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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) April 1, 1997
WEITEK CORPORATION
(Exact name of registrant as specified in charter)
CALIFORNIA 000-17191 94-2709963
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2801 ORCHARD PARKWAY, SAN JOSE, CA 94086
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 526-0300
NOT APPLICABLE
(Former name or former address, if changed since last report.)
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ITEM 3(b). BANKRUPTCY OR RECEIVERSHIP
The Company filed a voluntary Plan of Reorganization (the "Plan")
under Chapter 11 of the United States Bankruptcy Code on December 11, 1996 with
the United States Bankruptcy Court, Northern District of California, San Jose
Division (the "Bankruptcy Court"). On February 4, 1997, the Order Approving
Second Amended Disclosure Statement, Fixing Time For Filing Acceptances Or
Rejections of Plan, Fixing Time For Confirmation Hearing, Combined With Notice
Thereof (the "Disclosure Statement Order") was entered by the Bankruptcy Court.
The Disclosure Statement Order, the Disclosure Statement, the Debtor's First
Amended Plan Of Reorganization (the "Plan") and a Ballot were served on all
creditors, shareholders and parties in interest by February 14, 1997. The
requisite number of creditors and shareholders voted to accept the Plan. On
March 20, 1997, pursuant to a hearing, the Bankruptcy Court confirmed the Plan
as modified by the First Modification to First Amended Plan of Reorganization.
On April 1, 1997, the Plan became effective upon the satisfaction of the
conditions set forth in the Rockwell Agreement (as defined below).
The Plan provides for the sale of substantially all of the Company's
assets and a license for certain of the Company's technology to Rockwell
Semiconductor Systems, Inc. ("Rockwell") pursuant to an asset purchase
agreement dated December 11, 1996 (the "Rockwell Agreement"). Rockwell also
agreed to unconditionally assume and undertake to pay, perform and discharge
the Company's liabilities under its real property lease and certain specified
license agreements. Under the terms of the Rockwell Agreement, Rockwell is
obligated to pay approximately $3,124,050 subject to certain adjustments. On
April 1, 1997 the Rockwell Agreement was consummated and the Company completed
the sale of the assets to Rockwell. The Rockwell Agreement is set forth in
Exhibit 2.3 and is incorporated herein by reference.
Prior to the consummation of the Rockwell Agreement, the Company
entered into an Engineering Services Agreement (the "Services Agreement") and a
Facilities and Equipment Agreement with Rockwell (the "Facilities Agreement"),
subject to approval by the Bankruptcy Court. In conjunction with the Services
Agreement and Facilities Agreement, the Company also sought Bankruptcy Court
approval to enter into a license agreement with Rockwell (the "License
Agreement"). On December 30, 1996, the Bankruptcy Court approved the Services
Agreement, Facilities Agreement and License Agreement and Rockwell paid
$1,500,000 of the aggregate purchase price as required under the Rockwell
Agreement. The Services Agreement, Facilities Agreement and License Agreement
are set forth in Exhibits 99.1, 99.2 and 99.3, respectively, and are herein
incorporated by reference.
The Plan also provided for the assumption of an employment agreement
between the Company and Richard H. Bohnet. In April 1996, the Company retained
Mr. Bohnet as its President and Chief Executive Officer and entered into an
employment agreement with Mr. Bohnet under which he was entitled to compensation
as follows: (i) an annual salary of $225,000, (ii) eligibility to participate in
the executive officer bonus plans of the Company as determined by the board of
directors, (iii) employee benefits available to other key executives in the
Company, (iv) stock options and (v) termination benefits. Bohnet's termination
benefits are as follows: (i) if Bohnet was involuntarily terminated prior to the
end of his employment period, he is entitled to severance pay equal to one
year's salary payable within five days of termination or (ii) if Bohnet is
terminated as a result of a sale or sales of all or substantially all of the
Company's assets (a "Change of Control") during the first year of his
employment, he is entitled to
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a Change in Control payment equal to one year's salary plus two percent (2%) of
the amount paid to shareholders of the Company as a result of such sale or
sales. Upon consummation of the Rockwell Agreement on April 1, 1997, Bohnet
became entitled to the Change in Control payment. The Plan provided for the
assumption of Bohnet's employment agreement based upon his success in
identifying an acquisition candidate and negotiating the Rockwell Agreement and
his continued efforts to improve the return to the Company's shareholders upon
liquidation.
As soon as practicable after the Company has resolved and/or paid
outstanding claims and post-confirmation expenses incurred in connection with
implementing the Plan and disposed of its remaining assets, the holders of the
Company's common stock will receive a pro rata distribution of any remaining
available funds. As set forth in the Disclosure Statement sent to the
shareholders and creditors, the projected per share distribution to
shareholders ranges from $0.29 to $0.60. The actual amount to be distributed to
shareholders, however, may differ materially from these estimates. Factors
which may cause such distribution to differ materially include, but are not
limited to, (i) the number of successful claims including Rejection Claims (as
defined in the Plan) asserted by creditors against the Company, (ii) the
amount, if any, received by the Company from the sale of remaining assets and
technology and (iii) expenses related to winding up the affairs of the Company.
The foregoing discussion provides a general description of some of the
material features of the Plan. A more complete description of the Plan,
including more detailed information as to the Company's assets and liabilities,
is set forth in Exhibit 2.1 and 2.2 (the Plan as confirmed by the Bankruptcy
Court) and is herein incorporated by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
2.1 Debtor's First Amended Plan of Reorganization dated January 30,
1997.
2.2 First Modification to First Amended Plan of Reorganization
dated March 20, 1997.
2.3 Asset Purchase Agreement by and between Rockwell Semiconductor
Systems, Inc. and the Registrant.
99.1 Engineering Services Agreement dated December 11, 1996 by and
between Rockwell Semiconductor Systems, Inc. and the
Registrant.
99.2 Facilities and Equipment Agreement dated December 12, 1996 by
and between Rockwell Semiconductor Systems, Inc. and the
Registrant.
99.3 License Agreement dated December 12, 1996 by and between
Rockwell Semiconductor Systems, Inc. and the Registrant.
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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 hereunto duly authorized.
Date: April 11, 1996 WEITEK CORPORATION
/s/ Richard H. Bohnet
-----------------------------------------
Richard H. Bohnet
*Responsible Person
*As of the date of this filing, the Registrant no longer has any persons serving
as executive officers or members of its board of directors. Pursuant to the
Registrant's Plan of Reorganization approved by the United States Bankruptcy
Court on March 20, 1997, Mr. Bohnet, the former President and Chief Executive
Officer of the Registrant, is designated as the Responsible Person empowered to
do all things necessary and appropriate to meet the Registrant's obligations.
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
- ------- ----------- ------------
<S> <C> <C>
2.1 Debtor's First Amended Plan of Reorganization
dated January 30, 1997.
2.2 First Modification to First Amended Plan of
Reorganization dated March 20, 1997.
2.3 Asset Purchase Agreement by and between
Rockwell Semiconductor Systems, Inc. and
the Registrant.
99.1 Engineering Services Agreement dated December
11, 1996 by and between Rockwell Semiconductor
Systems, Inc. and the Registrant.
99.2 Facilities and Equipment Agreement dated
December 12, 1996 by and between Rockwell
Semiconductor Systems, Inc. and the Registrant.
99.3 License Agreement dated December 12, 1996
by and between Rockwell Semiconductor
Systems, Inc. and the Registrant.
</TABLE>
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Exhibit 2.1
[MURRAY & MURRAY LETTERHEAD]
JANICE M. MURRAY, #099996
MAUREEN C. HARRISON, #162063
MURRAY & MURRAY
A Professional Corporation
Attorneys at Law
3030 Hansen Way, Suite 200
Palo Alto, CA 94304-1009
(415) 852-9000
Attorneys for Debtor
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
In re )
) Case No. 96-59552-JRG-11
WEITEK CORPORATION, a )
California corporation, ) Chapter 11
)
Debtor. )
)
Employer's Tax Identification )
No.: 94-2709963 )
_______________________________________)
DEBTOR'S FIRST AMENDED PLAN OF REORGANIZATION
DATED JANUARY 30, 1997
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TABLE OF CONTENTS
Page
1. INTRODUCTION........................................................ 1
2. DEFINITIONS......................................................... 2
3. DESIGNATION OF CLASSES OF CLAIMS AND INTERESTS...................... 13
3.1 Class 1....................................................... 13
3.2 Class 2....................................................... 13
3.3 Class 3....................................................... 13
3.4 Class 4....................................................... 13
3.5 Class 5....................................................... 13
3.6 Class 6....................................................... 13
3.7 Class 7....................................................... 13
4. TREATMENT OF UNCLASSIFIED CLAIMS.................................... 14
4.1 Allowed Administrative Claims................................. 14
4.2 Tax Claims.................................................... 14
5. CLASSES OF CLAIMS AND INTERESTS NOT IMPAIRED UNDER THE
PLAN................................................................ 15
6. TREATMENT OF CLASSES OF CLAIMS AND INTERESTS THAT ARE
IMPAIRED UNDER THE PLAN............................................. 15
6.1 Class 1 Claims (Priority Claims).............................. 15
6.2 Class 2 Claim (Silicon Valley Bank)........................... 15
6.3 Class 3 Claim (Renco)......................................... 15
6.4 Class 4 Claim (Hewlett Packard Company)....................... 16
6.5 Class 5 Claims (Unsecured Creditors).......................... 16
6.6 Class 6 Interests (Common Stock).............................. 17
6.7 Class 7 Interests (Options)................................... 17
7. MEANS FOR IMPLEMENTATION OF THE PLAN................................ 17
7.1 Conditions to Confirmation.................................... 17
7.2 Conditions to the Effective Date.............................. 18
7.3 Consummation of the Rockwell Transaction...................... 19
7.4 Disposition of Assets Not Subject to Rockwell
Agreement..................................................... 19
7.5 Disbursement of Funds......................................... 19
7.6 Responsible Person............................................ 19
7.7 Expedited Procedure for Compromise of
Controversy, Sale or Abandonment.............................. 21
7.8 Avoidance and Other Actions................................... 22
7.9 Corporate Formalities......................................... 22
7.10 Compensation and Reimbursement of Professionals............... 23
7.11 Amendment of Charter to Prohibit the Issuance of
Non-Voting Equity Securities.................................. 23
7.12 Unclaimed Property............................................ 24
7.13 Dissolution of Corporation.................................... 24
8. COMPETING BID; BIDDING PROCEDURES................................... 24
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9. EXECUTORY CONTRACTS AND UNEXPIRED LEASES............................ 28
9.1 Assumption of Executory Contracts and Unexpired
Leases........................................................ 28
(a) Assumption of the Rockwell Agreement.................... 28
(b) Assumption and Assignment to Rockwell................... 28
(c) Assumption of Additional Executory Contracts
........................................................ 28
(d) Effect of Assumption.................................... 29
(e) Cure.................................................... 29
(f) Assumption Conditioned Upon Confirmation of
the Plan and Closing of the Rockwell
Transaction............................................. 29
9.2 Rejection of Executory Contracts and Unexpired
Leases........................................................ 30
9.3 Treatment of Executory Contracts and Unexpired
Leases........................................................ 30
9.4 Rejection Claims.............................................. 30
10. PROOFS OF CLAIM; EVIDENCE OF EQUITY SECURITY;
OBJECTIONS.......................................................... 31
10.1 Time for Filing Proofs of Claim............................... 31
10.2 Evidence of Claim or Interest................................. 31
10.3 Time for Filing Objections.................................... 31
10.4 Disputed Claims and Disputed Interests........................ 32
11. RESERVATION OF POWERS............................................... 33
12. WAIVER.............................................................. 33
13. REQUEST FOR CONFIRMATION............................................. 33
14. RETENTION OF JURISDICTION........................................... 34
15. EFFECT OF CONFIRMATION.............................................. 36
15.1 Binding Effect................................................ 36
15.2 Vesting of Property........................................... 36
15.3 Discharge..................................................... 36
16. CHAPTER 11 POST-CONFIRMATION REPORTS AND FINAL DECREE............... 36
16.1 Post-Confirmation Reports..................................... 36
16.2 Service of Reports............................................ 37
16.3 Final Decree.................................................. 37
17. MISCELLANEOUS....................................................... 38
17.1 Headings...................................................... 38
17.2 Singular/Plural............................................... 38
17.3 Gender........................................................ 38
17.4 Revocation and Withdrawal..................................... 38
17.5 Exhibits...................................................... 38
17.6 Notices....................................................... 38
17.7 Reservation of Rights......................................... 40
17.8 Computation of Time Periods................................... 40
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TABLE OF EXHIBITS
EXHIBIT "A": Executory Contracts And Unexpired Leases To Be Assumed By
Debtor And Assigned To Rockwell
EXHIBIT "B": Executory Contracts And Unexpired Leases To Be Assumed By
Debtor
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Weitek Corporation, a California corporation ("Weitek", the "Debtor" or
the "Company") proposes this First Amended Plan of Reorganization (the "Plan")
pursuant to the provisions of Chapter 11 of the Bankruptcy Code.
1. INTRODUCTION
1.1 On December 11, 1996, the Debtor filed its Voluntary Petition
under Chapter 11 of the Bankruptcy Code. Chapter 11 sets forth the rules and
procedures under which financially distressed entities may be reorganized or
liquidated pursuant to a plan of reorganization presented to creditors and
stockholders for consideration and approval. Confirmation of the Plan is the
culmination of that process.
1.2 The Plan sets forth a proposal for the satisfaction, discharge
and/or cancellation of all Claims against and Interests in the Debtor. With the
Plan, Creditors and Equity Security Holders will receive a Ballot for voting on
the Plan, and a Disclosure Statement that provides information concerning the
Debtor and the Plan. The Disclosure Statement includes a summary of the Debtor's
history, a summary of significant events during the Chapter 11 case, an estimate
of what certain Creditors and Interest holders will receive under the Plan and a
summary of the procedures and voting requirements necessary for confirmation of
the Plan. You should thoroughly review both the Plan and the Disclosure
Statement before deciding whether you will accept or reject the Plan.
/ / /
/ / /
/ / /
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1.3 CREDITORS AND EQUITY SECURITY HOLDERS WISHING TO VOTE ON THE PLAN
SHOULD COMPLETE THE BALLOT PROVIDED AND RETURN IT NO LATER THAN MARCH 11, 1997
TO:
MURRAY & MURRAY
A PROFESSIONAL CORPORATION
3030 HANSEN WAY, SUITE 200
PALO ALTO, CALIFORNIA 94304-1009
ATTN.: JANICE M. MURRAY
IF YOUR BALLOT IS NOT RETURNED BY MARCH 11, 1997, IT MAY NOT BE CONSIDERED.
BALLOTS WHICH ARE RETURNED BUT NOT PROPERLY EXECUTED WILL NOT BE CONSIDERED.
BALLOTS WHICH ARE EXECUTED BUT WHICH FAIL TO INDICATE EITHER ACCEPTANCE OR
REJECTION OF THE PLAN WILL BE CONSIDERED AS ACCEPTING THE PLAN.
2. DEFINITIONS
The following terms used in this Plan shall, unless the context
otherwise clearly requires, have the meanings specified below, and such meanings
shall be equally applicable to both the singular and plural forms of such terms.
2.1 "ADMINISTRATIVE CLAIM" means a Claim for any cost or expense of
administration of a kind specified in Section 503(b) of the Bankruptcy Code that
is entitled to priority under Section 507(a)(1) of the Bankruptcy Code,
including, without limitation, any actual and necessary costs and expenses of
preserving the Bankruptcy Estate incurred on or after the Petition Date and
through and including the Effective Date, any cure amounts that must be paid in
connection with the assumption of any executory contract or unexpired lease of
the Debtor under Section 365 of the Bankruptcy Code, Bankruptcy Fees, and
allowance of compensation for legal or other services and reimbursement of
expenses under Sections 330 and 331 of the
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Bankruptcy Code or otherwise allowed by the Bankruptcy Court.
2.2 "ALLOWED ADMINISTRATIVE CLAIM" means all or any portion of an
Administrative Claim that has either been (i) allowed by a Final Order or (ii)
has not been objected to within the time period established by the Plan or by an
order of the Bankruptcy Court.
