EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
DATED OCTOBER 20, 1995
AMONG
ADVANCED MICRO DEVICES, INC.,
AMD MERGER CORPORATION
AND
NEXGEN, INC.
TABLE OF CONTENTS
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PAGE
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SECTION 1
THE MERGER.......................................................... 1
1.1 Merger.................................................... 1
1.2 Closing................................................... 2
1.3 Consummation of Transactions.............................. 2
1.4 Effect of Transactions.................................... 2
1.5 Conversion of NexGen Common Stock......................... 2
1.6 Surrender and Payment..................................... 3
1.7 Fractional Shares......................................... 4
1.8 Assumption of Stock Options and Warrants.................. 5
1.9 Stockholders' Approvals................................... 5
1.10 Certificate of Incorporation, By-laws, Directors
and Officers of Surviving Corporation..................... 5
1.11 Accounting Treatment...................................... 5
1.12 Tax Consequences.......................................... 6
1.13 Stock Subject to Conditions of Forfeiture................. 6
SECTION 2
REPRESENTATIONS AND WARRANTIES OF NEXGEN............................ 6
2.1 Organization; Qualification............................... 6
2.2 Capitalization............................................ 6
2.3 Subsidiaries.............................................. 7
2.4 Authority Relative to Agreements.......................... 8
2.5 Consents and Approvals; No Violation...................... 8
2.6 SEC Reports and Financial Statements...................... 9
2.7 Undisclosed Liabilities................................... 10
2.8 Absence of Certain Changes or Events...................... 10
2.9 Proxy Statement........................................... 11
2.10 Certain Contracts and Arrangements........................ 11
2.11 Legal Proceedings......................................... 12
2.12 No Violation.............................................. 12
2.13 Taxes and Tax Returns..................................... 12
(a) General Tax Representations.......................... 12
(b) Withholding.......................................... 14
(c) Tax Sharing Agreements............................... 14
(d) Taxes Since June 30, 1995............................ 14
(e) Tax Methods.......................................... 14
(f) Definitions.......................................... 14
2.14 Employee Benefit Plans................................... 15
2.15 Intellectual Property.................................... 16
2.16 Title to Properties...................................... 19
2.17 Insurance................................................ 19
2.18 Transactions with Management............................. 19
2.19 Disclosure............................................... 20
2.20 Brokerage and Finders' Fees.............................. 20
2.21 Actions Affecting Pooling................................ 20
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2.22 Takeover Statutes........................................ 20
2.23 Agreements of Affiliates and Others...................... 20
2.24 Employee Relations....................................... 21
2.25 Environmental Matters.................................... 21
2.26 Commercial Relationships................................. 22
SECTION 3
REPRESENTATIONS AND WARRANTIES OF AMD AND AMD MERGER................ 22
3.1 Organization; Qualification............................... 22
3.2 Capitalization............................................ 22
3.3 Subsidiaries.............................................. 23
3.4 Authority Relative to this Agreement...................... 24
3.5 Consents and Approvals; No Violation...................... 24
3.6 SEC Reports and Financial Statement....................... 25
3.7 Undisclosed Liabilities................................... 25
3.8 Absence of Certain Changes or Events...................... 26
3.9 Proxy Statement........................................... 27
3.10 Material Contracts........................................ 27
3.11 Legal Proceedings......................................... 27
3.12 No Violation.............................................. 28
3.13 Taxes and Tax Returns..................................... 28
(a) General Tax Representations.......................... 28
(b) Withholding.......................................... 29
(c) Tax Sharing Agreements............................... 29
(d) Taxes Since July 2, 1995............................. 29
(e) Tax Methods.......................................... 29
(f) Definitions.......................................... 29
3.14 Employee Benefit Plans.................................... 30
3.15 Intellectual Property..................................... 31
3.16 Title to Properties....................................... 33
3.17 Insurance................................................. 33
3.18 Transactions with Management.............................. 33
3.19 Disclosure................................................ 34
3.20 Brokerage and Finders' Fees............................... 34
3.21 Actions Affecting Pooling................................. 34
3.22 Takeover Statutes......................................... 34
3.23 Environmental Matters..................................... 35
3.24 NexGen Commercial Relationships........................... 35
SECTION 4
COVENANTS OF NEXGEN................................................. 35
4.1 Negative Covenants........................................ 35
4.2 Affirmative Covenants..................................... 37
4.3 No Solicitation........................................... 41
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SECTION 5
COVENANTS OF AMD AND AMD MERGER..................................... 43
5.1 Negative Covenants........................................ 43
5.2 Affirmative Covenants..................................... 44
5.3 Stock Options, Warrants and Convertible
Instruments............................................... 47
5.4 Employee Benefits......................................... 48
SECTION 6
INDEMNIFICATION..................................................... 49
6.1 Indemnification by NexGen................................. 49
6.2 Indemnification by AMD.................................... 49
6.3 Defense of Action......................................... 50
6.4 Additional Indemnification by AMD......................... 50
SECTION 7
MUTUAL CONDITIONS................................................... 50
7.1 Absence of Restraint...................................... 51
7.2 Absence of Termination.................................... 51
7.3 Required Approvals........................................ 51
7.4 Securities Law Requirements............................... 51
7.5 Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act.............. 51
7.6 NexGen Stockholders' Approval............................. 51
7.7 AMD Stockholders' Approval................................ 51
7.8 New York Stock Exchange Listing........................... 51
SECTION 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF AMD AND AMD MERGER........... 52
8.1 Compliance with Covenants; Representations and
Warranties Correct........................................ 52
8.2 No Material Adverse Change................................ 52
8.3 Section 2.23 Documents.................................... 52
8.4 Key Employees............................................. 52
8.5 Fairness Opinion.......................................... 52
8.6 Comfort Letter............................................ 53
8.7 Legal Opinion............................................. 54
8.8 Resignations.............................................. 54
8.9 Tax Opinion............................................... 54
8.10 Pooling-of-Interests Accounting Treatment................. 54
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SECTION 9
CONDITIONS PRECEDENT TO NEXGEN'S OBLIGATIONS........................ 54
9.1 Compliance with Covenants; Representations and
Warranties Correct........................................ 55
9.2 No Material Adverse Change................................ 55
9.3 Tax Opinion............................................... 55
9.4 Fairness Opinion.......................................... 55
9.5 Legal Opinion............................................. 55
SECTION 10
TERMINATION OF AGREEMENT............................................ 55
10.1 Termination.............................................. 56
10.2 Effect of Termination.................................... 57
10.3 Fees and Expenses........................................ 57
10.4 Return of Information; Confidentiality................... 59
10.5 Extension of Time; Waivers............................... 60
(a) By AMD and AMD Merger................................ 60
(b) By NexGen............................................ 60
SECTION 11
MISCELLANEOUS....................................................... 60
11.1 Amendment................................................ 60
11.2 No Survival of Representations and Warranties............ 60
11.3 Entire Agreement; Counterparts; Applicable Law........... 61
11.4 Attorneys' Fees.......................................... 61
11.5 Assignability............................................ 61
11.6 Notices.................................................. 61
11.7 Titles................................................... 62
11.8 Third Party Beneficiary.................................. 62
11.9 Cooperation.............................................. 62
Annexes
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Annex 1 Credit Agreement.......................... Recital D
Exhibit
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Exhibit A Form of Voting Agreement............. Section 2.23
Exhibit B Form of Affiliate Agreement.......... Section 2.23
Exhibit C Form of No Sale Agreement............ Section 4.2(p)
Exhibit D Form of Opinion of Counsel
for NexGen........................... Section 8.7
Exhibit E Form of Opinion of Counsel
for AMD.............................. Section 9.5
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AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of October 20,
1995, by and among ADVANCED MICRO DEVICES, INC., a Delaware corporation
(hereinafter referred to as "AMD"), AMD MERGER CORPORATION, a Delaware
corporation (hereinafter referred to as "AMD Merger"), and NEXGEN, INC., a
Delaware corporation (hereinafter referred to as "NexGen").
A. AMD has formed AMD Merger as a wholly-owned subsidiary in order to
effect the merger of AMD Merger with and into NexGen (the "Merger") in
accordance with the laws of the State of Delaware and in accordance with this
Agreement so that upon consummation of the Merger, NexGen will be a wholly-owned
subsidiary of AMD and AMD Merger will cease to exist; and
B. This Agreement has been approved by the Boards of Directors of AMD, AMD
Merger and NexGen, by AMD in its capacity as the sole stockholder of AMD Merger,
and will be submitted for approval by the stockholders of AMD and NexGen; and
C. The Merger is intended to qualify as a tax-free reorganization within
the meaning of the provisions of Section 368 of the Internal Revenue Code of
1986, as it may be amended from time to time (the "Code"); and
D. AMD and NexGen have entered into a Credit Agreement, dated as of the
date hereof, in the form attached hereto as Annex 1 and forming an integral part
of this Agreement (the "Credit Agreement").
NOW, THEREFORE, in consideration of their mutual covenants, promises and
obligations contained in this Agreement and the Credit Agreement, the parties
hereto agree as follows:
SECTION 1
THE MERGER
1.1 Merger. At the Effective Time (as hereinafter defined) AMD Merger
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shall be merged with and into NexGen, whereupon the separate existence of AMD
Merger shall cease, and NexGen shall be the surviving corporation. The above
notwithstanding, at the election of AMD, the Merger shall be restructured such
that either (i) NexGen shall be merged with and into AMD, whereupon the separate
existence of NexGen shall cease, AMD shall be the surviving corporation, and AMD
Merger shall not be a constituent corporation of the Merger, or (ii) NexGen
shall be merged with and into AMD Merger, whereupon the separate existence of
NexGen shall cease, and AMD Merger shall be the surviving corporation; provided,
however, that in each case, AMD's right to elect an alternative structure shall
be subject to the condition that the
1
Merger will qualify as a tax-free reorganization within the meaning of the
provisions of Section 368 of the Code.
1.2 Closing. The transactions contemplated by this Agreement shall be
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consummated at a closing (the "Closing") which will take place at the offices of
Xxxxxxx, Xxxxxxx & XxXxxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx as
soon as practicable after the respective stockholders of AMD and NexGen shall
have approved the Merger, as provided in Section 1.9 of this Agreement;
provided, however, that if any condition of Closing specified in Sections 7
through 9 has not been satisfied, NexGen or AMD, as the case may be, may
postpone the Closing until a date which is promptly after the satisfaction of
such condition, but in no event shall such postponement extend beyond June 30,
1996. Notwithstanding the foregoing, the Closing may take place at such other
place, time or date as may be agreed upon by NexGen and AMD. The date of the
Closing is referred to in this Agreement as the "Closing Date."
1.3 Consummation of Transactions. If, at the Closing, no condition exists
----------------------------
which would permit any of the parties to terminate this Agreement or a condition
then exists and the party entitled to terminate because of that condition elects
not to do so, then the Merger shall be consummated, and then and thereupon AMD
Merger and NexGen will each carry out the procedures specified under the
applicable provisions of the Delaware General Corporation Law, as amended (the
"DGCL"), including filing a Certificate of Merger with the Secretary of State of
the State of Delaware, whereupon the Merger shall become effective. The time
that the Merger shall become effective is referred to in this Agreement as the
"Effective Time."
1.4 Effect of Transactions. The Merger shall have the effects set forth
----------------------
in Section 259 of the DGCL.
1.5 Conversion of NexGen Common Stock. (a) At the Effective Time, (i) each
---------------------------------
issued and outstanding share of NexGen common stock, par value $.0001 per share
("NexGen Common Stock") shall cease to be an existing and issued share and shall
become and be converted into, by virtue of the Merger and without any action on
the part of the holder thereof, the right to receive, upon surrender of the
certificate representing such share and in exchange therefor, 8/10th's of a
share (the "Exchange Ratio") of AMD common stock, $.01 par value ("AMD Common
Stock"); such shares shall be fully paid and nonassessable; and (ii) each issued
and outstanding share of AMD Merger Common Stock, par value $.01 per share,
shall be converted into one (1) issued and outstanding share of NexGen Common
Stock.
(b) In the case of any consolidation or merger of AMD with or into another
corporation other than a merger with another corporation in which AMD is a
continuing corporation and which
2
does not result in any reclassification or change of AMD Common Stock, at the
Effective Time, (i) each issued and outstanding share of NexGen Common Stock
shall cease to be an existing and issued share and shall become and be converted
into, by virtue of the Merger and without any action on the part of the holder
thereof, the right to receive, upon surrender of the certificate representing
such share and in exchange therefor, 8/10th's of the kind and amount of shares
of stock or other securities receivable upon such consolidation or merger by a
holder of one (1) share of AMD Common Stock; such securities shall be fully paid
and nonassessable; and (ii) each issued and outstanding share of AMD Merger
Common Stock, par value $0.01 per share, shall be converted into one (1) issued
and outstanding share of NexGen Common Stock. Upon any such consolidation or
merger, to the extent reasonably deemed necessary by NexGen, AMD or the
successor corporation shall execute appropriate documentation to insure the
result provided for in this Section 1.5(b).
1.6 Surrender and Payment. (a) Prior to the Effective Time, AMD shall
---------------------
appoint an agent reasonably satisfactory to NexGen (the "Exchange Agent") for
the purpose of exchanging certificates representing shares of NexGen Common
Stock as provided in Section 1.5. At the Effective Time, AMD will deposit with
the Exchange Agent certificates representing the aggregate number of shares of
AMD Common Stock to be issued in respect of shares of NexGen Common Stock.
Promptly after the Effective Time, AMD will send, or will cause the Exchange
Agent to send, to each holder of shares of NexGen Common Stock at the Effective
Time a letter of transmittal for use in such exchange (which shall specify that
the delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the certificates representing shares of NexGen Common Stock
to the Exchange Agent.
(b) Each holder of shares of NexGen Common Stock that have been converted
into a right to receive shares of AMD Common Stock upon surrender to the
Exchange Agent of a certificate or certificates representing such shares of
NexGen Common Stock, together with a properly completed letter of transmittal
covering such shares, will be entitled to receive the shares of AMD Common Stock
issuable in respect of such shares. Until so surrendered, each such certificate
shall, after the Effective Time, represent for all purposes only the right to
receive such shares of AMD Common Stock.
(c) If any shares of AMD Common Stock are to be paid to a person other
than the registered holder of the shares of NexGen Common Stock represented by
the certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the person requesting such payment shall pay to the
3
Exchange Agent any transfer or other taxes required as a result of such payment
to a person other than the registered holder of such shares of NexGen Common
Stock or establish to the satisfaction of the Exchange Agent that such tax has
been paid or is not payable.
(d) After the Effective Time, there shall be no further registration of
transfers of shares of NexGen Common Stock. If, after the Effective Time,
certificates representing shares of NexGen Common Stock are presented to NexGen
or AMD, they shall be canceled and exchanged for shares of AMD Common Stock in
accordance with the procedures set forth herein.
(e) Any shares of AMD Common Stock deposited with the Exchange Agent
pursuant to Section 1.6(a) that remain unclaimed by the holders of shares of
NexGen Common Stock twelve months after the Effective Time shall be returned to
AMD upon demand, and any such holder who has not exchanged his shares of NexGen
Common Stock for AMD in accordance with this Section 1.6 prior to that time
shall thereafter look only to AMD for his claim for AMD Common Stock, any cash
in lieu of fractional shares of AMD Common Stock and any dividends or
distributions with respect to AMD Common Stock. Notwithstanding the foregoing,
AMD shall not be liable to any holder of shares of AMD Common Stock for any
amount paid to a public official pursuant to applicable abandoned property laws.
(f) No dividends or other distributions with respect to the AMD Common
Stock to be issued in the Merger shall be paid to the holder of any
unsurrendered certificates representing shares of NexGen Common Stock until such
certificates are surrendered as provided in this Section 1.6. Upon such
surrender, there shall be paid, without interest, to the holder of the AMD
Common Stock into which such shares of NexGen Common Stock were converted, (1)
all dividends and other distributions in respect of AMD Common Stock that are
payable on a date subsequent to, and the record date for which occurs after, the
Effective Time, and (2) all dividends or other distributions in respect of
shares of NexGen Common Stock that are payable on a date subsequent to, and the
record date for which occurs before, the Effective Time.
1.7 Fractional Shares. No fractional shares of AMD Common Stock will be
-----------------
issued in connection with the Merger and no certificate therefor will be issued.
In lieu of such fractional shares, any holder of NexGen Common Stock who would
otherwise be entitled to a fraction of a share of AMD Common Stock shall, upon
surrender of his certificate or certificates representing NexGen Common Stock,
be paid an amount in cash (without interest) determined by multiplying such
fraction by the average of the last reported sales price, regular way, of AMD
Common Stock on the New York Stock Exchange (the "NYSE") for the twenty trading
days immediately preceding the Closing. The Exchange Agent will,
4
subject to any applicable abandoned property or similar law, until one year
after the Effective Time, pay to such holders, upon surrender of their
certificates, representing NexGen Common Stock outstanding immediately prior to
the Effective Time, the cash value of such fractions so determined, without
interest. This obligation shall be assumed by AMD one year after the Effective
Time subject to any applicable statute of limitations or any abandoned property
or similar law.
1.8 Assumption of Stock Options and Warrants. At the Effective Time, all
----------------------------------------
options or rights to purchase NexGen Common Stock then outstanding under the
NexGen 1995 Employee Stock Purchase Plan, the NexGen 1987 Stock Plan, and the
NexGen 1995 Stock Plan (the "NexGen Options"), all outstanding warrants to
purchase NexGen Common Stock (the "NexGen Warrants") and the option of ASCII to
acquire NexGen Common Stock under the ASCII Notes described in Section 2.2(b)
shall be assumed by AMD in accordance with the provisions of Section 5.3 hereof.
1.9 Stockholders' Approvals. AMD and NexGen shall each call a meeting of
-----------------------
their respective stockholders to consider and vote upon the approval of this
Agreement and the Merger contemplated hereby (the "AMD Stockholders' Meeting"
and the "NexGen Stockholders' Meeting"), all in accordance with the provisions
of the DGCL and the Securities Exchange Act of 1934, as amended ("the Exchange
Act"), as soon as practicable after AMD's registration statement on Form S-4
relating to the shares of AMD Common Stock to be issued in connection with the
Merger (the "S-4") shall have been declared effective by the Securities and
Exchange Commission (the "SEC") and the Proxy Statement, as defined in Section
4.2(c), has been cleared by the SEC.
1.10 Certificate of Incorporation, By-laws, Directors and Officers of
----------------------------------------------------------------
Surviving Corporation. At the Effective Time of the Merger, (i) the Certificate
---------------------
of Incorporation and By-laws of NexGen, as in effect immediately prior thereto,
shall be and remain the Certificate of Incorporation and By-laws of the
surviving corporation until thereafter amended in accordance with applicable law
and (ii) the officers and directors of NexGen shall be as set forth below:
Directors: X.X. Xxxxxxx III
Xxxxxxx Xxxxxxx
S. Xxxx Xxxx
Officers: S. Xxxx Xxxx, President and Secretary
Xxxxxxx X.X. Xxxx, Treasurer
1.11 Accounting Treatment. The parties intend that the Merger will be
--------------------
treated as a pooling-of-interests for accounting purposes by AMD.
5
1.12 Tax Consequences. For federal income tax purposes, the Merger is
----------------
intended to constitute a tax-free reorganization within the meaning of Section
368(a) of the Code.
1.13 Stock Subject to Conditions of Forfeiture. All shares of AMD Common
-----------------------------------------
Stock which are received in the Merger in exchange for shares of NexGen Common
Stock which, under agreements with NexGen or its subsidiaries, are unvested or
subject to a repurchase option or other condition of forfeiture which, by its
terms, does not terminate due to the Merger will also be unvested or subject to
the same repurchase option or other condition, as the case may be, and the
certificates evidencing such shares will be marked with appropriate legends.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF NEXGEN
Except as set forth in the schedule of disclosures and exceptions delivered
to AMD contemporaneously with the execution of this Agreement and initialled by
an officer of NexGen (the "NexGen Disclosure Schedule"), the sections of which
are numbered to correspond to the section numbers of this Agreement, NexGen
represents and warrants to AMD and AMD Merger as follows:
2.1 Organization; Qualification. NexGen is a corporation duly organized,
---------------------------
validly existing and in good standing under the laws of the State of Delaware.
NexGen has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted and is duly
qualified and in good standing to do business as a foreign corporation in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary, except where
the failure to have such power and authority or to be so duly qualified and in
good standing would not, in the aggregate, have a material adverse effect on the
business, operations or financial condition of NexGen. NexGen has previously
delivered to AMD complete and correct copies of NexGen's Certificate of
Incorporation and Bylaws.
2.2 Capitalization.
--------------
(a) NexGen's authorized capital stock consists of 125,000,000 shares
of NexGen Common Stock, $0.0001 par value per share, and 5,000,000 shares
of Preferred Stock, $0.0001 par value per share. As of September 30, 1995,
33,212,010 shares of NexGen Common Stock were issued and outstanding and
were designated for quotation on the Nasdaq National Market, no shares of
Preferred Stock were issued and outstanding, and no shares of NexGen Common
Stock or Preferred Stock were issued and held in the treasury. As of
6
September 30, 1995, NexGen had reserved 8,590,588 shares of NexGen Common
Stock for issuance pursuant to the NexGen employee benefit programs
described in Section 2.2 of the NexGen Disclosure Schedule and pursuant to
outstanding warrants and convertible securities.
(b) All outstanding shares of NexGen Common Stock are validly issued,
fully paid, nonassessable and free of preemptive rights. Section 2.2 of
the NexGen Disclosure Schedule contains a true and complete list of all
employee benefit programs and warrants which obligate or permit NexGen to
issue its capital stock to its directors, officers, employees, outside
independent sales representatives or other parties. Except for the options
and warrants issued pursuant to any of the employee benefit programs and
warrants described in Section 2.2 of the NexGen Disclosure Schedule, and
the option held by ASCII Corporation and ASCII of America, Inc.
(collectively "ASCII") pursuant to promissory notes between NexGen and
ASCII (the "ASCII Notes") which permit ASCII to convert all or a portion of
the ASCII Notes into shares of NexGen Common Stock, there are no
outstanding subscriptions, options, warrants, calls, rights, agreements or
commitments obligating NexGen to issue, sell, deliver or transfer
(including any right of conversion or exchange under any outstanding
security or other instrument) any shares of NexGen's capital stock.
(c) Except for this Agreement, the Section 2.23 Documents as defined
below, the employee benefit programs described in the NexGen Disclosure
Schedule and outstanding warrants, there are no agreements, restrictions or
understandings to which NexGen is a party, with respect to the sale,
transfer or voting of any shares of NexGen Common Stock.
2.3 Subsidiaries. Section 2.3 of the NexGen Disclosure Schedule contains
------------
a true and complete list of all of NexGen's subsidiaries (each such subsidiary
shall hereinafter separately be called a "NexGen Subsidiary" and all such
subsidiaries shall collectively be called the "NexGen Subsidiaries") and their
jurisdictions of incorporation. All of the shares of capital stock of each of
the NexGen Subsidiaries are owned directly or indirectly by NexGen, are validly
issued, fully paid and nonassessable and are owned free and clear of any liens,
claims, charges or encumbrances. There are no existing options, warrants, calls
or commitments of any character relating to the issued or unissued capital stock
of any of the NexGen Subsidiaries. NexGen has, and the NexGen Subsidiaries
have, no material investment in any subsidiary or any material investment in any
partnership, joint venture or similar entity, except as disclosed in Section 2.3
of the NexGen Disclosure Schedule, all
7
of which investments are owned free and clear of any liens, claims, charges or
encumbrances. Each of the NexGen Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. Each of the NexGen Subsidiaries has all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted and is duly qualified and in good standing to do
business as a foreign corporation in each jurisdiction in which the nature of
its business or the owning or leasing of its properties makes such qualification
necessary, except where the failure to have such power and authority or to be so
qualified would not, in the aggregate, have a material adverse effect on the
assets, properties, business or financial condition of NexGen and the NexGen
Subsidiaries taken as a whole.
2.4 Authority Relative to Agreements. NexGen has full corporate power and
--------------------------------
authority to execute and deliver this Agreement and the Credit Agreement and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Credit Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by the Board of Directors of NexGen, and no other corporate
proceedings on the part of NexGen are necessary for NexGen to authorize this
Agreement and the Credit Agreement or, other than approval of this Agreement by
NexGen's stockholders, to consummate the transactions contemplated hereby and
thereby. This Agreement and the Credit Agreement have been duly and validly
executed and delivered by NexGen and constitute valid and binding agreements of
NexGen, enforceable against NexGen in accordance with their terms.
