Closing Date shall not
have occurred on or before April 15, 1997, except that neither Buyer, on the one
hand, nor Seller, on the other hand, may so terminate this Agreement if the
absence of such occurrence is due to the failure of Buyer, on the one hand, or
Seller, on the other hand, to perform in all material respects each of its
obligations required to be performed prior to the Closing Date; provided, that
the failure to obtain any required consents to transfer any of the Key Software
Licenses at the Closing shall not constitute a material failure to perform;
(c) by either Buyer or Seller, if there shall be any statute,
law, rule or regulation that makes consummation of the transactions contemplated
by this Agreement illegal or otherwise prohibited or if any court of competent
jurisdiction or other Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement,
and such order, decree, ruling or other action shall not be subject to appeal or
shall have become final and unappealable;
(d) by Buyer, if the Bankruptcy Court shall dismiss, suspend
or abstain from exercising jurisdiction over the Chapter 11 Case, or by Seller,
if the Bankruptcy Court shall dismiss, suspend or abstain from exercising
jurisdiction over the Chapter 11 Case and Seller has performed its obligations
under Section 7.1(b) hereof;
(e) by Buyer, if there shall have been a breach of any
representation, warranty, covenant or agreement on the part of Seller set forth
in this Agreement, or if any representation or warranty of Seller set forth in
this Agreement shall have become untrue, in any such case such that the
conditions set forth in Section 8.2(a) or Section 8.2(b), as the case may be,
would not be satisfied as of such time, provided that if such breach is curable
by Seller prior to April 15, 1997 through the exercise of its reasonable best
efforts and for so long as Seller continues to exercise such reasonable best
efforts to cure the same, Buyer may not terminate this Agreement pursuant to
this Section 9.1(e);
(f) by Seller, if there shall have been a breach of any
representation, warranty, covenant or agreement on the part of Buyer set forth
in this Agreement, or if any representation or warranty of Buyer set forth in
this Agreement shall have become untrue, in any such case such that the
conditions set forth in Section 8.3(a) or Section 8.3(b), as the case may be,
would not be satisfied as of such time, provided that if such breach is curable
by Buyer prior to April 15, 1997 through the exercise of its reasonable best
efforts and for so long as Buyer continues to exercise such reasonable best
efforts to cure the same, Seller may not terminate this Agreement pursuant to
this Section 9.1(f).
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ARTICLE X
SURVIVAL
SECTION 10.1 Survival. Each and every representation and warranty of
Seller or Buyer contained in this Agreement (other than Seller's and Buyer's
representations and warranties with respect to finder's fees and brokers
contained in Section 13.4) shall survive the Closing Date solely for purposes of
Sections 11.1 and 11.2 until the earlier of (i) the final liquidation and
dissolution of Seller or (ii) one year after the Closing Date, and then expire.
Seller's and Buyer's representations and warranties with respect to finder's
fees and brokers contained in Section 13.4 shall survive the Closing Date solely
for purposes of Sections 11.1 and 11.2 until, and shall expire upon the earlier
of (i) the final liquidation and dissolution of Seller or (ii) all applicable
statutes of limitation (including any extensions thereof) have expired. Upon and
following expiration of any representation or warranty hereunder, neither Seller
nor Buyer shall have any liability whatsoever with respect to such
representation or warranty.
ARTICLE XI
INDEMNIFICATION
SECTION 11.1 Indemnification by Seller. Seller shall indemnify, defend
and hold Buyer, each Subsidiary and Affiliate of Buyer and each of their
employees, directors, officers and stockholders (collectively, the "Buyer
Group") harmless from and against any and all loss, liability, damage or
expense, including, without limitation, reasonable fees and disbursements of
legal counsel (collectively "Damages") actually incurred by any member of the
Buyer Group based upon, arising out of or otherwise in respect of (i) any breach
of any covenant or agreement of Seller contained in this Agreement or the
License Agreement, (ii) any breach of any of Seller's representations and
warranties contained in this Agreement or the License Agreement, and (iii) the
liabilities retained by Seller pursuant to Section 2.2.
