Exhibit 11 to
Debtors' Joint Reorganization Plan
TPG Mutual Release
MUTUAL RELEASE AGREEMENT
This MUTUAL RELEASE AGREEMENT (this "Agreement") is
entered into as of January 28, 2002, by and between ZiLOG, Inc., a Delaware
corporation ("ZiLOG"), and ZiLOG-MOD III, Inc., a Delaware corporation and
subsidiary of ZiLOG ("MOD III Subsidiary," and together with ZiLOG, the
"Companies"), on the one hand, and TPG Partners II, L.P., a Delaware
limited partnership (together with its Affiliates, (as defined herein)
"TPG"), Xxxx Xxxxxx and Xxxxxxx Xxxxx, on the other hand. Capitalized terms
not otherwise defined herein shall have the meaning ascribed to them in the
Plan (as defined herein).
RECITALS:
A. ZiLOG and MOD III Subsidiary intend to effect a restructuring
through a filing a joint plan of reorganization (the "Plan") with United
States Bankruptcy Court for the Northern District of California. A copy of
the Plan is attached hereto as Exhibit A.
B. In connection with the restructuring, the Companies and TPG
Partners II, L.P. have agreed to enter into a mutual release on the terms
set forth herein.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Company Release. As of the effective date under a
Conforming Plan (as defined herein), each of the Companies, for itself and
its successors and assigns, hereby fully and forever releases and
discharges TPG and all officers, directors, partners, employees, agents,
attorneys, predecessors, successors and assigns of any one or more of them
(collectively with TPG, the "TPG Related Parties"), from all claims
(including, without limitation, avoiding power and equitable subordination
claims), causes of action, or damages (including, without limitation,
reimbursement of costs or expenses, including, without limitation
attorney's fees), liabilities, demands, rights and losses of whatever
nature, whether known or unknown, asserted or unasserted, liquidated or
unliquidated, fixed or contingent, disputed or undisputed, direct, indirect
or derivative (collectively, "Claims"), that it or they ever had, now have,
or may have for acts, events or occurrences prior to the Effective Date
which arise out of or are related to the relationship between any one or
more of the Company Related Parties (as defined below), on the one hand,
and any one or more of the TPG Related Parties, on the other hand; provided
that nothing herein shall release any Claims that arise from obligations or
rights created under or in connection with the Plan or any agreement
provided for or contemplated under the Plan or identified on Exhibit 9 to
the Plan, which such exhibit is attached to this Agreement as Exhibit A.
Section 2. TPG Release. As of the effective date under a
Conforming Plan, each of TPG, Xxxx Xxxxxx and Xxxxxxx Xxxxx, for themselves
and each of their respective successors and assigns, hereby fully and
forever release and discharge each of the Companies and all officers,
directors, shareholders, employees, agents, attorneys, predecessors,
successors and assigns of any or all of them (collectively with the
Companies, the "Company Related Parties"), from all Claims that it or they
ever had, now have, or may have for acts, events or occurrences prior to
the Effective Date which arise out of or are related to the relationship
between any one or more of the TPG Related Parties, on the one hand, and
any one or more of the Company Related Parties, on the other hand; provided
that nothing herein shall release any Claims that arise from obligations or
rights created under or in connection with the Plan or any agreement
provided for or contemplated under the Plan or Exhibit A to this Agreement.
Section 3. Section 1542 Waiver. It is the intention of the parties
in executing this Agreement that it shall be effective as a full and final
accord and satisfactory release of each and every matter herein
specifically or generally referred to. In furtherance of this intention,
each party acknowledges that he or it is familiar with Section 1542 of the
Civil Code of the State of California, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
The parties waive and relinquish any rights and benefits which
they have or may have under Section 1542 of the Civil Code of the State of
California, and/or laws of similar effect, to the full extent that they may
lawfully waive all such rights and benefits pertaining to the subject
matter of this Agreement. The parties, and each of them, acknowledge that
they are aware that they may later discover facts in addition to or
different from those which they now know or believe to be true with respect
to the subject matter of this Agreement, but it is their intention to fully
and finally forever settle and release any and all matters, disputes and
differences, known and unknown, suspected and unsuspected, which now exist,
may later exist or may previously have existed between them, and that in
furtherance of this intention, the releases given in this Agreement shall
be and remain in effect as full and complete general releases
notwithstanding discovery or existence of any such additional or different
facts.
Section 4. Termination of Agreement.
(a) TPG Partners II, L.P. may terminate this Agreement by
written notice to ZiLOG:
(i) any time after March 31, 2002, if a plan of
reorganization, which includes (w) the provisions (the
"Provisions") of paragraph 8 of the ZiLOG, Inc. Restructuring Term
Sheet dated November 16, 2001, a copy of which is attached hereto
as Exhibit B (the "Term Sheet"), (x) an agreement by ZiLOG (of
which agreement each TPG Related Party shall be a stated
third-party beneficiary) that neither of the Companies will assert
a claim for preference, fraudulent conveyance or the like against
Xxxxxx X. Xxxxxxxx, or his successors or assigns, to the extent
that the assertion of that claim gives rise to a claim by Xx.