2.5 Consents and Approvals; No Violation. Except as may be required by
------------------------------------
the Exchange Act, the Securities Act of 1933, as amended (the "Securities Act"),
Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), state securities laws and the DGCL, there is no requirement
applicable to NexGen or any of the NexGen Subsidiaries to make any filing with,
or to obtain any permit, authorization, consent or approval of, any governmental
or regulatory authority as a condition to the lawful consummation by NexGen of
the transactions contemplated by this Agreement. NexGen does not know of any
reason why any required permit, authorization, consent or approval will not be
obtained. Neither the execution and delivery of this Agreement or the Credit
Agreement by NexGen nor the consummation by NexGen of the transactions
contemplated by this Agreement or the Credit Agreement will (a) conflict with or
result in any breach of any provision of the Certificate of Incorporation or
Bylaws of NexGen, (b) result in a breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default), or impair
NexGen's or any of the NexGen Subsidiaries' rights or alter the rights or
8
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material contract,
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which NexGen or any of the NexGen
Subsidiaries is a party or by which NexGen or any of the NexGen Subsidiaries or
its or any of their respective properties is bound or affected, (c) violate in
any material respects any statute, rule, regulation, order, writ, injunction or
decree applicable to NexGen, any NexGen Subsidiary or any of their respective
assets where the consequences of such violation would, in the aggregate, have a
material and adverse effect on NexGen and the NexGen Subsidiaries taken as a
whole, or (d) result in the creation of any material, individually or in the
aggregate, liens, charges or encumbrances on any of the assets of NexGen or the
NexGen Subsidiaries.
2.6 SEC Reports and Financial Statements.
------------------------------------
(a) NexGen has previously furnished to AMD complete and correct
copies, including exhibits, of: (i) its prospectus dated May 24, 1995,
filed with the SEC on May 26, 1995, pursuant to Rule 424(b)(4) under the
Act (the "NexGen Prospectus"); (ii) its Annual Report (the "NexGen Annual
Report") on Form 10-K for the fiscal year ended June 30, 1995; (iii) all
reports or filings, other than the NexGen Annual Report, filed by NexGen
with the SEC (the "NexGen Other Reports"); and (iv) a draft of its
Quarterly Report (the "NexGen Draft Quarterly Report") on Form 10-Q for the
quarter ended September 30, 1995.
(b) As of their respective dates, the NexGen Prospectus, the NexGen
Annual Report, the NexGen Other Reports, and the NexGen Draft Quarterly
Report did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(c) NexGen has filed with the SEC all reports and registration
statements and other filings required to be filed with the SEC under the
rules and regulations of the SEC.
(d) The audited consolidated financial statements and unaudited
interim financial statements included in the reports or other filings
referred to in Section 2.6(a) were prepared in conformity with generally
accepted accounting principles applied on a consistent basis (except as may
be indicated therein or in the notes thereto, and except that the unaudited
interim financial statements do not include complete footnote disclosure),
fairly present the
9
consolidated financial position of NexGen and the NexGen Subsidiaries as of
the dates thereof and the consolidated results of operations and changes in
financial position of NexGen and the NexGen Subsidiaries for the periods
shown therein, subject, in the case of unaudited interim financial
statements, to normal year-end audit adjustments.
2.7 Undisclosed Liabilities. Neither NexGen nor any NexGen Subsidiary has
-----------------------
any material liability or obligation, secured or unsecured (whether absolute,
accrued, contingent or otherwise, and whether due or to become due), except for
any such material liability and obligation which (a) is accrued or reserved
against in the balance sheet as of June 30, 1995, contained in the NexGen Annual
Report for the period ended June 30, 1995, (the "NexGen Audited Balance Sheet"),
or disclosed in the notes included in the audited financial statements of NexGen
for the fiscal year ended June 30, 1995, contained in the NexGen Annual Report
(the "NexGen Audited Financial Statements"), (b) is of a normally recurring
nature and was incurred after June 30, 1995, in the ordinary course of business
consistent with past practice, or (c) was incurred in the ordinary course of
business and is not required to be disclosed in financial statements or the
notes thereto under generally accepted accounting principles.
2.8 Absence of Certain Changes or Events. Since June 30, 1995, there has
------------------------------------
not been:
(a) any material adverse change in the business, assets, liabilities,
financial condition or results of operations of NexGen and the NexGen
Subsidiaries taken as a whole or any event which could, so far as can
reasonably be foreseen, have such an effect;
(b) any damage, destruction or casualty loss, whether or not covered
by insurance, materially and adversely affecting, or which could materially
and adversely affect, the assets, properties, business, results of
operations or financial condition of NexGen and the NexGen Subsidiaries
taken as a whole;
(c) any material increase in the compensation payable or to become
payable by NexGen or any NexGen Subsidiary to its directors, officers or
employees or any material increase in any bonus, insurance, pension or
other employee benefit plan or program, payment or arrangement made to, for
or with any such directors, officers or employees, other than in the
ordinary course of business;
(d) any labor dispute, other than routine matters none of which is,
or so far as can reasonably be foreseen could be, materially adverse to the
assets, properties, business, results of operations or financial condition
of NexGen and
10
the NexGen Subsidiaries taken as a whole;
(e) any entry by NexGen or the NexGen Subsidiaries into any material
commitment or transaction (including, without limitation, any borrowing or
capital expenditure), other than in the ordinary course of business;
(f) any change by NexGen or the NexGen Subsidiaries in accounting
methods, principles or practices, except as required by generally accepted
accounting principles or concurred with by NexGen's independent certified
public accountants;
(g) any declaration, payment or setting aside for payment of any
dividend (whether in cash, stock or property) with respect to the capital
stock of NexGen; or
(h) any material agreement, whether in writing or otherwise, to take
any action described in this Section 2.8.
2.9 Proxy Statement. None of the information relating to NexGen which is
---------------
furnished to AMD by NexGen for the purpose of inclusion in or the preparation of
(i) the Proxy Statement (as defined in Section 4.2(c)) at the time the Proxy
Statement is mailed, at the time of the meeting of NexGen's stockholders to vote
on the Merger or at the Effective Time of the Merger, as then amended or
supplemented, or (ii) the S-4 to be filed by AMD with the SEC pursuant to
Section 5.2(d) at the time the S-4 becomes effective or at the Effective Time of
the Merger, as then amended or supplemented, will contain any statement which,
at the time and in light of the circumstances under which it is made, is false
or misleading with respect to any material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading or necessary to correct any statement which has become
false or misleading in any earlier communication with respect to the
solicitation of proxies for the NexGen Stockholders' Meeting. The Proxy
Statement as it relates to NexGen will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder in effect at the time the Proxy Statement is mailed.
2.10 Certain Contracts and Arrangements. Except for agreements listed as
----------------------------------
exhibits to the NexGen Annual Report, none of NexGen or any Of the NexGen
Subsidiaries is a party to any material: (a) employment agreement; (b)
collective bargaining agreement; (c) license agreement or arrangement; (d)
indenture, mortgage, note, installment obligation, agreement or other instrument
relating to the borrowing of money in excess of $50,000 by NexGen or any NexGen
Subsidiary or the guaranty of any obligation for the borrowing of money by
NexGen or any NexGen Subsidiary in excess of such amount; or (e) agreement
(other than
11
contracts for insurance) which (i) is not terminable by NexGen, or a NexGen
Subsidiary, as applicable, on ninety (90) or fewer days notice at any time
without penalty and involves the receipt or payment by NexGen or a NexGen
Subsidiary of more than $50,000 in any 12 month period, (ii) any joint venture,
partnership or similar arrangement extending beyond six (6) months or involving
equity or investments of more than $50,000, or (iii) is otherwise material to
NexGen or the NexGen Subsidiaries taken as a whole. There is not, under any of
the aforesaid agreements or obligations, any material default or event of
default by NexGen or other event which (with or without notice, lapse of time or
both) would constitute a material default or event of default by NexGen or any
NexGen Subsidiary. Except as disclosed in the NexGen Prospectus, no director or
officer of NexGen or any NexGen Subsidiary, and to the knowledge of the
executive officers of NexGen, no person who is an affiliate of any such director
or officer has any material contractual relationship with NexGen or any NexGen
Subsidiary.
2.11 Legal Proceedings. Except as disclosed in the footnotes to the
-----------------
NexGen Audited Financial Statements or the NexGen Annual Report there are no
pending or, to the knowledge of NexGen, threatened legal, administrative,
arbitration or other proceedings or governmental investigations or reviews
against NexGen or any NexGen Subsidiary which could, individually or in the
aggregate, have a material adverse effect on the business, results of operations
or financial condition of NexGen and the NexGen Subsidiaries taken as a whole or
on the ability of NexGen to carry out the transactions contemplated in this
Agreement. Neither NexGen nor any NexGen Subsidiary is in default with respect
to any order, writ, award, judgment, injunction or decree of any court or
governmental or administrative body or agency applicable to it which could have
a materially adverse effect on the consolidated assets, properties, business or
financial condition of NexGen and the NexGen Subsidiaries taken as a whole.
2.12 No Violation. Except as disclosed in the NexGen Annual Report,
------------
NexGen and the NexGen Subsidiaries have substantially complied with all
applicable laws, ordinances, regulations, judgments, decrees, injunctions or
orders of any court or other governmental entity, except for violations which,
individually or in the aggregate, do not and are not expected to have a material
adverse effect on the operations, business or financial condition of NexGen and
the NexGen Subsidiaries taken as a whole.
2.13 Taxes and Tax Returns.
---------------------
(a) General Tax Representations. NexGen represents and warrants, on
---------------------------
behalf of itself and each of the NexGen Subsidiaries, that (i) each of
NexGen and the NexGen Subsidiaries has timely filed (or will timely file
prior to
12
the Closing) all federal, state, local and foreign tax returns required to
be filed by it prior to the Closing, (ii) each of NexGen and the NexGen
Subsidiaries has timely paid (or will do so prior to the Closing) or made
adequate provision for the payment of all taxes (which are separately or in
the aggregate material), as defined below, due and payable by it (without
regard to whether or not such taxes have been assessed); (iii) all material
information contained in or provided in connection with the tax returns
filed by (or to be filed by) NexGen or any of the NexGen Subsidiaries is
(or will be) true, complete and accurate; (iv) NexGen and each of the
NexGen Subsidiaries has no liability for unpaid taxes (which are separately
or in the aggregate material), whether or not disputed, accrued or
applicable for the period ended June 30, 1995, and for all years and
periods ended prior thereto, except for amounts reserved on the NexGen
Audited Balance Sheet; (v) the California Bank and Corporation Franchise
and Corporation Income tax returns of NexGen and of each of the NexGen
Subsidiaries have been audited by the Franchise Tax Board ("FTB") or the
statutes of limitations with respect to California Bank and Corporation
Franchise and Corporation Income taxes have all expired, for all fiscal
years to and including the fiscal year ended June 30, 1988; (vi) the
federal income tax returns of NexGen and each of the NexGen Subsidiaries
have been audited by the Internal Revenue Service ("IRS"), or the statutes
of limitations with respect to federal income taxes have all expired, for
all fiscal years to and including the fiscal year ended June 30, 1988;
(vii) all deficiencies asserted as a result of all foreign, if any, U.S.
federal, state and local tax examinations have been paid, fully settled or
adequately provided for as a tax liability in the NexGen Audited Balance
Sheet; (viii) there are no audits, investigations, examinations or tax
litigation matters threatened or pending, nor have any claims been made or
asserted, for or with respect to taxes (which are separately or in the
aggregate material) of NexGen or any of the NexGen Subsidiaries; (ix) there
are no outstanding agreements or waivers extending the statutory period of
limitation on assessment or collection applicable to any tax return or tax
period of NexGen or any of the NexGen Subsidiaries; (x) neither NexGen nor
any of the NexGen Subsidiaries has filed a consent to the application of
Section 341(f) of the Code; and (xi) to the best of NexGen's knowledge,
NexGen's stockholders do not have, and as of the Closing will not have, any
present intention, plan or arrangement to sell, transfer or otherwise
dispose of, in the aggregate, that number of the shares of AMD Common Stock
to be received by them pursuant to the terms of this Agreement which would
result, after all such transfers are made, in such stockholders retaining
and holding, after the Closing, shares of AMD common stock having an
aggregate
13
value of less than fifty percent (50%) of the aggregate value of the NexGen
Common Stock held by all of NexGen's shareholders immediately prior to the
Closing.
(b) Withholding. NexGen and each of the NexGen Subsidiaries has
-----------
withheld from its employees, customers and any other applicable payees (and
timely paid to the appropriate governmental entity) proper and accurate
amounts for all periods through the date hereof in compliance with all tax
withholding laws (including, without limitation, income, social security
and employment tax withholding for all types of compensation, back-up
withholding and withholding on payments to non-United States persons).
(c) Tax Sharing Agreements. There is no contract, agreement or
----------------------
intercompany account system in existence pursuant to which NexGen or any of
the NexGen Subsidiaries has, or may at any time in the future have, an
obligation to contribute to the payment of any portion of a tax (or pay any
amount calculated with reference to any portion of a tax) determined on a
consolidated, combined or unitary basis with respect to an affiliated group
or other group of corporations of which NexGen or any NexGen Subsidiary is
or was a member.
(d) Taxes Since June 30, 1995. Since June 30, 1995, NexGen and the
-------------------------
NexGen Subsidiaries have not incurred any material tax liability other than
taxes incurred (i) in the ordinary course of their business, (ii) pursuant
to a change set forth in Section 2.8(f) of the NexGen Disclosure Schedule,
or (iii) pursuant to a transaction permitted under Section 4.1 of this
Agreement.
(e) Tax Methods. Since June 30, 1995, NexGen and the NexGen
-----------
Subsidiaries have used tax accounting methods, practices and elections
consistent with past practices.
(f) Definitions. (i) The term "tax" or "taxes" shall mean all taxes,
-----------
charges, fees, levies or other assessments, including, without limitation,
income, gross receipts, ad valorem, value added, alternative or add-on
minimum, capital stock, registration, net worth, severance, stamp, windfall
profits, environmental (including taxes under Section 59A of the Code),
excise, property, sales, use, license, payroll, employment, disability,
social security, workers' compensation, franchise, duties, business or
other occupation, withholding, transfer or recording taxes, fees, charges
and obligations, imposed by the United States, or any state, local or other
political subdivision or agency thereof, as well as any foreign government
or other political subdivision or agency thereof, whether computed on a
consolidated, unitary, combined or any other basis; and
14
such term shall include any and all interest, penalties and additions to
tax, as well as any primary or secondary liability for taxes. (ii) The
term "tax return" shall mean any report, election, claim, information
statement, filing, return or other document or information required by law
to be supplied to a taxing authority in connection with taxes, including
any schedules, supplements or attachments thereto.
2.14 Employee Benefit Plans.
----------------------
(a) Section 2.14(a) of the NexGen Disclosure Schedule lists each
employee benefit plan, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA") and hereinafter referred
to as "Employee Benefit Plan(s)," which NexGen or any of the NexGen
Subsidiaries maintains or administers, or to which NexGen or any of the
NexGen Subsidiaries contributes or is required to contribute, or with
respect to which NexGen has or may incur any present or future obligation.
True and correct copies of all Employee Benefit Plans, and all related
trust agreements, annuity contracts and any other funding instruments have
been furnished to AMD, together with (i) the most recent annual report
(Form 5500 series, including, if applicable, Schedule B thereto), (ii) the
most recent actuarial valuations, if any, and (iii) all "summary plan
descriptions" and "summaries of material modifications" (as defined in
Section 102 of ERISA and the regulations thereunder) prepared in connection
with each Employee Benefit Plan. Neither NexGen nor any of the NexGen
Subsidiaries is a participant in any "multi-employer plan" within the
meaning of Section 4001(a)(3) of ERISA.
(b) Section 2.14(b) of the NexGen Disclosure Schedule lists all
plans, agreements or arrangements, exclusive of any Employee Benefit Plan,
relating to any form of current or deferred compensation (exclusive of base
salary and base wages), bonus, stock option, stock purchase, incentive,
vacation, health, dental, disability and death benefits which NexGen or any
of the NexGen Subsidiaries maintains or administers, or to which NexGen or
any of the NexGen Subsidiaries contributes or is required to contribute, or
with respect to which NexGen has or may incur any present or future
obligation. True and correct copies of all such plans, agreements or
arrangements (hereinafter referred to collectively as "NexGen Benefit
Arrangements") have been furnished to AMD.
(c) Each Employee Benefit Plan (and any related trust agreements,
annuity contracts and other funding instruments) has been and is being
administered and operated in accordance with its terms and has complied,
and complies currently, in all material respects, with the provisions of
15
ERISA and of the Code and all other applicable laws, rules and regulations.
Each NexGen Benefit Arrangement has been and is being administered and
operated in accordance with its terms and has complied, and currently
complies, with the provisions of all applicable laws, rules and
regulations. All reports required by any governmental agencies have been
timely filed with respect to all Employee Benefit Plans and all NexGen
Benefit Arrangements.
Each Employee Benefit Plan which is intended to be tax qualified under
Section 401(a) or Section 403 of the Code is so qualified and has received
a favorable determination letter, covering all amendments thereto, from the
IRS indicating that it is so qualified. Each trust which is intended to be
tax-exempt--under Section 501(a) of the Code is exempt from taxation.
(d) No "prohibited transaction," as defined in Section 406 of ERISA
and Section 4975 of the Code, has occurred with respect to any Employee
Benefit Plan which could subject any person or entity (other than a person
or entity for whom NexGen or any of the NexGen Subsidiaries is not directly
or indirectly responsible) to liability under Title I of ERISA or to the
imposition of any tax under Section 4975 of the Code.
(e) Other than for claims in the ordinary course for benefits under
any and all Employee Benefit Plans or NexGen Benefit Arrangements, there
are no actions, suits, claims or proceedings pending or, to the best
knowledge of NexGen, threatened, nor does there exist any basis therefor,
which could result in any material liability on the part of NexGen or any
NexGen Subsidiary with respect to any Employee Benefit Plan or NexGen
Benefit Arrangement.
(f) Neither NexGen nor any NexGen Subsidiary maintains any Employee
Benefit Plan subject to Title IV of ERISA.
(g) There has been no amendment to, or changes in the actuarial
assumptions or funding of, any Employee Benefit Plan or NexGen Benefit
Arrangement which would materially increase the annual expense associated
with such plan or arrangement above the level of the expense set forth in
the NexGen Consolidated Statement of Operations for the fiscal year ended
June 30, 1995.
2.15 Intellectual Property.
---------------------
(a) NexGen owns, or is licensed or otherwise possesses legally
sufficient rights to use, all patents, trademarks, trade names, service
marks, copyrights, maskworks and any applications therefor, technology,
know-how, computer
16
software programs or applications (in both source code and object code
form) and tangible or intangible proprietary information or material that
are used or proposed to be used in the business of NexGen as currently
conducted in any material respect. Section 2.15(a) of the NexGen
Disclosure Schedule lists all current and past (lapsed, expired, abandoned
or cancelled) patents, registered and material unregistered copyrights,
maskworks, trade names and any applications therefor owned by NexGen (the
"NexGen Intellectual Property Rights"), and specifies the jurisdictions in
which each such Intellectual Property Right has been issued or registered
or in which an application for such issuance and registration has been
filed, including the respective registration or application numbers and the
names of all registered owners, together with a list of all of NexGen's
currently marketed software products and an indication as to which, if any,
of such software products have been registered for copyright protection
with the United States Copyright Office and any foreign offices and by whom
such items have been registered. Section 2.15(a) of the NexGen Disclosure
Schedule includes and specifically identifies all third-party patents,
trademarks, copyrights (including software) and maskworks (the "Third Party
Intellectual Property Rights"), to the knowledge of NexGen, which are
incorporated in, are, or form a part of, any NexGen product. Section
2.15(a) of the NexGen Disclosure Schedule lists (i) any requests NexGen has
received to make any registration of the type referred to in the
penultimate sentence prior hereto, including the identity of the requestor
and the item requested to be so registered, and the jurisdiction for which
such request has been made; (ii) all material licenses, sublicenses and
other agreements as to which the Company is a party and pursuant to which
any person is authorized to use NexGen Intellectual Property Right, or any
trade secret material to NexGen; and (iii) all material licenses,
sublicenses and other agreements as to which NexGen is a party and pursuant
to which NexGen is authorized to use any Third Party Intellectual Property
Rights, or other trade secret of a third party in or as any product, and
includes the identity of all parties thereto, a description of the nature
and subject matter thereof, the applicable royalty and the term thereof.
(b) NexGen is not, nor will it be as a result of the execution and
delivery of this Agreement or the performance of its obligations hereunder,
in violation of any license, sublicense or agreement described in Section
2.15(a) of the NexGen Disclosure Schedule. No claims with respect to the
NexGen Intellectual Property Rights, any trade secret material to NexGen,
or Third Party Intellectual Property Rights to the extent arising out of
any use, reproduction or distribution of such Third Party Intellectual
Property
17
Rights by or through NexGen, are currently pending or, to the knowledge of
NexGen, are threatened by any person, nor does NexGen know of any valid
grounds for any bona fide claims (i) to the effect that the manufacture,
sale, licensing or use of any product as now used, sold or licensed or
proposed for use, sale or license by NexGen infringes on any copyright,
maskwork, patent, trademark, service xxxx or trade secret; (ii) against
the use by NexGen of any trademarks, trade names, trade secrets,
copyrights, maskworks, patents, technology, know-how or computer software
programs and applications used in NexGen's business as currently conducted
or as proposed to be conducted by NexGen; (iii) challenging the ownership,
validity or effectiveness of any of NexGen's Intellectual Property Rights
or other trade secret material to NexGen, or (iv) challenging NexGen's
license or legally enforceable right to use of the Third Party Intellectual
Rights. To NexGen's knowledge, after reasonable investigation, all
patents, registered trademarks, maskworks and copyrights held by NexGen are
valid and subsisting. To NexGen's knowledge, there is no material
unauthorized use, infringement or misappropriation of any of the NexGen
Intellectual Property by any third party, including any employee or former
employee of NexGen or any of the NexGen Subsidiaries. Neither NexGen nor
any of the NexGen Subsidiaries (i) has been sued or charged in writing as a
defendant in any claim, suit, action or proceeding which involves a claim
or infringement of trade secrets, any patents, trademarks, service marks,
maskworks or copyrights and which has not been finally terminated prior to
the date hereof or been informed or notified by any third party that NexGen
may be engaged in such infringement or (ii) has knowledge of any
infringement liability with respect to, or infringement by, NexGen or any
of the NexGen Subsidiaries of any trade secret, patent, trademark, service
xxxx, maskwork or copyright of another.
(c) Neither the execution and delivery of this Agreement or the
Credit Agreement by NexGen nor the consummation by NexGen of the
transactions contemplated by this Agreement or the Credit Agreement will
result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default), or impair NexGen's
or any of the NexGen Subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any license
agreement, contract or other arrangement of any nature relating to NexGen
Intellectual Property Rights or Third Party Intellectual Property Rights.
(d) Each employee of NexGen has executed a
18
confidentiality, invention and copyright agreement with NexGen in the forms
previously delivered to AMD.
2.16 Title to Properties. NexGen or a NexGen Subsidiary has good and
-------------------
marketable title to all properties and assets reflected on the NexGen Audited
Balance Sheet as owned by it and to properties or assets acquired by it or a
NexGen Subsidiary after the date thereof (except for equipment which is subject
to capital leases and properties sold or otherwise disposed of in the ordinary
course of business since the date of the NexGen Audited Balance sheet), free and
clear of all title defects and all liens, mortgages, pledges, claims, charges,
security interests or other encumbrances of any nature whatsoever except as
stated in the NexGen Annual Report or which alone or in the aggregate do not
materially detract from the value, or materially interfere with the present use,
of any material asset or property or of the assets or properties of NexGen and
the NexGen Subsidiaries as a whole or otherwise materially impair the business
of NexGen and the NexGen Subsidiaries as a whole.
2.17 Insurance. NexGen and each of the NexGen Subsidiaries has insurance
---------
on its officers, directors, employees, business operations and property, in such
amounts as are reasonable and deemed adequate by its Board of Directors or
management, against all risks usually insured against by persons operating
similar properties or businesses in the localities where such properties are
located, under, to the best of NexGen's knowledge, valid and enforceable
policies issued by insurers of recognized responsibility, and such policies
shall not, pursuant to their terms, in any way be affected by, or terminate or
lapse by reason of, the Merger. Section 2.17 of the NexGen Disclosure Schedule
contains a list of the policies of fire, casualty, liability, title, workers'
compensation and other forms of insurance held by NexGen, a list of all
liability policies and self-insured retentions (including the names of insurers
and the limits of liability for each policy) for the past nine years, as well as
a description of general liability loss details for the past five years and any
exposure ordinarily covered by commercial insurance which is self-insured.
NexGen has not done anything, either by way of action or inaction, that might
invalidate such policies in whole or in part.
2.18 Transactions with Management. Except as disclosed in the documents
----------------------------
described in Section 2.6(a), no executive officer, director or, stockholder of
NexGen or any of the NexGen Subsidiaries has, since June 30, 1995, engaged in
any business dealings with NexGen or any of the NexGen Subsidiaries other than
such business dealings as would not be required to be disclosed in such
documents or reports pursuant to the Securities Act and the rules and
regulations promulgated thereunder. No executive officer or director of NexGen
or any of the NexGen Subsidiaries (except in his capacity as such) has any
direct or indirect
19
material interest in (i) any property or assets of NexGen or that of any of the
NexGen Subsidiaries (except as a stockholder), (ii) any competitor, customer,
supplier or agent of NexGen or any of the NexGen Subsidiaries, or (iii) any
person which is a party to any contract or agreement which is material to NexGen
or any of the NexGen Subsidiaries.