SECTION 11.2 Indemnification by Buyer. Buyer shall indemnify, defend
and hold Seller, each Affiliate of Seller and each of their employees,
directors, officers and stockholders (collectively, the "Seller Group") harmless
from and against any and all Damages actually incurred by any member of the
Seller Group based upon, arising out of or otherwise in respect of (i) any
breach of any covenant or agreement of Buyer contained in this Agreement, (ii)
any breach of any of Buyer's representations and warranties contained in this
Agreement, and (iii) the Assumed Liabilities.
SECTION 11.3 Notice of Circumstances. Promptly after receipt by any
member of the Buyer Group or the Seller Group of notice of any action,
proceeding, claim or potential claim or discovery by any member of the Buyer
Group or the Seller Group of any facts (any of which is hereinafter individually
referred to as a "Circumstance") which could give rise to a right to
indemnification pursuant to any provision of this Agreement, such Person (the
"Indemnified Party") shall give the party who may become obligated to provide
indemnification hereunder (the "Indemnifying Party") prompt written notice
describing the Circumstance in reasonable detail. If notice of a Circumstance is
not given to the Indemnifying Party within a sufficient period of time or in
sufficient detail to apprise the Indemnifying Party of the nature of the
Circumstance (in each instance taking into account the facts and circumstances
with respect to such Circumstance), the Indemnifying Party shall not be liable
to the Indemnified Party to the extent that the Indemnifying Party's position is
actually prejudiced as a result thereof. The Indemnifying Party shall have the
right, at its option, to settle, compromise or defend, at its own expense and by
its own counsel, any Circumstance involving the asserted liability of the
Indemnified Party. In the event the Indemnifying Party fails to take
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diligent action to settle, compromise or defend such Circumstance within twenty
(20) days of receiving notice of such Circumstance from the Indemnified Party,
the Indemnifying Party shall forfeit its right to settle, compromise or defend
such Circumstance. If any Indemnifying Party shall undertake to settle,
compromise or defend any such asserted liability, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party agrees to
cooperate fully with the Indemnifying Party and its counsel in the settlement or
compromise of, or defense against, any such asserted liability, provided that
the Indemnifying Party shall not agree to any equitable relief with respect to
the Indemnified Party without the written consent of the Indemnified Party. All
out-of-pocket costs and expenses incurred (i) in connection with such
cooperation or (ii) following a failure by the Indemnifying Party to take
diligent action to settle, compromise or defend such Circumstance within twenty
(20) days of notice of a Circumstance, shall be borne by the Indemnifying Party.
In any event, the Indemnified Party shall have the right at its own expense to
participate in the defense of such asserted liability. Under no circumstances
shall the Indemnified Party settle or compromise any such asserted liability
without the written consent of the Indemnifying Party.
SECTION 11.4 Certain Limitations.
(a) The amount of any Damages or other liability for which
indemnification is provided under this Agreement shall be net of any amounts
recovered or recoverable by the Indemnified Party from third parties (including,
without limitation, amounts recovered or recoverable under insurance policies)
with respect to such Damages or other liability. Seller and Buyer, as
appropriate, shall, or shall cause each Indemnified Party to, use its reasonable
best efforts to pursue promptly any Claims or rights it may have against all
third parties which would reduce the amount of Damages or other liability for
which indemnification is provided under this Agreement.
(b) The amount of Damages or other liability for which
indemnification is provided under this Agreement shall be (A) increased to take
account of any Tax cost incurred (grossed up for such increase) by the
Indemnified Party arising from the receipt of indemnity payments hereunder
(unless such indemnity payment is treated as an adjustment to the Purchase Price
for tax purposes) and (B) reduced to take account of any Tax benefit realized by
the Indemnified Party arising from the incurrence or payment of any such Damages
or other liability. In computing the amount of any such Tax cost or Tax benefit,
the Indemnified Party shall be deemed to be subject (x) to the applicable
Federal and/or local country income taxes at the maximum statutory rate then in
effect and (y) to state and local taxes (if applicable) at the then-applicable
combined state and local tax rate, which shall be tax effected at such maximum
Federal rate. Any indemnity payment made pursuant to this Agreement will be
treated as an adjustment to the Purchase Price for Tax purposes unless a
determination (as defined in Section 1313 of the Code) or a similar event under
foreign tax law with respect to the Indemnified Party causes any such payment
not to constitute an adjustment to the Purchase Price for United States Federal
income tax purposes or foreign tax purposes, as the case may be.