2.3 "ALLOWED CLAIM" means a Claim (a) which is an Allowed Claim
pursuant to the terms of the Plan; (b) with respect to which a Proof of Claim
has been filed with the Bankruptcy Court within the time ordered by the
Bankruptcy Court, or if no time is ordered by the Bankruptcy Court, within the
time prescribed by the Plan, the Bankruptcy Code, the Bankruptcy Rules or by
Local Rules, and to which no objection has been filed within the time fixed by
the Plan or the Bankruptcy Court; (c) which has been listed on Schedule D, E or
F of the Debtor's Schedules filed with the Bankruptcy Court pursuant to Section
521(1) of the Bankruptcy Code and Bankruptcy Rule 1007(b), as may be amended,
(the "Schedules"), and is not listed as disputed, contingent, unliquidated or
unknown as to amount; or (d) which is allowed by a Final Order of the Bankruptcy
Court. Except for a Claim which is allowed pursuant to the terms of the Plan, no
Claim shall be considered an Allowed Claim if an objection to the allowance
thereof is interposed by the Debtor or other party in interest within the time
fixed by the Plan or the Bankruptcy Court, and such objection has not been
denied by a Final Order of the Bankruptcy Court.
2.4 "ALLOWED INTEREST" means the Interest of an Equity Security Holder
(a) which is an Allowed Interest pursuant to the
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terms of the Plan; (b) in respect to which a Proof of Interest has been filed
with the Bankruptcy Court within the time ordered by the Bankruptcy Court, or if
no time is ordered by the Bankruptcy Court, within the time prescribed by the
Plan, the Bankruptcy Code, the Bankruptcy Rules or by Local Rules, and to which
no objection has been filed within the time fixed by the Plan or the Bankruptcy
Court; or (c) which has been listed on the Debtor's List of Equity Security
Holders filed with the Bankruptcy Court pursuant to Bankruptcy Rule 1007(a)(3),
as may be amended, (the "List of Equity Security Holders"), and is not listed as
disputed, contingent, unliquidated or unknown as to class or amount. Except for
an Interest which is allowed pursuant to the terms of the Plan, no Interest
shall be considered an Allowed Interest if an objection to the allowance thereof
is interposed by the Debtor or other party in interest within the time fixed by
the Plan or the Bankruptcy Court, and such objection has not been denied by a
Final Order of the Bankruptcy Court. Pursuant to Bankruptcy Rule 3021, only
Allowed Class 6 Interests of Equity Security Holders as of the Distribution Date
shall be entitled to receive a Distribution under this Plan.
2.5 "ALLOWED SECURED CLAIM" means an Allowed Claim secured by a lien,
security interest, or other charge against or interest in property in which the
Debtor has an interest or that is subject to setoff under Section 553 of the
Bankruptcy Code, to the extent of the value (as specified in the Plan, or if no
value is specified, as determined in accordance with Section 506(a) of the
Bankruptcy Code) of the interest of a holder of
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such Allowed Claim in the Debtor's interest in such property or to the extent of
the amount subject to setoff, as the case may be.
2.6 "ALLOWED UNSECURED CLAIM" means any Allowed Claim, including a
Rejection Claim, but excluding Allowed Secured Claims, Allowed Administrative
Claims, Priority Claims, and Tax Claims.
2.7 "BALLOT" means the form distributed to holders of Claims and
Interests on which an acceptance or rejection of the Plan is to be stated.
2.8 "BANKRUPTCY CASE" or "CASE" means the bankruptcy case commenced by
the Debtor's filing with the Bankruptcy Court of a Voluntary Petition under
Chapter 11 of the Bankruptcy Code.
2.9 "BANKRUPTCY CODE" OR "CODE" means Title 11 of the United States
Code and also includes Sections 157, 158, 1334, 1408-1412, and 1452 of Title 28
of the United States Code.
2.10 "BANKRUPTCY COURT" OR "COURT" means the United States Bankruptcy
Court for the Northern District of California, San Jose Division, having
jurisdiction over the Bankruptcy Case and, to the extent of any reference made
pursuant to 28 U.S.C. Section 157(a) and Local Rule 5011-1, the unit of such
District Court constituted pursuant to 28 U.S.C. Section 151, commonly referred
to as the United States Bankruptcy Court for the Northern District of
California, San Jose Division, and any other courts or panels having competent
jurisdiction to hear the Bankruptcy Case or appeals from orders entered therein.
2.11 "BANKRUPTCY ESTATE" means the estate created by the commencement
of the Bankruptcy Case and comprised of the
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property described in Section 541 of the Bankruptcy Code.
2.12 "BANKRUPTCY FEES" mean the quarterly fees payable under Section
1930 of Title 28 of the United States Code.
2.13 "BANKRUPTCY RULES" means the Federal Rules of Bankruptcy Procedure
promulgated under 28 U.S.C. Section 2075, as amended, as applicable to this
Bankruptcy Case.
2.14 "BOHNET EMPLOYMENT AGREEMENT" means that certain Employment
Agreement dated April 25, 1996 by and between Richard H. Bohnet and the Debtor.
2.15 "CLAIM" means any right to payment, or right to an equitable
remedy for breach of performance if such breach gives rise to a right to
payment, from the Debtor, whether or not such right to payment or right to an
equitable remedy is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured.
2.16 "CLAIMS BAR DATE" means February 10, 1997, the date established by
order of the Bankruptcy Court pursuant to Bankruptcy Rule 3003(c) as the
deadline for filing proofs of Claim in the Bankruptcy Case.
2.17 "CLASS" means a category or group of holders of Claims or
Interests as designated pursuant to the Plan.
2.18 "CLOSING" means the date on which all documents and consideration
are exchanged pursuant to the Rockwell Transaction and at which time the
Rockwell Transaction is consummated.
2.19 "COMPANY" or "DEBTOR" means Weitek Corporation, a California
corporation.
2.20 "COMPETING BID" means an offer for the purchase of the
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Rockwell Assets from a Competing Bidder.
2.21 "COMPETING BIDDER" means a third party making a Competing Bid for
the Rockwell Assets.
2.22 "CONFIRMATION" means the entry by the Bankruptcy Court of the
Confirmation Order.
2.23 "CONFIRMATION DATE" means the date on which the Bankruptcy Court
enters the Confirmation Order.
2.24 "CONFIRMATION HEARING" means the hearing held before the
Bankruptcy Court in which the Debtor will seek Confirmation of this Plan,
including any and all adjournments thereof.
2.25 "CONFIRMATION ORDER" means the order entered by the Bankruptcy
Court approving and confirming the Plan in accordance with the provisions of
Chapter 11 of the Bankruptcy Code.
2.26 "CREDITOR" means any entity holding a Claim against the Debtor.
2.27 "DEBTOR'S PROFESSIONALS" collectively means Murray & Murray, A
Professional Corporation and Wilson, Sonsini, Goodrich & Rosati and/or their
successors, if any; such professional as the Debtor may select to complete the
Debtor's final tax returns; such other professionals whose employment by the
Debtor is approved by order of the Bankruptcy Court; and, following the
Effective Date, any professionals engaged by the Debtor to represent or assist
it in fulfilling the duties and obligations of the Debtor under the Plan after
the Effective Date, and administering the Plan, the Bankruptcy Case and the
Bankruptcy Estate, reviewing Claims and Interests, objecting to Disputed Claims
and Disputed Interests as appropriate, supervising the preparation and filing of
the Debtor's final tax returns, and
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closing the Bankruptcy Case.
2.28 "DISCLOSURE STATEMENT" means that informational disclosure
statement issued by the Debtor pursuant to Section 1125 of the Bankruptcy Code
and accompanying this Plan, and which has heretofore been approved by the
Bankruptcy Court pursuant to the Order Approving Disclosure Statement.
2.29 "DISPUTED CLAIM" means a Claim against the Debtor (a) that has
been listed in the Debtor's Schedules as disputed, contingent or unliquidated,
or; (b) as to which an objection or adversary proceeding has been filed within
the time fixed by the Bankruptcy Court and which objection or adversary
proceeding has not been withdrawn or disposed of by a Final Order of the
Bankruptcy Court.
2.30 "DISPUTED CLAIMS RESERVE ACCOUNT" means a segregated
interest-bearing account maintained and administered by the Debtor at a
depository approved by the Office of the United States Trustee for the purpose
of holding cash payments attributable to Disputed Claims.
2.31 "DISPUTED INTERESTS" means an Interest in the Debtor (a) that has
been listed on the List of Equity Security Holders (as may be amended) as
disputed, contingent or unliquidated, or (b) as to which an objection or
adversary proceeding has been filed within the time fixed by the Bankruptcy
Court and which objection or adversary proceeding has not been withdrawn or
disposed of by a Final Order of the Bankruptcy Court.
2.32 "DISPUTED INTERESTS RESERVE ACCOUNT" means a segregated
interest-bearing account maintained and administered by the Debtor at a
depository approved
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by the Office of the United States Trustee for the purpose of holding cash
payments attributable to Disputed Interests.
2.33 "DISTRIBUTION(S)" means the monies to be distributed under the
Plan to holders of Allowed Claims and Allowed Interests.
2.34 "DISTRIBUTION DATE" means the date of commencement of
Distribution(s) under the Plan.
2.35 "EFFECTIVE DATE" means: the later of (a) the first business day
which is eleven (11) calendar days after the Confirmation Date, provided the
Confirmation Order has become a Final Order; or (b) the first date following the
Confirmation Date on which all of the conditions to the Closing of the Rockwell
Transaction are satisfied or waived.
2.36 "EQUITY SECURITY" means (a) a share in the Debtor, whether or not
transferable or denominated "stock", or similar security; or (b) a warrant or
right (other than a right to convert) to purchase, sell, or subscribe to a
share, security, or interest of a kind specified in subparagraph (a) of this
section.
2.37 "EQUITY SECURITY HOLDER" means a holder of record, or if
appropriate, the beneficial owner, of any Equity Security of the Debtor as of
(a) the Petition Date, (b) the date the Order Approving Disclosure Statement is
entered, or (c) the Distribution Date, as the context requires.
2.38 "FINAL ORDER" means an order entered on the docket by the
Bankruptcy Court which is no longer subject to appeal, certiorari proceedings or
other proceedings for review or rehearing, and as to which no appeal, certiorari
proceedings, or
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other proceedings for review or rehearing are pending.
2.39 "INTEREST" means the rights and property interests represented by
an Equity Security of the Debtor.
2.40 "LOCAL RULES" means the Local Rules of the United States District
Court for the Northern District of California, as amended, as applicable to this
Bankruptcy Case.
2.41 "ORDER APPROVING DISCLOSURE STATEMENT" means the Order Approving
Disclosure Statement, Fixing Time for Filing Acceptances or Rejections of Plan,
Fixing Time for Confirmation, Combined with Notice Thereof entered by the
Bankruptcy Court with respect to the Debtor's Disclosure Statement, a copy of
which accompanies this Plan.
2.42 "PETITION DATE" means December 11, 1996, the date on which this
Bankruptcy Case was commenced.
2.43 "PLAN" means this First Amended Plan of Reorganization, including
any modification(s) hereof and/or amendment(s) hereto that comply with Section
1127 of the Bankruptcy Code and Bankruptcy Rule 3019.
2.44 "POST-PETITION INTEREST" means interest at the federal statutory
rate set by 28 U.S.C. Section 1961, accruing from the Petition Date. As of the
Petition Date, said interest rate was 5.49%.
2.45 "PRIORITY CLAIM" means any Allowed Claim entitled to priority
pursuant to Section 507(a) of the Bankruptcy Code, but not including
Administrative Claims and Tax Claims.
2.46 "PRO RATA" means the ratio that an Allowed Claim or Allowed
Interest in a particular Class bears to the aggregate amount of all Allowed
Claims or Allowed Interests in such Class.
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2.47 "PURCHASE PRICE" means the purchase price payable by Rockwell
pursuant to Article III of the Rockwell Agreement.
2.48 "REJECTION CLAIM" means an Allowed Unsecured Claim arising from
the Debtor's rejection of an unexpired lease or executory contract pursuant to
the Plan or pursuant to an order of the Bankruptcy Court.
2.49 "RENCO" means Renco Associates, a California Partnership, the
Debtor's landlord for the premises located at 2801 Orchard Parkway, San Jose,
California.
2.50 "RENCO LEASE" means that certain Industrial Space Lease dated
November 9, 1995 by and between Renco and the Debtor.
2.51 "RENCO LETTER OF CREDIT" means the Letter of Credit No.
SVB95ISO231, dated November 9, 1995 established by Silicon Valley Bank in favor
of Renco and all amendments thereto.
2.52 "RESPONSIBLE PERSON" means the individual designated by the Debtor
under the Plan, or as otherwise designated by order of the Bankruptcy Court, to
assist the Debtor in (a) fulfilling the duties and obligations of the Debtor
under the Plan, and (b) fully administering the Bankruptcy Estate as required by
the Plan, the Confirmation Order, the Bankruptcy Code and the Bankruptcy Rules,
which duties and obligations include, without limitation, the facilitation of
Distributions pursuant to the Plan, reviewing Claims and Interests, objecting to
Disputed Claims and Disputed Interests, supervising the preparation and filing
of the Debtor's final tax returns and closing the Bankruptcy Case.
2.53 "ROCKWELL" means Rockwell Semiconductor Systems, Inc.
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2.54 "ROCKWELL AGREEMENT" means, collectively, that certain Asset
Purchase Agreement by and between Rockwell Semiconductor Systems, Inc. and
Weitek Corporation Dated as of December 11, 1996, that certain Addendum to
License Agreement dated as of January 23, 1997, and other documents, in form and
substance satisfactory to the Debtor and Rockwell, which set forth the terms and
conditions of the Rockwell Transaction, which shall be submitted to the
Bankruptcy Court prior to the Confirmation Date and attached to the Order of
Confirmation and specifically approved thereby.
2.55 "ROCKWELL ASSETS" means the assets of the Bankruptcy Estate which
are the subject of the Rockwell Agreement.
2.56 "ROCKWELL TRANSACTION" means that transaction contemplated by the
Rockwell Agreement.
2.57 "STOCK OPTION PLAN" means the Debtor's 1991 Stock Option Plan.
2.58 "TAX CLAIM" means any Allowed Claim entitled to priority pursuant
to section 507(a)(8) of the Bankruptcy Code.
2.59 "TRANSFER AGENT" means Boston EquiServe Limited Partnership.
2.60 "UNCLAIMED PROPERTY" means any Distribution that cannot be
delivered to, or is not accepted by (i) the holder of an Allowed Claim and/or
(ii) the holder of an Allowed Interest of an Equity Security Holder as of the
Distribution Date, and shall include, without limitation, checks (and the funds
represented thereby) that are returned as undeliverable without a proper
forwarding address, are not cashed, or not delivered because of the absence of a
proper address to which to deliver
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the Distribution together with any interest on said funds.
2.61 "U. S. TRUSTEE" means the office of the United States Trustee for
Region 17 of the United States.
A term used in the Plan that is not herein defined but is used in the
Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to such
term in the Bankruptcy Code or the Bankruptcy Rules.
3. DESIGNATION OF CLASSES OF CLAIMS AND INTERESTS
The Allowed Claims against and Allowed Interests in the Debtor are
designated and classified below for purposes of the Plan. Except to the extent
the Plan provides otherwise, a Claim or Interest that is properly includable in
more than one Class is classified in a particular Class only to the extent that
it qualifies within the description of that Class, and is placed in a different
Class to the extent it qualifies within the description of such different Class.
3.1 Class 1. All Priority Claims.
3.2 Class 2. The Allowed Secured Claim of Silicon Valley Bank.
3.3 Class 3. The Allowed Secured Claim of Renco.
3.4 Class 4. The Allowed Secured Claim of Hewlett Packard Company.
3.5 Class 5. All Allowed Unsecured Claims.
3.6 Class 6. All Allowed Interests (common stock) of Equity Security
Holders as of the Distribution Date.
3.7 Class 7. The Allowed Interests of the holders of outstanding,
unterminated options and/or other rights to acquire any Equity Security of the
Debtor.
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4. TREATMENT OF UNCLASSIFIED CLAIMS
Unclassified Claims shall be treated as follows:
4.1 Allowed Administrative Claims. Each holder of an Allowed
Administrative Claim shall receive payment of such Claim, in cash, in full, upon
the latest of (a) the Effective Date, (b) if such Claim is a Disputed Claim,
upon allowance of such Claim by a Final Order of the Bankruptcy Court, (c) if
such Claim is incurred after the Petition Date in the ordinary course of the
Debtor's business, within such time as payment is due pursuant to the terms
giving rise to such Claim, or (d) such other time as may be agreed to by the
holder of such Claim. Any request for allowance of an Administrative Claim
pursuant to Section 503(a) of the Bankruptcy Code, other than by the Debtor's
Professionals and the U.S. Trustee, must be filed within ten (10) days following
the Effective Date or the holder of such Claim will be forever barred from
asserting such Claim or receiving any payment on account of such Claim.
Bankruptcy Fees shall be paid by the Debtor to the U.S. Trustee, for deposit
into the Treasury, for each quarter (including any fraction thereof) until this
Case is converted, dismissed or closed pursuant to a final decree, as required
by 28 U.S.C. Section 1930(a)(6).