2.19 Disclosure. No representations or warranties by NexGen in this
----------
Agreement or the NexGen Disclosure Schedule and no statement by NexGen or, to
the best knowledge of NexGen, any other person, contained in any document,
certificate or other writing furnished by NexGen to AMD in connection with the
preparation of the Proxy Statement or the S-4, contains any untrue statement of
a material fact or omits any material fact necessary to make the statements made
herein or therein, in light of the circumstances under which they were made, not
misleading.
2.20 Brokerage and Finders' Fees. NexGen has not incurred and will not
---------------------------
incur any liability for brokerage or finders' fees or agents commissions in
connection with this Agreement or the Merger other than fees agreed to be paid
to PaineWebber Incorporated in consideration for investment banking advice and
the rendering of a fairness opinion with respect to the Merger. NexGen has
provided AMD with a true copy of the agreement between NexGen and PaineWebber
Incorporated regarding the services to be rendered by such firm in connection
with the Merger. The fees to be paid to PaineWebber Incorporated and will be
equal to 0.45% of the fair market value as of the Effective Time of the AMD
Common Stock to issued in the Merger plus expenses. NexGen has received a
fairness opinion rendered by PaineWebber Incorporated and a copy of such opinion
is attached to the NexGen Disclosure Schedule.
2.21 Actions Affecting Pooling. Aside from any actions contemplated by
-------------------------
this Agreement, NexGen has not taken or permitted any action relating to NexGen
which would prevent the Merger from qualifying for pooling-of-interests
accounting treatment in accordance with generally accepted accounting principles
and all rules, regulations and policies of the SEC.
2.22 Takeover Statutes. No "fair price," "moratorium," "control share
-----------------
acquisition" or other similar anti-takeover statute or regulation enacted under
state or federal laws in the United States (each a "Takeover Statute"),
including, without limitation, Section 203 of the DGCL, applicable to NexGen or
any of the NexGen Subsidiaries, is applicable to the Merger or the other
transactions contemplated hereby.
2.23 Agreements of Affiliates and Others. As evidenced by the executed
-----------------------------------
Voting Agreements in the form of Exhibit A, which have been delivered to AMD,
the persons listed in Section 2.23 of the NexGen Disclosure Schedule have agreed
to vote all shares of
20
NexGen Common Stock held by such persons in favor of the Agreement and the
Merger as more fully set forth in such agreement. All persons who are believed
by NexGen or its counsel to be affiliates, as defined in the Securities Act and
in the rules promulgated thereunder, of NexGen, which determination shall be
reasonably satisfactory to counsel for AMD, have executed Affiliate Agreements
in the form attached hereto as Exhibit B, which have been delivered to AMD. The
documents executed by the stockholders of NexGen referred to in this Section
2.23 are referred to hereinafter and after as the "Section 2.23 Documents."
2.24 Employee Relations. NexGen has excellent relations with its key
------------------
employees and has no reason to believe that any of its key employees will not
continue in the employment of NexGen following the execution hereof.
2.25 Environmental Matters. Except with respect to matters which in the
---------------------
aggregate have not had and could not reasonably be expected to have a material
adverse effect on NexGen, NexGen and each of the NexGen Subsidiaries to the best
of NexGen's knowledge (i) have obtained all applicable permits, licenses and
other authorizations which are required under federal, state, provincial or
local laws relating to pollution or protection of the environment, including
laws relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants or hazardous or toxic materials or wastes into ambient
air, surface water, ground water or land or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or hazardous or toxic
materials or wastes by NexGen or the NexGen Subsidiaries (or their respective
agents); (ii) are in compliance with all the terms and conditions of such
required permits, licenses and authorization, and also are in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in such laws or
contained in any regulation, code, plan, order, decree, judgment, notice or
demand letter issued, entered, promulgated or approved thereunder; (iii) as of
the date hereof, are not aware of nor have received notice of any event,
condition, circumstance, activity, practice, incident, action or plan which is
reasonable likely to interfere with or prevent continued compliance with or
which would give rise to any common law or statutory liability, or otherwise
form the basis of any claim, action, suit or proceeding, based on or resulting
from NexGen's or any NexGen Subsidiary's (or any of their respective agents)
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge or release into the
environment, of any pollutant, contaminant or hazardous or toxic material or
waste; and (iv) have taken all actions necessary under applicable requirements
of federal, state or
21
local laws, rules or regulations to register any products or materials required
to be registered by NexGen or the NexGen Subsidiaries (or any of their
respective agents) thereunder.
2.26 Commercial Relationships. NexGen has no reason to believe that
------------------------
either IBM or VLSI will elect not to continue their relationships with NexGen
following the Effective Time.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF AMD AND AMD MERGER
Except as set forth in the schedule of disclosures and exceptions delivered
to NexGen contemporaneously with the execution of this Agreement and initialled
by an officer of AMD (the "AMD Disclosure Schedule"), the sections of which are
numbered to correspond to the section numbers of this Agreement, AMD and AMD
Merger represent and warrant to NexGen as follows:
3.1 Organization; Qualification. Each of AMD and AMD Merger is a
---------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. AMD has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted and is duly qualified and in good standing to do business as a
foreign corporation in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to have such power and
authority or to be so duly qualified and in good standing would not, in the
aggregate, have a material adverse effect on the business, operations or
financial condition of AMD. AMD has previously delivered to NexGen complete and
correct copies of the Certificate of Incorporation and Bylaws of each of AMD and
AMD Merger.
3.2 Capitalization.
--------------
(a) The authorized common stock of AMD consists of 250,000,000
shares, $.01 par value. As of October 18, 1995, 104,510,668 of such shares
were issued and outstanding and listed on the New York Stock Exchange (the
"NYSE"), and 245,021 of such shares were issued and held as treasury
shares. The authorized preferred stock of AMD consists of 1,000,000 shares
of serial preferred stock, $0.10 par value, of which no shares are issued
and outstanding. AMD has reserved 14,973,925 shares of common stock for
issuance pursuant to employee benefit plans described in Section 3.2 of the
AMD Disclosure Schedule.
(b) All outstanding shares of AMD Common Stock are, and the shares of
AMD Common Stock issuable in the Merger,
22
when issued in accordance with the terms of this Agreement, will be,
validly issued, fully paid, nonassessable and free of preemptive rights.
Section 3.2 of the AMD Disclosure Schedule contains a true and complete
list of all employee benefit plans which obligate or permit AMD to issue
its capital stock to its directors, officer, employees or other parties.
Except for the options issued pursuant to any of the employee benefit plans
described in Section 3.2 of the AMD Disclosure Schedule, there are no
outstanding subscriptions, options, warrants, calls, rights, agreements or
commitments obligating AMD or any of its subsidiaries to issue, sell,
deliver or transfer (including any right of conversion or exchange under
any outstanding security or other instrument) any shares of AMD capital
stock.
(c) Except for this Agreement or as set forth in the AMD Annual
Reports or the AMD 1995 Proxy Statement (as defined in Section 3.6(a)),
there are no agreements, restrictions or understandings to which AMD is a
party, with respect to the sale, transfer or voting of any shares of AMD
Common Stock.
3.3 Subsidiaries. Section 3.3 of the AMD Disclosure Schedule contains a
------------
true and complete list of all of AMD's subsidiaries (each such subsidiary shall
hereinafter separately be called an "AMD Subsidiary" and all of such
subsidiaries shall collectively be called the "AMD Subsidiaries") and their
jurisdictions of incorporation. All of the shares of capital stock of each of
the AMD Subsidiaries are owned directly or indirectly by AMD, are validly
issued, fully paid and nonassessable and are owned free and clear of any liens,
claims, charges or encumbrances. There are no existing options, warrants, calls
or commitments of any character relating to the issued or unissued capital stock
of any of the AMD Subsidiaries. AMD has, and the AMD Subsidiaries have, no
material investment in any subsidiary or any material investment in any
partnership, joint venture or similar entity, except as disclosed in Section 3.3
of the AMD Disclosure Schedule, all of which investments are owned free and
clear of any liens, claims, charges or encumbrances. Each of the AMD
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each of the
AMD Subsidiaries has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted
and is duly qualified and in good standing to do business as a foreign
corporation in each jurisdiction in which the nature of its business or the
owning or leasing of its properties makes such qualification necessary, except
where the failure to have such power and authority or to be so qualified would
not, in the aggregate, have a material adverse effect on the assets, properties,
business or financial condition of AMD and the AMD Subsidiaries taken as a
whole.
23
3.4 Authority Relative to this Agreement. Each of AMD and AMD Merger has
------------------------------------
full corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of AMD and AMD Merger
and by AMD as the sole stockholder of AMD Merger, and no other corporate
proceedings on the part of AMD or AMD Merger are necessary to authorize this
Agreement, other than approval of this Agreement by AMD's stockholders, or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by AMD and AMD Merger and constitutes the
valid and binding agreement of each of AMD and AMD Merger, enforceable against
AMD and AMD Merger in accordance with its terms.
3.5 Consents and Approvals; No Violation. Except for applicable
------------------------------------
requirements of the HSR Act, the Exchange Act, the Securities Act, state
securities laws, the NYSE and the DGCL, there is no requirement applicable to
AMD or AMD Merger to make any filing with, or to obtain any permit,
authorization, consent or approval of any governmental or regulatory authority
as a condition to the lawful consummation by AMD and AMD Merger of the
transactions contemplated by this Agreement. AMD does not know of any reason
why any required permit, authorization, consent or approval will not be
obtained. Except as set forth in Section 3.5 of the AMD Disclosure Statement,
neither the execution and delivery of this Agreement by AMD and AMD Merger nor
the consummation by AMD and AMD Merger of the transactions contemplated by this
Agreement will (a) conflict with or result in any breach of any provision of the
Certificate of Incorporation or Bylaws of AMD or AMD Merger, (b) result in a
breach of or constitute a default (or any event that with notice or lapse of
time or both would become a default), or impair AMD's or any of the AMD
Subsidiaries' rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material contract, note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which AMD or any of the AMD Subsidiaries is a party or by which
AMD or any of the AMD Subsidiaries or its or any of their respective properties
is bound or affected, (c) violate, in any material respects any statute, rule,
regulation, order, writ, injunction or decree applicable to AMD, any Subsidiary
or any of their respective assets, where the consequences of such violation
would, in the aggregate, have a material and adverse effect on AMD and the AMD
Subsidiaries taken as a whole, or (d) result in the creation of any material,
individually or in the aggregate, liens, charges or encumbrances on any of the
assets of AMD or the AMD Subsidiaries.
24
3.6 SEC Reports and Financial Statement.
-----------------------------------
(a) AMD has previously furnished to NexGen complete and correct
copies, including exhibits, of: (i) its Annual Reports on Form 10-K for
the years ended December 27, 1992, December 26, 1993, and December 25, 1994
(the "AMD Annual Reports"); (ii) its Quarterly Reports on Form 10-Q for the
quarters ended April 2, 1995, and July 2, 1995 (the "AMD Quarterly
Reports"); (iii) its proxy statement relating to its most recent annual
meeting of stockholders held on May 9, 1995 (the "AMD 1995 Proxy
Statement"); and (iv) all reports or filings other than the AMD Annual
Reports, the AMD Quarterly Reports and the AMD 1995 Proxy Statement filed
by AMD with the SEC since December 28, 1992 (the "AMD Other Reports").
(b) As of their respective dates, the AMD Annual Reports, the AMD
Quarterly Reports, the AMD 1995 Proxy Statement and the AMD Other Reports
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(c) Since December 25, 1994, AMD has filed with the SEC all reports
and registration statements and all other filings required to be filed with
the SEC under the rules and regulations of the SEC.
(d) The audited consolidated financial statements unaudited interim
financial statements included in reports or other filings referred to in
Section 3.6(a) were prepared in conformity with generally accepted
accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto, and except that the unaudited
interim financial statements do not include complete footnote disclosures)
and fairly present the consolidated financial position of AMD and the AMD
Subsidiaries as of the dates thereof and the consolidated results of
operations and changes in financial position of AMD and the AMD
Subsidiaries for the periods shown therein, subject, in the case of
unaudited interim financial statements, to normal year-end audit
adjustments.
3.7 Undisclosed Liabilities. Neither AMD nor any AMD Subsidiary has any
-----------------------
material liability or obligation, secured or unsecured (whether absolute,
accrued, contingent or otherwise, and whether due or to become due), except for
any such material liability and obligation which (a) is accrued or reserved
against in the consolidated balance sheet as of July 2, 1995, contained in the
AMD Quarterly Report for the period ended July 2, 1995 (the "AMD Unaudited
Balance Sheet"), or disclosed in the notes
25
included in the audited financial statement of AMD for the fiscal year ended
December 25, 1994, contained in the AMD Annual Report for the period ended
December 25, 1994 (the "AMD Audited Financial Statements"), (b) is of a normally
recurring nature and was incurred after December 25, 1994, in the ordinary
course of business and consistent with past practice, or (c) was incurred in the
ordinary course of business and is not required to be disclosed in financial
statements or the notes thereto under generally accepted accounting principles.
3.8 Absence of Certain Changes or Events. Except as set forth in Section
------------------------------------
3.8 of the AMD Disclosure Schedule, since July 2, 1995, there has not been:
(a) any material adverse change in the business, assets, liabilities,
financial condition or results of operations of AMD and the AMD
Subsidiaries taken as a whole or any event which could, so far as can
reasonably be foreseen, have such an effect;
(b) any damage, destruction or casualty loss, whether or not covered
by insurance, materially and adversely affecting, or which could materially
and adversely affect, the assets, properties, business, results of
operations or financial condition of AMD and the AMD Subsidiaries taken as
a whole;
(c) any material increase in the compensation payable or to become
payable by AMD or any AMD Subsidiary to its directors, officers or
employees or any material increase in any bonus, insurance, pension or
other employee benefit plan, payment or arrangement made to, for or with
any such directors, officers or employees, other than in the ordinary
course of business;
(d) any labor dispute, other than routine matters none of which is,
or so far as can reasonably be foreseen could be, materially adverse to the
assets, properties, business, results of operations or financial condition
of AMD and the AMD Subsidiaries taken as a whole;
(e) any entry by AMD or the AMD Subsidiaries into any material
commitment or transaction (including, without limitation, any borrowing or
capital expenditure), other than in the ordinary course of business;
(f) any change by AMD or the AMD Subsidiaries in accounting methods,
principles or practices, except as required by generally accepted
accounting principles or concurred with by AMD's independent certified
public accountants;
26
(g) any declaration, payment or setting aside for payment of any
dividend (whether in cash, stock or property) with respect to the capital
stock of AMD; or
(h) any material agreement, whether in writing or otherwise, to take
any action described in this Section 3.8.
3.9 Proxy Statement. None of the information relating to AMD included in
---------------
(i) the Proxy Statement (as defined in Section 4.2(c)) at the time the Proxy
Statement is mailed, at the time of the meeting of AMD's stockholders to vote on
the Merger or at the Effective Time of the Merger, as then amended or
supplemented, or (ii) the S-4 to be filed by AMD with the SEC pursuant to
Section 5.2(d) at the time the S-4 becomes effective or at the Effective Time of
the Merger, as then amended or supplemented, will contain any statement which,
at the time and in light of the circumstances under which it is made, is false
or misleading with respect to any material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading or necessary to correct any statement which has become
false or misleading in any earlier communication with respect to the
solicitation of proxies for the AMD Stockholders' Meeting. The Proxy Statement
as it relates to AMD will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder in
effect at the time the Proxy Statement is mailed.
3.10 Material Contracts. There is no material default or event of default
------------------
by AMD or any AMD Subsidiary, or other event which (with or without notice,
lapse of time or both) would constitute a material default or event of default,
by AMD or any AMD Subsidiary, under any agreement which is material to AMD and
to which either AMD or any AMD Subsidiary is a party. Except as disclosed in
the AMD Annual Report, no director or officer of AMD or any AMD Subsidiary, and
to the knowledge of the executive officers of AMD, no person who is an
affiliate of any such director or officer has any material contractual
relationship with AMD or any AMD Subsidiary.
3.11 Legal Proceedings. Except as disclosed in the footnotes to the AMD
-----------------
Audited Financial Statements or in the AMD Annual Reports or the AMD Quarterly
Reports there are no pending or, to the knowledge of AMD, threatened legal,
administrative, arbitration or other proceedings or governmental investigations
or reviews against AMD or any AMD Subsidiary which could, individually or in the
aggregate, have a material adverse effect on the business, results of operations
or financial condition of AMD and the AMD Subsidiaries taken as a whole or on
the ability of AMD to carry out the transactions contemplated in this Agreement.
Neither AMD nor any AMD Subsidiary is in default with respect to any order,
writ, award, judgment, injunction or decree of any court or governmental or
administrative body or agency
27
applicable to it which could have a materially adverse effect on the
consolidated assets, properties, business or financial condition of AMD and the
AMD Subsidiaries taken as a whole.
3.12 No Violation. Except as disclosed in the AMD Annual Reports or the
------------
AMD Quarterly Reports, AMD and the AMD Subsidiaries have substantially complied
with all applicable laws, ordinances, regulations, judgments, decrees,
injunctions or orders of any court or other governmental entity, except for
violations which, individually or in the aggregate, do not and are not expected
to have a material adverse effect on the operations, business or financial
condition of AMD and the AMD Subsidiaries taken as a whole.
3.13 Taxes and Tax Returns.
---------------------
(a) General Tax Representations. AMD represents and warrants, on
---------------------------
behalf of itself and each of the AMD Subsidiaries, that (i) each of AMD and
the AMD Subsidiaries has timely filed (or will timely file prior to the
Closing) all federal, state, local and foreign tax returns required to be
filed by it prior to the Closing, (ii) each of AMD and the AMD Subsidiaries
has timely paid (or will do so prior to the Closing) or made adequate
provision for the payment of all taxes (which are separately or in the
aggregate material), as defined below, due and payable by it (without
regard to whether or not such taxes have been assessed); (iii) all material
information contained in or provided in connection with the tax returns
filed by (or to be filed by) AMD or any of the AMD Subsidiaries is (or will
be) true, complete and accurate; (iv) the liability for taxes reflected in
the AMD Audited Balance Sheet is sufficient for the payment for all unpaid
taxes, whether or not disputed, accrued or applicable for the period ended
December 25, 1994 and for all years and periods ended prior thereto; (v)
the California Bank and Corporation Franchise and Corporation Income tax
returns of AMD and of each of the AMD Subsidiaries have been audited by
the Franchise Tax Board ("FTB") or the statutes of limitations with respect
to California Bank and Corporation Franchise and Corporation Income taxes
have all expired, for all fiscal years to and including the fiscal year
ended December, 1988; (vi) the federal income tax returns of AMD and each
of the AMD Subsidiaries have been audited by the Internal Revenue Service
("IRS"), or the statutes of limitations with respect to federal income
taxes have all expired, for all fiscal years to and including the fiscal
year ended December, 1990; (vii) all deficiencies asserted as a result of
all foreign, if any, U.S. federal, state and local tax examinations have
been paid, fully settled or adequately provided for as a tax liability in
the AMD Audited Balance Sheet; (viii) there are no audits, investigations,
examinations or tax litigation matters
28
threatened or pending, nor have any claims been made or asserted, for or
with respect to taxes (which are separately or in the aggregate material)
of AMD or any of the AMD Subsidiaries; (ix) there are no outstanding
agreements or waivers extending the statutory period of limitation on
assessment or collection applicable to any tax return or tax period of AMD
or any of the AMD Subsidiaries; and (x) neither AMD nor any of the AMD
Subsidiaries has filed a consent to the application of Section 341(f) of
the Code.
(b) Withholding. AMD and each of the AMD Subsidiaries has withheld
-----------
from its employees, customers and any other applicable payees (and timely
paid to the appropriate governmental entity) proper and accurate amounts
for all periods through the date hereof in compliance with all tax
withholding laws (including, without limitation, income, social security
and employment tax withholding for all types of compensation, back-up
withholding and withholding on payments to non-United States persons).
(c) Tax Sharing Agreements. There is no contract, agreement or
----------------------
intercompany account system in existence pursuant to which AMD or any of
the AMD Subsidiaries has, or may at any time in the future have, an
obligation to contribute to the payment of any portion of a tax (or pay any
amount calculated with reference to any portion of a tax) determined on a
consolidated, combined or unitary basis with respect to an affiliated group
or other group of corporations of which AMD or any AMD Subsidiary is or was
a member.
(d) Taxes Since July 2, 1995. Since July 2, 1995, AMD and the AMD
------------------------
Subsidiaries have not incurred any material tax liability other than taxes
incurred (i) in the ordinary course of their business, (ii) pursuant a
change set forth in Section 3.8(f) of the AMD Disclosure Schedule, or (iii)
pursuant to a transaction not prohibited by Section 5.1 of this Agreement.
(e) Tax Methods. Since July 2, 1995, AMD and the AMD Subsidiaries
-----------
have used tax accounting methods, practices and elections consistent with
past practices.
(f) Definitions. (i) The term "tax" or "taxes" shall mean all taxes,
-----------
charges, fees, levies or other assessments, including, without limitation,
income, gross receipts, ad valorem, value added, alternative or add-on
minimum, capital stock, registration, net worth, severance, stamp, windfall
profits, environmental (including taxes under Section 59A of the Code),
excise, property, sales, use, license, payroll, employment, disability,
social security, workers' compensation, franchise, duties, business or
other
29
occupation, withholding, transfer or recording taxes, fees, charges and
obligations, imposed by the United States, or any state, local or other
political subdivision or agency thereof, as well as any foreign government
or other political subdivision or agency thereof, whether computed on a
consolidated, unitary, combined or any other basis; and such term shall
include any and all interest, penalties and additions to tax, as well as
any primary or secondary liability for taxes. (ii) The term "tax return"
shall mean any report, election, claim, information statement, filing,
return or other document or information required by law to be supplied to a
taxing authority in connection with taxes, including any schedules,
supplements or attachments thereto.
3.14 Employee Benefit Plans.
----------------------
(a) As used in this Section 3.14, the term "Employee Benefit Plan(s)"
means an employee benefit plan, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA") which AMD or any of the
AMD Subsidiaries maintains or administers, or to which AMD or any of the
AMD Subsidiaries contributes or is required to contribute, or with respect
to which AMD has or may incur any present or future obligation. Neither
AMD nor any of the AMD Subsidiaries is a participant in any "multi-employer
plan" within the meaning of Section 4001(a)(3) of ERISA.
(b) All plans, agreements or arrangements, exclusive of any Employee
Benefit Plan, relating to any form of current or deferred compensation
(exclusive of base salary and base wages), bonus, stock option, stock
purchase, incentive, vacation, health, dental, disability and death
benefits which AMD or any of the AMD Subsidiaries maintains or administers,
or to which AMD or any of the AMD Subsidiaries contributes or is required
to contribute, or with respect to which AMD has or may incur any present or
future obligation, referred to collectively in this Section 3.14 as "AMD
Benefit Arrangements".
(c) Each Employee Benefit Plan (and any related trust agreements,
annuity contracts and other funding instruments) has been and is being
administered and operated in accordance with its terms and has complied,
and complies currently, in all material respects, with the provisions of
ERISA and of the Code and all other applicable laws, rules and regulations.
Each AMD Benefit Arrangement has been and is being administered and
operated in accordance with its terms and has complied, and currently
complies, with the provisions of all applicable laws, rules and
regulations. All reports required by any governmental agencies have been
timely filed with respect to all Employee Benefit Plans and all AMD Benefit
Arrangements.
30
Each Employee Benefit Plan which is intended to be tax qualified under
Section 401(a) or Section 403 of the Code is so qualified and has received
a favorable determination letter, covering all amendments thereto, from the
IRS indicating that it is so qualified. Each trust which is intended to be
tax-exempt--under Section 501(a) of the Code is exempt from taxation.
(d) No "prohibited transaction," as defined in Section 406 of ERISA
and Section 4975 of the Code, has occurred with respect to any Employee
Benefit Plan which could subject any person or entity (other than a person
or entity for whom AMD or any of the AMD Subsidiaries is not directly or
indirectly responsible) to liability under Title I of ERISA or to the
imposition of any tax under Section 4975 of the Code.
(e) Other than for claims in the ordinary course for benefits under
any and all Employee Benefit Plans or AMD Benefit Arrangements, there are
no actions, suits, claims or proceedings pending or, to the best knowledge
of AMD, threatened, nor does there exist any basis therefor, which could
result in any material liability on the part of AMD or any AMD Subsidiary
with respect to any Employee Benefit Plan or AMD Benefit Arrangement.
(f) Neither AMD nor any AMD Subsidiary maintains any Employee Benefit
Plan subject to Title IV of ERISA.
(g) There has been no amendment to, or changes in the actuarial
assumptions or funding of, any Employee Benefit Plan or AMD Benefit
Arrangement which would materially increase the annual expense associated
with such plan or arrangement above the level of the expense set forth in
the AMD Consolidated Statement of Operations for the fiscal year ended
December 25, 1994.