(c) Neither Seller nor Buyer shall have any obligation to
indemnify the other or any other Persons under this Agreement pursuant to
Section 11.1 or Section 11.2, respectively, against lost profits or
consequential or incidental damages.
SECTION 11.5 Termination of Indemnification Obligations. The
obligations of Seller to indemnify, defend and hold harmless the Buyer Group
pursuant to Section 11.1 or any other Section of this Agreement shall terminate
upon the entry of the Final Decree (as defined below) by the Bankruptcy Court,
and the obligations of Buyer to indemnify, defend and hold harmless the Seller
Group pursuant to Section 11.2 shall terminate on the Closing Date except that
Buyer's obligation pursuant to clause (iii) of Section 11.2 shall terminate upon
the entry of the Final Decree by the Bankruptcy Court. Upon and following
termination of any obligation to indemnify, defend and hold
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harmless with respect to any matter hereunder, no claim, arbitration, lawsuit,
action or proceeding for indemnification may be brought with respect to such
matter and the party who formerly had such obligation shall no longer have any
liability whatsoever with respect to such matter. As used herein, the term
"Final Decree" shall mean the final decree of the Bankruptcy Court closing the
Chapter 11 Case.
ARTICLE XII
ASSIGNMENT; PARTIES IN INTEREST; AMENDMENT; WAIVER
SECTION 12.1 Assignment. The parties to this Agreement shall not
convey, assign or otherwise transfer any of their rights or obligations under
this Agreement without the express written consent of Buyer or Seller, as the
case may be, except that Buyer may (without obtaining any consent) assign its
rights, interests or obligations to any direct or indirect wholly-owned
subsidiary of Rockwell International Corporation. Any conveyance, assignment or
transfer requiring the express written consent of the other party which is made
without such consent shall be void ab initio. No assignment of this Agreement
shall relieve the assigning party of its obligations hereunder.
SECTION 12.2 Parties in Interest. This Agreement is binding upon and is
for the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement is not made for the benefit of any person,
firm, corporation or other entity not a party hereto, and no person, firm,
corporation or other entity other than the parties hereto or their respective
successors and permitted assigns shall acquire or have any right, remedy or
claim under or by virtue of this Agreement.
SECTION 12.3 Amendment. This Agreement cannot be amended or modified
except by a written agreement executed by the parties hereto.
SECTION 12.4 Waiver. At any time prior to the Closing Date, Buyer may
extend the time for the performance of or waive compliance with any of the
obligations or other acts of Seller contained herein or waive any inaccuracies
in the representations and warranties of Seller contained herein or in any
document delivered pursuant hereto, and Seller may extend the time for the
performance of or waive compliance with any of the obligations or other acts of
Buyer contained herein or waive any inaccuracies in the representations and
warranties of Buyer contained herein or in any document delivered pursuant
hereto. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party to be bound thereby. The failure of
any party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
ARTICLE XIII
GENERAL PROVISIONS
SECTION 13.1 Effect of Investigation. All representations, warranties,
covenants and agreements made by Seller in this Agreement or in any
certificates, statements or other instruments delivered pursuant to this
Agreement shall be unaffected by any investigation made by or on behalf of Buyer
or knowledge obtained as a result thereof or otherwise.
SECTION 13.2 Fees and Expenses.
(a) Except as otherwise provided in this Section 13.2, each of
the parties hereto agrees to pay, without right of reimbursement from the other,
the costs incurred by it incident to the
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performance of its obligations hereunder, including, without limitation, the
fees and disbursements of counsel, accountants, financial advisors, experts and
consultants employed by the respective parties in connection with the
transactions contemplated hereby, whether or not the transactions contemplated
by this Agreement are consummated.