4.2 Tax Claims. Each holder of a Tax Claim shall be paid in cash, in
full, on the Effective Date, but in no event shall the holder of a Tax Claim be
paid prior to the payment in full or reservation for Allowed Claims entitled to
priority pursuant to Section 507(a)(1) through (a)(7) of the Bankruptcy Code.
/ / /
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5. CLASSES OF CLAIMS AND INTERESTS NOT
IMPAIRED UNDER THE PLAN
There are no classes of Claims and Interests which are not impaired
under the Plan.
6. TREATMENT OF CLASSES OF CLAIMS AND INTERESTS
THAT ARE IMPAIRED UNDER THE PLAN The following classes of
Claims and Interests are impaired under the Plan, and shall be treated
as follows:
6.1 Class 1 Claims (Priority Claims). Each holder of a Claim in Class
1 shall receive payment in cash in full, including Post-Petition Interest, on
the Effective Date.
6.2 Class 2 Claim (Silicon Valley Bank). The holder of the Class 2
Claim shall be treated as follows: On the Effective Date and in conjunction with
the Closing of the Rockwell Transaction, the Renco Letter of Credit shall be
cancelled and the lien of Silicon Valley Bank against the Debtor's certificate
of deposit shall be released and of no further force and effect.
6.3 Class 3 Claim (Renco). The holder of the Class 3 Claim shall be
treated as follows: On the Effective Date in conjunction with the Closing of the
Rockwell Transaction and upon the assumption and assignment of the Renco Lease
as approved by the Bankruptcy Court, the Renco Letter of Credit shall be
cancelled and of no further force and effect. Rockwell (or such other assignee
of the Renco Lease as may be approved by the Bankruptcy Court) shall cause to be
issued a replacement letter of credit in the amount of $250,000.00 in favor of
Renco pursuant to the terms of the Renco Lease, unless Renco, in its discretion,
agrees to waive in writing this requirement.
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/ / /
6.4 Class 4 Claim (Hewlett Packard Company). The Allowed Secured Claim
of Hewlett Packard Company ("HP") secured by a perfected lien on certain
equipment of the Debtor shall be treated as follows: At the Debtor's election,
the property subject to the HP Lease will be sold free and clear of the HP lien
with the HP lien to attach to the proceeds and HP shall receive payment from
such proceeds totalling the allowed amount of HP's Claim, of a value, as of the
Effective Date, of HP's interest in the Bankruptcy Estate's interest in such
property; or such property will be returned to HP in full satisfaction of its
secured Claim and the HP Lease otherwise terminated.
6.5 Class 5 Claims (Unsecured Creditors). The holders of Class 5
Allowed Unsecured Claims shall receive payment in cash in full, including
Post-Petition Interest, as soon as practicable after the Effective Date, but in
no event later than the later of (i) forty (40) days after the Effective Date or
(ii) upon resolution of all Disputed Claims, including Rejection Claims;
provided, however, no payment shall be made to members of Class 5 until after
the payment of or reservation for all Allowed Administrative Claims, Allowed
Secured Claims, Tax Claims, Priority Claims, any other senior Claims, and post-
Confirmation expenses of implementing the Plan, winding up the affairs of the
Debtor and closing the Bankruptcy Case. In the unlikely event there are
insufficient funds available to pay Class 5 Claims in full with Post-Petition
Interest as described herein, holders of Class 5 Allowed Unsecured Claims shall
be paid pro rata from the funds available for the payment of Class
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5 Claims.
6.6 Class 6 Interests (Common Stock). Each Equity Security Holder with
an Allowed Class 6 Interest as of the Distribution Date shall receive a pro rata
distribution from available funds, as soon as practicable after (i) the payment
of or reservation for all Allowed Administrative Claims, Allowed Secured Claims,
Tax Claims, Priority Claims, Allowed Unsecured Claims, any other senior Claims,
and post-Confirmation expenses of implementing the Plan, winding up the affairs
of the Debtor and closing the Bankruptcy Case and (ii) resolution of all
Disputed Claims and Disputed Interests. All Class 6 Interests shall otherwise be
cancelled and extinguished on the Distribution Date.
6.7 Class 7 Interests (Options). The holders, as of the Effective
Date, of outstanding, unterminated options to acquire the Debtor's common stock
shall be entitled to exercise said options through and including thirty (30)
days after the Effective Date pursuant to the terms of the Stock Option Plan,
and upon such exercise will be treated as holders of Class 6 Interests. All
options representing Class 7 Interests which have not been exercised by such
date shall be cancelled and extinguished.
7. MEANS FOR IMPLEMENTATION OF THE PLAN
7.1 Conditions to Confirmation. In addition to any other conditions to
Confirmation set forth in the Plan and the Bankruptcy Code, Confirmation of the
Plan is subject to the further conditions that the Bankruptcy Court shall have
made the following findings and determinations at the Confirmation
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Hearing so that the Confirmation Order will include provisions:
(a) Approving the Rockwell Transaction and authorizing and
directing consummation of the Rockwell Transaction.
(b) Approving the form, and authorizing and directing the
delivery and performance by all necessary parties, of the Rockwell Agreement.
(c) Approving the form, and authorizing and directing the
execution and delivery by all necessary parties, of all other documents and
agreements contemplated in the Plan and by the Rockwell Agreement.
7.2 Conditions to the Effective Date. It is a condition to the
Effective Date of the Plan that:
(a) The Bankruptcy Court shall have entered the Confirmation
Order, with appropriate findings, in form and substance acceptable to the Debtor
and Rockwell;
(b) The Confirmation Order shall have become a Final Order;
(c) The Confirmation Order shall contain the provisions described
in Section 7.1 above;
(d) All conditions to the obligations of Rockwell set forth in
the Plan and the Rockwell Agreement shall have been satisfied or waived in
writing by the affected party;
(e) All conditions to the obligations of the Debtor set forth in
the Rockwell Agreement shall have been satisfied or waived in writing by the
affected party;
(f) All necessary parties shall have signed all of the documents
contemplated by the Rockwell Agreement, and such
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documents shall be in full force and effect subject only to the entry of the
Confirmation Order and the occurrence of the Effective Date.
7.3 Consummation of the Rockwell Transaction. The Rockwell Transaction
will be consummated which will generate the Purchase Price for the benefit of
the Bankruptcy Estate.
7.4 Disposition of Assets Not Subject to Rockwell Agreement. All
assets of the Debtor which are not subject to the Rockwell Transaction shall be
liquidated; provided, however, that if the Responsible Person determines, in his
discretion, that an asset is burdensome or of inconsequential value, said asset
will be abandoned.
7.5 Disbursement of Funds. Funds attributable to (i) the proceeds from
the Rockwell Transaction, (ii) proceeds from the liquidation of the Debtor's
remaining assets and (iii) monies otherwise property of the Bankruptcy Estate
and the Debtor on the Effective Date shall be utilized to implement the Plan and
to make the disbursements contemplated thereby.
7.6 Responsible Person.
(a) Richard H. Bohnet, the Debtor's President and Chief Executive
Officer, shall be designated as the Responsible Person. The Responsible Person
shall be compensated on an hourly basis at an hourly rate not to exceed $175.00
from and after the Effective Date. Bohnet's employment under the Bohnet
Employment Agreement shall otherwise cease on the Effective Date.
(b) In the event that Bohnet is unable to serve as the Responsible
Person, the Debtor's Board of Directors will
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appoint an individual to serve as the Responsible Person.
(c) The Responsible Person, on behalf of the Debtor, is authorized
to liquidate the remaining assets of the Bankruptcy Estate and/or abandon such
assets which the Responsible Person determines to be burdensome or of
inconsequential value to the Debtor.
(d) The Responsible Person is authorized to review and object to
claims, enter into compromises to allow and satisfy Disputed Claims and Disputed
Interests, settle and liquidate any claim or cause of action of the Debtor
against a third party.
(e) The Responsible Person is authorized to retain, employ and
utilize such professionals as may be necessary without further approval of the
Bankruptcy Court.
(f) The Responsible Person shall be responsible for moving for the
entry of a final decree in this case and preparing and filing status reports as
may be required by the Bankruptcy Court in connection with the final decree. The
Responsible Person shall be discharged from all duties and responsibilities of
the Plan upon the issuance of the final decree. The Responsible Person shall be
entitled to destroy all records in his possession upon entry of the final
decree, except for such corporate formation documents, minutes and other records
as the Responsible Person considers to be material and original executed copies
of documents filed with the Securities and Exchange Commission, all of which
shall be retained for five (5) years, and tax returns and related records, which
shall be retained for six (6) years.
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/ / /
(g) The Responsible Person shall review and approve the
Distribution amounts to Creditors and Equity Security Holders. The Responsible
Person shall be responsible for making Distributions pursuant to the Plan and
shall obtain a guaranty or fiduciary bond for all of the monies of the
Bankruptcy Estate within thirty (30) days of the Confirmation Date.
(h) The Responsible Person shall do all things necessary and
appropriate to assist the Debtor in fulfilling the duties and obligations of the
Debtor under the Plan and fully administering the Bankruptcy Estate as required
by the Plan, the Confirmation Order, the Bankruptcy Code and the Bankruptcy
Rules, which duties and obligations include, without limitation, the
facilitation of Distributions pursuant to the Plan, reviewing Claims and
Interests, objecting to Disputed Claims and Disputed Interests, supervising the
preparation of filing of the Debtor's final tax returns and closing the
Bankruptcy Case.
7.7 Expedited Procedure for Compromise of Controversy, Sale or
Abandonment. Subject to the notice procedures set forth in this Section , the
Responsible Person is authorized to (i) enter into binding compromises to allow
and satisfy Disputed Claims and Disputed Interests or settle and liquidate any
claim or cause of action of the Debtor, (ii) sell the Debtor's remaining assets,
and/or (iii) abandon property of the Bankruptcy Estate which the Responsible
Person determines to be burdensome or of inconsequential benefit to the
Bankruptcy Estate. The Responsible Person shall mail written notice of any such
compromise, disposition, or abandonment to Rockwell,
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members of any committee appointed in this case, counsel to such committee, the
U.S. Trustee and those parties who have filed a written request that all notices
be mailed to them. If no party serves on the Responsible Person and Debtor's
counsel a written objection or demand for a hearing on the compromise,
disposition, or abandonment within ten (10) days of mailing of such notice, the
compromise, disposition or abandonment shall be effective, final and binding on
all parties, Creditors, Equity Security Holders, Rockwell and other parties in
interest in this Case without further approval or action by the Court. The time
for serving written objections shall not be extended pursuant to Rule 9006(f) of
the Bankruptcy Rules. If timely notice of an objection to the compromise,
disposition or abandonment is served on the Responsible Person and Debtor's
counsel, the Responsible Person shall (i) withdraw the proposed compromise,
disposition or abandonment wherein it will be without force and effect, or (ii)
move for the approval of the compromise, disposition or abandonment on notice to
Rockwell, any committee appointed in this case, counsel to such committee, the
U.S. Trustee and those parties who have filed a written request that all notices
be mailed to them.
7.8 Avoidance and Other Actions. The Responsible Person shall be
authorized to prosecute any action, including actions for recovery of avoidable
transfers pursuant to the provisions of the Bankruptcy Code for the benefit of
the Bankruptcy Estate.
7.9 Corporate Formalities. The Responsible Person is authorized on
behalf of the Debtor to execute all instruments, agreements and documents and to
take all action by the Debtor
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necessary to effectuate the provisions of the Plan without further action by the
Debtor's board of directors or shareholders.
7.10 Compensation and Reimbursement of Professionals. All professionals
shall be entitled to payment of their post- Confirmation fees and reimbursement
of expenses on a monthly basis. Professionals shall serve a detailed statement
of unpaid fees and expenses on the Responsible Person, members of any committee
appointed in the case and committee counsel. If there is no objection to the
requested fees and expenses within ten (10) days of service by the professional,
the Responsible Person shall pay the requested amount in full. If the
Responsible Person or such committee objects to a portion of the fees or
expenses submitted by any professional, the Responsible Person shall timely pay
the undisputed portion of such fees and expenses and shall reserve monies in the
amount of the disputed fees and expenses pending resolution of said objection by
(i) written agreement between the party requesting such fees and expenses and
the disputing party, or (ii) resolution of the disputed amount by the Bankruptcy
Court pursuant to a Final Order. Professionals shall not otherwise be required
to file applications for Court approval of post-Confirmation fees and expenses.
7.11 Amendment of Charter to Prohibit the Issuance of Non- Voting
Equity Securities. Pursuant to the requirements of Section 1123(a)(6) of the
Bankruptcy Code, the Certificate of Incorporation of the Debtor shall be, and it
hereby is deemed amended as of the Effective Date to conform to the Bankruptcy
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Code provision which prohibits the issuance of non-voting equity securities and
requires, among other things, the distribution of voting power equitably among
the classes of voting securities.
7.12 Unclaimed Property. With respect to each Allowed Claim and Allowed
Interest, the existence of Unclaimed Property on the 90th day following a
Distribution shall cause the respective Allowed Claim or Allowed Interest to be
disallowed, and the amount of the Unclaimed Property shall become available for
distribution pursuant to the Plan.
7.13 Dissolution of Corporation. Pursuant to authority contained in
Section 1400 of the California Corporations Code, the Debtor shall be dissolved
and its corporate existence terminated without further corporate action upon the
entry of a final decree in this case pursuant to Rule 3022 of the Bankruptcy
Rules. The Confirmation Order shall be deemed an order authorizing and directing
the Responsible Person to file a certificate of dissolution as required by
Section 1401 of the California Corporations Code and the Responsible Person
shall file such certificate concurrently with the request for entry of a final
decree.
8. COMPETING BID; BIDDING PROCEDURES
8.1 In order to facilitate the consummation of an orderly sale
pursuant to the Rockwell Transaction and to maximize value for the Bankruptcy
Estate, any Competing Bids must comply with the following bidding procedures or
such other bidding procedures as established pursuant to Bankruptcy Court order:
(a) A Competing Bid for the purchase of all or a portion of the
Rockwell Assets shall not be eligible for
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consideration by the Debtor or for approval by the Bankruptcy Court unless the
following conditions are met:
(i) The Competing Bidder must provide to the Debtor
satisfactory evidence of its financial ability to fully and timely consummate
the sale on the terms of the Competing Bid no later than March 6, 1997.
(ii) The Debtor will consider satisfactory evidence of the
Competing Bidder's ability to perform to be as follows:
(1) Liquid assets, which are readily convertible to cash at
the date the sale is consummated, at least equal to the Rockwell Purchase Price,
plus $100,000.00, plus all expense reimbursement fees required to be paid to
Rockwell under Section 13.2 of the Rockwell Agreement; and/or
(2) An unconditional, enforceable written commitment from a
reputable and financially sound financial institution to provide sufficient
funds to the Competing Bidder at the date the sale is consummated; and
(3) To the extent the Competing Bidder assumes the Renco
Lease or other obligations of the Debtor, recent audited financial statements
which would provide assurance of the Competing Bidder's ability to meet future
obligations under the Renco Lease or other liabilities assumed.
(iii) The Competing Bid may be for all or a portion of the
Rockwell Assets and may include offers to purchase assets in addition to those
comprising the Rockwell Assets, provided, however, that the Competing Bid for
such assets be for a purchase price which complies with Paragraph
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8.1(a)(vi) below;
(iv) The Competing Bid must be in writing setting forth all
material terms and conditions of the Competing Bid which is received by the
Debtor and Rockwell no later than March 6, 1997, addressed as follows:
DEBTOR: Weitek Corporation
c/o Richard H. Bohnet
2801 Orchard Parkway
San Jose, CA 95134-2301
(408) 526-0300
Fax: (408) 474-1900
WITH COPIES TO: Janice M. Murray, Esq.
Murray & Murray
A Professional Corporation
3030 Hansen Way, Suite 200
Palo Alto, CA 94304-1009
(415) 852-9000
Fax: (415) 852-9244
Kenneth M. Siegel, Esq.
Bridget Logterman, Esq.
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
(415) 493-9300
Fax: (415) 493-6811
ROCKWELL: Anthony C. Kalas
Vice President and Controller
Rockwell Semiconductor
Systems, Inc.
4311 Jamboree Road
Newport Beach, CA 92658-8902
(714) 221-4600
Fax: (714) 221-4391
WITH COPIES TO: Kenneth P. Coleman, Esq.