3.15 Intellectual Property.
---------------------
(a) AMD owns, or is licensed or otherwise possesses legally
sufficient rights to use, all patents, trademarks, trade names, service
marks, copyrights, maskworks and any applications therefor, technology,
know-how, computer software programs or applications (in both source code
and object code form) and tangible or intangible proprietary information or
material that are used or proposed to be used in the business of AMD as
currently conducted in any material respect. The term "AMD Intellectual
Property Rights" as used in this Section 3.15 means all current and past
(lapsed, expired, abandoned or cancelled) patents, registered and material
unregistered copyrights, maskworks, trade names and any applications
therefor owned by AMD. The term "Third Party Intellectual Property Rights"
as used in
31
this Section 3.15 means all third-party patents, trademarks, copyrights
(including software) or maskworks, to the knowledge of AMD, which are
incorporated in, are, or form a part of, any AMD product.
(b) AMD is not, nor will it be as a result of the execution and
delivery of this Agreement or the performance of its obligations hereunder,
in violation of any license, sublicense or agreement, which relates to the
AMD Intellectual Property Rights . No claims with respect to the AMD
Intellectual Property Rights, any trade secret material to AMD, or Third
Party Intellectual Property Rights to the extent arising out of any use,
reproduction or distribution of such Third Party Intellectual Property
Rights by or through AMD, are currently pending or, to the knowledge of
AMD, are threatened by any person, nor does AMD know of any valid grounds
for any bona fide claims (i) to the effect that the manufacture, sale,
licensing or use of any product as now used, sold or licensed or proposed
for use, sale or license by AMD infringes on any copyright, maskwork,
patent, trademark, service xxxx or trade secret; (ii) against the use by
AMD of any trademarks, trade names, trade secrets, copyrights, maskworks,
patents, technology, know-how or computer software programs and
applications used in AMD's business as currently conducted or as proposed
to be conducted by AMD; (iii) challenging the ownership, validity or
effectiveness of any of AMD's Intellectual Property Rights or other trade
secret material to AMD, or (iv) challenging AMD's license or legally
enforceable right to use of the Third Party Intellectual Rights. To AMD's
knowledge, after reasonable investigation, all patents, registered
trademarks, maskworks and copyrights held by AMD are valid and subsisting.
To AMD's knowledge, there is no material unauthorized use, infringement or
misappropriation of any of the AMD Intellectual Property by any third
party, including any employee or former employee of AMD or any of the AMD
Subsidiaries. Neither AMD nor any of the AMD Subsidiaries (i) has been
sued or charged in writing as a defendant in any claim, suit, action or
proceeding which involves a claim or infringement of trade secrets, any
patents, trademarks, service marks, maskworks or copyrights and which has
not been finally terminated prior to the date hereof or been informed or
notified by any third party that AMD may be engaged in such infringement or
(ii) has knowledge of any infringement liability with respect to, or
infringement by, AMD or any of the AMD Subsidiaries of any trade secret,
patent, trademark, service xxxx, maskwork or copyright of another.
(c) Neither the execution and delivery of this Agreement, the Warrant
Purchase Agreement or the Credit Agreement by AMD nor the consummation by
AMD of the
32
transactions contemplated by this Agreement, the Warrant Purchase Agreement
or the Credit Agreement will result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become
a default), or impair AMD's or any of the AMD Subsidiaries' rights or alter
the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
license agreement, contract or other arrangement of any nature relating to
AMD Intellectual Property Rights or Third Party Intellectual Property
Rights.
(d) Each employee of AMD has executed a confidentiality and invention
agreement.
3.16 Title to Properties. Either AMD or an AMD Subsidiary has good and
-------------------
marketable title to all properties and assets reflected on the AMD Unaudited
Balance Sheet as owned by AMD and to properties or assets acquired by AMD or any
AMD Subsidiary after the date thereof (except for equipment which is subject to
capital leases and properties sold or otherwise disposed of in the ordinary
course of business since the date of the AMD Unaudited Balance sheet), free and
clear of all title defects and all liens, mortgages, pledges, claims, charges,
security interests or other encumbrances of any nature whatsoever except as
stated in the AMD Annual Reports or the AMD Quarterly Reports, or which alone or
in the aggregate do not materially detract from the value, or materially
interfere with the present use, of any material asset or property or of the
assets or properties of AMD and the AMD Subsidiaries as a whole or otherwise
materially impair the business of AMD and the AMD Subsidiaries as a whole.
3.17 Insurance. AMD and each of the AMD Subsidiaries has insurance on its
---------
officers, directors, employees, business operations and property, in such
amounts as are reasonable and deemed adequate by its Board of Directors or
management, against all risks usually insured against by persons operating
similar properties or businesses in the localities where such properties are
located, under, to the best of AMD's knowledge, valid and enforceable policies
issued by insurers of recognized responsibility, and such policies shall not,
pursuant to their terms, in any way be affected by, or terminate or lapse by
reason of, the Merger. AMD has not done anything, either by way of action or
inaction, that might invalidate, in whole or in part, any of the material
policies of fire, casualty, liability, title, workers' compensation and other
forms of insurance held by AMD.
3.18 Transactions with Management. Except as disclosed in the documents
----------------------------
described in Section 3.6(a), no executive officer, director or, stockholder of
AMD or any of the AMD Subsidiaries has, since July 2, 1995, engaged in any
business dealings with AMD or any of the AMD Subsidiaries other than such
business dealings as would not be required to be disclosed in such
33
documents or reports pursuant to the Securities Act and the rules and
regulations promulgated thereunder. No executive officer or director of AMD or
any of the AMD Subsidiaries (except in his capacity as such) has any direct or
indirect material interest in (i) any property or assets of AMD or that of any
of the AMD Subsidiaries (except as a stockholder), (ii) any competitor,
customer, supplier or agent of AMD or any of the AMD Subsidiaries, or (iii) any
person which is a party to any contract or agreement which is material to AMD or
any of the AMD Subsidiaries.
3.19 Disclosure. No representations or warranties by AMD in this Agreement
----------
or the AMD Disclosure Schedule and no statement by AMD or, to the best knowledge
of AMD, any other person, contained in any document, certificate or other
writing furnished by AMD to NexGen in connection with the preparation of the
Proxy Statement or the S-4, contains any untrue statement of a material fact or
omits any material fact necessary to make the statements made herein or therein,
in light of the circumstances under which they were made, not misleading.
3.20 Brokerage and Finders' Fees. AMD has not incurred and will not incur
---------------------------
any liability for brokerage or finders' fees or agents commissions in connection
with this Agreement or the Merger other than fees agreed to be paid to
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation in consideration for
investment banking advice and the rendering of a fairness opinion with respect
to the Merger. AMD has provided NexGen with a true copy of the agreement
between AMD and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation regarding
the services to be rendered by Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation in connection with the Merger, and the fee to be paid to Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation will not exceed $ 4,500,000 plus
expenses. AMD has received the fairness opinion rendered by Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, and a copy of such opinion is attached to the
AMD Disclosure Schedule.
3.21 Actions Affecting Pooling. Aside from any actions contemplated this
-------------------------
Agreement, AMD has not taken or permitted any action relating to AMD which would
prevent the Merger from qualifying for pooling-of-interests accounting treatment
in accordance with generally accepted accounting principles and all rules,
regulations and policies of the SEC.
3.22 Takeover Statutes. No "fair price," "moratorium," "control share
-----------------
acquisition" or other similar anti-takeover statute or regulation enacted under
state or federal laws in the United States (each a "Takeover Statute"),
including, without limitation, Section 203 of the DGCL, applicable to AMD or any
of the AMD Subsidiaries, is applicable to the Merger or the other transactions
contemplated hereby.
34
3.23 Environmental Matters. Except with respect to matters which in the
---------------------
aggregate have not had and could not reasonably be expected to have a material
adverse effect on AMD, AMD and each of the AMD Subsidiaries to the best of AMD's
knowledge (i) have obtained all applicable permits, licenses and other
authorizations which are required under federal, state, provincial or local laws
relating to pollution or protection of the environment, including laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic materials or wastes into ambient air, surface
water, ground water or land or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or hazardous or toxic materials or wastes
by AMD or the AMD Subsidiaries (or their respective agents); (ii) are in
compliance with all the terms and conditions of such required permits, licenses
and authorization, and also are in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in such laws or contained in any regulation,
code, plan, order, decree, judgment, notice or demand letter issued, entered,
promulgated or approved thereunder; (iii) as of the date hereof, are not aware
of nor have received notice of any event, condition, circumstance, activity,
practice, incident, action or plan which is reasonable likely to interfere with
or prevent continued compliance with or which would give rise to any common law
or statutory liability, or otherwise form the basis of any claim, action, suit
or proceeding, based on or resulting from AMD's or any AMD Subsidiary's (or any
of their respective agents) manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling, or the emission, discharge
or release into the environment, of any pollutant, contaminant or hazardous or
toxic material or waste; and (iv) have taken all actions necessary under
applicable requirements of federal, state or local laws, rules or regulations to
register any products or materials required to be registered by AMD or the AMD
Subsidiaries (or any of their respective agents) thereunder.
3.24 NexGen Commercial Relationships. AMD and AMD Merger have no reason to
-------------------------------
believe that either IBM or VLSI will elect not to continue their relationship
with NexGen following the Effective Time.
XXXXXXX 0
XXXXXXXXX XX XXXXXX
XxxXxx hereby covenants and agrees as follows:
4.1 Negative Covenants. Between the date of this Agreement and the
------------------
Effective Time, unless AMD shall otherwise consent in
35
writing, which consent AMD may not unreasonably withhold, neither NexGen nor any
NexGen Subsidiary will do any of the following or commit to do so:
(a) Make any purchase, sale or disposition of any material asset or
property or mortgage, pledge, subject to a lien or otherwise encumber any
of its material properties or assets, other than in the ordinary course of
business consistent with past practices;
(b) Except for obligations under existing contracts and agreements,
incur any material contingent liability as a guarantor or otherwise with
respect to the obligations of any person or entity other than NexGen
Subsidiaries;
(c) Take or permit any action which would prevent the Merger from
qualifying as a tax-free reorganization under Section 368 of the Code or
from being eligible for pooling-of-interests accounting treatment in
accordance with generally accepted accounting principles and all rules,
regulations and policies of the SEC, and NexGen will use its best efforts
to prevent any of its officers or directors from taking or permitting any
such action;
(d) Amend or incur any obligation to amend its Certificate of
Incorporation or Bylaws, offer to issue or issue any shares of its capital
stock (other than pursuant to presently outstanding options or warrants),
effect any stock split, reverse stock split or stock dividend, or grant any
options, warrants or rights to acquire any capital stock of NexGen (other
than grants of options pursuant to existing employee benefit programs in a
manner which is consistent with past practice), or accelerate the
exercisability or vesting of options or warrants presently outstanding,
except (i) acceleration which occurs automatically pursuant to the terms of
an existing agreement between NexGen and a holder of NexGen Options or
NexGen Warrants and (ii) to provide that any presently outstanding options
or warrants shall not terminate merely by reason of the Merger;
(e) Declare, set aside or pay any dividend or make any other
distribution in respect of its capital stock, or make any direct or
indirect redemption, purchase or other acquisition of its capital stock
(other than in connection with the repurchase of stock from terminated
employees or the surrender of stock to NexGen for the purpose of a stock-
for-stock exercise of an employee stock option);
(f) Make any change in the compensation payable or to become payable
to any of its directors, officers or employees (other than increases in
compensation called for by the terms of any outstanding employment
agreement or
36
increases which are consistent with past practice) or enter into or amend
any indemnity, employment or consulting agreements;
(g) Make any loans to any of its stockholders, officers, directors or
employees or make any change in its borrowing arrangements;
(h) Enter into (i) any licensing or manufacturing contracts or
agreements or (ii) any sales agent, distributor or OEM sales contracts or
agreements not entered into in the ordinary course of business;
(i) Undertake any change in the capital structure of NexGen or of any
NexGen Subsidiary or in the operational or management structure of NexGen
and the NexGen Subsidiaries as a whole;
(j) Undertake a course of action inconsistent with this Agreement or
which would prevent any conditions precedent to its obligations under this
Agreement from being satisfied at or prior to the Effective Time;
(k) Provide or publish to its stockholders any material which might
constitute an unauthorized "prospectus" within the meaning of the
Securities Act;
(l) Violate the terms of the Credit Agreement;
(m) Issue any press release or any public disclosure, either written
or oral, of the transactions contemplated by this Agreement or negotiations
related thereto without the prior knowledge and written consent of AMD,
which consent shall not be unreasonably withheld; provided, however, that
no such consent shall be required if NexGen has determined in good faith
upon written advice of counsel that it is required under applicable
securities laws to make the disclosure; or
(n) Aside from any actions contemplated by this Agreement, take or
permit any action relating to NexGen which would prevent the Merger from
qualifying for pooling-of-interests accounting treatment in accordance with
Generally Accepted Accounting Principles and all rules, regulations and
policies of the SEC.
4.2 Affirmative Covenants. Prior to or on the Effective Time NexGen will
---------------------
do each of the following:
(a) Use its best efforts to perform and fulfill all conditions and
obligations on its part to be performed and fulfilled under this Agreement
to the end that the
37
transactions contemplated by this Agreement shall be fully carried out;
(b) Use its best efforts to obtain all authorizations, consents and
permits of others required to permit the consummation by NexGen of the
transactions contemplated by this Agreement and the Credit Agreement and
the continuation of NexGen's business after consummation of the Merger,
including, without limitation, using its best efforts through preparation,
SEC clearance and distribution as promptly as possible of the Proxy
Statement (as defined below) and otherwise to obtain the approval of
NexGen's stockholders sufficient for corporate and tax law purposes and
pooling-of-interests accounting;
(c) Cooperate with AMD to the best of NexGen's ability in the
preparation of (i) the joint proxy statement to be used in connection with
the solicitation of proxies from the respective stockholders of AMD and
NexGen with respect to approval of the Merger (the "Proxy Statement"); (ii)
the S-4; and (iii) the S-8 (as defined below). (Collectively, the S-4 and
S-8 are referred to herein as the "Registration Statements.") In this
regard, NexGen from time to time will furnish to AMD, and be responsible
for, all information regarding NexGen required for the proper preparation
of such Proxy Statement and Registration Statements and shall promptly
furnish AMD with information with respect to any event as a result of which
the Registration Statements, if such information were not disclosed
therein, would include an untrue statement of a material fact relating to
NexGen or the NexGen Subsidiaries or omit a material fact necessary to make
the statements therein relating to NexGen or the NexGen Subsidiaries not
misleading;
(d) Promptly advise AMD in writing of (i) any materially adverse
change in the financial condition, business, operations or key personnel of
NexGen or the NexGen Subsidiaries; and (ii) the occurrence of any event
which causes the representations and warranties made by NexGen in this
Agreement or the information included in NexGen Disclosure Schedule to be
incomplete or inaccurate in any material respect;
(e) Conduct its business only in the ordinary course and refrain from
changing or introducing any method of management or operations except in
the ordinary course of business and consistent with prior practices;
(f) Use its best efforts to keep intact its business organization to
keep available its present officers, agents and employees as NexGen deems
necessary or appropriate to continue its business as presently conducted
and to preserve
38
the goodwill of all suppliers, customers and others having business
relations with it;
(g) Permit AMD and its authorized representatives to have full access
to all of its properties, assets, records, tax returns, contracts and
documents and furnish to AMD and its authorized representatives such
financial and other information with respect to its business and properties
as AMD may from time to time reasonably request for purposes of making a
review of the business of NexGen, which review may include an environmental
assessment;
(h) Except as expressly permitted by Section 4.3(d), use its best
efforts to obtain approval of this Agreement by the holders of outstanding
shares of NexGen Common Stock entitled to vote (and to that end, will
recommend approval of the Merger to NexGen's stockholders) and present
evidence of such recommendation and approval to AMD in form and content
satisfactory to AMD and its counsel;
(i) As promptly as reasonably practicable after the date of this
Agreement, file with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice and any other
governmental agencies or departments all notices, reports and other
documents required by law with respect to this Agreement and the Merger and
promptly submit any additional information or documentary material properly
requested by any such governmental agency or department;
(j) In the event that between the date hereof and the Effective Time,
any person, entity or federal, state, local or foreign governmental
authority shall commence any examination, review, investigation, action,
suit or proceeding against NexGen with respect to the Merger, NexGen shall
give prompt notice thereof to AMD, shall keep AMD informed as to the status
thereof, and shall (except as may be prohibited by such governmental
authority or by any court order or decree in an action or suit instituted
by a person other than NexGen or an affiliate of NexGen) permit AMD to
observe and be present at each meeting, conference or other proceeding and
have access to and be consulted in connection with any document filed or
provided to such person, entity or governmental authority in connection
with such examination, review, investigation, action, suit or proceeding;
(k) Deliver to AMD at the Closing the resignations of all directors
of NexGen;
(l) Promptly provide AMD with (i) copies of all written materials and
communications furnished by NexGen to
39
its stockholders after the date of this Agreement, and (ii) copies of all
notices, reports or other documents filed with the Federal Trade Commission
or the Antitrust Division of the United States Department of Justice
pursuant to Section 4.2(i) hereof, and (iii) copies of all reports filed
with the SEC;
(m) Promptly provide AMD copies of its consolidated balance sheet and
related consolidated statements of income, changes in financial position
and changes in stockholders' equity for all interim monthly and quarterly
periods prior to the Closing. Such monthly and quarterly financial
statements shall be prepared in conformity with generally accepted
accounting principles applied on a consistent basis (subject to the absence
of footnotes) and shall present (subject to normal year-end audit
adjustments) the consolidated financial condition, results of operations
and changes in consolidated financial position of NexGen and the NexGen
Subsidiaries as of the dates and for the periods covered by such
statements;
(n) As of the Effective Time, employees of NexGen and its
Subsidiaries shall cease to accrue any additional benefits under all NexGen
Benefit Arrangements and Employee Benefit Plans and any other plans or
agreements for the benefit of the employees of NexGen or its Subsidiaries,
except under plans, arrangements or agreements which AMD has elected to
continue, which election will be in the sole discretion of AMD. At the
request of AMD, NexGen and the NexGen Subsidiaries will take such action as
may be requested by AMD to enter into, amend, or terminate any or all of
the NexGen Benefit Arrangements, Employee Benefit Plans and any other
benefit plans or agreements in connection therewith, with such amendments
or terminations to be effective as of the Effective Time;
(o) Use its best efforts to deliver to AMD, and to cause its counsel
to deliver to AMD, the closing documents referred to in this Agreement;
(p) Use its best efforts to provide to AMD No Sale Agreements, in the
form of Exhibit C attached hereto, executed by NexGen's stockholders after
the date on which a public announcement is made concerning the execution of
this Agreement; and
(q) Promptly following the date of this Agreement, consider the
adoption of a stockholders rights plan and adopt such a plan if the Board
of Directors of NexGen concludes that such plan is in the best interests of
NexGen and its stockholders.
40
4.3 No Solicitation.
---------------
(a) NexGen shall immediately cease and cause to be terminated any
existing discussions or negotiations with regard to a business combination
or similar transaction with any parties other than AMD and AMD Merger.
NexGen agrees not to release any third party from any confidentiality or
standstill agreement to which NexGen is a party.
(b) NexGen shall not, directly or indirectly, through any officer,
director, employee, representative or agent of NexGen or any NexGen
Subsidiaries, solicit or encourage (including by way of furnishing
nonpublic information) the initiation of any inquiries or proposals
regarding any merger, consolidation, sale of substantial assets, sale of
shares of capital stock including without limitation by way of a tender
offer or similar transactions involving NexGen or any NexGen Subsidiaries
(any of the foregoing inquiries or proposals being referred to herein as an
"Acquisition Proposal"). Notwithstanding the foregoing, if a corporation,
partnership, person, or other entity or group (a "Third Party") after the
date of this Agreement submits to the Board of Directors of NexGen an
unsolicited bona fide, written Acquisition Proposal (i) which is not
subject to any financing contingency, (ii) which the Board of Directors of
NexGen determines may constitute a Superior Proposal (as that term is
defined in Section 4.3(d) of this Agreement), and (iii) the Board of
Directors of NexGen concludes, after receipt of advice from outside legal
counsel to NexGen, that the failure to engage in discussions with the Third
Party concerning such Acquisition Proposal would cause the Board of
Directors to violate its fiduciary duties to NexGen and its stockholders,
then in such case NexGen may (x) furnish information about its business,
properties, or assets to the Third Party under protection of a
confidentiality agreement substantially the same in its protections to
NexGen as the Confidentiality and Standstill Agreement dated October 16,
1995, between NexGen and AMD, and (y) negotiate and participate in
discussions and negotiations with such Third Party. Thereafter, if the
Board of Directors of NexGen concludes, after receipt of advice from
outside legal counsel to NexGen, that it is under a duty to take actions
reasonably calculated to maximize present stockholder value, the Board of
Directors may approve the solicitation of additional Acquisition Proposals
and furnish such information and have such negotiations as it deems
advisable under the circumstances.
(c) NexGen shall immediately notify AMD after receipt of any
Acquisition Proposal or any request for nonpublic information relating to
NexGen or any NexGen Subsidiaries in connection with an Acquisition
Proposal or for access to the
41
properties, books or records of NexGen or any subsidiary by any person or
entity that informs the Board of Directors of NexGen or such NexGen
Subsidiary that it is considering making, or has made, an Acquisition
Proposal. Such notice to AMD shall be made orally and in writing and shall
include a copy of any writing submitted by such person or entity and shall
indicate in reasonable detail the identity of the offeror and the terms and
conditions of such proposal, inquiry or contact.
(d) Notwithstanding the foregoing, in the event the Board of
Directors of NexGen receives an Acquisition Proposal that based on the
advice of outside counsel, the Board of Directors is required to consider
in the exercise of its fiduciary obligations and that it determines to be a
Superior Proposal, the Board of Directors may (subject to the following
sentences) withdraw or adversely modify its approval or recommendation of
the Merger and recommend any such Superior Proposal, or terminate the
Agreement but such termination may occur only after the NexGen
Stockholders' Meeting, in each case at any time after the fourth business
day following delivery of written notice to AMD (a "Notice of Superior
Proposal") advising AMD that the Board of Directors has received a Superior
Proposal, specifying the material terms of the structure of such Superior
Proposal. NexGen may take any of the foregoing actions pursuant to the
preceding sentence only if an Acquisition Proposal that was a Superior
Proposal continues to be a Superior Proposal in light of any improved
transaction proposed by AMD prior to the expiration of the four business
day period specified in the preceding sentence. For purposes of this
Agreement, a "Superior Proposal" means any bona fide Acquisition Proposal
to merge with NexGen or to acquire, directly or indirectly, a material
equity interest in or a significant amount of voting securities or assets
of NexGen for consideration consisting of cash and/or securities, and
otherwise on terms which the Board of Directors of NexGen determines in the
proper exercise of its fiduciary duties (based on the advice of a financial
advisor of nationally recognized reputation including, without limitation,
PaineWebber Incorporated) to provide greater value to NexGen and its
stockholders than the Merger (or otherwise proposed by AMD as contemplated
above). Nothing contained herein shall prohibit NexGen from taking and
disclosing to its stockholders a position contemplated by Rule 14d-9(e)
under the Exchange Act prior to the fourth business day following
Purchaser's receipt of a Notice of Superior Proposal provided that NexGen
does not withdraw or modify its position with respect to the Merger or
approve or recommend an Acquisition Proposal.
(e) NexGen agrees to use its best efforts to ensure
42
that the officers, directors and employees of NexGen and the NexGen
Subsidiaries and any investment banker or other advisor or representative
retained by NexGen are aware of the restrictions described in this Section.
SECTION 5
COVENANTS OF AMD AND AMD MERGER
AMD and AMD Merger covenant and agree as follows:
5.1 Negative Covenants. Between the date of this Agreement and the
------------------
Effective Time, unless NexGen shall otherwise consent in writing, which consent
NexGen may not unreasonably withhold, neither AMD nor any AMD Subsidiary will do
any of the following or commit to do so:
(a) Declare, set aside, or pay any dividend or make any other
distribution in respect of its capital stock, whether payable in AMD Common
Stock or otherwise, or effect a stock split of its capital stock;
(b) Undertake a sale, spinoff or other distribution of all or
substantially all of the assets of AMD or all or substantially all of the
assets of AMD associated with the production of any product or group of
products of AMD which represented 10% or more of the gross revenues of AMD
in the fiscal year ended December 25, 1994;
(c) Undertake any consolidation or merger of AMD with or into another
corporation other than a merger with another corporation in which AMD is a
continuing corporation and which does not result in any reclassification or
change of AMD Common Stock, unless at the time of any such consolidation or
merger, to the extent reasonably deemed necessary by NexGen, AMD or the
successor corporation shall execute appropriate documentation to insure the
result provided for in Section 1.5(b).
(d) Aside from any actions contemplated by this Agreement, take or
permit any action relating to AMD which would prevent the Merger from
qualifying for pooling-of-interests accounting treatment in accordance with
Generally Accepted Accounting Principles and all rules, regulations and
policies of the SEC.