(b) Seller agrees that if this Agreement shall be terminated
prior to the date on which the Employees become employees of Buyer (i) pursuant
to Section 9.1(d), and there has been a Major Breach by Seller of its covenants
or agreements set forth in Section 7.1(b), 7.1(f) or 7.3, or (ii) pursuant to
Section 9.1(e), and there has been a Major Breach by Seller of any of its
covenants or agreements set forth in this Agreement, or (iii) upon the
consummation of a Competing Bid (as defined in the Plan), then Seller shall pay
to Buyer an amount equal to (i) any payments made by Buyer to Seller pursuant to
any other agreements between Buyer and Seller entered into concurrently herewith
or at any time hereafter (including, without limitation, the Engineering
Services Agreement by and between Seller and Buyer (the "Engineering Services
Agreement") and the Facilities and Equipment Agreement by and between Seller and
Buyer (the "Facilities and Equipment Agreement"), neither of which Buyer would
have entered into had it not expected to acquire the Assets hereunder), and (ii)
the costs ("Out-of-Pocket Costs") incurred by Buyer in connection with the
transactions contemplated by this Agreement or any such other agreements
including, without limitation, the fees and disbursements of counsel,
accountants, financial advisers, experts and consultants employed by Buyer in
connection with the transactions contemplated by this Agreement and any such
other agreements, subject to a limit (in the case of such fees and disbursements
of counsel, accountants, financial advisers, experts and consultants only) of
$300,000. In the event that this Agreement shall be terminated under the
circumstances described in clause (i), (ii) or (iii) hereof at any time after
the date on which the Employees become employees of Buyer, then Seller shall be
relieved of its obligation to refund to Buyer any amounts paid by Buyer pursuant
to the Engineering Services Agreement and the Facilities and Equipment
Agreement, and shall pay to Buyer an amount equal to its Out-of-Pocket Costs
(including, without limitation, the fees and disbursements of counsel,
accountants, financial advisers, experts and consultants employed by Buyer in
connection with the transactions contemplated by this Agreement and any such
other agreements, subject to a limit (in the case of such fees and disbursements
of counsel, accountants, financial advisers, experts and consultants only) of
$300,000). The right of Buyer hereunder to receive such payment shall be in
addition to any other rights or remedies available to Buyer in law or in equity;
provided, that in the event that such payment is due to Buyer solely by reason
of the consummation of a Competing Bid (and there has not been a breach by
Seller of any of its covenants or agreements set forth in this Agreement), the
payment provided for in this Section 13.2 shall be Buyer's sole and exclusive
remedy. As used herein, the term "Major Breach" shall mean a breach by Seller
arising out of the willful misconduct, gross negligence or reckless disregard of
its covenants and agreements hereunder.
(c) Any payment required to be made pursuant to Section
13.2(b) shall be made as promptly as practicable but not later than five
business days after notification from Buyer to Seller of the occurrence of the
event giving rise to such payment and shall be made by wire transfer of
immediately available funds to an account designated by Buyer.
SECTION 13.3 Notices. Any notice, request, instruction or other
communication to be given hereunder by any party to the others shall be in
writing and shall be deemed to have been duly given (i) on the date of delivery
if delivered personally, or by telecopy, upon confirmation of receipt, (ii) on
the first business day following the date of dispatch if delivered by Federal
Express or other nationally reputable next-day courier service, or (iii) on the
third business day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice.
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(a) If to Buyer:
Rockwell Semiconductor Systems, Inc.
c/o Rockwell International Corporation
2201 Seal Beach Boulevard
Seal Beach, California 90740-8250
Attention: William J. Calise, Jr., Esq.
Senior Vice President, General Counsel and Secretary
Telecopy: (310) 797-5687
with a copy to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
Attention: Peter R. Kolyer, Esq.
Telecopy: (212) 541-5369
(b) If to Seller:
Weitek Corporation
2801 Orchard Parkway
San Jose, California 95134
Attention: Richard H. Bohnet
President
Telecopy: (408) 474-1900
with a copy to:
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Kenneth M. Siegel, Esq.