L. Kevin O'Mara, Jr., Esq.
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, NY 10112
(212) 408-5100
Fax: (212) 541-5369
(v) Any Competing Bidder must either agree to close the sale
upon the same terms and conditions as the
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Rockwell Agreement or must submit with the Competing Bid a copy
/ / /
of its proposed purchase agreement;
(vi) The Competing Bid must be for a purchase price equal to or
greater than the sum of the following: (a) cash of not less than the Purchase
Price, plus $100,000; (b) the assumption of the liabilities to be assumed by
Rockwell pursuant to the Rockwell Agreement; and (c) all expense reimbursement
fees set forth in Section 13.2 of the Rockwell Agreement;
(vii) The Competing Bidder must deposit with Debtor's bankruptcy
counsel a good faith deposit of $500,000.00 in verified funds (e.g. by certified
check of a national bank) prior to the conclusion of the Confirmation Hearing;
(viii) In the event of Bankruptcy Court approval of the Competing
Bid, such Competing Bidder's deposit shall become non-refundable;
(ix) All bids for consideration in excess of the minimum
Competing Bid as set forth in paragraph 8.1(a)(vi) above shall increase in cash
increments of not less that $100,000.00;
(x) At every level of bidding, Rockwell will have the right to
acquire the Rockwell Assets by matching the Competing Bid; and
(xi) In the event a Competing Bid is approved but not
consummated within eleven (11) calendar days after entry of the Confirmation
Order approving the sale (or at such time as the Debtor and the Competing Bidder
shall mutually agree), the next highest bid shall be approved without necessity
of further Bankruptcy Court Order.
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(b) Not withstanding the foregoing, no Competing Bid shall be
accepted if it is contingent upon obtaining financing and/or conducting due
diligence. The Debtor will not object to a Competing Bidder who intends to
finance its Competing Bid, but does not make financing a condition of the
Competing Bid.
8.2 In the event a Competing Bid is approved by the Bankruptcy Court
as provided in this Section 8, all relevant sections of the Plan referring to
Rockwell, the Rockwell Transaction, the Rockwell Agreement, and the Rockwell
Assets shall be deemed to be modified to reference the Competing Bid and the
Competing Bidder as may be necessary or appropriate.
9. EXECUTORY CONTRACTS AND UNEXPIRED LEASES
9.1 Assumption of Executory Contracts and Unexpired
Leases.
(a) Assumption of the Rockwell Agreement. The Rockwell Agreement
shall be assumed by the Debtor on the Effective Date. The Rockwell Agreement and
documents executed in connection therewith, shall remain in full force and
effect, be unimpaired by the Plan except as specifically modified by the Plan
and the Confirmation Order (with Rockwell's consent), and be binding on the
parties thereto, on and after the Effective Date.
(b) Assumption and Assignment to Rockwell. In addition to the
foregoing, each executory contract or unexpired lease listed on Exhibit "A"
hereto shall be assumed by the Debtor and assigned to Rockwell on the Effective
Date in conjunction with the Closing of the Rockwell Transaction.
(c) Assumption of Additional Executory Contracts.
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Each executory contract or unexpired lease listed on Exhibit "B" hereto shall be
assumed by the Debtor.
(d) Effect of Assumption. The leases and contracts listed on
Exhibits "A" and "B" hereto, and all documents executed in connection therewith,
shall remain in full force and effect and be unimpaired by the Plan except as
specifically modified by the Plan and the Confirmation Order. The lists set
forth on Exhibits "A" and "B" may be amended, with appropriate notice, by the
Debtor at any time prior to the conclusion of the hearing on Confirmation of the
Plan.
(e) Cure. The Debtor has determined that no defaults exist under
any of the executory contracts or unexpired leases set forth on Exhibits "A" or
"B" hereto. In the event that the Debtor determines that a non-monetary default
exists under any executory contract or unexpired lease to be assumed, other than
the kind specified in 11 U.S.C. Section 365(b)(2), the Debtor shall, on or
before the Effective Date, (a) cure, or provide adequate assurance that it will
promptly cure such default, (b) compensate, or provide adequate assurance that
it will promptly compensate, the other party to such contract or lease, for any
actual pecuniary loss to such party resulting from such default, and (c) provide
adequate assurance of future performance under such contract or lease.
Furthermore, should the Debtor determine that a monetary default exists under
any contract or lease to be assumed, the amount required to cure such default
will be paid to the respective party to the executory contract or unexpired
lease on or before the Effective Date.
(f) Assumption Conditioned Upon Confirmation of the
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Plan and Closing of the Rockwell Transaction. The Debtor desires to assume the
executory contracts and unexpired leases as set forth on Exhibits "A" and "B"
hereto to the extent, and only to the extent, that such contracts or leases
constitute an executory contract or unexpired lease. Additionally, (i) the
assumption of such executory contracts and unexpired leases, and (ii) the
assignment of those executory contracts and unexpired leases set forth on
Exhibit "A" hereto are expressly conditioned upon Confirmation of the Debtor's
Plan and the Closing and consummation of the Rockwell Transaction.
9.2 Rejection of Executory Contracts and Unexpired Leases. Without
admitting the validity of any other executory contract or unexpired lease, any
executory contract or unexpired lease not listed on Exhibits "A" and "B" to the
Plan shall be rejected as of the Effective Date, subject to Section 9.3.
9.3 Treatment of Executory Contracts and Unexpired Leases. The Debtor
reserves the right to apply to the Bankruptcy Court prior to Confirmation to
assume, assume and assign, or reject, pursuant to Bankruptcy Code Section 365,
any and all contracts that are executory and leases that are unexpired. All
executory contracts and unexpired leases of the Debtor that are not (a) assumed
prior to Confirmation, (b) the subject of a pending motion to assume filed prior
to Confirmation, or (c) assumed pursuant to the terms of the Plan are hereby
rejected by the Debtor. Confirmation of the Plan shall be deemed to constitute
Bankruptcy Court approval of such rejection.
9.4 Rejection Claims. Rejection Claims shall be classified as Class 5
Claims. Within thirty (30) days following
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the Effective Date, the holder of a Rejection Claim shall file with the
Bankruptcy Court, and serve on the Debtor's counsel, a proof of Claim evidencing
such Rejection Claim or be forever barred from asserting any such Claim or
receiving any payment on account of such Claim.
10. PROOFS OF CLAIM; EVIDENCE OF EQUITY SECURITY; OBJECTIONS
10.1 Time for Filing Proofs of Claim. Proofs of Claim shall be filed
with the Bankruptcy Court no later than the Claims Bar Date.
10.2 Evidence of Claim or Interest.
(a) As soon as practicable after the Distribution Date, the Debtor
shall obtain a list of all Equity Security Holders and their respective
Interests of record as of the Distribution Date from the Transfer Agent. Said
list shall be conclusively presumed to be complete and accurate in all respects.
The Debtor and the Responsible Person shall be entitled to rely on said list in
connection with any Distributions to be made to Class 6 Interests.
(b) For purposes of any Distribution under the Plan, the Debtor
and the Responsible Person shall have no obligation to recognize any transfer of
Claims or Interests occurring on or after the Distribution Date and the Debtor
and the Responsible Person shall be entitled to recognize and deal for all
purposes with only those holders of record stated on the claims docket
maintained by the Bankruptcy Court and the stock records maintained by the
Transfer Agent.
10.3 Time for Filing Objections. Any objection to any Claim or Interest
shall be filed no later than ninety (90) days
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after the Effective Date.
/ / /
10.4 Disputed Claims and Disputed Interests.
(a) Notwithstanding any of the provisions of this Plan, Disputed
Claims and/or Disputed Interests shall not receive any Distribution, unless and
until the status of an Allowed Claim or Allowed Interest is obtained.
(b) The Debtor shall maintain and administer a Disputed Claims
Reserve Account and a Disputed Interests Reserve Account. Cash payments
attributable to Disputed Claims shall be maintained in the Disputed Claims
Reserve Account. Cash payments attributable to Disputed Interests shall be
maintained in the Disputed Interests Reserve Account. In the event that a Claim
or Interest is disputed and has not become an Allowed Claim or Allowed Interest
as of the date of any Distribution to the Class of Creditors or Interests to
which the Disputed Claim or Disputed Interest belongs, the appropriate amount of
cash shall be deposited into the Disputed Claims Reserve Account on account of
the Disputed Claim or into the Disputed Interests Reserve Account on account of
the Disputed Interest, as the case may be. The amounts so deposited will be
equal to the amount that would otherwise be due on account of the Disputed Claim
or the Disputed Interest under this Plan if the Claim or Interest were allowed
in full. On a motion of any party in interest, the Court shall determine what
lesser amount is sufficient to pay into the Disputed Claims Reserve Account or
the Disputed Interests Reserve Account on account of such Disputed Claim or
Disputed Interest. The funds paid into the Disputed Claims
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<PAGE> 37
Reserve Account with respect to the Disputed Claim or funds paid into the
Disputed Interests Reserve Account with respect to the Disputed Interest, shall
be paid to the holder of the Disputed Claim or the Disputed Interest, as the
case may be, if and when such Claim becomes an Allowed Claim or such Interest
becomes an Allowed Interest. As soon as practicable after the date that the
order or judgment of the Court allowing a Disputed Claim or Disputed Interest
becomes a Final Order, any proceeds in the Disputed Claims Reserve Account or
the Disputed Interests Reserve Account that would have been distributed to the
holder of such Disputed Claim or Disputed Interest had such Disputed Claim or
Disputed Interest been allowed on the Effective Date shall be distributed to the
holder of such Claim or Interest.
11. RESERVATION OF POWERS
11.1 Nothing in the Plan shall be deemed to constitute a waiver of the
powers of the Debtor as a debtor in possession under the Bankruptcy Code, the
Bankruptcy Rules or the Local Rules, and the Debtor shall retain after
Confirmation and after the Effective Date, all powers granted by the Bankruptcy
Code, the Bankruptcy Rules and the Local Rules.
12. WAIVER
12.1 After the entry of the Order of Confirmation by the Bankruptcy
Court and except as otherwise specifically set forth in the Plan, any term of
the Plan may be waived only by the party or parties entitled to the benefit of
the term to be waived.
13. REQUEST FOR CONFIRMATION
13.1 The Debtor, as proponent of the Plan, requests
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<PAGE> 38
Confirmation of the Plan.
/ / /
13.2 In the event any impaired Class shall fail to accept this Plan in
accordance with Section 1129(a)(8) of the Bankruptcy Code, the Debtor requests
that the Bankruptcy Court confirm the Plan in accordance with the provisions of
Section 1129(b) of the Bankruptcy Code.
14. RETENTION OF JURISDICTION
14.1 After Confirmation, the Bankruptcy Court shall retain and have all
authority and jurisdiction as is allowed under the Bankruptcy Code and other
applicable law to enforce the provisions, purposes, and intent of this Plan
including, without limitation, matters or proceedings that relate to:
(a) The Rockwell Transaction;
(b) A Competing Bid and Competing Bidder;
(c) Allowance, disallowance, adjustment, treatment, or liquidation
of Claims and Interests and objections thereto;
(d) The assumption, assignment, or rejection of any executory
contract or unexpired lease, or any agreement, lease, contract, sale, purchase,
assignment, or other action taken with regard to property of the Debtor;
(e) The title, rights, or interests of the Debtor in any property;
(f) Any right, power, action, or duty of the Debtor under this
Plan;
(g) Any determination or estimation necessary or appropriate under
Section 505 of the Bankruptcy Code or other determination or estimation relating
to tax returns filed or to
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<PAGE> 39
be filed by the Debtor for periods through the end of the fiscal year in which
the Effective Date occurs, including, without limitation, the determination of
the amount of taxes, net operating losses, tax attributes, tax benefits, tax
refunds, and related matters of the Debtor;
(h) Requests for payment of Claims entitled to priority under
Section 507(a) of the Bankruptcy Code, including compensation and reimbursement
of expenses for professionals, to the extent Bankruptcy Court approval therefor
is required under this Plan or the Confirmation Order;
(i) Resolution of controversies and disputes, including the
correction of any mistake, defect, or omission regarding interpretation or
enforcement of this Plan, the Confirmation Order, and any agreements referred to
herein or executed in contemplation of or to implement this Plan;
(j) Implementation of the provisions of this Plan and entry of
orders in aid of confirmation of this Plan, including, without limitation,
appropriate orders to protect the Debtor from actions by holders of Claims and
Interests;
(k) Modification of this Plan pursuant to the Bankruptcy Code;
(l) Adjudication of any causes of action brought by the Debtor;
(m) The entry of an Order, including injunctions, necessary to
enforce the title, rights, and powers of the Debtor and the purposes and intent
of this Plan, and to impose such limitations, restrictions, terms and conditions
of such title, rights, and powers as the Court may deem necessary;
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<PAGE> 40
(n) Such other matters as may be provided under the Bankruptcy
Code, this Plan, the Confirmation Order, or other applicable law; and
(o) Entry of a final decree closing this Chapter 11 Case,
including provisions for injunctive relief as may be equitable, consistent with
Bankruptcy Rule 3022.
15. EFFECT OF CONFIRMATION
As of the Effective Date, the effect of Confirmation shall be as
provided in Section 1141 of the Bankruptcy Code, and as follows:
15.1 Binding Effect. The provisions of the confirmed Plan shall bind
the Debtor, Rockwell, any other entity acquiring property under the Plan, any
Creditor, and any Equity Security Holder, whether or not the Claim or Interest
of such Creditor or Equity Security Holder is impaired under the Plan and
whether or not any such Creditor or Equity Security Holder has accepted the
Plan.
15.2 Vesting of Property. All property of the Bankruptcy Estate shall
vest in the Debtor subject to the terms and conditions of this Plan. All
property of the Debtor, except as otherwise provided in this Plan, shall be free
and clear of any liens, encumbrances, Claims of Creditors and Interests of
Equity Security Holders.
15.3 Discharge. Due to the liquidating nature of this Plan and pursuant
to Bankruptcy Code 1141(d)(3), the entry of the Confirmation Order shall not act
as a discharge of any debt of the Debtor that arose prior to Confirmation.
16. CHAPTER 11 POST-CONFIRMATION REPORTS AND FINAL DECREE
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<PAGE> 41
16.1 Post-Confirmation Reports. Not later than 90 days after entry of
the Confirmation Order, the Debtor shall file a post-Confirmation status report,
the purpose of which is to explain the progress made toward substantial
consummation of the confirmed Plan. The report shall include a statement of
receipts and disbursements, with the ending cash balance, for the entire 90 day
period. The report shall also include information sufficiently comprehensive to
enable the Court to determine (1) whether the Confirmation Order has become
final; (2) whether deposits, if any, required by the Plan have been distributed;
(3) whether any property proposed by the Plan to be transferred has been
transferred; (4) whether the Debtor under the Plan has assumed the business or
the management of the property dealt with by the Plan; (5) whether the payments
under the Plan have commenced; (6) whether accrued fees due to the U.S. Trustee
under 28 U.S.C. Section 1930(a)(6) have been paid; and (7) whether all motions,
contested matters and adversary proceedings have been finally resolved. Further
reports must be filed every 90 days thereafter until entry of a final decree,
unless otherwise ordered by the Court.
16.2 Service of Reports. A copy of each report shall be served, no
later than the day upon which it is filed with the Court, upon the U.S. Trustee
and such other persons or entities as may request such reports in writing by
special notice filed with the Court.
16.3 Final Decree. After the Bankruptcy Estate is fully administered,
the Debtor shall file an application for a final decree, and shall serve the
application on the U.S. Trustee,
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<PAGE> 42
together with a proposed final decree. The U.S. Trustee shall have twenty (20)
days within which to object or otherwise comment upon the Court's entry of the
final decree.
17. MISCELLANEOUS
17.1 Headings. The headings contained in the Plan are for convenience
of reference only and shall not limit or otherwise affect in any way the meaning
or interpretation of the Plan.
17.2 Singular/Plural. All references in the Plan to the singular shall
be construed to include references to the plural and vice versa.
17.3 Gender. All references in the Plan to any one of the masculine,
feminine or neuter genders shall be deemed to include references to both other
such genders.
17.4 Revocation and Withdrawal. The Debtor reserves the right to revoke
or withdraw this Plan at any time before the Confirmation Date. If the Debtor
revokes or withdraws this Plan prior to the Confirmation Date, or if the
Confirmation Date or Effective Date does not occur, then this Plan shall be
deemed null and void. In such event, nothing contained herein or in the
Disclosure Statement shall be deemed to constitute an admission of validity,
waiver or release of any Interests in, or any Claims by or against the Debtor or
any other person or prejudice in any manner the rights of the Debtor or any
person in any proceeding involving the Debtor.
17.5 Exhibits. All exhibits attached to the Plan are, by this
reference, hereby incorporated into the Plan.