(e) Take or permit any action which would prevent the Merger from
qualifying as a tax-free reorganization under Section 368 of the Code or
from being eligible for pooling-of-interests accounting treatment in
accordance with generally accepted accounting principles and all rules,
regulations and policies of the SEC, and AMD will use its
43
best efforts to prevent any of its officers or directors from taking or
permitting any such action;
(f) Undertake a course of action inconsistent with this Agreement or
which would prevent any conditions precedent to its obligations under this
Agreement from being satisfied at or prior to the Effective Time;
(g) Provide or publish to its stockholders any material which might
constitute an unauthorized "prospectus" within the meaning of the
Securities Act;
(h) Issue any press release or any public disclosure, either written
or oral, of the transactions contemplated by this Agreement or negotiations
related thereto without the prior knowledge and written consent of NexGen,
which consent shall not be unreasonably withheld; provided, however, that
no such consent shall be required if AMD has determined in good faith upon
written advice of counsel that it is required under applicable securities
laws to make the disclosure; or
(i) Violate the terms of the Credit Agreement.
5.2 Affirmative Covenants. Prior to or on the Effective Time AMD and/or
---------------------
AMD Merger will do the following:
(a) Use its best efforts to perform and fulfill all conditions and
obligations on their part to be performed and fulfilled under this
Agreement, to the end that the transactions contemplated by this Agreement
and the Credit Agreement shall be fully carried out;
(b) Use its best efforts to obtain all authorizations, consents and
permits of others required to permit the consummation by AMD and AMD Merger
of the transactions contemplated by this Agreement and the Credit
Agreement, including, without limitation, using its best efforts through
preparation, SEC clearance and distribution as promptly as possible of the
Proxy Statement and otherwise to obtain the approval of AMD's stockholders
sufficient for corporate law purposes and pooling-of-interests accounting;
(c) Cooperate with NexGen to the best of AMD's ability in the
preparation of the Proxy Statement;
(d) File the S-4 with the SEC as promptly as practicable, which shall
relate to the maximum number of shares of AMD Common Stock into which the
shares of NexGen Common Stock will be converted on the Effective Time, and
use its best efforts to cause the S-4 to become effective as soon after
such filing as practicable. In this regard, AMD
44
will advise NexGen promptly as to the time at which the S-4 becomes
effective and of the issuance by the SEC of any stop order suspending the
effectiveness of the S-4 or the institution of any proceedings for such
purpose and will use its best efforts to prevent the issuance of any stop
order and to obtain as soon as possible the lifting thereof if issued.
Until the Effective Time, AMD will advise NexGen promptly of any
requirement of the SEC for any amendment or supplement to the S-4 or for
additional information, and will not at any time file any amendment of or
supplement to the prospectus contained therein (or to the prospectus filed
pursuant to Rule 424(b) of the SEC) (the "Prospectus") which shall not have
been previously submitted to NexGen a reasonable time prior to the proposed
filing thereof or to which NexGen shall reasonably object or which is not
in compliance in all material respects with the Securities Act and the
rules and regulations issued by the SEC thereunder. When the S-4 becomes
effective, it will comply in all material respects with the provisions of
the Securities Act and the rules and regulations thereunder. From and
after the date the S-4 becomes effective and until the Effective Time, if
any event occurs as a result of which the Prospectus would include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading or if it is
necessary at any time to amend the S-4 or the Prospectus to comply with the
Securities Act, AMD will promptly notify NexGen and will prepare an amended
or supplemented S-4 or Prospectus which will correct such statement or
omission and will use its best efforts to cause any such amendment to
become effective as promptly as possible. AMD will deliver to NexGen two
signed copies of the S-4 and all amendments thereto, including all
financial statements and exhibits filed therewith;
(e) If any shares of AMD Common Stock are listed on the NYSE or any
other exchange as of the Closing Date, use its best efforts to list the AMD
Common Stock to be issued pursuant to the Merger on the NYSE or such other
exchange;
(f) Promptly advise NexGen in writing of (i) any materially adverse
change in the financial condition, business, operations or key personnel of
AMD or the AMD Subsidiaries; and (ii) the occurrence of any event which
causes the representations and warranties made by AMD in this Agreement or
the information included in AMD Disclosure Schedule to be incomplete or
inaccurate in any material respect;
(g) Provide to NexGen such financial reports and other information as
may be reasonably requested by NexGen for the purpose of monitoring the
business of AMD;
45
(h) Use its best efforts to (i) qualify the Common Stock to be issued
pursuant to the Merger under the securities or "blue sky" laws of every
jurisdiction of the United States in which any registered stockholder of
NexGen has an address on the records of NexGen's transfer agent on the
record date for determining the NexGen stockholders entitled to notice of
and to vote on the Merger, and (ii) qualify the NexGen Options and NexGen
Warrants to be assumed by AMD pursuant to Section 5.3 under the securities
or "blue sky" laws or every jurisdiction of the United States in which the
records of NexGen, as of the Closing Date, indicate that a holder of such
options or warrants resides, except in either case any such jurisdiction
with respect to which counsel for AMD has determined that such
qualification is not required under the securities or "blue sky" laws of
such jurisdiction;
(i) Use its best efforts to obtain the approval of this Agreement by
affirmative vote of the holders of the outstanding shares of AMD Common
Stock entitled to vote (and to that end, will recommend approval of the
Merger to AMD's stockholders) and shall present evidence of such
recommendation and approval to NexGen in form and content satisfactory to
NexGen and its counsel;
(j) As promptly as reasonably practicable after the date of this
Agreement, file with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice and any other
governmental agencies or departments all notices, reports and other
documents required by law with respect to this Agreement and the Merger and
promptly submit any additional information or documentary material properly
requested by any such governmental agency;
(k) In the event that between the date hereof and the Effective Time,
any person, entity or federal, state, local or foreign governmental
authority shall commence any examination, review, investigation, action,
suit or proceeding against AMD with respect to the Merger, AMD shall give
prompt notice thereof to NexGen, shall keep NexGen informed as to the
status thereof, and shall (except as may be prohibited by such governmental
authority or by any court order or decree in an action or suit instituted
by a person other than AMD or an affiliate of AMD) permit NexGen to observe
and be present at each meeting, conference or other proceeding and have
access to and be consulted in connection with any document filed or
provided to such person, entity or governmental authority in connection
with such examination, review, investigation, action, suit or proceeding;
46
(l) Cause AMD Merger to perform all of its agreements contained
herein and in the Merger Agreement;
(m) Promptly provide NexGen with (i) copies of all written materials
and communications furnished by AMD to its stockholders after the date of
this Agreement, and (ii) copies of notices, reports or other documents
filed with the Federal Trade Commission or the Antitrust Division of the
United States Justice Department pursuant to Section 5.2(j) hereof (iii)
copies of all reports filed with the SEC;
(n) Promptly provide NexGen copies of its Consolidated Balance Sheet
and related consolidated statements of income, changes in financial
position and changes in stockholders' equity for all interim 4-week and
quarterly periods prior to the Closing. Such 4-week and quarterly
financial statements shall be prepared in conformity with Generally
Accepted Accounting Principals applied on a consistent basis (subject to
the absence of footnotes) and shall present (subject to normal year-end
audit adjustments) the consolidated financial condition, results of
operations and changes in financial position of AMD and the AMD
Subsidiaries as of the dates and for the periods covered by such
statements;
(o) Use its best efforts to deliver to NexGen, and to cause its
counsel to deliver to NexGen, the closing documents referred to in this
Agreement; and
(p) Appoint the Chairman of NexGen to the Board of Directors of AMD
effective as of the Effective Time.
5.3 Stock Options, Warrants and Convertible Instruments.
---------------------------------------------------
(a) At the Effective Time, AMD shall assume the NexGen 1987 Stock
Plan, the NexGen 1995 Stock Plan and the NexGen 1995 Employee Stock
Purchase Plan; and each NexGen Option then outstanding under such plans
shall remain outstanding and shall be deemed an option to purchase, in
place of the purchase of NexGen Common Stock previously subject to such
option, that number of shares of AMD Common Stock equal to the product of
the number of shares subject to the NexGen Option, to the extent not
exercised or terminated on or prior to the Effective Time, multiplied by
the Exchange Ratio and rounded downward to the nearest whole share, at an
exercise price per share equal to the exercise price per share under the
NexGen Option divided by the Exchange Ratio and rounded upward to the
nearest whole cent. The assumption of the NexGen Options which are
incentive stock options as defined in Section 422(b) of the Code and of
options outstanding under the NexGen Employee Stock Purchase Plan shall be
accomplished in a transaction to which Section 424(a) of the Code applies.
All the other terms and
47
conditions of the NexGen Options shall remain the same.
(b) As of the Effective Time, each NexGen Warrant then outstanding
shall remain outstanding and shall be deemed to be a warrant to purchase,
in place of the purchase of the shares of NexGen Common Stock previously
subject to such Warrant, that number of shares of AMD Common Stock equal to
the product of the number of shares of NexGen Common Stock subject to such
Warrant, and not exercised prior to the Effective Time, multiplied by the
Exchange Ratio and rounded downward to the nearest whole share. The
exercise price per share shall be equal to the exercise price per share
under the NexGen Warrant divided by the Exchange Ratio and rounded upward
to the nearest one-hundredth of one (1) whole cent. As of the Effective
Time, any existing right of ASCII Corporation to convert debt payable by
NexGen into NexGen Common Stock shall remain effective and shall be deemed
to be a right to convert such debt into that number of shares of AMD Common
Stock as is equal to the product of the number of shares of NexGen Common
Stock into which such debt could have been converted prior to the Effective
Time, and was not so converted, multiplied by the Exchange Ratio and
rounded downward to the nearest whole share.
(c) AMD will (i) file with the SEC a new registration statement on
Form S-8 relating to such NexGen Options and the shares of AMD Common Stock
to be issued upon their exercise or an amendment to its existing
registration statement on Form S-8 to include such options and shares (such
new or amended registration statement is referred to in this Agreement as
the "S-8"), (ii) file with the SEC a registration statement on Form S-3 (or
such other form as AMD deems appropriate) (the "S-3") relating to such
NexGen Warrants and the shares of AMD Common Stock to be issued upon their
exercise, (iii) use its best efforts to cause the S-8 and the S-3 to become
effective prior to the Closing, and (iv) if the shares of AMD Common Stock
issuable upon exercise of existing AMD stock option plans are listed on the
NYSE or some other exchange as of the Closing Date, AMD will list the
shares of AMD Common Stock to be issued pursuant to NexGen Options and
NexGen Warrants assumed by AMD on the NYSE or such other exchange.
5.4 Employee Benefits. Consistent with AMD's employee benefit plans, all
-----------------
NexGen employees who become employees of AMD or a subsidiary of AMD as of the
Effective Time shall receive the same or reasonably comparable benefits as such
NexGen employees currently receive and, to the extent not prohibited by law,
shall receive service credit which includes their employment by NexGen prior to
the Effective Time.
48
SECTION 6
INDEMNIFICATION
6.1 Indemnification by NexGen. NexGen will indemnify and hold harmless
-------------------------
AMD and the AMD Subsidiaries and each of their officers, directors, employees
and agents from and against any and all losses, claims, damages or liabilities
(including expenses), joint and several, to which any of them may become subject
under the Securities Act, the Exchange Act, common law, or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of, or are based upon, any untrue statement or alleged untrue
statement of any material fact contained in the S-4, the Prospectus or the Proxy
Statement or arise out of, or based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each such party to be
indemnified by it for any legal or other expenses reasonably incurred by such
party in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the foregoing
indemnification shall be limited to any loss, claim, damage or liability
(including expenses) arising out of, or based upon, any untrue statement or
alleged untrue statement in or omission or alleged omission from the S-4, the
Prospectus or the Proxy Statement made in reliance upon and in conformity with
information furnished by or on behalf of NexGen or any of the NexGen
Subsidiaries specifically for use therein or in preparation thereof. The
indemnity agreement in this section is in addition to any liability which NexGen
may otherwise have.
6.2 Indemnification by AMD. AMD will indemnify and hold harmless NexGen
----------------------
and the NexGen Subsidiaries and each of their officers, directors, employees and
agents from and against any and all losses, claims, damages or liabilities
(including expenses), joint or several, to which any of them may become subject
under the Securities Act, the Exchange Act, common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of, or are based upon, any untrue statement or alleged untrue
statement of any material fact contained in the S-4, the Prospectus or the Proxy
Statement or arise out of, or are based upon, the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each such party
to be indemnified by it for any legal or other expenses reasonably incurred by
such party in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that there shall be excluded
from the foregoing indemnification any loss, claim, damage or liability
(including expenses) arising out of, or based upon, any untrue statement or
alleged untrue statement in or omission or alleged omission from the S-4, the
49
Prospectus or the Proxy Statement made in reliance upon and in conformity with
information furnished by or on behalf of NexGen or any NexGen Subsidiary
specifically for use therein or in preparation thereof. The indemnity agreement
in this section is in addition to any liability which AMD may otherwise have.
6.3 Defense of Action. Promptly after receipt by an indemnified person
-----------------
under this Section 6 of notice of the commencement of any action, such
indemnified person shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 6, notify the indemnifying party in
writing of the commencement thereof, enclosing a copy of all papers served. The
failure to notify the indemnifying party shall relieve it from any liability
under this Section 6, but not from any liability the indemnifying party might
otherwise have to the indemnified party. The party proposing to be indemnified
shall cooperate fully with the indemnifying party in the defense of the action.
If the indemnifying party agrees in writing to assume and undertake the defense
of the claim or action, the indemnifying party shall have the right to select
and retain counsel reasonably satisfactory to the indemnified person and the
indemnified person, upon receipt of written notice of the agreement of the
indemnifying party, shall have no right to indemnification of fees or expenses
incurred subsequent to receipt of the notice. If, however, the indemnified party
requires separate counsel because a conflict of interest would otherwise exist,
the indemnifying party shall pay the reasonable legal fees and reasonable
expenses of such separate counsel on a monthly basis. The identifying party
shall not be liable for any settlement or compromise effected without its
consent. The indemnifying party shall have the right to settle or otherwise
compromise the action in its sole discretion provided that it agrees to satisfy
any and all settlement obligations from its own resources.
6.4 Additional Indemnification by AMD. AMD agrees that upon consummation
---------------------------------
of the Merger and at all times thereafter, AMD shall indemnify and hold harmless
each person who was an officer or director of NexGen prior to the Effective Time
upon the same terms and conditions as each such person was entitled to be
indemnified by NexGen at the date hereof and as of the Effective Time pursuant
to the Bylaws of NexGen or any agreement between NexGen and each such person or
as provided by the DGCL.
SECTION 7
MUTUAL CONDITIONS
Neither AMD, AMD Merger nor NexGen will be obligated to complete or cause
to be completed the transactions contemplated by this Agreement unless the
following conditions have been satisfied prior to or at the Closing:
50
7.1 Absence of Restraint. No order to restrain, enjoin or otherwise
--------------------
prevent the consummation of this Agreement or the transactions contemplated
herein shall have been entered and remain in effect by any court or
administrative body.
7.2 Absence of Termination. The obligations to consummate the
----------------------
transactions contemplated hereby shall not have been terminated pursuant to
Section 10 hereof.
7.3 Required Approvals. AMD, AMD Merger and NexGen shall have received
------------------
all such material governmental approvals, consents, authorizations or
modifications as may be required to permit the performance by AMD, AMD Merger
and NexGen, of their respective obligations under this Agreement and the
consummation of the transactions herein contemplated.
7.4 Securities Law Requirements. All permits, licenses, consents and
---------------------------
approvals necessary under any laws relating to the sale of securities shall have
been issued or given, and all registrations or registration statements filed
under any laws relating to the sale of securities for the issuance of AMD Common
Stock issuable pursuant to this Agreement, including the S-4, shall have become
effective, and no such permit, license, consent approval, registration or
registration statement shall have been revoked, cancelled, terminated, suspended
or made the subject of any stop order or proceeding therefor.
7.5 Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act. AMD and NexGen shall
--------------------------------------------
have made all required filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act and the required statutory periods under such Act shall have
expired.
7.6 NexGen Stockholders' Approval. The approval of this Agreement shall
-----------------------------
have been obtained by the requisite vote of the outstanding shares of NexGen
entitled to vote, as required by and in accordance with the applicable
provisions of the DGCL and the Certificate of Incorporation and Bylaws of
NexGen; and NexGen shall have presented evidence of such approvals to AMD in
form and content satisfactory to AMD and its counsel.
7.7 AMD Stockholders' Approval. The approval of this Agreement shall have
--------------------------
been obtained by the requisite vote of the outstanding shares of AMD entitled to
vote as required by the Rules of the NYSE; and AMD shall have presented evidence
of such approvals to NexGen in form and content satisfactory to NexGen and its
counsel.
7.8 New York Stock Exchange Listing. If any shares of AMD Common Stock
-------------------------------
are listed on the NYSE or another exchange on the Closing Date, the NYSE or such
other exchange shall have authorized the listing, upon official notice of
issuance, on the NYSE or such other exchange of the shares of AMD Common Stock
to
51
be issued or delivered in connection with the Merger, and no order suspending
trading in AMD's Common Stock shall be in effect as of the Closing Date.
SECTION 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF AMD AND AMD MERGER
The obligations of AMD and AMD Merger to consummate the transactions
contemplated in this Agreement are subject to the fulfillment, prior to or upon
the Closing, of the following conditions precedent:
8.1 Compliance with Covenants; Representations and Warranties Correct.
-----------------------------------------------------------------
NexGen shall have complied with and performed in all material respects all of
the covenants contained in this Agreement to be performed by it at or prior to
the Closing Date; the representations and warranties of NexGen contained in this
Agreement shall, after taking into account any supplemental disclosures made by
NexGen pursuant to Section 4.2(d)(ii) of this Agreement, be true and correct in
all material respects as of the Closing Date with the same effect as though made
on the Closing Date; and NexGen shall have delivered to AMD a certificate of the
Chief Executive Officer of NexGen evidencing compliance with the conditions set
forth in this Section 8.1.
8.2 No Material Adverse Change. From and after the date hereof, there
--------------------------
shall have been no material adverse change in the business or financial
condition of NexGen and the NexGen Subsidiaries taken as a whole. For the
purposes hereof, a material adverse change shall mean a material adverse change,
other than a decrease in the reported stock price, which (from the perspective
of AMD) results in a significant diminution of the value of the NexGen business
enterprise as a whole, and which material adverse change shall cause Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation to withdraw its written opinion to the
Board of Directors or AMD delivered pursuant to Section 8.5 hereof.
8.3 Section 2.23 Documents. AMD shall have received the Section 2.23
----------------------
Documents.
8.4 Key Employees. AMD shall be reasonably satisfied prior to the
-------------
Effective Time with the employment arrangements between NexGen and (i) those
employees of NexGen whom AMD has identified to NexGen as key employees and (ii)
any additional employees of NexGen whom AMD reasonably identifies as key
employees to the business of NexGen as now being conducted or currently proposed
to be conducted prior to the Effective Time.
8.5 Fairness Opinion. The Board of Directors of AMD shall have received a
----------------
written opinion from Xxxxxxxxx, Lufkin and
52
Xxxxxxxx Securities Corporation, dated the date of this Agreement and dated on
the date on which the Proxy Statement is first mailed to AMD stockholders, in
form and substance satisfactory to AMD, stating that the consideration to be
paid by AMD in the Merger is fair to the stockholders of AMD from a financial
point of view and such opinion shall not have been withdrawn by the closing.
8.6 Comfort Letter. AMD shall have received a letter from Price
--------------
Waterhouse LLP, as independent certified public accountants for NexGen, dated
(i) the effective date of the S-4, and (ii) the Closing Date, in each case
substantially to the effect that:
(a) it is a firm of independent public accountants with respect to
NexGen and its Subsidiaries within the meaning of the Securities Act and
the rules and regulations of the SEC thereunder;
(b) in its opinion, the audited consolidated financial statements of
NexGen and its Subsidiaries examined by it and included or incorporated by
reference in the S-4 comply as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and the
applicable published rules and regulations of the SEC thereunder with
respect to registration statements on Form S-4; and
(c) on the basis of specified procedures (which do not constitute an
examination in accordance with generally accepted auditing standards),
consisting of a reading of the unaudited consolidated financial statements
of NexGen and its subsidiaries included or incorporated by reference in the
S-4 and of the latest available unaudited consolidated financial statements
of NexGen and its Subsidiaries, inquiries of officers of NexGen and its
Subsidiaries responsible for financial and accounting matters, and a
reading of the minutes of meetings of stockholders and the Board of
Directors of NexGen and its Subsidiaries, nothing has come to its attention
which causes it to believe: (1) that the unaudited consolidated financial
statements of NexGen and its Subsidiaries included or incorporated by
reference in the S-4 do not comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and the
published rules and regulations thereunder, (2) that the unaudited
consolidated financial statements are not fairly presented in conformity
with generally accepted accounting principles consistently applied and on a
basis substantially consistent with that of the audited consolidated
financial statements, or (3) that as of a date which is five (5) business
days prior to the date of such letter there was any change in the capital
stock, any increase in long-term debt or any
53
decrease in consolidated net assets of NexGen and its Subsidiaries as
compared to the amounts shown in the NexGen Audited Balance Sheet, or that
during the period from June 30, 1995, to the most recent month-end for
which financial statements are available there was any decrease, as
compared with the corresponding period in the preceding year, in
consolidated net income of NexGen and its Subsidiaries, except in all
instances for changes or decreases which are set forth in such letter or
which the S-4 discloses have occurred or may occur;
and covering such other matters (including tables, statistics and other
financial information and data included in the S-4) as AMD may reasonably
request consistent with the Statement on Auditing Standards No. 49 issued by the
American Institute of Certified Public Accountants.
8.7 Legal Opinion. AMD shall have received an opinion of Pillsbury,
-------------
Madison & Sutro, counsel to NexGen, dated the Closing Date, in substantially the
form attached hereto as Exhibit D.
8.8 Resignations. AMD shall have received written resignations, effective
------------
as of the Closing Date, of each director of NexGen.
8.9 Tax Opinion. AMD shall have received a written opinion of Xxxxxxx,
-----------
Xxxxxxx & XxXxxxxx, counsel for AMD, in form and substance reasonably
satisfactory to it and substantially identical in form and substance to the
opinion described in Section 9.3 of this Agreement to the effect that the Merger
will constitute a reorganization within the meaning of Section 368(a)(1) of the
Code. Counsel shall, in rendering such opinion, be entitled to rely on
representations of AMD, AMD Merger and NexGen.
8.10 Pooling-of-Interests Accounting Treatment. AMD shall have received a
-----------------------------------------
letter from Ernst & Young LLP, AMD's independent public accountants, dated the
Closing Date, in form and substance satisfactory to AMD, to the effect that the
Merger will qualify for pooling-of-interests accounting treatment in accordance
with generally accepted accounting principles and all applicable rules,
regulations and policies of the SEC and the NYSE.
SECTION 9
CONDITIONS PRECEDENT TO NEXGEN'S OBLIGATIONS
The obligations of NexGen to consummate the transactions contemplated
herein are subject to the fulfillment, prior to or upon the Closing, of the
following conditions precedent:
54
9.1 Compliance with Covenants; Representations and Warranties Correct.
-----------------------------------------------------------------
AMD and AMD Merger shall have performed in all material respects all of the
covenants contained in this Agreement to be performed by them at or prior to the
Closing Date; the representations and warranties of AMD contained in this
Agreement shall, after taking into account any supplemental disclosures made by
AMD pursuant to Section 5.2(f)(ii) of this Agreement, be true and correct in all
material respects as of the Closing Date with the same effect as though made on
the Closing Date; and AMD shall have delivered to NexGen a certificate of the
Chief Executive Officer of AMD evidencing compliance with the conditions set
forth in this Section 9.1.
9.2 No Material Adverse Change. From and after the date hereof there
--------------------------
shall have been no material adverse change in the business or financial
condition of AMD and the AMD Subsidiaries taken as a whole. For the purposes
hereof, a material adverse change shall mean a material adverse change, other
than a decrease in the reported stock price, which (from the perspective of
NexGen) results in a significant diminution of the value of the AMD business
enterprise as a whole, and which material adverse change shall cause PaineWebber
Incorporated to withdraw its written opinion to the Board of Directors of NexGen
delivered pursuant to Section 9.4 hereof.
9.3 Tax Opinion. NexGen shall have received a written opinion of
-----------
Pillsbury, Madison & Sutro, counsel for NexGen, in form and substance reasonably
satisfactory to it and substantially identical in form and substance to the
opinion described in Section 8.9 of this Agreement to the effect that the Merger
will constitute a reorganization within the meaning of Section 368(a)(1) of the
Code. Counsel shall, in rendering such opinion, be entitled to rely on
representations of AMD, AMD Merger and NexGen.
9.4 Fairness Opinion. The Board of Directors of NexGen shall have
----------------
received a written opinion from PaineWebber Incorporated dated the date of this
Agreement and updated on the date on which the Proxy Statement is first mailed
to NexGen stockholders, in form and substance satisfactory to NexGen, stating
that the terms of the Merger are fair to the stockholders of NexGen from a
financial point of view, and such opinion shall not have been withdrawn by the
Closing.
9.5 Legal Opinion. NexGen shall have received an opinion of Xxxxxxx,
-------------
Xxxxxxx & XxXxxxxx, counsel to AMD, dated the Closing Date, in substantially the
form attached hereto as Exhibit E.