Xxxxxxxx, or his successors or assigns, as the case may be,
against any one or more of the TPG Related Parties, (y) a
provision that, if Xx. Xxxxxxxx, or his successors or assigns, if
appropriate, offers to execute a mutual release of the type called
for in the Provisions, such mutual release will include each TPG
Related Party as a third-party beneficiary, and (z) payments of
cash to shareholders of ZiLOG on substantially the terms outlined
in the Plan (together with an appropriate disclosure statement, a
plan with such terms in subsections (w) through (z) above, a
"Conforming Plan"), is not filed with the United States Bankruptcy
Court on or before March 31, 2002, provided that ZiLOG and the
Informal Committee may agree in writing to extend such deadline
for an additional thirty days;
(ii) any time after June 9, 2002, if the effective
date under a Conforming Plan has not occurred on or before June 9,
2002; or
(iii) at any time after the filing of a plan of
reorganization with the United States Bankruptcy Court, if either
ZiLOG or more than 50% or the outstanding principal of Senior
Notes fails to support a Conforming Plan (by voting against, or
withdrawing their respective acceptance of, that plan).
(b) ZiLOG may terminate this Agreement by written notice
to TPG:
(i) at any time after the filing of a plan of
reorganization with the Bankruptcy Court, if TPG withdraws its
support of a Conforming Plan; or
(ii) at any time upon the occurrence of any breach
(but not after such breach has been cured) by TPG of either: (A)
the Non-Solicitation and Non-Hire Agreement between ZiLOG and TPG
dated January 25, 2002 (the "Non-Solicitation Agreement"); or (B)
the Tax Agreement between ZiLOG and TPG dated January 25, 2002
(the "Tax Agreement"); provided, that, after the effective date of
a Conforming Plan, ZiLOG will not have the right to terminate this
Agreement unless it has delivered written notice to TPG Partners
II, L.P. specifying the nature of the breach and provided a 30 day
cure period unless such breach has not been cured within such 30
day period or if such breach is not capable of being cured within
30 days but is capable of being cured, TPG has not commenced, and
thereafter does not continue diligently, efforts to cure such
breach, or even if TPG has done so, the breach is not cured within
75 days from the date notice was given.
If ZiLOG terminates this Agreement prior to the occurrence of the effective
date of a Conforming Plan, then, notwithstanding anything in the
Non-Solicitation Agreement or in the Tax Agreement to the contrary, the
Non-Solicitation Agreement and the Tax Agreement shall terminate
automatically. Nothing in this Agreement shall be deemed or construed to
prohibit ZiLOG from seeking damages or injunctive relief, in lieu of
termination, in the event of a breach by TPG of this Agreement, the
Non-Solicitation Agreement or the Tax Agreement.
Section 5. Representations By The Parties. Each of the parties
warrants and represents to the others that none of them has assigned or
transferred or purported to assign or transfer to any person or entity not
a party to this Agreement any Claims or any part or portion of any Claims
covered by this Agreement, and each of them agrees to indemnify and hold
harmless the others from and against any claim, demand, damage, debt,
liability, account, reckoning, obligation, cost, expense, lien, action or
cause of action (including, without limitation, reasonable attorneys fees
and costs paid or incurred) based upon or in connection with or arising out
of any such assignment or transfer or purported or claimed assignment or
transfer.
Section 6. No Admission. The execution of this Agreement effects
the settlement of claims which are contested and denied. Nothing contained
in this Agreement shall be construed as an admission by any party of any
liability of any kind to the other parties. Each party acknowledges that
the others expressly deny that any of them is in any way liable or
obligated to the others.
Section 7. Definition of Affiliate. For the purposes of this
Agreement, "Affiliate" shall mean any corporation, general partnership,
limited partnership, limited liability partnership, trust, company
(including, without limitation, any limited liability company or joint
stock company) or other organization or entity that, directly or
indirectly, through one or more intermediaries, controls, is controlled by
or is under common control with TPG Partners II, L.P. For purposes hereof,
control of any entity by any party shall be deemed to exist only if that
party owns more than 50% of the voting securities or other interests of
that entity or otherwise has the power to elect or appoint more than 50% of
the governing body of that entity.
Section 8. Notices. Any and all notices, demands or other
communications required or desired to be given hereunder by any party shall
be in writing and shall be validly given or made to another party if served
personally, sent via overnight courier (fare prepaid), sent via facsimile,
or if deposited in the United States mail, certified or registered, postage
prepaid, return receipt requested, and delivered to a party hereto as
follows (or to such other address as a party hereto shall identify to the
other in a like notice):
(a) If to ZiLOG, at:
ZiLOG, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
(b) If to TPG, at:
Texas Pacific Group
000 Xxxxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
With a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Section 9. Continuing Indemnification Obligations. Anything
contained in this Agreement to the contrary notwithstanding, nothing in
this Agreement shall be deemed or construed to release the Company from its
obligations to indemnify its present and former directors, officers, or
employees under its certificate of incorporation, by-laws,
employee-indemnification policy, state law, or any other instrument,
document or agreement and such obligations will survive and be unaffected
by the Plan's confirmation, regardless of whether the right to
indemnification arose before or after the petition date.