17.6 Notices. All notices required or permitted to be made in
accordance with the Plan shall be in writing and shall be
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<PAGE> 43
delivered personally or by first class mail, as follows:
/ / /
-39-
<PAGE> 44
IF TO THE DEBTOR:
Richard H. Bohnet
President & Chief Executive Office
Weitek Corporation
2801 Orchard Parkway
San Jose, CA 95134
WITH COPIES TO:
Janice M. Murray, Esq.
Maureen C. Harrison, Esq.
Murray & Murray, A Professional Corporation
3030 Hansen Way, Suite 200
Palo Alto, CA 94304-1009
Kenneth M. Siegel
Bridget Logterman, Esq.
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
IF TO ROCKWELL:
Anthony C. Kalas
Vice President and Controller
Rockwell Semiconductor Systems, Inc.
4311 Jamboree Road
Newport Beach, CA 92658-8902
WITH COPIES TO:
Kenneth P. Coleman, Esq.
L. Kevin O'Mara, Jr., Esq.
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, NY 10112
and if to a holder of an Allowed Claim or Allowed Interest, at the address set
forth in its proof of Claim or Interest filed with the Bankruptcy Court, or if
none, at its address set forth in the Schedules or List of Equity Security
Holders. Notices shall be deemed given when delivered or mailed. Any entity may
change the address at which such entity is to receive notices under the Plan by
(i) sending written notice, pursuant to the provisions of this section, to the
entity to be charged with knowledge of such change and (ii) filing such notice
with the
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<PAGE> 45
Bankruptcy Court.
17.7 Reservation of Rights. Neither the filing of the Plan nor any
statement or provision contained in the Plan or in the Disclosure Statement, nor
the taking by any party in interest of any action with respect to the Plan,
shall (a) be or be deemed to be an admission against interest, and (b) until the
Effective Date, be or be deemed to be a waiver of any rights any party in
interest may have (i) against any other party in interest, or (ii) in any of the
assets of any other party in interest, and, until the Effective Date, all such
rights are specifically reserved. In the event that the Plan is not confirmed or
fails to become effective, neither the Plan nor the Disclosure Statement nor any
statement contained in the Plan or in the Disclosure Statement may be used or
relied upon in any manner in any suit, action, proceeding or controversy within
or without this Bankruptcy Case involving the Debtor, except with respect to
Confirmation of the Plan.
17.8 Computation of Time Periods. In computing any period of time
prescribed or allowed by the Plan, the day of the act, event, or default from
which the designated period of time begins to run shall not be included. The
last day of the period so computed shall be included unless it is a Saturday, a
Sunday, or a legal holiday, or, when the act to be done is the filing of paper
in the Bankruptcy Court, a day on which weather or other conditions have made
the clerk's office inaccessible, in which event the period runs until the end of
the next day which is not one of the aforementioned days.
-41-
<PAGE> 46
DATED this 30th day of January, 1997
WEITEK CORPORATION, a
California corporation
By: /s/ Richard H. Bohnet
---------------------
Richard H. Bohnet
President and Chief Executive
Officer
MURRAY & MURRAY
A PROFESSIONAL CORPORATION
By /s/ Janice M. Murray
--------------------
Janice M. Murray
Attorneys for Debtor
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<PAGE> 47
Exhibit A
Executory Contracts And Unexpired Leases To Be Assumed By Debtor And
Assigned To Rockwell.
A. Industrial Space Lease dated November 9, 1995 by and between Renco
Associates, a California Partnership, and Weitek Corporation.
B. Software License Agreements
1. Cadence Design Systems, Inc. Software License Agreement dated
September 6, 1989, covering the Cadence Dracula III software,
and any other agreements between Cadence Design Systems, Inc.
(or its predecessors) and Weitek Corporation entered into
prior to September 6, 1989 or at any time thereafter
(including, without limitation, the Software Maintenance
Agreement dated January 19, 1989), under which rights to use
the Cadence Dracula III software (or any improvements or
modifications thereto) have been conveyed to Weitek
Corporation, subject to the consent of the licensor, to the
extent such consent to assignment is required.
2. Cedance Design Systems, Inc. Software License Agreement dated
May 4, 1990, covering the Verilog HDL software, and any other
agreements between Cadence Design Systems, Inc. (or its
predecessors) and Weitek Corporation entered into prior to May
4, 1990 or at any time thereafter, under which rights to use
the Verilog HDL software (or any improvements or modifications
thereto) have been conveyed to Weitek Corporation, subject to
the consent of the licensor, to the extent such consent to
assignment is required.
3. Viewlogic Systems, Inc. Any and all software license
agreements between Viewlogic Systems, Inc. (or its
predecessors) and Weitek Corporation entered into at any time
prior to the date of confirmation, under which rights to use
the Chronologics VCS software (or any improvements or
modifications thereto) at twenty (20) seats have been conveyed
to Weitek Corporation, subject to the consent of the licensor,
to the extent such consent to assignment is required.
4. Synopsys, Inc. Any and all software license agreements between
Synopsys, Inc. and Weitek Corporation entered into at any time
prior to the date of confirmation, under which rights to use
the HDL Compiler, Design Compiler, VHDL Compiler and/or
Library Compiler software (or any improvements or
modifications thereto) have been conveyed to Weitek
Corporation, subject to the consent of the licensor, to the
extent such consent to assignment is required.
<PAGE> 48
5. InterHDL, Inc. End-user License Agreement dated October 2,
1995, covering the Verilint XL 3.0X software, and any other
agreements between InterHDL, Inc. and Weitek Corporation
entered into at prior to October 2, 1995 or at any time
thereafter, under which rights to use the Verilint XL 3.0X
software (or any improvements or modifications thereto) have
been conveyed to Weitek Corporation, subject to the consent of
the licensor, to the extent such consent to assignment is
required.
6. Elpin Systems. Software License Agreement dated August 14,
1995, covering the VGS BIOS software, and any other agreements
between Elpin Systems and Weitek Corporation entered into at
prior to August 14, 1995 or at any time thereafter, under
which rights to use the VGS BIOS software (or any improvements
or modifications thereto) have been conveyed to Weitek
Corporation, subject to the consent of the licensor, to the
extent such consent to assignment is required.
7. Meta-Software, Inc.. Software License Agreement dated November
29, 1989, covering the HSPICE software, and any other
agreements between Meta- Software, Inc. and Weitek Corporation
entered into at prior to November 29, 1989 or at any time
thereafter, under which rights to use the HSPICE software (or
any improvements or modifications thereto) have been conveyed
to Weitek Corporation, subject to the consent of the licensor,
to the extent such consent to assignment is required.
8. Pure Atria. Software License Agreement number 1415269, dated
November 28, 1995, covering the PureLink software, and any
other agreements between Pure Atria (or its affiliates) and
Weitek Corporation entered into at prior to November 28, 1995
or at any time thereafter, under which rights to use the
PureLink software (or any improvements or modifications
thereto) have been conveyed to Weitek Corporation, subject to
the consent of the licensor, to the extent such consent to
assignment is required.
9. Design Acceleration Incorporated. Any and all software license
agreements between Design Acceleration Incorporated and Weitek
Corporation, entered into at any time prior to date of
confirmation, under which rights to use the DAI Signalscan
software (or any improvements or modifications thereto) have
been conveyed to Weitek Corporation, subject to the consent of
the licensor, to the extent such consent to assignment is
required.
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<PAGE> 49
Exhibit B
Executory Contracts and Unexpired Leases to be Assumed by Debtor and
Assigned to Rockwell.
A. Asset Purchase Agreement By and Between Rockwell Semiconductor
Systems, Inc. and Weitek Corporation dated as of December 11, 1996;
Addendum to License Agreement dated as of January 23, 1997.
B Employment Agreement dated April 25, 1996 by and between Richard
Bohnet and Weitek Corporation.
-3-
<PAGE> 1
Exhibit 2.2
[MURRAY & MURRAY LETTERHEAD]
JANICE M. MURRAY, #099996
MAUREEN C. HARRISON, #162063
MURRAY & MURRAY
A Professional Corporation
Attorneys at Law
3030 Hansen Way, Suite 200
Palo Alto, California 94304-1009
(415) 852-9000
Attorneys for Debtor
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
In re )
) Case No. 96-59552-JRG-11
WEITEK CORPORATION, a )
California corporation, ) Chapter 11
)
Debtor. )
) Date: March 20, 1997
Employer's Tax Identification ) Time: 10:00 a.m.
No.: 94-2709963 ) Place: Courtroom 3020
_______________________________________) Judge: Hon. James R. Grube
FIRST MODIFICATION TO FIRST AMENDED PLAN OF REORGANIZATION
Weitek Corporation, the debtor, debtor in possession and plan proponent
herein (the "Debtor"), hereby proposes and files this First Modification to
First Amended Plan of Reorganization.
Exhibit "A" to the Debtor's First Amended Plan of Reorganization is hereby
modified as set forth on Exhibit "A" hereto and incorporated herein by
reference.
Dated: March 20, 1997 WEITEK CORPORATION
By /s/ Richard H. Bohnet
---------------------
Richard H. Bohnet
President & Chief
Executive Officer
-1-
<PAGE> 2
MURRAY & MURRAY
A Professional Corporation
By /s/ Janice M. Murray
--------------------
Janice M. Murray
Attorneys for Debtor
-2-
<PAGE> 3
Exhibit A
Executory Contracts and Unexpired Leases to be Assumed by Debtor and
Assigned to Rockwell.
1. Industrial Space Lease dated November 9, 1995 by and between Renco
Associates, a California Partnership, and Weitek Corporation.
2. Software License Agreements
a. Cadence Design Systems, Inc. Software License Agreement
covering the Cadence Dracula III software, dated September 6,
1989.
b. Viewlogic Systems, Inc. Software License Agreement covering 20
seats of the Chronologics VCS software.
c. Synopsys, Inc. Software License Agreement covering HDL
Compilers, Design Compiler, VHDL Compiler and Library Compiler
software.
d. Cedance Design Systems, Inc. Software License Agreement
covering the Verilog HDL software, dated may 4, 1990.
e. InterHDL, Inc. End-user License Agreement covering the
Verilint XL 3.0X software, dated October 2, 1995.
f. Elpin Systems. Software License Agreement covering the VGS
BIOS software, dated August 14, 1995.
g. Meta-Software, Inc.. Software License Agreement covering the
HSPICE software, Rev. 11/29/89.
<PAGE> 1
Exhibit 2.3
ASSET PURCHASE AGREEMENT
by and between
ROCKWELL SEMICONDUCTOR SYSTEMS, INC.
AND
WEITEK CORPORATION
Dated as of December 11, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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
</TABLE>
-i-
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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
</TABLE>
-ii-
<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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
</TABLE>
SCHEDULES
- ---------
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.
-iii-
<PAGE> 5
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"):
<PAGE> 6
(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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<PAGE> 25
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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<PAGE> 26
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.
<PAGE> 27
Schedule 3.2 - Allocation of Purchase Price
<TABLE>
<CAPTION>
Purchased Assets Allocation
- ---------------- ----------
<S> <C> <C>
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
<CAPTION>
Assumed Liabilities
- -------------------
<S> <C>
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
</TABLE>
<PAGE> 1
Exhibit 99.1
ENGINEERING SERVICES AGREEMENT
THIS ENGINEERING SERVICES AGREEMENT (this "Agreement") is made and entered
into as of December 11, 1996, with an effective date of November 30, 1996 (the
"Effective Date"), by and between WEITEK CORPORATION, a California corporation
("Weitek"), and Rockwell Semiconductor Systems, Inc., a Delaware corporation
("RSS").
RECITALS
WHEREAS, RSS and Weitek have entered into an Asset Purchase Agreement
dated December 11, 1996 (the "Asset Purchase Agreement"), pursuant to which RSS
will purchase substantially all of the assets of Weitek for the purchase price
set forth therein;
WHEREAS, Weitek and RSS intend to enter into a License Agreement pursuant
to which Weitek will license to RSS the rights to certain intellectual property
owned by Weitek;
WHEREAS, RSS desires to obtain engineering services from Weitek and Weitek
is willing to furnish or make such services available to RSS, for a limited
period of time;
WHEREAS, at the termination of this Agreement the parties contemplate that
a majority of Weitek's employees will become employed by RSS, and that Weitek
and RSS will enter into further agreements to continue to allow RSS to utilize
the facilities and equipment of Weitek; and
WHEREAS, the parties contemplate that Weitek will file a Voluntary
Petition for relief pursuant to Chapter 11 with the Bankruptcy Court of the
Northern District of California, San Jose Division (the "Court") and that
additional agreements between the parties, including a Facilities and Equipment
Agreement, will be submitted to the Court for approval.
NOW, THEREFORE, in consideration of the above and the mutual promises
contained herein, the parties agree as follows:
AGREEMENT
1. SERVICES. In consideration of the payments to be made pursuant to
Section 2, Weitek shall provide to RSS the engineering and support services
including, but not limited to, those set forth on Schedule A hereto (the
"Services"). RSS may, at any time and from time to time, by written notice to
Weitek, issue additional instructions, require additional services (to the
extent that such instructions and services are within the general scope of this
Agreement and appropriate to the number of engineers performing services
hereunder) or require the termination of specific Services covered by this
Agreement, without the alteration of the compensation due to Weitek hereunder.
2. CONSIDERATION. As consideration for the Services (as they may be
modified in accordance with Section 1 hereof), RSS agrees to pay to Weitek an
amount equal to $15,000 per month for each
<PAGE> 2
engineer or managing engineer (each, an "Engineer") which performs any Services
hereunder on or after the Effective Date hereof. In addition, in the event that
RSS requests in writing, in connection with the performance of any Services
hereunder, that any Engineer travel to a site outside of San Jose, California
and its environs, RSS will reimburse Weitek for the reasonable travel costs
incurred by such Engineer. On the first business day of the first month after
the execution of this Agreement, Weitek shall provide an invoice to RSS setting
forth the number of Engineers who have performed Services hereunder since the
Effective Date of this Agreement, as well as any travel costs for which RSS is
obligated to reimburse Weitek at that time and the total amount due. Thereafter,
on the first business day of each month during the term hereof, Weitek shall
provide an invoice to RSS setting forth the anticipated number of Engineers to
perform Services hereunder during such month (or portion thereof), as well as
any travel costs for which RSS is obligated to reimburse Weitek for the previous
month and the total amount due. Within fifteen (15) days after receipt of such
invoice, RSS shall pay all undisputed amounts set forth therein and shall set
forth any dispute to the invoice in writing. In the event that this Agreement
(a) is executed and becomes effective or (b) is terminated, before the end of a
month, the charge provided for in this Section 2 will be pro-rated for the days
of the month that such charge is applicable and, if applicable, Weitek shall
apply any overage amount to reduce the next monthly invoice or shall refund to
RSS any amount of overage previously paid by RSS, as requested by RSS. RSS's
only payment obligation under this Agreement is to make the payments set forth
in this Section 2, and RSS shall have no responsibility for any other payments
(including to any Engineers) during the term hereof or at any time following the
termination hereof on account of the Services provided hereunder. Weitek agrees,
as an independent contractor hereunder, to pay to each Engineer all salary,
bonuses and benefits to which such Engineer is entitled under his or her
employment arrangements with Weitek.
3. NUMBER OF EMPLOYEES. At all times during the term of this Agreement,
Weitek shall provide at least fifteen (15) and no more than twenty-one (21)
Engineers to perform Services hereunder. The parties hereto agree that the
initial number of Engineers performing the Services hereunder is twenty-one
(21). Weitek shall give RSS notice of the dismissal by Weitek of any Engineer
performing Services hereunder for any reason. In the event that the number of
Engineers is at any time less than fifteen (15), RSS may terminate this
Agreement upon five (5) days' written notice to Weitek and thereafter shall have
no further payment obligation to Weitek hereunder with the exception of payments
due and owing as of the date of termination. RSS shall have the right, in its
sole discretion, to demand that one or more Engineers not perform Services
hereunder in the event that RSS determines, in its sole judgment, that any such
Engineer is not qualified to perform Services hereunder or that such Engineer is
involved in improper conduct.
4. ACCESS.
(a) Use of Properties. Weitek will provide to personnel of RSS access
to and use of the Weitek facilities and equipment located at 2801 Orchard
Parkway, San Jose, California as necessary to support or oversee the Services.
Weitek will remain in sole management, possession and control of the premises
during the term of this Agreement subject to the terms of the Weitek lease of
the facilities (the "Lease"). The parties agree that, at the request and expense
of RSS, Weitek will paint and otherwise redecorate the Facilities provided that
the occupancy of SGS-Thomson shall not be disturbed and that
-2-
<PAGE> 3
such actions are allowed under the Lease. In the event that any consent of the
landlord is required for such redecoration Weitek will make a commercially
reasonable effort to obtain such consent in a timely fashion.