SECTION 10
TERMINATION OF AGREEMENT
55
10.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Effective Time, notwithstanding approval thereof by the shareholders either
of AMD or of NexGen or of both:
(a) by mutual written consent duly authorized by the Boards of
Directors of AMD and NexGen; or
(b) by either AMD or NexGen if the Merger shall not have been
consummated by June 30, 1996, provided, however, that the right to
terminate this Agreement under this Section 10.1(b) shall not be available
to any party whose failure to fulfill any obligation under this Agreement
has been the cause of or resulted in the failure of the Merger to occur on
or before such date; or
(c) by either AMD or NexGen if a court of competent jurisdiction or
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action, in each case
having the effect of permanently restraining, enjoining or otherwise
prohibiting the Merger; or
(d) by AMD or NexGen, if (i) at the NexGen Stockholders' Meeting
(including any adjournment or postponement thereof), the requisite vote of
the stockholders of NexGen shall not have been obtained and (ii) in the
case of the termination of this Agreement under this Section 10.1(d) by
NexGen, NexGen shall have paid to AMD all amounts owing by NexGen to AMD
under Section 10.3; or
(e) By AMD or NexGen, if (i) at the AMD Stockholders' Meeting
(including any adjournment or postponement thereof), the requisite vote of
the stockholders of AMD shall not have been obtained and (ii) in the case
of the termination of this Agreement under this Section 10.1(e) by AMD, AMD
shall have paid to NexGen all amounts owing by AMD to NexGen under Section
10.3; or
(f) by AMD, if a tender offer or exchange offer for 20% or more of
the outstanding shares of NexGen Common Stock is commenced (other than by
AMD or an affiliate of AMD), and within ten (10) business days of such
commencement the Board of Directors of NexGen shall not have recommended
that the shareholders of NexGen not tender their shares in such tender or
exchange offer; or
(g) by NexGen, upon a breach of any representation, warranty,
covenant or agreement on the part of AMD set forth in this Agreement, or if
any representation or warranty of AMD shall have become untrue, in either
case such that the
56
conditions set forth in Section 9.1 would not be satisfied (a "Terminating
AMD Breach"), provided, that, if (i) such Terminating AMD Breach is curable
by AMD through the exercise of its reasonable best efforts and for so long
as AMD continues to exercise such reasonable best efforts, or (ii) such
Terminating AMD Breach relates solely to representations and warranties and
does not cause PaineWebber Incorporated to withdraw its written opinion to
the Board of Directors of NexGen delivered pursuant to Section 9.4 hereof;
then NexGen may not terminate this Agreement under this Section 10.1(g); or
(h) by AMD, upon breach of any representation, warranty, covenant or
agreement on the part of NexGen set forth in this Agreement, or if any
representation or warranty of NexGen shall have become untrue, in either
case such that the conditions set forth in Section 8.1 would not be
satisfied ("Terminating NexGen Breach"), provided, that, (i) if such
Terminating NexGen Breach is curable by NexGen through the exercise of its
reasonable best efforts and for so long as NexGen continues to exercise
such reasonable best efforts, or (ii) such Terminating NexGen Breach
relates solely to representations and warranties and does not cause
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation to withdraw its written
opinion to the Board of Directors of AMD delivered pursuant to Section 8.5
hereof; then AMD may not terminate this Agreement under this Section
10.1(h).
10.2 Effect of Termination. If this Agreement shall be terminated as
---------------------
provided in Section 10.1, this Agreement shall forthwith become void (except as
otherwise provided in Section 10.4 and 11.2) and there shall be no liability on
the part of any party hereto to any other party except for (i) payment of any
amounts payable pursuant to Section 10.3, (ii) payment of any amounts payable
pursuant to Section 11.4 and (iii) any damages for a material breach of this
Agreement, but the foregoing shall be without prejudice to any other rights or
remedies any party may have arising out of any prior breach of any material
representation, warranty or covenant in this Agreement.
10.3 Fees and Expenses.
-----------------
(a) Except as set forth in this Section 10.3, all fees and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses,
whether nor not the Merger is consummated; provided, however, that AMD and
NexGen shall share equally all fees and expenses other than attorneys'
fees, incurred in relation to the printing and filing of the Proxy
Statement (including any preliminary materials related thereto) and the
Registration Statement (including financial statements and exhibits) and
any amendments or supplements
57
thereto.
(b) NexGen shall pay AMD a fee of $28,000,000 (subject to offset,
for any amount paid pursuant to Section 10.3(e)), upon the earlier to occur
of the following events:
(i) if NexGen's Board of Directors prior to the vote at the
NexGen Stockholders' Meeting has withdrawn, modified or changed in any
manner adverse to AMD its recommendation of the Merger or resolved to
do so, provided, however, that disclosing to its stockholders in
conformance with the securities laws information regarding a Superior
Alternative Transaction without so withdrawing, changing or modifying
its recommendation shall not be deemed to be a breach of this clause
(i); or
(ii) the NexGen Board prior to the vote at the NexGen
Stockholders' Meeting has resolved to accept, accepted or recommended
to the stockholders of NexGen a Superior Alternative Transaction; or
(iii) the later to occur of both (A) the entering into an
agreement contemplating a Superior Alternative Transaction or the
consummation of a Superior Alternative Transaction on or before June
30, 1996 and (B) termination of this Agreement pursuant to Sections
(f) or (h) of Section 10.1 of this Agreement; or
(iv) the later to occur of both (A) the entering into an
agreement contemplating an Alternative Transaction or the consummation
of an Alternative Transaction on or before June 30, 1996 and (B)
termination of this Agreement pursuant to Section 10.1(d); or
(v) as a result of any material breach by NexGen of Section 4.3
of this Agreement as a result of any willful solicitation by NexGen's
directors, executive officers, five other key employees identified by
AMD in connection with Section 8.4(i), the financial advisor or
counsel of NexGen;
provided, however, that no payment hereunder shall be due with respect to
any of such events which occurs after the earlier of June 30, 1996 or the
termination of the Agreement by AMD and NexGen pursuant to Sections
10.1(a), or by NexGen pursuant to section 10.1(b), 10.1(c), 10.1(e) or
10.1(g).
(c) As used herein "Alternative Transaction" means: (i) a transaction
pursuant to which any person other than
58
AMD or its affiliates (a "Third Party") acquires more than 20% of the
outstanding shares of NexGen Common Stock, whether from NexGen or pursuant
to a tender offer or exchange offer or otherwise, provided, however, that
after termination of this Agreement, the issuance of new equity by NexGen
where reasonably necessary to provide continued funding for NexGen's
operations shall not be deemed an Alternative Transaction except as
provided in clause (iii) of this paragraph (c); (ii) a merger or other
business combination involving NexGen pursuant to which any Third Party
acquires more than 20% of the outstanding equity securities of NexGen or
the entity surviving such merger or business combination; or (iii) any
other transaction pursuant to which any Third Party acquires control of
assets (including for this purpose the outstanding equity securities of
subsidiaries of NexGen, and the entity surviving any merger or business
combination including any of them) of NexGen or any of the NexGen
Subsidiaries having a fair market value (as determined by the Board of
Directors of NexGen in good faith) equal to more than 20% of the fair
market value of all the assets of NexGen, and the NexGen Subsidiaries,
taken as a whole, immediately prior to such transaction. As used herein, a
"Superior Alternative Transaction" means an Alternative Transaction in
which consideration is received by NexGen or its stockholders for NexGen
Common Stock and the consideration for each share of NexGen Common Stock
has a greater value than the consideration for each share of NexGen Common
Stock determined as of the date hereof to be received by Stockholders of
NexGen pursuant to the Merger.
(d) If the Fee is payable pursuant to Section 10.3(b), then the Fee
shall be paid within one business day after demand therefor by AMD unless
payment is earlier due as provided in Section 10.1(d).
(e) NexGen shall pay AMD $15,000,000 upon the earliest to occur of
the following events: (i) the termination of this Agreement by AMD pursuant
to Section 10.1(d) as a result of the failure to receive the requisite vote
for approval of this Agreement and the Merger by the stockholders of NexGen
at the NexGen Stockholders' Meeting; or (ii) the termination of this
Agreement by AMD pursuant to Section 10.1(f).
(f) AMD shall pay NexGen $15,000,000 upon the termination of this
Agreement by NexGen pursuant to Section 10.1(e) as a result of the failure
to receive the requisite vote for approval of this Agreement and the Merger
by the stockholders of AMD at the AMD Stockholders' meeting.
10.4 Return of Information; Confidentiality. In the event
--------------------------------------
59
this Agreement is terminated or the Merger is not consummated for any reason,
AMD, AMD Merger and NexGen agree that all written information and documents
supplied by either AMD or AMD Merger to NexGen or by NexGen to either AMD or AMD
Merger for their respective evaluations of the proposed Merger shall be promptly
returned to the other party at its request, and AMD, AMD Merger and NexGen each
will use its best efforts to cause confidential information to continue to be
treated as confidential. The rights of AMD and NexGen with respect to
information disclosed to the other are set forth in the Confidentiality and
Standstill Agreement dated October 16, 1995, which agreement shall continue in
full force and effect and not be affected by or merged with the terms of this
Agreement.
10.5 Extension of Time; Waivers. At any time prior to the Closing Date:
--------------------------
(a) By AMD and AMD Merger. AMD and AMD Merger may (i) extend the
---------------------
time for the performance of any of the obligations or other acts of NexGen,
and (ii) waive compliance with any of the agreements or conditions
contained herein to be performed by NexGen. Any agreement on the part of
AMD and AMD Merger to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of AMD and AMD
Merger.
(b) By NexGen. NexGen may (i) extend the time for the performance of
---------
any of the obligations or other acts of AMD and/or AMD Merger, and (ii)
waive compliance with any of the agreements or conditions contained herein
to be performed by AMD and/or AMD Merger. Any agreement on the part of
NexGen to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of NexGen.
SECTION 11
MISCELLANEOUS
11.1 Amendment. This Agreement may be amended with the approval of the
---------
Boards of Directors of AMD, AMD Merger and NexGen at any time before or after
approval hereof by the stockholders of NexGen or AMD, but, after any such
stockholder approval, no amendment shall be made which would have a material
adverse effect on the stockholders of either NexGen or AMD or which changes any
of the principal terms of this Agreement, without the further approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
11.2 No Survival of Representations and Warranties. None of the
---------------------------------------------
representations, warranties and agreements in this
60
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Merger, except for (i) the agreements of "Affiliates" of NexGen to
be delivered pursuant to Section 2.23 of this Agreement, (ii) the provisions of
Section 5.3 of this Agreement, (iii) the provisions of Section 6 of this
Agreement to the extent they inure to the benefit of persons other than AMD, AMD
Merger or NexGen, and (iv) the provisions of Section 10.3 of this Agreement.
11.3 Entire Agreement; Counterparts; Applicable Law. This Agreement
----------------------------------------------
together with the Confidentiality and Standstill Agreement, and the Credit
Agreement and the agreements contemplated by the exhibits hereto (a) constitute
the entire agreement and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
(b) may be executed in several counterparts each of which will be deemed an
original and all of which shall constitute one and the same instrument and (c)
shall be governed in all respects, including validity, interpretation and
effect, by the laws of the State of Delaware, without regard to the principles
of conflicts of laws thereof.
11.4 Attorneys' Fees. In any action at law or suit in equity in relation
---------------
to this Agreement, the prevailing party in such action or suit shall be entitled
to receive a reasonable sum for its attorneys' fees and all other reasonable
costs and expenses incurred in such action or suit.
11.5 Assignability. This Agreement shall be binding upon, and shall be
-------------
enforceable by and inure to the benefit of, the parties named herein and their
respective successors; provided, however, that this Agreement may not be
assigned by any party without the prior written consent of the other parties,
and any attempted assignment without such consent shall be void and of no
effect.
11.6 Notices. All notices, requests, demands and other communications
-------
hereunder shall be deemed to have been duly given if delivered by hand or mailed
by certified or registered mail:
To NexGen: NexGen, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: S. Xxxx Xxxx
Chairman
With a copy to:
Pillsbury, Madison & Sutro
0000 Xxxxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. del Xxxxx, Esq.
61
To AMD: Advanced Micro Devices, Inc.
Attention: General Counsel
P. O. Xxx 0000 X/X 000
Xxxxxxxxx, XX 00000-0000
With a copy to:
Xxxxxxx, Xxxxxxx & XxXxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Or to such other address at which any party may by registered mail notify the
other party, and shall be deemed given on the date on which hand-delivered or on
the third business day following the date on which mailed.
11.7 Titles. The titles and captions of the sections and paragraphs of
------
this Agreement are included for convenience of reference only and shall have no
effect on the construction or meaning of this Agreement.
11.8 Third Party Beneficiary. Section 6 of this Agreement shall be
-----------------------
enforceable by, and shall inure to the benefit of, the persons entitled to be
indemnified thereunder. Section 5.3 of this Agreement shall be enforceable by,
and shall inure to the benefit of, the holders of NexGen Warrants and NexGen
Options assumed by AMD. No other section of this Agreement shall be interpreted
or construed as creating any right of enforcement or cause of action on the part
of any person who is not a party to this Agreement.
11.9 Cooperation. AMD, AMD Merger and NexGen each agree to execute and
-----------
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be necessary or desirable in order to consummate
expeditiously or implement the transactions contemplated by this Agreement.
62
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first set forth above.
ADVANCED MICRO DEVICES, INC.
By /s/ X. X. Xxxxxxx III
____________________________
AMD MERGER CORPORATION
By /s/ X. X. Xxxxxxx III
____________________________
NEXGEN, INC.
By /s/ S. Xxxx Xxxx
____________________________
63
SECURED CREDIT AGREEMENT
BETWEEN
ADVANCED MICRO DEVICES, INC.
AND
NEXGEN, INC.
October 20, 1995
ANNEX 1
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I: DEFINITIONS.................................................. 1
1.1 Defined Terms..................................................... 1
1.2 Accounting Terms.................................................. 7
1.3 Terms Generally................................................... 7
ARTICLE II: THE LOAN..................................................... 7
2.1 The Line of Credit................................................ 7
2.2 Availability of the Line of Credit................................ 7
2.3 Disbursements..................................................... 8
a. Advances..................................................... 8
b. Notice of Advances........................................... 8
c. Method of Disbursement....................................... 8
2.4 The Note.......................................................... 9
2.5 Repayment of Principal............................................ 9
2.6 Interest Rate and Payments of Interest............................ 9
a. Interest Rate................................................ 9
b. Interest on Overdue Amounts; Alternative Rate of Interest.... 9
c. Usury Law.................................................... 9
2.7 Prepayments....................................................... 10
2.8 Payment to the Lender............................................. 10
2.9 Other Secured Indebtedness........................................ 11
2.10 Subordination..................................................... 11
ARTICLE III: THE CLOSING.................................................. 11
3.1 Closing Date...................................................... 11
3.2 Failure to Meet Conditions........................................ 11
ARTICLE IV: CONDITIONS PRECEDENT......................................... 11
4.1 Documents Required Prior to Initial Disbursement.................. 12
4.2 Conditions Precedent to Each Disbursement......................... 13
ARTICLE V: COLLATERAL SECURITY.......................................... 13
5.1 Secured Obligations............................................... 13
5.2 The Collateral.................................................... 13
5.3 Priority of Liens................................................. 14
5.4 Financing Statements and Perfection............................... 14
i
TABLE OF CONTENTS
-----------------
(continued)
Page
----
ARTICLE VI: REPRESENTATIONS AND WARRANTIES OF THE BORROWER............... 15
6.1 Organization...................................................... 15
6.2 Authorization..................................................... 15
6.3 Enforceability.................................................... 15
6.4 No Proceedings.................................................... 15
6.5 Compliance with Laws and Agreements............................... 16
6.6 Title to Assets................................................... 16
6.7 Financial Condition............................................... 16
6.8 Absence of Undisclosed Liabilities................................ 16
6.9 Taxes 17
6.10 Misleading Statements............................................. 17
6.11 Consents 17
6.12 Federal Reserve Regulations....................................... 17
6.13 Finder's or Broker's Fee.......................................... 17
6.14 Subsidiaries...................................................... 17
6.15 Investment Company Act; Public Utility Holding Company Act........ 18
ARTICLE VII: DEFAULT...................................................... 18
7.1 Event of Default.................................................. 18
7.2 Remedies.......................................................... 18
ARTICLE VIII: GENERAL PROVISIONS........................................... 18
8.1 Construction...................................................... 18
8.2 Further Assurances................................................ 18
8.3 Enforcement and Waiver by the Lender.............................. 19
8.4 Notices 19
8.5 Waiver and Release by the Borrower................................ 20
8.6 Choice of Law and Forum........................................... 20
8.7 Binding Effect, Assignment and Entire Agreement................... 20
8.8 Severability...................................................... 20
8.9 Attorneys' Fees and Costs......................................... 20
8.10 Headings 20
8.11 Survival 20
8.12 Counterparts...................................................... 21
EXHIBIT A: NAMES OF AUTHORIZED INDIVIDUALS................................. A-1
EXHIBIT B: FORM OF ADVANCE REQUEST......................................... B-1
EXHIBIT C: SECURED PROMISSORY NOTE......................................... C-1
EXHIBIT D: SECURITY AGREEMENT.............................................. D-1
EXHIBIT E: CONTENT OF OPINION OF BORROWER'S COUNSEL........................ E-1
ii
SECURED CREDIT AGREEMENT
------------------------
THIS SECURED CREDIT AGREEMENT (the "Agreement") is made and entered into as
of October 20, 1995, by and between NEXGEN, INC., a Delaware corporation (the
"Borrower"), and ADVANCED MICRO DEVICES, INC., a Delaware corporation (the
"Lender").
RECITALS:
---------
a. Concurrently herewith, the Borrower is entering into a certain Agreement
and Plan of Merger (the "Merger Agreement") with the Lender and AMD Merger
Corporation, a Delaware corporation and wholly owned subsidiary of the Lender.
b. The Borrower has requested that the Lender extend revolving credit
facilities to the Borrower in the aggregate principal amount of up to Sixty
Million Dollars ($60,000,000) and the Lender is willing to do so, upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and for other good and valuable consideration, the sufficiency and receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
---------
DEFINITIONS
-----------
1.1 Defined Terms. For the purposes of this Agreement, the capitalized
-------------
terms in the preamble and the recitals hereto shall have the meanings therein
given them and the following terms shall have the respective meanings set forth
below:
"Accounts" shall mean all rights to payment for goods sold or leased,
or to be sold or leased, or for services rendered or to be rendered, whether or
not earned by performance, no matter how evidenced and including without
limitation accounts receivable, chattel paper, contract rights, drafts,
instruments, notes, purchase orders, acceptances and all other forms of
obligations and receivables.
"Advance" shall mean each and every advance of sums hereunder by the
Lender to or for the account of the Borrower.
"Business Day" shall mean any day which is not a Saturday, Sunday or
legal holiday in the State of California on which banks are open for business in
the City of San Francisco.
1
"Chattel Paper," "Contracts," "Contract Rights," "Documents,"
"Equipment," "Fixtures," "General Intangibles," "Goods," "Instruments" and
"Inventory" shall have the respective meanings as are given to those terms in
the Uniform Commercial Code as adopted by the State of California (the
"U.C.C.").
"Closing" shall mean the closing of the transactions contemplated
under this Agreement.
"Closing Date" shall mean the date referred to in Section 3.1 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as the same may
from time to time be amended.
"Collateral" shall mean all of the property in which a security
interest is granted to the Lender pursuant to Section 5.2 hereof.
"Collateral Documents" shall mean all those certain documents
specified in paragraphs (c) and (d) of Section 4.1 hereof and any additional
documents executed and delivered by the Borrower pursuant to Section 5.4 hereof.
"Dollars" or "$" shall mean the lawful currency of the United States
of America.
"Event of Default" shall mean the event specified in Section 7.1
hereof.
"Financial Statements" shall mean the consolidated balance sheet of
the Borrower and its Subsidiaries, taken as a whole, as of June 30, 1995, the
consolidated statement of operations, statement of stockholders' equity and
statement of cash flows of the Borrower and its Subsidiaries, taken as a whole,
for the fiscal year of the Borrower ended on such date, and the notes thereto.
"Indebtedness" shall mean, with respect to any person, all items of
indebtedness, obligations and liabilities, whether matured or unmatured,
liquidated or unliquidated, fixed or contingent, joint or several, including
without limitation:
a. All indebtedness hereunder;
b. All indebtedness guaranteed in any manner, whether directly or
indirectly, or endorsed (other than for collection or deposit in the
ordinary course of business) or discounted with recourse;
c. All indebtedness in effect guaranteed, whether directly or
indirectly, through agreements, contingent or
2
otherwise: (i) to repurchase such indebtedness; or (ii) to purchase, sell
or lease (whether as lessee or lessor) property, products, materials or
supplies, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such indebtedness or to assure the
owner of the indebtedness against loss; or (iii) to supply funds to or in
any other manner invest in the debtor; and
d. All indebtedness secured by (or for which the holder of such
indebtedness has a right, contingent or otherwise, to be secured by) any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance upon property owned or acquired subject thereto, whether or not
the liabilities secured thereby have been assumed.
"Index Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next higher 1/16th of 1%) equal to the Index Rate
in effect on such day plus three hundred fifty basis points (3.50). Any change
in the Index Base Rate due to a change in the Index Rate shall be effective on
the effective date of such change in the Index Rate.
"Index Rate" shall mean that rate established and published from time
to time by Bank of America National Trust and Savings Association, San
Francisco, California ("BofA"), as its prime, base or reference rate. The Index
Rate is determined by BofA at its discretion based on various factors including
its costs of funds and desired return, general economic conditions and other
factors. BofA uses the Index Rate as a benchmark for pricing certain types of
loans. Depending upon the circumstances, such as the amount and terms of a
loan, the creditworthiness of a borrower or any guarantor, the presence and
nature of collateral and other relationships between a borrower and BofA, loans
may be priced at, above or below the Index Rate. The Borrower acknowledges that
the use of the appellation "Index Rate" does not constitute a representation on
the part of the Lender that no loans or for-bearances are made by BofA (or the
Lender) at a lesser rate of interest. In the event that BofA shall cease to
establish or publish an Index Rate, whether denominated as such or otherwise,
the Index Rate shall be deemed to be the average "prime," "base" or "reference"
interest rate for each calendar month, as of the first day of such calendar
month, of the three largest (as determined by total assets) banking institutions
in the State of California (other than BofA) then establishing or publishing a
"prime," "base" or "reference" rate of interest; provided, however, that in the
event any such banking institution publishes more than one such rate, the rate
used with respect to such banking institution shall be the highest among those
so published by it.
"Liabilities" shall mean all Indebtedness that should, in accordance
with generally accepted accounting principles
3
consistently applied, be classified as liabilities on a balance sheet of the
Borrower.
"Lien" shall mean, with respect to any asset: (i) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset; (ii) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset; or
(iii) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Line of Credit" shall mean that certain line of credit described in
Section 2.1 hereof.
"Loan" shall mean the aggregate of all Advances hereunder.
"Loan Documents" shall mean: (i) this Agreement; (ii) the note,
agreements, financing statements, instruments and other documents referred to in
Article IV hereof; and (iii) any amendment, supplement, modification, consent or
waiver of, to or in respect of any of the foregoing.
"Material Adverse Effect" shall mean material impairment of the rights
of or benefits available to the Lender under any of the Loan Documents.
"Maturity Date" shall mean the first to occur of the following dates:
(i) the date which is twelve (12) months after the date of any termination of
the Merger Agreement in accordance with the provisions of Section 10.1 of the
Merger Agreement; and (ii) the date of the acquisition by any one person or
group of persons (other than the Lender, AMD Merger Corporation or any other
affiliate of the Lender) of, or of the right to acquire, more than fifty percent
(50%) of any class or series of voting securities of the Borrower;
"Obligations" shall mean the obligations of the Borrower:
(i) To pay the principal of and interest on the Note (as defined
herein) in accordance with the terms hereof and thereof and to perform all
of its other obligations to or for the benefit of the Lender, whether
hereunder or otherwise, now existing or hereafter incurred, matured or
unmatured, fixed or contingent, joint or several, including any extensions,
modifications or renewals thereof or substitutions therefor;
(ii) To repay to the Lender all amounts advanced by the Lender
hereunder or otherwise to or on behalf of the Borrower, including without
limitation all advances for principal or interest payments to prior secured
parties or
4
mortgagees, or for liens, or for taxes, levies, insurance, rent, or repairs
to or maintenance or storage of any of the property of the Borrower; and
(iii) To reimburse the Lender, on demand, for all of the Lender's
expenses and costs, including the reasonable fees and expenses of its
counsel, in connection with the enforcement of this Agreement and the
documents required hereunder, including without limitation any proceeding
brought or threatened to enforce payment of any of the obligations referred
to in clauses (i) and (ii) of this definition.