Section 10. Entire Agreement. This Agreement contains the entire
understanding of the parties; there are no representations, covenants or
undertakings other than those expressly set forth in this Agreement. Each
party acknowledges that no other party or any agent or attorney of any
other party has made any promise, representation or warranty whatsoever,
express, implied or statutory, not contained in this Agreement concerning
its subject matter, to induce them to execute this Agreement. The parties
acknowledge that they have not executed this Agreement in reliance upon any
such promise, representation or warranty not specifically contained in this
Agreement.
Section 11. Binding On Successors. This Agreement and the
covenants and conditions contained in it shall apply to, be binding upon
and inure to the benefit of the respective heirs, administrators,
executors, legal representatives, assigns, successors and agents of each of
the parties.
Section 12. No Third Party Beneficiaries. This Agreement is solely
for the benefit of the parties, and has no third party beneficiaries,
except for TPG Related Parties (other than TPG Partners II, L.P.) and
Company Related Parties (other than the Companies), each of whom or which,
as the case may be, shall constitute such a third party beneficiary, to the
extent the context hereof so provides.
Section 13. Interpretation. Nothing in this Agreement shall be
deemed or construed to provide or purport to cause a release of Claims
against TPG held by any person other than the Companies (except insofar as
such Claim may be asserted as a derivative claim or right constituting
property of the Estates (as defined in the Plan).
Section 14. Governing Law. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of
California, without reference to its internal conflicts of law.
Section 15. Joint Preparation. This Agreement is to be deemed to
have been jointly prepared by the parties, and any uncertainty or ambiguity
in it shall not be interpreted against any of the parties, but according to
the application of the rules of interpretation of contracts.
Section 16. Attorneys' Fees. In the event that any party hereto
shall institute any action or proceeding to enforce any rights granted
hereunder, the prevailing party in such action or proceeding shall be
entitled, in addition to any other relief granted by the court or other
applicable judicial body, to such reasonable attorneys fees as may be
rewarded.
Section 17. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ZiLOG, INC.
By: /s/
-------------------------------------
Name:
Title:
ZiLOG-MOD III, INC.
By: /s/
-------------------------------------
Name:
Title:
TPG PARTNERS II, L.P.
By: TPG GENPAR II, L.P.
By: TPG ADVISORS II, INC.
By: /s/
-------------------------------------
Name:
Title:
Agreed and Acknowledged
/s/
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Xxxx Xxxxxx
/s/
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Xxxxxxx Xxxxx
Exhibit A to Mutual Release Agreement
EXHIBIT 9
EXCEPTIONS TO MUTUAL RELEASES
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Debtor Name Non-Debtor Party Name Agreement Name Date
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ZiLOG, Inc. Advanced Interconnect Technologies, Limited. Confidentiality Agreement 3-Mar-01
(AIT, Ltd.)
0000 Xxxx Xxxxxx Xxxx., Xxx. 000
Xxxxxxxxxx, XX 00000
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Astra Microtronics Technology (AMT)
(fkna AIT, Ltd.)
ZiLOG, Inc. 0000 Xxxx Xxxxxx Xxxxxxx, Xxx. 000, Non Disclosure Agreement 20-Aug-98
Xxxxxxxxxx, XX 00000
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P.T. Astra Microtronics Technology (AMT)
(fkna AIT, Ltd.) Assembly Agreement 01-Sept-92
ZiLOG, Inc. XX.X. Xxxxxx Xxx. 000, Xxxx Kuning
Batam Industrial Park Agreement, as 00-Xxx-00
Xxxxx, Xxxxxxxxx amended
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GlobeSpan Semiconductor Inc. (GSI)
ZiLOG, Inc. 000 Xxxxx Xxxxx Memorandum of Understanding (2) 19-Jan-98,
Xxx Xxxx, Xxx Xxxxxx 00000 2-Aug-00
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Globespan Technologies, Inc.
(GTI)
ZiLOG, Inc. 000 Xxxxxx Xxxxx Non Disclosure Agreement 13-Aug-97
Xxx Xxxx, XX 00000
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TPG Partners II, Inc.
ZiLOG, Inc. 301 Commerce, Suite 3300 Non-Solicitation and Non-Hire 28-Jan-02
Xxxx Xxxxx, Xxxxx 00000 Agreement
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ZiLOG, Inc., TPG Partners II, Inc.
ZiLOG-MOD III, 301 Commerce, Suite 3300 Mutual Release 28-Jan-02
Inc. Xxxx Xxxxx, Xxxxx 00000
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ZiLOG, Inc. TPG Partners II, Inc. Tax Agreement 28-Jan-02
000 Xxxxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
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