(b) Concurrent Use. Use of the Facilities is subject to concurrent use
of a portion of the premises by no more than ten (10) employees of SGS-Thomson
as previously agreed to by Weitek and RSS. Weitek agrees to establish, subject
to the reasonable approval of RSS, procedures to isolate any employee of
SGS-Thomson from any work produced by or performed by Weitek or the employees of
RSS hereunder and to isolate any employee of RSS from any work produced by or
performed by Weitek or SGS-Thomson pursuant to the agreements between Weitek and
SGS-Thomson. Weitek and RSS agree to adhere to such procedures at all times, to
cause their respective employees to adhere to such procedures, and Weitek agrees
to cause employees of SGS-Thomson to adhere to such procedures, during the term
of this Agreement.
(c) Equipment and Software. RSS may, in its sole discretion, provide
any equipment or software to Weitek to assist Weitek in performing the Services
hereunder, which equipment shall at all times remain the sole exclusive property
of RSS. In the event that the Facilities and Equipment Agreement submitted by
Weitek to the Court does not become effective or the closing under the Asset
Purchase Agreement does not occur at the completion of the term hereof, RSS
shall be free to remove any such equipment and software on or prior to the last
day of the term hereof. Any actions pursuant to this Section 4(c) shall be taken
in full compliance with the Lease.
5. TERM OF AGREEMENT.
(a) Term. This Agreement shall commence on the date hereof and shall
continue until the first to occur of (i) January 31, 1997 (unless otherwise
extended by the mutual agreement of the parties hereto), (ii) the date that the
Facilities and Equipment Agreement (or similar agreement between Weitek and RSS
providing for the use by RSS of Weitek's facilities and equipment) is approved
by the Court, (iii) the termination of the Asset Purchase Agreement prior to the
closing contemplated thereunder; or (iv) termination by RSS or Weitek due to a
breach as set forth in (c) below.
(b) Termination Due to Breach. In the event of a breach of any
covenant or agreement hereof on the part of either party hereto, the other party
shall have the right to terminate this Agreement upon fifteen (15) days' prior
written notice specifying that nature of such breach and the intent of the
sender of the notice to terminate this Agreement. RSS's liability to Weitek for
damages that arise solely out of the act of termination pursuant to this Section
5(b) shall be limited to such amounts as are due pursuant to Sections l and 2
hereof to the date of termination, provided, however, that Weitek retains any
and all other rights at law and equity for damages not arising solely from the
act of termination pursuant to Section 5(b).
-3-
<PAGE> 4
6. COVENANTS.
6.1 Covenants of Weitek.
(a) Performance of Services. Weitek shall perform the Services
with the same degree of care, skill, and prudence customarily exercised in the
conduct of its own business.
(b) Maintenance of Facilities and Equipment. Weitek agrees that,
for so long as access to its facilities or equipment are provided to RSS under
this Agreement, it will use commercially reasonable efforts to keep such
facilities and equipment in working condition. To the extent that any present or
future equipment is held by Weitek pursuant to a lease, or is subject to a
security interest, Weitek agrees to make all payments and otherwise comply with
all provisions of the underlying lease or financing agreements which if not
complied with would be reasonably likely to result in a breach of such
underlying leases or financing agreements; provided, however, that Weitek need
not take any actions that would be reasonably likely, in the sole reasonable
judgment of Weitek, to result in a violation of an order or stay of the Court or
to cause a sanction of the Court.
(c) Notice. Weitek will give prompt notice to RSS after Weitek has
actual knowledge of (i) any material loss or destruction of the facilities or
any equipment being utilized by RSS pursuant to this Agreement, whether or not
covered by insurance, (ii) the sale of any equipment being utilized by RSS
pursuant to this Agreement or any default by Weitek under or any termination of
any lease or financing agreement pursuant to which the facilities or equipment
being utilized by RSS pursuant to this Agreement has been pledged, (iii) any
eminent domain or similar proceedings affecting the facilities, (iv)
cancellation of any insurance policies covering those facilities or equipment
being utilized by RSS pursuant to this Agreement; or (v) any other event or
action actually known to Weitek which could reasonably be expected to have a
material adverse effect on the ability of Weitek to perform hereunder,
including, without limitation, a breach in any of the procedures specified in
Section 4(b) applicable to employees of SGS-Thomson.
(d) Insurance. Weitek agrees to maintain policies of insurance
against losses with respect to the facilities, the equipment, and its personnel
(including workers' compensation insurance) of such types and in such amounts as
is commercially reasonable and customary with respect to similarly situated
assets and operations.
6.2 Covenant of RSS.
(a) Insurance. RSS agrees to maintain policies of workers'
compensation insurance with respect to any of its employees that will have
access to the facilities and/or equipment pursuant to this Agreement.
(b) Compliance with Weitek Leases. RSS covenants that it will not
take any actions in violation of Weitek's Lease, or any lease of equipment, or
actions which would be reasonably likely to result in a violation of, or to
cause Weitek to violate, any such Lease or equipment lease.
-4-
<PAGE> 5
7. CONFIDENTIALITY
(a) Except as expressly set forth in this Section 6, Weitek and
RSS shall, and shall cause their respective affiliates and their respective
officers, directors, employees, agents and subcontractors (collectively,
"Representatives") to, keep confidential any and all technical, commercial,
scientific and other proprietary data, processes, documents or other information
(whether in oral, written or electronic form) or physical object acquired from
the other party, its affiliates or any of their Representatives in respect of
the transactions contemplated by this Agreement and which relates to the other
party or any of its affiliates of their respective businesses or products
("Confidential Information"), and Weitek or RSS, as applicable, shall not
disclose directly or indirectly, and shall cause its respective affiliates and
Representatives not to disclose directly or indirectly, any Confidential
Information to anyone outside Weitek or RSS, as applicable, such affiliates and
their respective Representatives (each of the foregoing, a "Person"), except
that the foregoing restriction shall not apply to any information disclosed
hereunder to any party if such Person (the "Receiving Person") can demonstrate
that such Confidential Information:
(i) is or hereafter becomes generally available to the
trade or public other than by reason of any breach hereof,
(ii) was already known to the Receiving Person or such
affiliate or Representative as shown by written records;
(iii) is disclosed to the Receiving Person or such affiliate
or Representative by a third party who has the right to disclose such
information;
(iv) is developed by or on behalf of the Receiving Person or
any of its affiliates independently, without reliance on Confidential
Information received hereunder; or
(v) based on such Person's good faith judgment with the
advice of counsel, is otherwise required to be disclosed in compliance with
applicable law by a court of competent jurisdiction and such information shall
remain Confidential Information for all other purposes unless subparagraphs (i)
through (iv) above otherwise apply.
(b) Except in furtherance of its rights and obligations hereunder
or under other agreements between RSS and Weitek, RSS and Weitek each agree that
it shall not (and shall not permit any of its affiliates or Representatives to)
at any time use any Confidential Information in the conduct of its business. The
obligations set forth in this Section 6 shall extend to copies, if any, of
Confidential Information made by any of the Persons referred to in paragraph (a)
hereof and to documents prepared by such Persons which embody or contain
Confidential Information, and to any electronic data files containing
Confidential Information.
(c) RSS and Weitek shall each deal with Confidential Information
so as to protect it from disclosure with a degree of care not less than that
used by it in dealing with its own
-5-
<PAGE> 6
information intended to remain exclusively within its knowledge and shall take
reasonable steps to minimize the risk of disclosure of Confidential Information.
(d) The obligations set forth in this Section 6 shall survive the
expiration or termination of this Agreement for a period of five (5) years
thereafter.
8. LIMITATION ON LIABILITY. In performing this Agreement RSS and Weitek
shall each have the duty to act, and to cause its respective employees and
agents to act, in a reasonably prudent manner, but neither Weitek nor RSS nor
any of their respective officers, directors or agents shall be liable to the
other party hereto or such other party's creditors or shareholders for errors of
judgment or for anything except willful misfeasance, bad faith or gross
negligence in the performance of their duties or reckless disregard of each
party's respective obligations and duties under the terms of this Agreement.
Neither party will be responsible for general, special, indirect, incidental or
consequential damages that the other party or any third party may incur or
experience on account of entering into or relying on this Agreement.
9. MISCELLANEOUS
9.1 Assignment. Neither party shall assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
the other.
9.2 Permits and Licenses. Weitek shall be solely responsible for any
and all permits, licenses or authorizations from any federal, state or local
governmental authority necessary or desirable for the performance of its
obligations hereunder or for the maintenance of the Facilities or the Equipment.
9.3 Gratuities. Weitek warrants that none of its employees, officers,
agents or representatives has offered or given any gratuities to any of RSS's
officers, employees, agents or representatives with a view toward securing the
execution of this Agreement by RSS or securing favorable treatment with respect
thereto.
9.4 Compliance with Law. In connection with the performance of its
obligations hereunder, each of RSS and Weitek shall comply in all material
respects with all U.S., State of California and local laws, rules, ordinances,
orders and regulations.
9.5 Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective upon receipt and may
be delivered in person, by telecopy, express delivery service or U.S. mail, in
which event it may be mailed by first-class, certified or registered, postage
prepaid, addressed to the parties as set forth on the signature pages hereto or
to such other address as a party may have specified in writing.
9.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS
ENTERED INTO AND WHOLLY TO BE PERFORMED WITHIN THE STATE OF CALIFORNIA BY
CALIFORNIA RESIDENTS.
-6-
<PAGE> 7
9.7 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
hereof.
9.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
9.9 SEVERABILITY OF THIS AGREEMENT. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
9.10 FORCE MAJEURE. No party shall be deemed to have breached this
Agreement or be held liable for any failure or delay in the performance of all
or any portion of its obligations under this Agreement if prevented from doing
so by acts of God or the public enemy, fires, floods, storms, earthquakes,
riots, strikes, lock-outs, wars and war-operations, restraints of government
power or communication line failure or by reason of the judgment, ruling or
order of any court or agency of competent jurisdiction or change of law or
regulation subsequent to the execution of this Agreement. If, however, Weitek or
RSS is prevented by any of the foregoing events of force majeure from performing
any of its obligations hereunder, the other party hereto shall be excused from
any of its obligations to such party hereunder until such time as the event of
force majeure ceases to prevent performance hereunder, if ever.
9.11 HEADINGS. Sections headings are for convenience only and do not
control or affect the meaning or interpretation of any terms or provisions of
this Agreement.
9.12 PAYMENT OF FEES AND EXPENSES. Each party shall be responsible for
paying its own fees, costs and expenses in connection with this Agreement and
the transactions herein contemplated.
-7-
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
<TABLE>
<S> <C>
WEITEK CORPORATION ROCKWELL SEMICONDUCTOR SYSTEMS, INC.
By: /s/ Richard H. Bohnet By: /s/ David C. Gelvin
----------------------------------------- -------------------
Richard H. Bohnet, David C. Gelvin,
President and Chief Executive Officer Vice President Multimedia Division
</TABLE>
[Engineering Services Agreement]
-8-
<PAGE> 9
SCHEDULE A
STATEMENT OF WORK
ROCKWELL/WEITEK
ENGINEERING SERVICES AGREEMENT
1. PROJECT SCOPE
Weitek is to provide evaluation and implementation assistance in support
of projects involving 2-D and 3-D Graphic Accelerators, Video Displays, and VGA
Core technologies regarding Brooktree products Bt2164, Bt2166, and future
products, as well as undertake additional training in the tools used by the
Multimedia SBU.
2. SUMMARY OF PROJECT TASKS
2.1 Weitek Software Engineering Group will develop Win3.1 drivers for
the Bt2164 & Bt2166.
2.2 Weitek Verification Engineering Group will:
- Assist the Hardware group in the development of core cells;
- Provide a verification review of all tools Weitek has
developed; and
- Provide assistance to the verification of the Bt2166 and
future products as needed.
2.3 Weitek Hardware Engineering Group will:
- Prepare the Weitek VGA core to be integrated into a future
Brooktree product;
- Assist Marketing in evaluating integrated MPEGII cores;
- Work with Marketing on future product definitions;
- Work with the Austin Architecture group on analyzing the need
and implementation of a Floating Point Multiplier in a 3D
engine;
- Learn Synopsis logic synthesis; and
- Review the Bt2164 & Bt2166 design and methodology.
3. PROJECT MANAGEMENT
3.1 Project Manager. The Rockwell Project Manager is Dave Gelvin.
Responsibilities include directing and controlling the activities relative to
the project goals and milestones schedule. Status will be communicated to
Rockwell via ____________, Weitek Engineering Manager.
-9-
<PAGE> 10
3.2 Meetings. The Rockwell Project Manager (Dave Gelvin) and the Weitek
Project Engineering Manager (______________) will hold weekly teleconferences
during the project duration.
3.3 Project Reports. The Weitek Project Engineering Manager will (when
requested) provide written reports concerning the status of the Work in relation
to meeting established milestones. At the conclusion of this Agreement, Weitek
will deliver a Final Project Report detailing the status of the Work in progress
and completed during the period of performance.
4. RESOURCES
4.1 Weitek Furnished Resources.
- 1 Engineering Project Manager
- Software Engineers
- Design Engineers
- Verification Engineers
- Measurement/analytical tools
4.2 Rockwell Furnished Resources.
- Rockwell Project Manager; and
- Engineering personnel will be increased or decreased as
mutually agreed to by Weitek and Rockwell.
5. DELIVERABLES
- Regular updates when appropriate.
- A final report submitted at the conclusion of the Agreement which
details all Works in process or completed during the period of
performance.
6. MILESTONE SCHEDULE
- Agreement Start Date: ______________
- Status Reports: Weekly
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<PAGE> 1
Exhibit 99.2
FACILITIES AND EQUIPMENT AGREEMENT
THIS FACILITIES AND EQUIPMENT AGREEMENT (this "Agreement") is made and
entered into as of December 12, 1996 by and between WEITEK CORPORATION, a
California corporation ("Weitek"), and Rockwell Semiconductor Systems, Inc., a
Delaware corporation ("RSS").
RECITALS
WHEREAS, RSS and Weitek have entered into an Asset Purchase Agreement
dated as of December 11, 1996 (the "Asset Purchase Agreement"), pursuant to
which RSS will purchase substantially all of the assets of Weitek for the
purchase price set forth therein;
WHEREAS, Weitek and RSS are party to a License Agreement of even date
herewith pursuant to which Weitek has licensed to RSS the rights to certain
intellectual property owned by Weitek;
WHEREAS, in addition to the intellectual property rights which have been
licensed, RSS desires to obtain the right to use certain facilities, equipment
and other personal property owned or leased by Weitek, and Weitek is willing to
furnish or make such facilities and property available to RSS, for a limited
period of time;
WHEREAS, the parties recognize that Weitek has filed a Voluntary Petition
for relief pursuant to Chapter 11 with the Bankruptcy Court of the Northern
District of California, San Jose Division (the "Court") and that additional
agreements between the parties, including the Asset Purchase Agreement, will be
submitted to the Court for approval; and
WHEREAS, if approved by the Court, at the termination of this Agreement
the parties contemplate that Weitek will transfer permanently to RSS certain
contracts, licenses and other agreements relating to the Facilities and
Equipment through the execution of the Asset Purchase Agreement, the License
Agreement and/or similar agreements, between the parties.
NOW, THEREFORE, in consideration of the above and the mutual promises
contained herein the parties agree as follows:
AGREEMENT
1. FACILITIES AND EQUIPMENT.
(a) Use of Properties. In consideration for the payment specified in
Section 3 below, Weitek will provide to personnel of RSS access to and use of
the Weitek facilities located at 2801 Orchard Parkway, San Jose, California (the
"Facilities"). Except as provided in Section 1(b) regarding the use by
SGS-Thomson, the portions of the Facilities occupied by employees of Weitek, or
as otherwise agreed in writing by the parties hereto, RSS shall have full use of
and unobstructed access to all areas of the Facilities. RSS agrees that Weitek
will remain in sole management, possession and control of the Facilities during
the term of this Agreement, subject to the terms of the Weitek lease of the
facilities (the "Lease").
<PAGE> 2
(b) Concurrent Use. Use of the Facilities is subject to concurrent
use of a portion of the premises by no more than ten (10) employees of
SGS-Thomson. Weitek agrees to establish, subject to the reasonable approval of
RSS, procedures to isolate any employee of SGS-Thomson from any work produced by
or performed by Weitek or the employees of RSS hereunder and to isolate any
employee of RSS from any work produced by or performed by Weitek or SGS-Thomson
pursuant to the agreements between Weitek and SGS-Thomson. Weitek and RSS agree
to adhere to such procedures at all times, to cause their respective employees
to adhere to such procedures, and Weitek agrees to cause employees of
SGS-Thomson to adhere to such procedures, during the term of this Agreement.