"Permitted Liens" shall mean:
(i) Liens for taxes, assessments or similar charges incurred in
the ordinary course of business that are not yet due and payable;
(ii) Pledges or deposits made in the ordinary course of business
to secure payment of workers' compensation or to participate in any fund in
connection with workers' compensation, insurance, old-age pensions or other
social security programs;
(iii) Liens of mechanics, materialmen, warehousemen or carriers,
and other like liens, securing obligations incurred in the ordinary course
of business that are not yet due and payable;
(iv) Liens arising by operation of law;
(v) Good faith pledges or deposits made in the ordinary course of
business to secure performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, or to secure statutory
obligations or surety, appeal, indemnity, performance or other similar bonds
required in the ordinary course of business;
(vi)Encumbrances consisting of zoning restrictions, easements or
other restrictions on the use of real property, none of which materially
impair the use of such property by the Borrower in the operation of its
business, and none of which are violated in any material respect by existing
or proposed structures or land use;
(vii)Liens in favor of the Lender;
(viii)Liens in favor of lessors of equipment under equipment lease
agreements entered into by the Borrower, as lessee, in the ordinary course
of business;
5
(ix) Existing Liens in favor of ASCII Corporation and ASCII of
America, Inc. under the Security Agreement with the Borrower dated November
15, 1991, as amended;
(x) Existing Liens in favor of Phemus Corporation under the
Security Agreement with Borrower dated July 22, 1993;
(xi) Liens with respect to the Accounts and Inventory of the
Borrower, securing the Borrower's line of credit with a commercial bank or
credit company;
(xii) Any Liens which are approved in writing by the Lender;
(xiii)Any Lien in favor of any supplier/manufacturer of inventory,
including without limitation VLSI Technology, Inc. and IBM Corporation;
(xiv) Any of the following, if the validity or amount thereof is
being contested in good faith by appropriate and lawful proceedings and levy
and execution thereon have been stayed and continue to be stayed, and if
they do not, in the aggregate, materially detract from the value of the
property of the Borrower or materially impair the use thereof in the
operation of the Borrower's business:
(A) Claims or Liens for tax assessments or charges due and
payable and subject to interest or penalty;
(B) Claims, Liens and encumbrances upon, and defects of
title to, real or personal property, including without limitation any
attachment of personal or real property or other legal process prior
to adjudication of a dispute on the merits;
(C) Claims or Liens of mechanics, materialmen,
warehousemen or carriers, or other like liens; and
(D) Adverse judgments on appeal; and
(xv) Any Lien which is expressly made subordinate to the Liens in
favor of the Lender and which come into existence after any termination of the
Merger Agreement.
6
"Security Agreement" shall mean that certain Security Agreement which
is to be executed and delivered by the Borrower to the Bank with respect to
those items set forth in Section 5.2 hereof.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Term" shall mean the term of this Agreement, commencing on the
Closing Date and expiring on the Maturity Date; provided, however, that in the
event the Borrower fails to pay to the Lender all sums required hereunder on or
before the Maturity Date, the Borrower shall continue to be bound by the terms
of this Agreement until all such sums are paid in full but the Lender shall be
under no further obligations hereunder after such date.
1.2 Accounting Terms. Except as otherwise expressly provided herein, all
----------------
terms of an accounting or financial nature shall have the meanings given them
under generally accepted accounting principles as in effect from time to time
applied on a consistent basis over the time period in question.
1.3 Terms Generally. Except where the context requires otherwise, the
---------------
definitions in Section 1.1 hereof shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include," "includes" and "including" shall be deemed to be followed
by the phrase "without limitation." Unless otherwise stated, references to
Sections, Articles, Schedules and Exhibits made herein are to Sections,
Articles, Schedules or Exhibits, as the case may be, of this Agreement.
ARTICLE II
----------
THE LOAN
--------
2.1 The Line of Credit. Subject to the terms of this Agreement, the
------------------
Borrower may at any time and from time to time before the Maturity Date, and so
long as no Event of Default or event which with the giving of notice or the
passage of time or both would become an Event of Default has occurred, borrow
from the Lender pursuant to the revolving credit facility described in this
Section 2.1 (the "Line of Credit"), and the Lender shall lend to the Borrower
pursuant to the Line of Credit, such requested Advances, each in an amount of
not less than One Million Dollars ($1,000,000), and not to exceed in the
aggregate at any one time outstanding during the Term hereof the principal sum
of Sixty Million Dollars ($60,000,000).
2.2 Availability of the Line of Credit. The Line of Credit shall be
----------------------------------
available for Advances to the Borrower during the Term in accordance with the
following schedule:
7
a. On or before December 31, 1995: Advances in an aggregate principal
amount not exceeding Thirty Million Dollars ($30,000,000);
b. On or before March 31, 1996: Advances in an aggregate principal
amount not exceeding Fifty Million Dollars ($50,000,000); and
c. On or before June 30, 1996: Advances in an aggregate principal
amount not exceeding Sixty Million Dollars ($60,000,000).
Any unused portion of the Line of Credit existing on June 30, 1996 shall be
cancelled as of such date and no longer available.
2.3 Disbursements.
-------------
a. Advances. Upon satisfaction in full of the conditions precedent
--------
set forth in Article IV hereof, the Lender shall at the Closing and
thereafter make Advances hereunder pursuant to the Line of Credit, in
accordance with the availability schedule set forth in Section 2.2 hereof,
upon receipt by the Lender of a request pursuant to paragraph (b) of this
Section 2.3 from any one of the individuals whose names are set forth in
Exhibit A attached hereto, acting alone. Notwithstanding anything to the
contrary herein contained, any Advance shall be conclusively presumed to
have been made to or for the benefit of the Borrower so long as the Lender
believes in good faith that the requests and directions received by the
Lender in connection therewith have been made by a person authorized
hereunder or where such Advance is deposited to the credit of the account of
the Borrower with Bank of America National Trust and Savings Association,
regardless of the fact that persons other than those authorized hereunder
may have authority to draw against such account or to have made such
requests.
b. Notice of Advances. In order to request an Advance (including
------------------
but not limited to any Advance to be disbursed on the Closing Date), the
Borrower shall give written notice (or telephonic notice promptly confirmed
in writing or by facsimile transmission) to the Lender in the form of
Exhibit B not later than 8:00 a.m., San Francisco time, on the day of the
proposed Advance. Such notice shall be irrevocable and shall in each case
refer to this Agreement and specify the date of such Advance (which shall be
a Business Day) and the amount thereof.
c. Method of Disbursement. Unless otherwise specified by the
----------------------
Borrower and agreed to by the Lender, each Advance shall be credited by the
Lender to the Borrower's deposit account number 12579-53309, FFC 10-10-435-
0000000, with Bank of America National Trust and Savings Association,
Account Administration
8
(South) [bank routing (ABA) number 000-000-000], subject to the terms and
conditions set forth herein.
2.4 The Note. Concurrently with the execution of this Agreement, the
--------
Borrower shall execute and deliver to the Lender a secured promissory note, in
the form of Exhibit C hereto, with respect to the Line of Credit; (the "Note").
The Note shall be secured, as provided in Article V hereof.
2.5 Repayment of Principal. The Borrower shall repay to the Lender the
----------------------
aggregate principal amount of any and all Advances under the Line of Credit on
the Maturity Date.
2.6 Interest Rate and Payments of Interest.
--------------------------------------
a. Interest Rate. All Advances shall bear interest as follows:
-------------
(i) Each Advance shall bear interest at a rate per annum equal
to the Index Base Rate, computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days (as the case may be).
Interest on each Advance shall be due and payable on the Maturity
Date. The Lender shall determine and advise the Borrower three (3)
Business Days prior to the Maturity Date of the total interest then
due, which determination shall be conclusive and binding on the
Borrower, absent manifest error.
(ii) Interest on each Advance shall accrue from and including
the date on which such Advance is made and to but excluding the date
on which such Advance is repaid in full, unless the date of repayment
is the same as the date on which such Advance is made, in which case
such date shall be included.
b. Interest on Overdue Amounts; Alternative Rate of Interest.
---------------------------------------------------------
Notwithstanding any provision of this Section 2.6 to the contrary, if the
Borrower shall default in the payment of the principal of or interest on any
Advance or any fees or other amounts becoming due hereunder, whether by
scheduled maturity, notice of prepayment, acceleration or otherwise, the
Borrower shall on demand from time to time from the Lender pay interest from
and including the date of such default, to the extent permitted by law, on
such defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum (computed as provided
in paragraph (a) of this Section 2.6) equal to the Index Base Rate plus two
percent (2.00%).
c. Usury Law. It is the intent of the Lender and the Borrower in
---------
the execution of this Agreement, the Note and the
9
Collateral Agreements and all other security agreements and financing
statements evidencing the Borrower's obligations hereunder, to contract in
strict compliance with the usury laws of the State of California (the "Usury
Law"). In furtherance thereof, the Lender and the Borrower stipulate and
agree that none of the terms and provisions contained herein or in the Note
or in any Collateral Agreement or in any other instrument executed in
connection herewith or therewith, shall ever be construed to create a
contract to pay for the use, forbearance or detention of money at a rate of
interest in excess of the maximum interest rate permitted to be charged by
the Lender in compliance with the Usury Law. Neither the Borrower nor any
guarantors, endorsers or other parties now or hereafter becoming liable for
payment hereunder or under the Note or any Collateral Agreement shall ever
be required to pay interest thereon at a rate in excess of the maximum
interest that may be lawfully charged by the Lender in compliance with the
Usury Law, and the provisions of this paragraph 2.6(c) shall control over
all other provisions hereof or of the Note or any Collateral Agreement, and
of any other instruments now or hereafter executed in connection herewith or
therewith, which may be in apparent conflict herewith. If the maturity of
any Obligations shall be accelerated for any reason or if the principal of
the Note is paid prior to the expiration of the term thereof, and as a
result thereof the interest received for the actual period of existence of
the Loan exceeds the applicable maximum lawful rate permitted to be charged
by the Lender in compliance with the Usury Law, the Lender shall refund to
the Borrower the amount of such excess or shall, at its option, credit the
amount of such excess against the principal balance of the Loan then
outstanding. In the event that the Lender shall collect monies which are
deemed to constitute interest in excess of the lawful rate which the Lender
may charge, for any reason whatsoever, such monies shall, upon such
determination and at the option of the Lender, be immediately either
returned to the Borrower or credited against the principal balance of the
Loan then outstanding.
2.7 Prepayments. The Borrower shall have the right to make payments in
-----------
reduction of the outstanding balance of the Line of Credit, in whole or in part,
at any time; provided, however, that each such prepayment must be accompanied by
payment of all interest accrued thereon, and provided further that such
prepayment must be in the amount of One Million Dollars ($1,000,000) or integral
multiples thereof, or the outstanding balance if less. Any amount of principal
so repaid may be reborrowed by Borrower and shall be available for future
Advances under the Line of Credit.
2.8 Payment to the Lender. All sums payable to the Lender hereunder
---------------------
shall be paid directly to the Lender (or to a bank account specified by the
Lender) in immediately available funds. The Lender shall send the Borrower
statements of all amounts due
10
hereunder, which statements shall be considered correct and conclusively binding
upon the Borrower (absent manifest error) unless the Borrower notifies the
Lender to the contrary within thirty (30) days of its receipt of any statement
which the Borrower believes to be incorrect.
2.9 Other Secured Indebtedness. The Borrower covenants and agrees with
--------------------------
the Lender that, so long as any of the Obligations shall remain outstanding, the
Borrower shall not, and shall not cause or permit any of the Subsidiaries to,
either directly or indirectly, create, incur, assume or permit to exist any
indebtedness secured by a Lien on any of its properties or assets, except for
Permitted Liens. The Borrower also covenants and agrees to furnish to the
Lender promptly (and within any applicable cure period) notice of the occurrence
of an event of default or any event which with notice or the passage of time (or
both) would constitute an event of default under the Security Agreement dated
November 15, 1991, as amended, with ASCII Corporation and ASCII of America, Inc.
or the Security Agreement dated July 22, 1993 with Phemus Corporation.
2.10 Subordination. Lender agrees that the Obligations of Borrower
-------------
hereunder, and the Liens granted to Lender pursuant to Article V hereof, are
subordinate to the prior payment in full of the indebtedness owing to ASCII
Corporation, ASCII of America, Inc. and Phemus Corporation (together the "Senior
Lenders") and junior in priority to the existing Liens in favor of the Senior
Lenders, as described in the security agreements referenced in Section 2.9
hereof, in each case whether such right of payment is in the ordinary course of
business or in the event of any distribution of the assets of Borrower upon any
dissolution, winding-up, liquidation or bankruptcy, insolvency or other similar
proceedings. The Borrower will not make and the Lender will not demand, accept
or receive any payment on the Line of Credit or any Advances hereunder until all
amounts owing to the Senior Lenders shall have been paid in full. The Lender
and the Borrower covenant to execute and deliver to the Senior Lenders such
further instruments and to take such further action as the Senior Lenders may at
any time or times reasonably request in order to carry out the provisions and
intent of this Section 2.10.
ARTICLE III
-----------
THE CLOSING
-----------
3.1 Closing Date. The Closing shall be held on October 20, 1995, at 5:00
------------
p.m., local time, in the offices of Xxxxxxx, Xxxxxxx & XxXxxxxx at 00 Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx, or at such other time and location
as the parties hereto shall mutually agree. At or prior to the Closing, the
Borrower shall deliver and execute all documents, reports, opinions and
instruments required to be delivered and/or executed hereunder.
11
3.2 Failure to Meet Conditions. If, at the Closing, the conditions
--------------------------
specified in Article IV of this Agreement have not been satisfied or waived in
writing by the Lender, the Lender may thereupon elect to be relieved of all
further obligations under this Agreement.
ARTICLE IV
----------
CONDITIONS PRECEDENT
--------------------
The obligation of the Lender to make any Advance hereunder is subject to the
satisfaction of the following conditions precedent:
4.1 Documents Required Prior to Initial Disbursement. The Borrower shall
------------------------------------------------
have delivered to the Lender, prior to or at the Closing and prior to the
initial disbursement of any Advance hereunder, the following documents in form
and substance satisfactory to the Lender:
(a) This Agreement, duly executed by the Borrower;
(b) The Note, duly executed by the Borrower and in the form
attached hereto as Exhibit C;
(c) The Security Agreement, duly executed by the Borrower and
in the form attached hereto as Exhibit D;
(d) The UCC-1 Financing Statement and related notices of
security interests (patents, patent applications and trademarks) required by
Article V hereof;
(e) An opinion of Pillsbury Madison & Sutro, as counsel to the
Borrower, dated as of the Closing Date, addressing the matters set forth in
Exhibit E hereto and in form and substance acceptable to the Lender and its
counsel; and
(f) A certificate of the Secretary of the Borrower, dated as of
the Closing Date, certifying: (i) that attached thereto is a true and
correct copy of the Certificate of Incorporation of the Borrower,
accompanied by a certificate to that effect from the Secretary of State of
the State of Delaware dated reasonably close to the Closing Date, which
Certificate of Incorporation has not been amended since the date of said
certificate of the Secretary of State; (ii) that attached thereto is a true,
correct and complete copy of the Bylaws of the Borrower, as in effect on the
date of such certificate; (iii) that attached thereto is a true, correct and
complete copy of the resolutions duly adopted by the Board of Directors of
the Borrower authorizing the execution, delivery and performance of this
Agreement, the Note, the Security Agreement and all other Loan Documents by
the Borrower and that
12
said resolutions have not been amended or revoked and are in full force and
effect on the date of such certificate; and (iv) as to the incumbency and
specimen signature of each officer of the Borrower executing this Agreement,
the Note, the Security Agreement or any other instrument or document to be
executed and delivered by the Borrower in connection herewith.
4.2 Conditions Precedent to Each Disbursement. At the time of each and
-----------------------------------------
every disbursement of an Advance hereunder:
a. No Event of Default shall have occurred and be continuing, nor
shall any event have occurred and be continuing that with the giving of
notice or the passage of time, or both, would be an Event of Default;
b. No event shall have occurred which constitutes a Material Adverse
Effect;
c. All of the Collateral Documents shall be and remain in full force
and effect;
d. The Borrower shall have provided the Lender with an Advance
request, in the form of Exhibit B hereto, pursuant to Section 2.3 hereof.
ARTICLE V
---------
COLLATERAL SECURITY
-------------------
5.1 Secured Obligations. The Collateral shall constitute collateral
-------------------
security for the Loan and all other Obligations and shall be general and
continuing until all Obligations have been satisfied in full. The Collateral
referred to in Section 5.2 hereof shall be the subject of the Security
Agreement, which shall be executed by the Borrower and delivered to the Lender
concurrently with the execution and delivery of this Agreement.
5.2 The Collateral. As security for the prompt satisfaction of all
--------------
Obligations, the Borrower shall assign to the Lender, pursuant to the terms and
conditions of the Security Agreement, all of its right, title and interest in
and to, and grants to the Lender a Lien upon and security interest in, all of
the following:
(a) all patents, patent applications, and like protection,
including, without limitation, those patents and pending applications, U.S.
and foreign, listed in Schedules (1) and (2) attached hereto, improvements,
divisions, continuations, renewals, reissues and extensions thereof
heretofore or hereafter filed, issued or acquired (collectively, "Patents");
13
(b) all inventions, whether or not any of said inventions are
patentable, including, without limitation, those inventions disclosed or
claimed in patents and patent applications (collectively, "Inventions");
(c) all trademarks and service marks (collectively,
"Trademarks") registered or unregistered, including without limitation those
marks listed in Schedule (3) attached hereto;
(d) all works of authorship, copyrights, copyright
applications, copyright registrations, mask work applications, mask work
registrations, and like protection, including, without limitation, renewals,
rights of termination, continuations, divisions and extensions thereof,
whether or not the underlying works of authorship have been published and
whether said copyrights are statutory or arise under the common law
(collectively, "Copyrights");
(e) all foreign rights corresponding to Patent, Invention,
Trademark and Copyright rights, including, without limitation, those
available by treaty and reciprocity;
(f) all computer programs and software, whether in source code
or object code and in whatever medium created or acquired;
(g) all trade secrets, processes, confidential information, and
all assets (including, without limitation, any General Intangibles)
associated with the Patents, Inventions, Trademarks or Copyrights;
(h) any and all tangible or intangible assets, including
without limitation all Chattel Paper, Instruments, Documents, Goods,
Inventory, Contracts, Contract Rights, General Intangibles, Accounts,
Equipment or other tangible property owned by the Borrower, excluding any
assets subject to equipment lease arrangements or equipment which is subject
to a security interest in favor of a lender providing financing for the
purchase of such equipment;
(i) all proceeds of the foregoing and all accessions to ,
substitutions and replacements for, and royalties, profits, license fees and
products of the foregoing; and
(j) all books and records pertaining to the foregoing.
5.3 Priority of Liens. The foregoing Liens are intended by the parties
-----------------
to be first and prior Liens on the Collateral, except
14
for Permitted Liens and subject to the provisions of Section 2.10 hereof.
5.4 Financing Statements and Perfection. The Borrower shall: (i) join
-----------------------------------
with the Lender in executing such financing statements describing all or any
part of the Collateral (including amendments thereto and continuation statements
thereof) in form and substance satisfactory to the Lender as the Lender may
specify and, at the Lender's sole discretion, at any time during the Term of
this Agreement, to make such filings with the United States Patent and Trademark
Office and the United States Copyright Office with respect to the Patents,
Trademarks and Copyrights as are necessary to perfect the Lender's security
interest therein; and (ii) take such other steps as the Lender may reasonably
direct, including the noting of the Lender's lien on the Collateral and on any
certificates of title therefor, all to perfect the Lender's interest in the
Collateral. In addition to the foregoing and not in limitation thereof, a
carbon, photographic or other reproduction of the Security Agreement shall be
sufficient as a financing statement and may be filed in any appropriate office
in lieu thereof.
ARTICLE VI
----------
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
----------------------------------------------
The Borrower represents and warrants to the Bank as follows:
6.1 Organization. The Borrower is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of Delaware, has the
corporate power to own its properties and to engage in the business it conducts,
and is duly qualified and in good standing as a foreign corporation in all
jurisdictions wherein the nature of the business transacted by it or property
owned by it makes such qualification necessary, except where the failure to so
qualify could not reasonably be expected to result in a Material Adverse Effect.
6.2 Authorization. The Borrower has the power and authority to enter
-------------
into and perform its obligations under this Agreement, the Note and the
Collateral Documents, and to incur the Obligations herein and therein provided
for, and has taken all corporate actions necessary to authorize the execution,
delivery and performance of this Agreement, the Note and the Collateral
Documents.
6.3 Enforceability. This Agreement and the Collateral Documents are, and
--------------
the Note when delivered will be, legal, valid and binding Obligations of the
Borrower, enforceable upon the Borrower in accordance with their respective
terms, except to the extent that such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
15
application from time to time affecting the rights of creditors generally.
6.4 No Proceedings. There are no actions, suits or proceedings at law or
--------------
in equity or by or before any governmental authority now pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary or the businesses, assets or rights of the Borrower or any Subsidiary
as to which there is a reasonable possibility of an adverse determination and
which, if adversely determined, could, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
6.5 Compliance with Laws and Agreements. Neither the Borrower nor any
-----------------------------------
Subsidiary is in violation of any law, or in default with respect to any
judgment, writ, injunction, decree, rule or regulation of any governmental
authority, where such violation or default could reasonably be expected to
result in a Material Adverse Effect. Neither the Borrower nor any Subsidiary is
in default under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, where such default could reasonably be expected to result in a Material
Adverse Effect, and the entering into and performance by the Borrower of this
Agreement, the Note and the Collateral Documents will not (immediately or with
the expiration of an application cure period or the giving of notice, or both):
(i) violate any charter or bylaw provision of the Borrower or any Subsidiary, or
violate any law or result in a default under any contract, agreement or
instrument to which the Borrower or any Subsidiary is a party or by which the
Borrower or any Subsidiary or its respective properties is bound; or (ii) result
in the creation or imposition of any security interest in, or Lien upon, any of
the assets of the Borrower or any Subsidiary (except a Permitted Lien).
6.6 Title to Assets. The Borrower and each of its Subsidiaries has good
---------------
and marketable title to all of its respective assets, subject to no security
interest, encumbrance, Lien (except for Permitted Liens) or claim of any third
person.
6.7 Financial Condition. The Financial Statements, including any
-------------------
schedules and notes pertaining thereto, have been prepared in accordance with
generally accepted accounting principles consistently applied, and fairly
present the financial condition of the Borrower and all of its Subsidiaries,
taken as a whole, at the dates thereof and the results of operations for the
periods covered thereby, and there has occurred no event which might reasonably
result in a Material Adverse Effect from the dates thereof to the date hereof.
16
6.8 Absence of Undisclosed Liabilities. As of the date of the Financial
----------------------------------
Statements, neither the Borrower nor any Subsidiary had any material
Indebtedness of any nature, including without limitation liabilities for taxes
and any interest or penalties relating thereto, except to the extent reflected
(in a footnote or otherwise) and reserved against in the Financial Statements or
as disclosed in or permitted by this Agreement. The Borrower does not know and
has no reasonable grounds to know of any basis for the assertion against it or
any Subsidiary as of the date hereof of any material Indebtedness of any nature
not fully disclosed in or permitted by this Agreement.
6.9 Taxes. Except as otherwise permitted herein, the Borrower and each
-----
Subsidiary have filed all federal, state and local tax returns and other reports
that it is required by law to file prior to the date hereof and which are
material to the conduct of its respective businesses, have paid or caused to be
paid all taxes, assessments and other governmental charges that are due and
payable prior to the date hereof, and have made adequate provision for the
payment of such taxes, assessments or other charges accruing but not yet
payable. The Borrower has no knowledge of any deficiency or additional
assessment in a materially important amount in connection with any taxes,
assessments or charges not provided for on its books.
6.10 Misleading Statements. No representation or warranty by the Borrower
---------------------
contained herein or in any certificate or other document furnished by the
Borrower pursuant hereto contains any untrue statement of material fact or omits
to state a material fact necessary to make such representation or warranty not
misleading in light of the circumstances under which it was made.
6.11 Consents. Each consent, approval or authorization of, or filing,
--------
registration or qualification with, any entity which is required to be obtained
or effected by the Borrower or any Subsidiary in connection with the execution
and delivery of this Agreement, the Note and the Collateral Documents, or the
undertaking or performance of any Obligation hereunder or thereunder, has been
duly obtained or effected.
6.12 Federal Reserve Regulations. Neither the Borrower nor any Subsidiary
---------------------------
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying any "margin stock"
within the meaning of Regulations G, U or X of the Board of Governors of the
Federal Reserve System of the United States (the "Board"). No part of the
proceeds of the Loan has been or will be used, whether directly or indirectly,
and whether immediately, incidentally or alternately, for any purpose which
entails a violation of, or which is inconsistent with, the provisions of the
regulations promulgated by the Board, including but not limited to regulations
G, T, U or X.
17
6.13 Finder's or Broker's Fee. The Borrower has not made any agreement or
------------------------
taken any action which might cause anyone to become entitled to a commission or
fee as a result of the making of an Advance.
6.14 Subsidiaries. As of the Closing Date, all of the issued and
------------
outstanding shares of capital stock or partnership interest (as the case may be)
of each of the Subsidiaries have been validly issued and are fully paid and
nonassessable and are owned directly or indirectly by the Borrower free and
clear of all Liens whatsoever, and there are no options, warrants, calls,
conversion or exchange rights, commitments or agreements of any character
obligating any of the Subsidiaries to issue, deliver or sell additional shares
of capital stock of any class or any securities convertible into or exchangeable
for any such capital stock or any additional partnership interest other than as
disclosed in the Financial Statements.