Telecopy: (415) 496-4084
SECTION 13.4 Brokers. Seller represents and warrants that there are no
Claims (or any basis for any Claims) for brokerage commissions, finder's fees or
like payments in connection with this Agreement or the transactions contemplated
hereby resulting from any action taken by or on behalf of Seller for which Buyer
may be found to be liable. Buyer represents and warrants that there are no
Claims (or any basis for any Claims) for brokerage commissions, finder's fees or
like payments in connection with this Agreement or the transactions contemplated
hereby resulting from any action taken by or on behalf of it for which Seller
may be found to be liable.
SECTION 13.5 Captions; Currency. The Article, Section and paragraph
captions herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to limit or otherwise affect any of the
provisions hereof. Unless otherwise specified, all references contained in this
Agreement, in any Exhibit or Schedule referred to herein or in any instrument or
document delivered pursuant hereto to dollars shall mean United States Dollars.
Unless otherwise specified, all references herein to numbered sections and
articles are to sections and articles of this Agreement and all references
herein to Exhibits are to Exhibits to this Agreement.
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SECTION 13.6 Entire Agreement. This Agreement and the Confidentiality
Agreement together constitute the entire agreement between the parties with
respect to the subject matter hereof and this Agreement and the Confidentiality
Agreement supersede all prior agreements or understandings of the parties
relating thereto.
SECTION 13.7 Specific Performance. In the event of any actual or
threatened default in, or breach of, any of the terms, conditions and provisions
of this Agreement, the party or parties who are or are to be thereby aggrieved
shall have the right to seek specific performance and injunctive relief giving
effect to its or their rights under this Agreement, in addition to any and all
other rights and remedies at law or in equity, and all such rights and remedies
shall be cumulative. The parties agree that the remedies at law for any breach
or threatened breach, including monetary damages, are inadequate compensation
for any loss and that any defense in any action for specific performance that a
remedy at law would be adequate is waived.
SECTION 13.8 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions thereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated thereby is not affected in any manner
adverse to any party. Upon any such determination, the parties shall negotiate
in good faith in an effort to agree upon a suitable and equitable substitute
provision to effect the original intent of the parties.
SECTION 13.9 Exhibits and Schedules. All Exhibits and Schedules
attached hereto are hereby incorporated in and made a part of this Agreement as
if set forth in full herein. Capitalized terms used in the Schedules hereto but
not otherwise defined therein shall have the respective meanings assigned to
such terms in this Agreement.
SECTION 13.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware
applicable to contracts made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
SECTION 13.11 Counterparts. For the convenience of the parties, this
Agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts
shall together constitute the same agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto on the date first
hereinabove written.
ROCKWELL SEMICONDUCTOR SYSTEMS, INC.
By: /s/ Anthony C. Kalas
----------------------------------------
Name: Anthony C. Kalas
Title: Vice President and Controller
WEITEK CORPORATION
By: /s/ Richard H. Bohnet
----------------------------------------
Name: Richard H. Bohnet
Title: President
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Schedule 2.1 - Assumed Liabilities
Industrial Space Lease dated November 9, 1995 between Renco Associates
(Landlord) and Weitek Corporation (Tenant) for approximately 40,380 square feet
located at 2801 Orchard Parkway, San Jose, California (the "Lease"). This Lease
requires a Letter of Credit from Tenant. Seller will cancel the Letter of
Credit that it has provided to Landlord when the Lease is assigned to the
Buyer.
Schedule 3.2 - Allocation of Purchase Price
[Download Table]
Purchased Assets Allocation
---------------- ----------
Equipment $ 328,938
Deposit on Lease 33,112
Workforce in Place 1,500,000
License Agreement 500,000
Key Software Agreements (All agreements Amount
of Seller relating to the following software): ------
Cadence Dracula $ 300,000
Synopsis Design Compiler 100,000
Chronologics VCS 300,000
Other 62,000 762,000
Assumed Liabilities
-------------------
Industrial Space Lease dated November 9, 1995 between
Renco Associates (Landlord) and Weitek Corporation
(Tenant) for approximately 40,380 square feet located
at 2801 Orchard Parkway, San Jose, California (the
"Lease").
No amount allocated
Total Purchase Price $3,124,050
Dates Referenced Herein and Documents Incorporated by Reference
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