(c) Equipment. In consideration for the payment specified in Section
3 below, Weitek will provide to RSS access to and use of the equipment located
at the Facilities (including, but not limited to, that equipment listed on
Schedule 1.1 of the Asset Purchase Agreement) with the exception of any
equipment being used by SGS-Thomson (the "Equipment"). Any change in the
Equipment will be made only by mutual written agreement. RSS agrees that Weitek
will remain in sole management, possession and control of the Equipment during
the term of this Agreement. In addition, RSS may, at its sole option, install or
locate at the Facilities such additional equipment as it deems necessary or
desirable, which equipment shall at all times remain the sole property of RSS,
which RSS will be able to remove promptly following the expiration of this
Agreement; provided, however, that any such actions are taken in compliance with
the terms of the Lease.
2. TERM.
(a) Effective Date. This Agreement shall become effective (the
"Effective Date") upon the entry of an order of the Court approving this
Agreement in form and substance satisfactory to the parties hereto. In the event
that such a satisfactory order is not entered by the Court this Agreement shall
be of no force or effect and neither party hereto shall have any obligation with
respect to this Agreement.
(b) Termination. Except as set forth below, after the Effective Date
this Agreement shall remain in full force and effect (unless extended by mutual
agreement of the parties hereto) until the earlier of (i) the termination of the
Asset Purchase Agreement prior to the date of the closing contemplated therein;
(ii) the date of the closing contemplated under the Asset Purchase Agreement; or
(iii) termination by RSS or Weitek due to a breach as set forth in (c) below.
(c) Termination Due to Breach. In the event of a breach of any
covenant or agreement hereof on the part of either party hereto, the other party
shall have the right to terminate this Agreement upon fifteen (15) days' prior
written notice specifying that nature of such breach and the intent of the
sender of the notice to terminate this Agreement. RSS's liability to Weitek for
damages that arise solely out of the act of termination pursuant to this Section
2(c) shall be limited to such amounts as are due pursuant to Sections l and 3
hereof to the date of termination, provided, however, that Weitek retains any
and all other rights at law and equity for damages not arising solely from the
act of termination pursuant to Section 2(c).
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3. PAYMENT.
3.1 One-Time Payment. In consideration of the transfer of the
workforce in place, RSS agrees to pay to Weitek on the Effective Date the amount
of one million five hundred thousand dollars ($1,500,000) in immediately
available funds provided that a total of (i) 90% of the employees of Seller set
forth in Subsection A of Schedule 5.11(a) to the Asset Purchase Agreement and
(ii) 75% of the employees of Seller set forth in Subsection B of such Schedule
5.11(a) (collectively, those persons listed on such Schedule 5.11(a) are
referred to herein as the "Employees") have previously been employed by Buyer or
are employees of Weitek on the Effective Date of this Agreement.
3.2 Monthly Payments. In addition, in consideration of the access
to the Facilities and use of the Equipment to be provided by Weitek hereunder,
commencing on the Effective Date, RSS agrees to pay to Weitek on the first day
of each month the sum of $85,000 in immediately available funds. In the event
that this Agreement (a) becomes effective or (b) is terminated, before the end
of a month, the charges provided for in this Section 3 will be pro-rated for the
days of the month that such charge is applicable and, if applicable, Weitek
shall refund to RSS any amount of overage previously paid by RSS within five
days.
4. COVENANTS.
4.1 Covenants of Weitek.
(a) Maintenance of Facilities and Equipment. Weitek agrees
that, for so long as access to the Facilities or Equipment is provided to RSS
under this Agreement, it will (i) use commercially reasonable efforts to keep
such Facilities and Equipment in working condition and (ii) not sell or
otherwise dispose of any of the Equipment. To the extent that any present or
future Equipment is held by Weitek pursuant to a lease, or is subject to a
security interest, Weitek agrees to make all payments and otherwise comply with
all provisions of the underlying lease or financing agreements which if not
complied with would be reasonably likely to result in a breach of such
underlying leases or financing agreements; provided, however, that Weitek need
not take any actions that would be reasonably likely, in the sole reasonable
judgment of Weitek, to result in a violation of an order or stay of the Court or
to cause a sanction of the Court.
(b) Notice. Weitek will give prompt notice to RSS after Weitek
has actual knowledge of (i) any material loss or destruction of the Facilities
or any Equipment, whether or not covered by insurance, (ii) the sale of any
Equipment, or any default by Weitek under or any termination of any lease or
financing agreement pursuant to which the Facilities or any Equipment has been
pledged, (iii) any eminent domain or similar proceedings affecting the
Facilities, (iv) cancellation of any insurance policies covering the Facilities
or any Equipment, or (v) any other event or action actually known to Weitek
which could reasonably be expected to have a material adverse effect on the
ability of Weitek to perform hereunder, including, without limitation, a breach
in any of the procedures specified in Section 1(b) applicable to employees of
SGS-Thomson. .
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(c) Insurance. Weitek agrees to maintain policies of
insurance against losses with respect to the Facilities, the Equipment owned or
leased by Weitek, and its personnel (including Workers' Compensation Insurance)
of such types and in such amounts as is commercially reasonable and customary
with respect to similarly situated assets and operations.
4.2 Covenants of RSS.
(a) Insurance. RSS agrees to maintain policies of Workers'
Compensation Insurance with respect to any of its employees that will have
access to the Facilities and/or Equipment pursuant to this Agreement.
(b) Compliance with Weitek Leases. RSS covenants that it
will not take any actions in violation of Weitek's Lease, or any lease of
Equipment, or actions which would be reasonably likely to result in a violation
of, or to cause Weitek to violate, any such Facilities Lease or Equipment lease.
(c) Employee Hiring. Prior to or on the Effective Date,
provided that the Asset Purchase Agreement is in effect, RSS shall act upon
those several employment offer letters dated on or about November 18, 1996, as
amended (if applicable), given by RSS to the Employees and in so doing shall
employ those Employees who desire to be employed by RSS on such date under the
terms specified in those offer letters (or such other terms as any such employee
and RSS may agree). RSS shall promptly notify Weitek of such employment or
refusal of employment by any Employee.
5. CONFIDENTIALITY
(a) Except as expressly set forth in this Section 5, Weitek
and RSS shall, and shall cause their respective affiliates and their respective
officers, directors, employees, agents and subcontractors (collectively,
"Representatives") to, keep confidential any and all technical, commercial,
scientific and other proprietary data, processes, documents or other information
(whether in oral, written or electronic form) or physical object acquired from
the other party, its affiliates or any of their Representatives in respect of
the transactions contemplated by this Agreement and which relates to the other
party or any of its affiliates of their respective businesses or products
("Confidential Information"), and Weitek or RSS, as applicable, shall not
disclose directly or indirectly, and shall cause its respective affiliates and
Representatives not to disclose directly or indirectly, any Confidential
Information to anyone outside Weitek or RSS, as applicable, such affiliates and
their respective Representatives (each of the foregoing, a "Person"), except
that the foregoing restriction shall not apply to any information disclosed
hereunder to any party if such Person (the "Receiving Person") can demonstrate
that such Confidential Information:
(i) is or hereafter becomes generally available to the
trade or public other than by reason of any breach hereof,
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<PAGE> 5
(ii) was already known to the Receiving Person or such
affiliate or Representative as shown by written records;
(iii) is disclosed to the Receiving Person or such
affiliate or Representative by a third party who has the right to disclose such
information;
(iv) is developed by or on behalf of the Receiving
Person or any of its affiliates independently, without reliance on Confidential
Information received hereunder; or
(v) based on such Person's good faith judgment with
the advice of counsel, is otherwise required to be disclosed in compliance with
applicable law by a court of competent jurisdiction and such information shall
remain Confidential Information for all other purposes unless subparagraphs (i)
through (iv) above otherwise apply.
(b) Except in furtherance of its rights and obligations
hereunder or under other agreements between RSS and Weitek, RSS and Weitek each
agree that it shall not (and shall not permit any of its affiliates or
Representatives to) at any time use any Confidential Information in the conduct
of its business. The obligations set forth in this Section 5 shall extend to
copies, if any, of Confidential Information made by any of the Persons referred
to in paragraph (a) hereof and to documents prepared by such Persons which
embody or contain Confidential Information, and to any electronic data files
containing Confidential Information.
(c) RSS and Weitek shall each deal with Confidential
Information so as to protect it from disclosure with a degree of care not less
than that used by it in dealing with its own information intended to remain
exclusively within its knowledge and shall take reasonable steps to minimize the
risk of disclosure of Confidential Information.
(d) The obligations set forth in this Section 5 shall
survive the expiration or termination of this Agreement for a period of five (5)
years thereafter.
6. LIMITATION ON LIABILITY. In performing this Agreement RSS and Weitek
shall each have the duty to act, and to cause its employees and agents to act,
in a reasonably prudent manner, but neither Weitek nor RSS nor any of their
respective officers, directors or agents shall be liable to the other party
hereto or such other party's creditors or shareholders for errors of judgment or
for anything except willful misfeasance, bad faith or gross negligence in the
performance of their duties or reckless disregard of each party's respective
obligations and duties under the terms of this Agreement. Neither party will be
responsible for general, special, indirect, incidental or consequential damages
that the other party or any third party may incur or experience on account of
entering into or relying on this Agreement.
7. MISCELLANEOUS
7.1 Assignment. Neither party shall assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
the other.
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7.2 Permits and Licenses. Weitek shall be solely responsible for any
and all permits, licenses or authorizations from any federal, state or local
governmental authority necessary or desirable for the performance of its
obligations hereunder or for the maintenance of the Facilities or the Equipment.
7.3 Gratuities. Weitek warrants that none of its employees, officers,
agents or representatives has offered or given any gratuities to any of RSS's
officers, employees, agents or representatives with a view toward securing the
execution of this Agreement by RSS or securing favorable treatment with respect
thereto.
7.4 Compliance with Law. In connection with the performance of its
obligations hereunder, each of RSS and Weitek shall comply in all material
respects with all U.S., State of California and local laws, rules, ordinances,
orders and regulations.
7.5 Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective upon receipt and may
be delivered in person, by telecopy, express delivery service or U.S. mail, in
which event it may be mailed by first-class, certified or registered, postage
prepaid, addressed to the parties as set forth on the signature pages hereto or
to such other address as a party may have specified in writing.
7.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS
ENTERED INTO AND WHOLLY TO BE PERFORMED WITHIN THE STATE OF CALIFORNIA BY
CALIFORNIA RESIDENTS.
7.7 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
hereof.
7.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
7.9 Severability of this Agreement. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
7.10 Force Majeure. No party shall be deemed to have breached this
Agreement or be held liable for any failure or delay in the performance of all
or any portion of its obligations under this Agreement if prevented from doing
so by acts of God or the public enemy, fires, floods, storms, earthquakes,
riots, strikes, lock-outs, wars and war-operations, restraints of government
power or communication line failure or by reason of the judgment, ruling or
order of any court or agency of competent jurisdiction or change of law or
regulation subsequent to the execution of this Agreement. If, however, Weitek or
RSS is prevented by any of the foregoing events of force majeure from performing
any of its obligations hereunder, the other party hereto shall be excused from
any of its obligation to such
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party hereunder until such time as the event of force majeure ceases to prevent
performance hereunder, if ever.
7.11 Headings. Sections headings are for convenience only and do not
control or affect the meaning or interpretation of any terms or provisions of
this Agreement.
7.12 Payment of Fees and Expenses. Each party shall be responsible for
paying its own fees, costs and expenses in connection with this Agreement and
the transactions herein contemplated.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
<TABLE>
<S> <C>
WEITEK CORPORATION ROCKWELL SEMICONDUCTOR SYSTEMS, INC.
By: /s/ Richard H. Bohnet By: /s/ David C. Gelvin
Richard H. Bohnet, David C. Gelvin,
President and Chief Executive Officer Vice President Multimedia Division
</TABLE>
[Facilities & Equipment Agreement]
-8-
<PAGE> 1
Exhibit 99.3
LICENSE AGREEMENT
This License Agreement (this "Agreement") is entered into this 12th day
of December, 1996 ("Effective Date"), by and between Weitek Corporation, a
California corporation, with principal offices at 2801 Orchard Parkway, San
Jose, California 95134 ("Weitek") and Rockwell Semiconductor Systems, Inc., a
Delaware corporation, with principal offices at 4311 Jamboree Road, Newport
Beach, California 90740 (together with its majority-owned subsidiaries, "RSS").
BACKGROUND
A. Weitek has developed and is continuing to develop designs and
manufacturing processes for semiconductor products and has obtained and is
obtaining certain patents relating thereto.
B. RSS desires to obtain from Weitek a non-exclusive license to use
Weitek's technology in the manufacture and sale of products by RSS and its
affiliates and Weitek desires to grant to RSS such a license on the terms and
conditions set forth below.
C. The parties recognize that Weitek has filed a Voluntary Petition for
relief pursuant to Chapter 11 with the Bankruptcy Court of the Northern District
of California, San Jose Division (the "Court") and that additional agreements
between the parties, including an Asset Purchase Agreement, will be submitted to
the Court for approval.
AGREEMENT
1. DEFINITIONS.
1.1 Weitek Improvements. "Weitek Improvements" shall mean all
Improvements to products incorporating Weitek Technology or to the manufacturing
processes for Licensed Products made or acquired by Weitek.
1.2 Weitek Technology. "Weitek Technology" shall mean the following
items which are owned by Weitek from time to time during the term of this
Agreement: (1) all inventions (whether patentable or unpatentable and whether or
not reduced to practice), and improvements thereto, and all patents (including
utility and design patents, industrial designs and utility models), patent
applications, and patent or invention disclosures, together with all
reissuances, continuations, continuations-in-part, divisions, revisions,
supplementary protection certificates, extensions and re-examinations thereof
including, but not limited to, those patents identified on Exhibit A hereto
("Weitek Patents"); (2) all copyrightable works, and all applications,
registrations and renewals in connection therewith; (3) all mask works and
semiconductor chip rights and all applications, registrations and renewals in
connection therewith; (4) all trade secrets and confidential business and
technical information (including ideas, research and development, knowhow,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, engineering notebooks, industrial models,
software and specifications); (5) all computer software, both source code and
object code (including data and related documentation, flow charts, diagrams,
<PAGE> 2
descriptive texts and programs, computer print-outs, underlying tapes, computer
databases and similar items); (6) all copies and tangible embodiments of any or
all of the foregoing (in whatever form or medium, including without limitation
electronic media); and (7) all other proprietary, intellectual property of
Weitek and other rights relating to any or all of the foregoing (other than any
rights to sue for any past, present or future infringement).
1.3 Confidential Information. "Confidential Information" has the
meaning set forth in Section 6.1 below.
1.4 Improvements. "Improvements" shall mean improvements, enhancements,
reconfigurations or new models, whether or not patentable.
1.5 Licensed Products. "Licensed Products" shall mean products the
manufacture, use or sale of which would infringe any Weitek Technology.
1.6 RSS Improvements. "RSS Improvements" shall mean all Improvements of
or to Weitek Technology or to the manufacturing processes incorporating or using
Weitek Technology which are made by RSS during the term of this Agreement.
2. GRANT OF LICENSE.
2.1 Grant to RSS. Weitek hereby grants to RSS the non-exclusive,
worldwide right and license, without the right to grant sublicenses, under the
Weitek Technology to make, have made and sell Licensed Products during the term
of this Agreement. The foregoing right and license shall become perpetual if the
Court approves the Asset Purchase Agreement and this Agreement is not otherwise
terminated pursuant to Section 8.2. If the Court does not approve the Asset
Purchase Agreement and this Agreement is not otherwise terminated pursuant to
Section 8.2, RSS shall obtain a perpetual, non-exclusive, worldwide right and
license, without the right to grant sublicenses, to the Weitek Technology
described in Section 3.1(b).
2.2 Subcontractors. RSS shall have the right to subcontract
manufacturing of all or part of Licensed Products provided that each
subcontractor agrees in writing (i) not to use Weitek Technology for any purpose
other than subcontract manufacturing for RSS, (ii) to be bound by the provisions
of Article 6, and (iii) to grant to RSS a non-exclusive, worldwide, royalty-free
license to any patents (including utility models) which apply to Improvements to
Licensed Products developed during the term of this Agreement with rights to
sublicense the same to Weitek. RSS agrees that in the event that the closing
under the Asset Purchase Agreement does not occur, or in the event of
termination pursuant to Section 8.2 prior to the closing of the Asset Purchase
Agreement at the request of Weitek RSS will grant to Weitek sublicenses of such
licenses, if any, that RSS has obtained pursuant to (iii).
2.3 Limitations. No license or other right is granted, by implication,
estoppel or otherwise, to RSS under any Weitek Technology or other proprietary
rights now or hereafter owned or controlled by Weitek except for the licenses
and rights expressly granted in this Agreement.
