Exhibit 10.5
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (this "Agreement") is entered into as
of May 13, 2002, by and between ZiLOG, Inc., a Delaware corporation
("ZiLOG"), and ZiLOG-MOD III, Inc., a Delaware corporation and a
wholly-owned subsidiary of ZiLOG ("MOD III Subsidiary").
WHEREAS, on April 30, 2002, the United States Bankruptcy Court for
the Northern District of California entered an order confirming the joint
plan of reorganization (the "Plan") filed by ZiLOG and MOD III Subsidiary;
WHEREAS, in consideration for the receipt of the Non-Operating
Assets (as defined below), MOD III Subsidiary (i) has assumed an obligation
on, and has become a co-obligor to the extent of, $30,000,000 of ZiLOG's 9
1/2% Senior Secured Notes due 2005, (ii) has issued to ZiLOG 1,000,000
shares of its Common Stock and (iii) is issuing to ZiLOG 28,000 shares of
its Series B Preferred Stock; and
WHEREAS, ZiLOG and MOD III Subsidiary have executed and delivered
to State Street Bank Trust Company a supplemental indenture (the
"Supplemental Indenture"), dated as of January 23, 2002, which provides
that ZiLOG shall contribute the Non-Operating Assets to MOD III Subsidiary;
and
WHEREAS, as a condition for the effectiveness of the Plan, and in
accordance with the terms of the Supplemental Indenture, ZiLOG and MOD III
Subsidiary are entering into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth herein, the parties hereto agree as
follows:
Section 1. Contribution. Effective as of the date hereof, and on
the terms and subject to the conditions set forth herein, ZiLOG does hereby
contribute, assign, transfer, convey and deliver to MOD III Subsidiary: (a)
all of ZiLOG's right, title and interest in and to the eight-inch wafer
fabrication facility in Nampa, Idaho known as "MOD III" (the "MOD III
Facility") and the equipment and assets necessary for its operation
including those listed on Schedule A attached hereto (together with the MOD
III Facility, the "Non-Operating Assets"); and (b) those certain associated
liabilities listed on Schedule B attached hereto (the "Associated
Liabilities"); provided that the transfer of any such assets and
liabilities that is subject to the receipt of any consent, approval, waiver
or the satisfaction of any other condition shall be effective only upon
such receipt and satisfaction; provided further that the Associated
Liabilities shall be paid in accordance with Section 4 of the Services
Agreement between ZiLOG and MOD III Subsidiary dated the date hereof.
Section 2. Acceptance. Effective as of the date hereof, and on the
terms and subject to the conditions set forth herein, MOD III Subsidiary
does hereby accept and assume all of ZiLOG's right, title and interest in
and to the Non-Operating Assets and the Associated Liabilities.
Section 3. Instruments of Transfer. Each of ZiLOG and MOD III
Subsidiary agrees that each shall file with the relevant governmental or
other entities such assignment documents as may be necessary (if any) to
reflect in the registries of such governmental or other entities the change
in ownership of the Non-Operating Assets.
Section 4. ZiLOG Representations and Warranties. ZiLOG hereby
represents and warrants to MOD III Subsidiary, as of the date hereof, that:
(a) the Non-Operating Assets are free and clear of all liens;
(b) the Non-Operating Assets constitute all the equipment and
assets used for operation of the MOD III Facility, other than certain
equipment which is not essential to the operations of such facility and the
exclusion of which would not diminish the saleable value of the
Non-Operating Assets by more than $100,000;
(c) except as disclosed on Schedule C attached hereto, none of
the execution, delivery or performance of this Agreement nor the
consummation of the transactions contemplated hereby will:
(i) conflict with or result in any breach of any
provision of either party's certificate of incorporation or bylaws;
(ii) require any consent, approval or authorization of,
or filing with, any local, state or federal governmental
authority, except (A) such consents, approvals or authorizations
that have been obtained or such filings that have been made as of
the date hereof, (B) any post-closing filings and notices as may
be required under applicable law, which will be timely filed
within the applicable periods therefor and (C) for customary
approvals typically required in connection with transfers of
manufacturing facilities that are routinely granted; or
(iii) constitute, with or without due notice or the
passage of time or both, a material default under any of the
terms, conditions or provisions of any material agreement to which
either is a party or by which the Non-Operating Assets are bound;
except in the case of clause (ii), where the failure to obtain such
consents, approvals or authorizations, or to make such filings, would not,
individually or in the aggregate, have a material adverse effect on the
parties' ability to consummate the transactions contemplated hereby or
materially impair the intended benefits of such transactions.
Section 5. Best Efforts. From time to time at or after the date of
this Agreement, each of the parties to this Agreement shall cooperate and
use its best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable under
applicable laws to consummate and make effective the transactions
contemplated herein, including, but not limited to, executing and
delivering, or causing to be executed and delivered, such other documents
as may be reasonably necessary to effectuate the transaction contemplated
by this Agreement.
Section 6. Expenses. ZiLOG shall pay all costs and expenses
relating to this Agreement and the contribution contemplated hereby.
Section 7. No Breach. No breach of this Agreement shall be deemed
to have occurred until the non-breaching party delivers written notice of
the breach to the other party and the breach has not been cured within 30
days of receipt of such notice.
Section 8. Notices. All notices or other communications required
or desired to be given hereunder by any party shall be in writing and shall
be validly given or made 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:
(a) If to ZiLOG, at:
ZiLOG, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention:General Counsel
Facsimile:000-000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention:Xxxxxx X. Xxxx, Esq.
Facsimile:000-000-0000
(b) If to MOD III Subsidiary, at:
ZiLOG-MOD III, Inc.
c/o ZiLOG, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention:General Counsel
Facsimile:000-000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention:Xxxxxx X. Xxxx, Esq.
Facsimile:000-000-0000
Section 9. Successors and Assigns. This Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties hereto and
their respective successors and assigns.
Section 10. Governing Law. This Agreement shall be governed by,
enforced under and construed in accordance with the laws of the State of
California, without giving effect to any choice or conflict of law
provision or rule thereof.
Section 11. Counterparts. This Agreement may be executed in one or
more counterparts each of which shall be deemed to be an original and all
of which together constitute a single document.
Section 12. Amendments. This Agreement may be changed, modified or
terminated only by an instrument in writing signed by each of the parties
hereto and in a manner consistent with MOD III Subsidiary's Certificate of
Incorporation, as in effect as of the date of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
ZiLOG, Inc.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Vice President and Chief Financial Officer
ZiLOG-MOD III, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
Title: Secretary