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3. CONSIDERATION.
3.1 License Fees. In consideration of the grant of this license, RSS
shall pay to Weitek:
(a) If the Asset Purchase Agreement is approved by the Court:
(i) If RSS elects to take a license to all of the
Weitek Technology, the amount of $500,000 as set forth in the Asset Purchase
Agreement; or
(ii) If RSS elects to take a license to less than all
of the Weitek Technology, for such Weitek Technology as RSS may elect to license
pursuant to Section 7.5 of the Asset Purchase Agreement, a price equal to the
lowest price that such selected technology has been licensed for during the last
three years, not to exceed in the aggregate the sum of $500,000 as set forth in
the Asset Purchase Agreement.
(b) If the Asset Purchase Agreement is not approved by the
Court, for each item of the Weitek Technology incorporated into Licensed
Products or Weitek Technology incorporated into any RSS Improvements, as well as
Weitek Technology selected by RSS pursuant to Section 4.2 hereof, a price equal
to the lowest price that each such item of technology has been licensed for
during the last three years.
3.2 Timing of Payment. Payment of the license fee due hereunder shall
be made, in the case of Section 3.1(a) hereof, at the closing under the Asset
Purchase Agreement as part of the Purchase Price (as defined therein), or in the
case of Section 3.1(b) hereof, on the business day which is five (5) days after
termination of the Asset Purchase Agreement.
3.3 Taxes. All payments by RSS shall be made free and clear of, and
without reduction for, any and all taxes, including, without limitation, sales,
use, property, license, value added, excise, franchise, income, withholding or
similar taxes, other than taxes which are imposed by the United States or any
political subdivision thereof based on the net income of Weitek for which Weitek
shall be solely liable. Any such taxes which are otherwise imposed on payments
to Weitek shall be the sole responsibility of RSS. RSS shall provide Weitek with
official receipts issued by the appropriate taxing authority or such other
evidence as is reasonably requested by Weitek to establish that such taxes have
been paid.
4. TECHNOLOGY TRANSFER
4.1 Delivery of Weitek Technology. Throughout the term of this
Agreement, Weitek shall make available to RSS the Weitek Technology necessary to
perform this Agreement.
4.2 Licensed Technology. If the Court approves the Asset Purchase
Agreement, RSS shall obtain a perpetual, irrevocable, non-exclusive, right and
license, without the right to grant sublicenses, as described in Section 2. In
the event that the Asset Purchase Agreement is not approved by the Court, RSS
shall have the right to obtain a perpetual, irrevocable, non-exclusive,
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worldwide right and license, without the right to grant sublicenses, as
described in Section 2 for the Weitek Technology incorporated into Licensed
Products and the Weitek Technology incorporated into any RSS Improvements. RSS
may select additional Weitek Technology which shall be licensed in the same
manner to RSS with payment to be made pursuant to Section 3.1(b).
4.3 Transfer Documentation. Weitek agrees to (i) deliver to RSS such
records, data or other documents consistent with the provisions of this Section
4, (ii) execute, and deliver or cause to be delivered, all such assignments,
consents, documents or further instruments of transfer or license, and (iii)
take or cause to be taken all such other actions, as necessary in order for RSS
to obtain the full benefits of this Agreement.
4.4 Disclaimer. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE Weitek
TECHNOLOGY AND INFORMATION IS PROVIDED WITHOUT WARRANTY, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
5. INTELLECTUAL PROPERTY OWNERSHIP
5.1 Weitek Warranty of Ownership. During the term of this Agreement,
Weitek warrants that it owns all right, title and interest in and has the right
to license to RSS the Weitek Technology.
5.2 Ownership of Improvements. RSS has the right to develop
Improvements of the Weitek Technology. Commencing upon the effective date of
this Agreement, Weitek and RSS shall jointly own all right, title and interest
in RSS Improvements. At such time, if ever, that payment is made pursuant to
Section 3.1(a) any such RSS Improvements shall thereafter be the sole property
of RSS.
5.3 Records of Improvements. In order that the parties may determine
certain technology licensable under Sections 3.1(b) and 8.3 hereof, and comply
with the transfer of rights and records pursuant to Section 4.3, the parties
hereto agree to keep such records, data and documents throughout the term of
this Agreement as are required to document the Weitek Technology incorporated
into Licensed Products and the Weitek Technology incorporated into RSS
Improvements.
6. CONFIDENTIAL INFORMATION
6.1 Definition. As used in this Agreement, the term "Confidential
Information" shall mean any information disclosed by one party to the other
during the term of this Agreement which is in written, graphic, machine readable
or other tangible form and is marked "Confidential", "Proprietary" or clearly
marked in some other manner to indicate its confidential and proprietary nature.
Confidential Information may also include oral information disclosed by one
party to the other in the course of the performance of this Agreement, provided
that such information is designated as confidential at the time of disclosure
and reduced to a written summary by the disclosing party, within thirty (30)
days after its oral disclosure, which is clearly marked in a manner to indicate
its
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confidential and proprietary nature and delivered to the receiving party. As
used herein, "Confidential Information" may include, without limitation, the
know-how, inventions, prototypes, materials, processes, process equipment,
designs, specifications, and certain technical data, business and financial
data, product information, patent applications, and documents relating to the
development, manufacturing, testing, and marketing of products disclosed by
either party to the other directly in writing or by drawings or inspection of
parts or equipment.
6.2 Nondisclosure. Each party shall treat as strictly confidential all
Confidential Information of the other party, shall not use such Confidential
Information except as expressly set forth herein or otherwise authorized in
writing, shall implement reasonable procedures to prohibit the disclosure,
unauthorized duplication, misuse or removal of the other party's Confidential
Information and shall not disclose such Confidential Information to any third
party except as may be necessary and required in connection with the rights and
obligations of such party under this Agreement, and subject to confidentiality
obligations at least as protective as those set forth herein. Without limiting
the foregoing, each of the parties shall use at least the same procedures and
degree of care which it uses to prevent the disclosure of its own confidential
information of like importance to prevent the disclosure of Confidential
Information disclosed to it by the other party under this Agreement.
6.3 Exceptions. Notwithstanding the above, neither party shall have
liability to the other with regard to any Confidential Information of the other
which:
(a) was generally known and available in the public domain at
the time it was disclosed or becomes generally known and available in the public
domain through no fault of the receiver;
(b) was known to the receiver without restriction at the time
of disclosure as shown by the files of the receiver in existence at the time of
disclosure and was not acquired directly or indirectly from a third party under
obligation of confidentiality to the disclosing party;
(c) is disclosed with the prior written approval of the
discloser;
(d) was independently developed by the receiver without any
use of the Confidential Information, provided that the receiver can demonstrate
such independent development by documented evidence prepared contemporaneously
with such independent development;
(e) becomes known to the receiver without restriction from a
source other than the discloser without breach of this Agreement by the receiver
and otherwise not in violation of the discloser's rights; or
(f) is disclosed pursuant to the order or requirement of a
court, administrative agency, or other governmental body; provided, that the
receiver shall provide prompt, advance notice thereof to enable the discloser to
seek a protective order or otherwise prevent such disclosure.
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6.4 Binding Other Parties. Each party shall obtain the execution of
proprietary nondisclosure agreements with its employees, agents and consultants,
including those of the majority-owned subsidiaries of RSS, having access to
Confidential Information of the other party, and shall diligently enforce such
agreements, and shall exercise due care to control the actions of such
employees, agents and consultants in this respect so long as they have a working
relationship with the party.
6.5 Rights Under Breach. Each party acknowledges that the other party's
Confidential Information is an important business asset, the misuse or improper
disclosure of which would cause irreparable harm to the interest of such party.
Accordingly, if either party breaches any of its obligations under this Section
the other party shall be entitled to seek equitable relief to protect its
interest therein, including but not limited to injunctive relief, as well as
money damages. In addition, the parties agree upon request to cooperate in
efforts seeking to enjoin the subsequent wrongful disclosure of Confidential
Information by third parties to whom such information was disclosed by a
receiving party hereunder.
6.6 Survival. The obligations set forth in this Section 6 shall survive
the expiration or termination of this Agreement for a period of five (5) years
thereafter.
7. LIMITATION OF LIABILITY
WEITEK'S LIABILITY ARISING OUT OF THIS AGREEMENT SHALL NOT EXCEED THE
AMOUNTS RECEIVED FROM RSS HEREUNDER. IN NO EVENT SHALL WEITEK BE LIABLE FOR COST
OF PROCUREMENT OF SUBSTITUTE PRODUCTS, SERVICES, OR TECHNOLOGY NOR SHALL WEITEK
BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT OR SPECIAL DAMAGES HOWEVER
CAUSED AND ON ANY THEORY OF LIABILITY ARISING OUT OF THIS AGREEMENT. THESE
LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY.
8. TERM AND TERMINATION
8.1 Term. This Agreement shall become effective as of the date hereof
and shall continue in full force and effect perpetually unless terminated
pursuant to Section 8.2 hereof:
(i) as to all of the Weitek Technology, provided that
the closing under the Asset Purchase Agreement occurs on or before
April 15, 1997 and payment is made pursuant to Section 3.1(a)(i)
hereof,
(ii) as to such Weitek Technology in respect of which
RSS selects and has made license payments pursuant to Section
3.1(a)(ii) hereof and Section 7.5 of the Asset Purchase Agreement, or
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<PAGE> 7
(iii) as to such Weitek Technology described in
Section 3.1(b) and that Weitek Technology in respect of which RSS
selects and has made license payments pursuant to Section 3.1(b) hereof
if the closing under the Asset Purchase Agreement does not occur.
8.2 Termination. If either party defaults in the performance of any
material obligation under this Agreement and fails to correct such default
within thirty (30) days after receiving written notice to correct the default
then the non-defaulting party may, in addition to any other remedies it may
have, terminate this Agreement. In the event that Section 6 hereof has been
breached the non-defaulting party may terminate this agreement immediately upon
written notice to the defaulting party and RSS shall retain no further rights to
the Weitek Technology.
8.3 Effect of Termination. Upon termination of this Agreement, all
licenses and rights granted by the parties to each other hereunder shall
terminate, and neither RSS nor its subcontractors shall have any rights with
respect to any Weitek Technology; provided, however, solely in the event that
this Agreement is terminated pursuant to Section 8.2 due to a breach of any
provision hereof other than the provisions of Section 6, RSS shall retain a
perpetual license to make, use and sell those Licensed Products that (i) RSS was
manufacturing at or before the time of the breach and (ii) RSS was demonstrably
developing at the time of the breach, if any. The provisions of Sections 4.4,
5.2, 6, 7, 8 and 9 shall survive any termination of this Agreement for any
reason. In addition, all amounts for which payment is due to Weitek prior to the
date of termination shall remain due and payable until paid.
9. GENERAL PROVISIONS
9.1 Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the United States and the State of California
without reference to conflict of laws principles.
9.2 Settlement of Disputes. The parties shall use their best endeavors
to settle by mutual agreement any disputes, controversies or differences which
may arise from, under, out of or in connection with this Agreement. If such
disputes, controversies or differences cannot be settled between the parties,
they shall be finally resolved by binding arbitration in San Jose, California,
under the Commercial Rules of Arbitration of the American Arbitration
Association by three arbitrators appointed in accordance with said rules. The
arbitrators shall apply California law to the merits of any dispute or claim,
without reference to rules of conflicts of law or arbitration. Judgment on the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to
any court of competent jurisdiction for temporary, preliminary, or final
injunctive or other equitable relief without breach of this arbitration
provision.
9.3 Assignment. Neither party may assign or delegate this Agreement or
any of its rights or duties hereunder without the prior written consent of the
other party, which shall not be unreasonably withheld. Without limiting the
generality of the foregoing, in the event that Weitek wishes to transfer its
rights in any of the Weitek Technology to a third party, Weitek shall not be
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permitted to do so unless and until each such transferee delivers to RSS a
written acknowledgment of the rights of RSS hereunder and agrees to accept
assignment of this Agreement from Weitek and to be bound by the terms and
conditions hereof applicable to Weitek, and RSS agrees to provide a similar
written acknowledgment of the transferee's rights if requested by Weitek or the
transferee.
9.4 Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effective when mailed by
registered or certified mail, postage prepaid, or otherwise delivered by hand,
by messenger or by telecommunication, addressed to the addresses first set forth
above or at such other address furnished with a notice in the manner set forth
herein. Such notices shall be deemed to have been served when delivered or, if
delivery is not accomplished by reason of some fault of the addressee, when
tendered.
9.5 United States Export Controls.
(a) RSS understands and acknowledges that the Weitek
Technology and Licensed Products are subject to regulation by agencies of the
U.S. government, including the U.S. Department of Commerce, which prohibit
export or diversion of certain products and technology to certain countries. RSS
warrants that it will comply in all respects with the Export Administration
Regulations or other United States laws and regulations in effect from time to
time.
(b) Without in any way limiting the provisions of this
Agreement, RSS agrees that unless prior written authorization is obtained from
the Bureau of Export Administration or the Export Administration Regulations, it
will not export, reexport or transship directly or indirectly (i) into (or to a
national resident of) Cuba, Iraq, Libya, Yugoslavia, North Korea, Iran, Syria
(for so long as the export, reexport or transship into such countries is
prohibited or restricted) or any other country which the U.S. has embargoed
goods; or (ii) to anyone on the U.S. Treasury Department's list of Specially
Designated Nationals or the U.S. Commerce Department's Table of Deny Orders, any
of the Weitek Technology or Licensed Products.
9.6 Force Majeure. Neither party shall be liable to the other for
failure or delay in the performance of any obligations under this Agreement for
the time of and to the extent such failure or delay is caused by riots, civil
commotion, wars or hostilities between nations, governmental laws, orders, or
regulations, embargoes, actions by the government or any agency thereof, acts of
God, earthquakes, storms, fires, accidents, strikes, sabotages, explosions, or
other similar or different contingencies beyond the reasonable control of the
parties. If, however, Weitek or RSS is prevented by any of the foregoing events
of force majeure from performing any of its obligations hereunder, the other
party hereto shall be excused from any obligation to the other party hereunder
until such time as the event of force majeure ceases to prevent performance
hereunder, if ever.
9.7 Partial Invalidity. If any Section, provision, or clause in this
Agreement is found or be held to be invalid or unenforceable in any jurisdiction
in which this Agreement is being performed, the remainder of this Agreement
shall be valid and enforceable and the parties shall negotiate, in good faith, a
substitute, valid and enforceable provision which most nearly effects the
parties' intent in entering into this Agreement.
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9.8 Counterparts. This Agreement may be executed in two (2) or more
counterparts all of which, taken together, shall be regarded as one and the same
instrument.
9.9 Relationship of Parties. The relationship of the parties under this
Agreement is that of independent contractors. Nothing contained herein or done
in pursuance of this Agreement shall constitute either party the agent of the
other party for any purpose or in any sense whatsoever, or constitute the
parties as partners or joint venturers.
9.10 Modification. No alteration, amendment, waiver, cancellation or
any other in any term or condition of this Agreement shall be valid or binding
on either party unless same shall have been mutually assented to in writing by
both parties.
9.11 Waiver. The failure of either party to enforce at any time the
provisions of this Agreement, or the failure to require at any time performance
by the other party of any of provisions of this Agreement, shall in no way be
constituted to be a present or future waiver of such provisions, nor in any way
affect the validity of either party to enforce each and even provision
thereafter. The express waiver by either party of any provision, condition or
requirement of this Agreement shall not constitute a waiver of any future
obligation to comply with such provision, condition or requirement.
9.12 Entire Agreement. The terms and conditions herein constitute the
entire agreement between the parties and supersede all previous agreements and
understandings, whether oral or written, between the parties with respect to the
subject matter hereof and no agreement or understanding varying or extending the
same shall be binding upon either party unless in a written document signed by
the party to be bound.
9.13 Section Headings and Language. The section headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
WEITEK CORPORATION ROCKWELL SEMICONDUCTOR
SYSTEMS, INC.
By: /s/ Richard H. Bohnet By: /s/ David C. Gelvin
---------------------------------------- -------------------
Richard H. Bohnet, David C. Gelvin,
President and Chief Executive Officer Vice President
Multimedia Division
[License Agreement]
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<PAGE> 11
EXHIBIT A
TO LICENSE AGREEMENT
PATENTS
U.S. Patent Number 5280439
U.S. Patent Number 5245564
U.S. Patent Number 5204825
U.S. Patent Number 5136536
U.S. Patent Number 5027272
U.S. Patent Number 5021985
U.S. Patent Number 4939686
U.S. Patent Number 4901267
U.S. Patent Number 4866652
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