6.15 Investment Company Act; Public Utility Holding Company Act. Neither
----------------------------------------------------------
the Borrower nor any Subsidiary is an "investment company" as that term is
defined in, or is otherwise subject to regulation under, the Investment Company
Act of 1940. Neither the Borrower nor any Subsidiary is a "holding company" as
that term is defined in, or is otherwise subject to regulation under, the Public
Utility Holding Company Act of 1935.
ARTICLE VII
-----------
DEFAULT
-------
7.1 Event of Default. Any failure of the Borrower to pay the Note when
----------------
the same becomes due and payable on the Maturity Date shall constitute an Event
of Default hereunder, without regard to any fault of or cause by the Borrower.
7.2 Remedies. Upon the occurrence of an Event of Default, the Lender may
--------
exercise any rights it may have at law or in equity or otherwise to avail itself
of any and all remedies to which it may have recourse as a secured party under
applicable law.
ARTICLE VIII
------------
GENERAL PROVISIONS
------------------
8.1 Construction. The provisions of this Agreement shall be in addition
------------
to those of any agreement, instrument, note or other evidence of liability held
by the Lender, all of which shall be construed as complementary to each other.
Nothing herein contained shall prevent the Lender from enforcing any or all
other notes, instruments or agreements in accordance with their respective
terms. In the event that there is a conflict between the terms of
18
this Agreement and the terms of the Note or any Collateral Document, the terms
of this Agreement shall control.
8.2 Further Assurances. From time to time, the Borrower shall execute
------------------
and deliver to the Lender such additional documents and provide such additional
information as the Lender may reasonably require to carry out the terms of this
Agreement and be informed of the Borrower's status and affairs (and that of any
of its Subsidiaries).
8.3 Enforcement and Waiver by the Lender. The Lender shall have the
------------------------------------
right at all times to enforce the provisions of this Agreement, the Note and the
Collateral Documents in strict accordance with the terms hereof and thereof,
notwithstanding any conduct or custom on the part of the Lender in refraining
from so doing at any time or times. The failure of the Lender at any time or
times to enforce its rights under such provisions, strictly in accordance with
the same, shall not be construed as having created a custom in any way or manner
contrary to the specific provisions of this Agreement or as having in any way or
manner modified or waived the same. All rights and remedies of the Lender are
cumulative and concurrent and the exercise of one right or remedy shall not be
deemed a waiver or release of any other right or remedy.
8.4 Notices. Any notices or consents required or permitted by this
-------
Agreement shall be in writing and shall be deemed duly given if delivered in
person or by courier, or if sent by facsimile transmission or certified mail,
postage prepaid and return receipt requested, addressed as follows, unless such
address is changed by written notice hereunder:
a. If to the Borrower:
NexGen, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
With a copy to:
Pillsbury Madison & Sutro
Xxx Xxxxxxx Xxxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. del Xxxxx, Esq.
b. If to the Lender:
Advanced Micro Devices, Inc.
Xxx XXX Xxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
19
With a copy to:
Xxxxxxx, Xxxxxxx & XxXxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
All such notices shall be deemed to be received by the party to be noticed upon
the earlier of (i) actual receipt or (ii) delivery at the specified address.
8.5 Waiver and Release by the Borrower. To the maximum extent permitted
----------------------------------
by applicable law, the Borrower waives notice and opportunity to be heard before
exercise by the Lender of the remedies of self-help, setoff or of other summary
procedures permitted by any applicable law or by any agreement with the
Borrower, and except where required hereby or by any applicable law, notice of
any other action taken by the Lender.
8.6 Choice of Law and Forum. This Agreement has been entered into, and
-----------------------
shall be interpreted in accordance with, the laws of the State of California,
and any dispute arising hereunder or under the Note or any Collateral Document
shall be heard by a court of competent jurisdiction sitting in the City and
County of San Francisco, California.
8.7 Binding Effect, Assignment and Entire Agreement. This Agreement
-----------------------------------------------
shall inure to the benefit of, and shall be binding upon, the respective
successors and permitted assigns of the parties hereto. The Borrower has no
right to assign any of its rights or delegate any of its obligations hereunder
without the prior written consent of the Lender, but the Lender may freely
assign its rights hereunder without the consent of the Borrower. This
Agreement, and the documents executed and delivered pursuant hereto, constitute
the entire Agreement between the parties and may be amended only by a writing
signed on behalf of each party.
8.8 Severability. If any provision of this Agreement shall be held
------------
invalid under any applicable laws, such invalidity shall not affect any other
provision of this Agreement that can be given effect without the invalid
provision and, to this end, the provisions hereof are severable.
8.9 Attorneys' Fees and Costs. In the event of a dispute hereunder, the
-------------------------
prevailing party (as determined by the court) shall be awarded, in addition to
any judgment, all reasonable attorneys' fees and costs incurred by it in
connection with such dispute.
8.10 Headings. The headings contained in this Agreement are for
--------
convenience of reference only and shall not affect the construction or
interpretation hereof.
20
8.11 Survival. All representations, warranties, agreements and covenants
--------
made herein and in the certificates, instruments and documents delivered
pursuant hereto shall survive the making by the Lender of Advances and the
execution and delivery to the Lender of the Note and shall continue in full
force and effect until all Obligations are satisfied in full.
8.12 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused its duly
authorized representative to execute this Agreement on its behalf as of the day
and year first above written.
THE BORROWER:
NEXGEN, INC.,
a Delaware Corporation
By: /s/ S. Xxxx Xxxx
________________________________
Its Chairman of the Board, President
and Chief Executive Officer
________________________________
THE LENDER:
ADVANCED MICRO DEVICES, INC.,
a Delaware corporation
By: /s/ X. X. Xxxxxxx III
________________________________
Its Chairman of the Board and Chief
Executive Officer
________________________________
21
EXHIBIT A
---------
NAMES OF AUTHORIZED INDIVIDUALS
-------------------------------
1. S. Xxxx Xxxx
2. Xxxxxxx X. X. Xxxx
A-1
EXHIBIT B
---------
FORM OF ADVANCE REQUEST
-----------------------
Advanced Micro Devices, Inc.
Xxx XXX Xxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Dear Sir:
The undersigned, NexGen, Inc. (the "Borrower"), refers to that certain
Secured Credit Agreement dated as of October 20, 1995 (as amended, modified,
supplemented or waived, the "Credit Agreement") by and between the Borrower and
yourselves (the "Lender"). Capitalized terms used but not defined in this letter
shall have the meanings specified in the Credit Agreement. The Borrower hereby
gives the Lender notice pursuant to Section 2.3 of the Credit Agreement that it
requests an Advance, and in connection therewith sets forth below the terms on
which the Advance is requested to be made:
(i) Date of Advance _____________
(ii) Principal Amount of Advance/1/ _____________
Upon the making of the Advance in response to this request, the Borrower
shall be deemed to have represented and warranted that the conditions to lending
specified in Section 4.2 of the Credit Agreement have been satisfied in full.
Very truly yours,
NEXGEN, INC.,
a Delaware corporation
By:________________________
Its________________________
________________________
/1/ Not less than $1,000,000.00.
B-1
EXHIBIT C
---------
SECURED PROMISSORY NOTE
-----------------------
$60,000,000 October 20, 0000
Xxx Xxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, the undersigned, NEXGEN, INC., a Delaware corporation
(the "Borrower"), unconditionally promises to pay to the order of ADVANCED MICRO
DEVICES, INC. (the "Lender"), in lawful money of the United States of America at
its office located at Xxx XXX Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, or to such
other entity or at such other address as the Lender may from time to time
direct, on or before the Maturity Date, the lesser of (i) the principal sum of
Sixty Million Dollars ($60,000,000) or (ii) the aggregate unpaid principal
amount of all Advances made pursuant to that certain Secured Credit Agreement
dated October 20, 1995, by and between the Borrower and the Lender (the "Credit
Agreement"), and to pay interest (before, as well as after, judgment) in
arrears, from the date hereof in like money at said office on the unpaid
principal amount hereof from time to time outstanding, as provided for in the
Credit Agreement.
Interest which is not paid when due shall thereafter bear interest like as
to principal.
The Lender is hereby authorized by the Borrower to endorse on the schedule
forming a part hereof appropriate notations evidencing the date and amount of
each Advance made by the Lender and the date and amount of each payment of
principal and interest made by the Borrower with respect thereto.
Presentment, notice of dishonor and protest are hereby waived by all
makers, sureties, guarantors and endorsers hereof. The Borrower hereby
expressly waives, to the full extent permitted by law, its rights to plead any
and all statutes of limitations as a defense to any demand hereunder.
This Note is the Note referred to in the Credit Agreement and is secured by
a Security Agreement between the Lender and the Borrower of even date herewith.
Reference is hereby made to said Credit Agreement for provisions regarding the
payment and prepayment hereof. Terms defined in said Credit Agreement and not
otherwise defined herein are used herein as therein defined.
C-1
This Note was made and shall be governed and construed in accordance with
the laws of the State of California.
THE BORROWER:
NEXGEN, INC.,
a Delaware corporation
By: ___________________________________
Its ___________________________________
C-2
BORROWINGS AND PAYMENTS OF PRINCIPAL
------------------------------------
Principal Interest Date of Amount of Notation
Date of or Face Rate Repayment/ Repayment/ Made By
Advance Amount of Prepayment Prepayment
Advance
===========================================================================================
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===========================================================================================
C-3
EXHIBIT D
---------
SECURITY AGREEMENT
------------------
THIS SECURITY AGREEMENT is made as of October 20, 1995, by and between
ADVANCED MICRO DEVICES, INC., a Delaware corporation ("Secured Party"), and
NEXGEN, INC., a Delaware corporation ("Debtor").
RECITALS
--------
This Security Agreement is entered into in order to grant to Secured Party
a security interest in the property described herein as Collateral for the
indebtedness of Debtor to Secured Party pursuant to that certain Secured Credit
Agreement of even date herewith (the "Credit Agreement"), as evidenced by a
Secured Promissory Note of even date herewith in the principal amount of Sixty
Million Dollars ($60,000,000) (the "Note"), and for other obligations as set
forth herein. All terms not otherwise defined herein shall have the meanings
ascribed thereto in the Credit Agreement.
AGREEMENT
---------
NOW, THEREFORE, in reliance upon the foregoing and in consideration of the
premises and covenants set forth herein, the parties hereto agree as follows:
1. Grant of Security Interest. Debtor hereby grants to Secured Party a
--------------------------
security interest in the property described in Section 2 hereof (collectively
and severally, the "Collateral") to secure the payment and performance of the
obligations of Debtor to Secured Party described in Section 3 hereof
(collectively and severally, the "Obligations").
2. Collateral. The Collateral shall consist of the following, whether
----------
now existing or hereafter acquired by Debtor:
(a) all patents, patent applications, and like protection, including,
without limitation, those patents and pending applications, U.S. and
foreign, listed in Schedules (1) and (2) attached hereto, improvements,
divisions, continuations, renewals, reissues and extensions thereof
heretofore or hereafter filed, issued or acquired (collectively,
"Patents");
(b) all inventions, whether or not any of said inventions are
patentable, including, without limitation, those inventions disclosed or
claimed in patents and patent applications (collectively, "Inventions");
D-1
(c) all trademarks and service marks (collectively, "Trademarks")
registered or unregistered, including without limitation those marks listed
in Schedule (3) attached hereto;
(d) all works of authorship, copyrights, copyright applications,
copyright registrations, mask work applications, mask work registrations,
and like protection, including, without limitation, renewals, rights of
termination, continuations, divisions and extensions thereof, whether or
not the underlying works of authorship have been published and whether said
copyrights are statutory or arise under the common law (collectively,
"Copyrights");
(e) all foreign rights corresponding to Patent, Invention, Trademark
and Copyright rights, including, without limitation, those available by
treaty and reciprocity;
(f) all computer programs and software, whether in source code or
object code and in whatever medium created or acquired;
(g) all trade secrets, processes, confidential information, and all
assets (including, without limitation, any general intangibles) associated
with the Patents, Inventions, Trademarks or Copyrights;
(h) any and all tangible or intangible assets, including without
limitation all Chattel Paper, Instruments, Documents, Goods, Inventory,
Contracts, Contract Rights, General Intangibles, Accounts, Equipment or
other tangible property owned by Debtor, excluding any assets subject to
equipment lease arrangements or equipment which is subject to a security
interest in favor of a lender providing financing for the purchase of such
equipment;
(i) all proceeds of the foregoing and all accessions to,
substitutions and replacements for, and royalties, profits, license fees
and products of the foregoing; and
(j) all books and records pertaining to the foregoing.
3. Obligations. The Obligations of Debtor secured by the Collateral
-----------
shall consist of any and all debts, obligations and liabilities of Debtor to
Secured Party, including without limitation those arising under the Credit
Agreement, the Note, this Security Agreement, all other Collateral Documents and
any other documents or agreements executed in connection therewith, and all
amendments, extensions and renewals thereof, whether now existing or hereafter
arising, voluntary or involuntary, whether or not jointly owed with others,
direct or indirect, absolute or contingent, liquidated or unliquidated, and
whether or not from
D-2
time to time decreased or extinguished and later increased, created or incurred.
4. Representations and Warranties. Debtor hereby represents and warrants
------------------------------
that:
(i) Debtor is the owner of the Collateral (or, in the case of after-
acquired Collateral, at the time Debtor acquires rights in the Collateral
will be the owner thereof) and that no other person, entity, agency or
government has (or, in the case of after-acquired Collateral, at the time
Debtor acquires rights therein will have) any right, title, claim or
interest (by way of security interest or other Lien or charge or otherwise)
in, against or to the Collateral, except as previously disclosed to Secured
Party including Permitted Liens.
(ii) All information heretofore, herein or hereafter supplied to
Secured Party by or on behalf of Debtor with respect to the Collateral is
true and correct in all material respects.
(iii) Debtor has the authority to enter into this Security Agreement
and to be obligated under the terms of the Credit Agreement, the Note and
the Collateral Documents, and any person signing this Security Agreement
and/or the Note or Collateral Document has been duly authorized to sign
same.
5. Covenants of Debtor. In addition to all covenants and agreements of
-------------------
Debtor set forth in the Credit Agreement, the Note and the Collateral Documents,
which are incorporated herein by this reference, Debtor hereby agrees:
(i) To do all acts that may be necessary to reasonably maintain,
preserve and protect the Collateral;
(ii) Not to use or permit any Collateral to be used unlawfully
or in violation of any provision of this Security Agreement or any
applicable statute, regulation or ordinance, or any policy of insurance,
covering the Collateral;
(iii) To pay promptly when due all taxes, assessments, charges,
encumbrances and liens now or hereafter imposed upon or affecting any
Collateral;
(iv) To notify Secured Party promptly of any change in Debtor's
name or place of business or, if Debtor has more than one place of
business, its head office or office in which Debtor's records relating to
the Collateral are kept and any material change in the permanent location
of the Collateral;
D-3
(v) To procure, execute and deliver from time to time any and
all endorsements, assignments, financing statements and other writings
deemed necessary or appropriate by Secured Party to perfect, maintain and
protect its security interest hereunder and the priority thereof, and to
deliver promptly to Secured Party all originals of Collateral, and
proceeds, consisting of chattel paper or instruments not delivered to a
senior lien holder.
(vi) To communicate to Secured Party, or its representatives,
any material facts respecting said Patents, Inventions, Trademarks or
Copyrights, and to testify in any legal proceedings, sign all lawful
papers, execute all divisions, continuations, substitutions, and renewal,
reexamination and reissue applications, and upon an Event of Default,
execute all necessary assignment papers to cause title to any and all
Patents, Inventions, Trademarks or Copyrights to be transferred to Secured
Party, make all rightful oaths and generally do everything reasonably
necessary or desirable to preserve Secured Party's interests in said
Collateral.
(vii) To appear in and defend any action or proceeding which may
affect its title to or Secured Party's interest in the Collateral, to give
Secured Party notice of same, and to assist Secured Party should Secured
Party take part in any such action or proceeding;
(viii) If Secured Party gives value to enable Debtor to acquire
rights in, or the use of, any Collateral, to use such value for such
purpose;
(ix) To keep separate, accurate and complete records of the
Collateral, and to provide Secured Party upon an Event of Default with such
records and such other reports and information relating to the Collateral
as Secured Party may request from time to time;
(x) Not to surrender or lose possession of (other than to
Secured Party), sell, encumber, lease, rent or otherwise dispose of or
transfer any Collateral, or any right or interest therein, except in the
ordinary course of Debtor's business, and to keep the Collateral free of
all levies and security interests or other liens, charges or encumbrances
except Permitted Liens;
(xi) To keep the Collateral in good condition and repair,
reasonable wear and tear excepted;
(xii) Not to cause or permit any waste or unusual or
unreasonable depreciation of the Collateral;
D-4
(xiii) At any reasonable time, upon demand by Secured Party upon
an Event of Default, to exhibit to and allow inspection by Secured Party
(or persons designated by Secured Party) of the Collateral;
(xiv) To comply with all laws, regulations and ordinances
relating to the possession, operation, maintenance and control of the
Collateral; and
5.1 Authorized Action by Secured Party. Debtor hereby irrevocably
----------------------------------
appoints Secured Party as its attorney-in-fact, to do (but Secured Party
shall not be obligated to and shall incur no liability to Debtor or any
third party for failure so to do) any act which Debtor is obligated by this
Security Agreement to do upon the occurrence of an Event of Default as
defined herein, and to exercise such rights and powers as Debtor might
exercise with respect to the Collateral, including without limitation the
right to:
(i) Collect by legal proceedings or otherwise and endorse,
receive and issue receipts for all dividends, interest payments, proceeds
and other sums and property now or hereafter payable on or on account of
the Collateral;
(ii) Enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender,
accept, hold or apply other property in exchange for, the Collateral;
(iii) Insure, process and preserve the Collateral;
(iv) Transfer the Collateral to its own or its nominee's name;
and
(v) Make any compromise or settlement, and take any action it
deems advisable, with respect to the Collateral.
Debtor agrees to reimburse Secured Party upon demand for any costs and expenses,
including but not limited to reasonable attorneys' fees, which Secured Party may
incur while acting as Debtor's attorney-in-fact hereunder, all of which costs
and expenses are included in the Obligations secured hereby. It is further
agreed and understood between the parties hereto that such care as Secured Party
gives to the safekeeping of its own property of like kind shall constitute
reasonable care of the Collateral when in Secured Party's possession; provided,
however, that Secured Party shall not be required to make any presentment,
demand or protest, or give any notice, and need not take any action to preserve
any rights against any prior party or any other Person in connection with the
Obligations or with respect to the Collateral.
D-5
6. Events of Default. The occurrence of any Event of Default under the
-----------------
Credit Agreement shall constitute a default hereunder by Debtor.
7. Remedies of Secured Party. Subject to the prior payment in full of
-------------------------
the indebtedness owed by Debtor to the Senior Lenders, and upon the occurrence
of any Event of Default, Secured Party may, at its option and without notice to
or demand on Debtor and in addition to all rights and remedies otherwise
available at law or in equity or otherwise to Secured Party, do any one or more
of the following:
(i) Foreclose or otherwise enforce Secured Party's security
interest in any manner permitted by law or provided for in this Security
Agreement;
(ii) Sell, lease or otherwise dispose of any Collateral at one
or more public or private sales, whether or not such Collateral is present
at the place of sale, for cash or credit or future delivery, on such terms
and in such manner as Secured Party may determine;
(iii) Recover from Debtor all costs and expenses, including but
not limited to reasonable attorneys' fees, incurred or paid by Secured
Party in exercising any right, power or remedy provided by this Security
Agreement or by law;
(iv) Require Debtor to assemble the Collateral and make it
available to Secured Party at a place to be designated by Secured Party;
(v) Enter onto property where any Collateral is located and take
possession thereof with or without judicial process; and
(vi) Prior to the disposition of the Collateral, store, process,
repair or recondition it or otherwise prepare it for disposition in any
manner.
provided however that upon the occurrence of an Event of Default, Secured Party
----------------
shall have the right to purchase from the Senior Lenders their entire right,
title and interest with respect to the indebtedness owed by Debtor to the Senior
Lenders, for a cash purchase price equal to the aggregate unpaid principal
balance of such indebtedness plus accrued and unpaid interest (including default
interest), fees and any other amounts then owing to the Senior Lenders.
8. Waiver of Hearing. Debtor hereby expressly waives, to the extent
-----------------
permitted by law, any constitutional or other right to a judicial hearing prior
to the time Secured Party takes possession or disposes of the Collateral upon
default.
D-6
9. Cumulative Rights. The rights, powers and remedies of Secured Party
-----------------
under this Security Agreement shall be in addition to all rights, powers and
remedies given to Secured Party by virtue of any statute or rule of law, or any
other agreement, all of which rights, powers and remedies shall be cumulative
and may be exercised successively or concurrently without impairing Secured
Party's security interest in the Collateral.
10. Waiver. Any forbearance, failure or delay by Secured Party in
------
exercising any right, power or remedy shall not preclude the further exercise
thereof, and every right, power or remedy of Secured Party shall continue in
full force and effect until such right, power or remedy is specifically waived
in a writing executed by Secured Party. Debtor waives all rights to require
Secured Party to proceed against any Person or to exhaust any Collateral or to
pursue any remedy in Secured Party's power.
11. Setoff. Debtor agrees that Secured Party may exercise its rights of
------
setoff with respect to the Obligations in the same manner as if the Obligations
were unsecured.
12. Binding Upon Successors; Agency. All rights of Secured Party under
-------------------------------
this Security Agreement shall inure to the benefit of its successors and
assigns, and all obligations of Debtor shall bind its heirs, executors,
administrators, successors and assigns. Secured Party may exercise any and all
of its rights hereunder through one or more agents.
13. Entire Agreement; Severability. This Security Agreement contains the
------------------------------
entire security agreement between Secured Party and Debtor. If any of the
provisions of this Security Agreement shall be held invalid or unenforceable,
this Security Agreement shall be construed as if not containing those provisions
and the rights and obligations of the parties hereto shall be construed and
enforced accordingly.
14. References. The singular includes the plural. If more than one
----------
Debtor executes this Security Agreement, the term "Debtor" shall be deemed to
refer to each of the undersigned as well as to all of them, and their
obligations and agreements hereunder shall be joint and several.
15. No Obligations Assumed. Secured Party does not assume any of Debtor's
----------------------
obligations arising under any of the Collateral in which a security interest is
hereby granted or any agreement with respect thereto, and Debtor hereby
covenants and agrees to keep and perform all such obligations.
16. Choice of Law. This Security Agreement shall be construed in
-------------
accordance with and governed by the laws of the State of California, and, where
applicable and except as otherwise defined herein or in the Credit Agreement,
terms used herein shall
D-7
have the meanings given them in the Uniform Commercial Code as adopted in the
State of California.
17. Notice. Any written notice, consent or other communication provided
------
for in this Security Agreement shall be delivered or sent pursuant to the notice
provisions of the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement on the day and year first written above.
SECURED PARTY:
ADVANCED MICRO DEVICES, INC.,
a Delaware Corporation
By: _________________________________
Its _________________________________
DEBTOR:
NEXGEN, INC.,
a Delaware Corporation
By: _________________________________
Its _________________________________
D-8
SCHEDULES
to Security Agreement
[ADD: Schedules (1), (2) and (3)]
D-9
EXHIBIT E
---------
CONTENT OF OPINION OF BORROWER'S COUNSEL
----------------------------------------
The opinion of Pillsbury Madison & Sutro, counsel to the Borrower, shall
cover the matters set forth below. All defined terms used herein and in the
opinion shall have the meaning ascribed to them in that certain Secured Credit
Agreement dated as of October 20, 1995, by and between Advanced Micro Devices,
Inc. and NexGen, Inc.
1. Each of the Borrower and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and each has the corporate power and authority to own its assets and
carry on its business as it is now being conducted. Each of the Borrower and
its Subsidiaries is duly qualified to do business and is in good standing in all
jurisdictions in which the ownership of its property or the conduct of its
business makes such qualifications necessary.
2. The execution, delivery and performance of the Agreement, the Note and
the Collateral Documents by the Borrower are within the corporate power and
authority of the Borrower and have been duly authorized by all necessary
corporate action on the part of the Borrower.
3. The Agreement, the Note and the Collateral Documents have been duly
executed and delivered by the Borrower, and each constitutes the legal, valid
and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, except as the enforceability thereof may
be limited by bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and by general equitable
principles regarding the availability of the remedy of specific performance.
4. All consents, authorizations, approvals of or filings or registrations
with any commission, board, agency, court or other
governmental authority necessary in connection with the valid
execution, delivery and performance of the Agreement, the Note and the
Collateral Documents by the Borrower have been obtained or effected and are in
full force and effect.
5. The execution and delivery by the Borrower of the Agreement, the Note
and the Collateral Documents as the case may be, will not: (i) violate any
provision of the Certificate of
E-1
Incorporation or the Bylaws of the Borrower, or any law, rule or regulation
applicable to the Borrower, or any order, writ, judgment, decree, determination
or award known to us; (ii) to the best of our knowledge after due inquiry,
result in a breach of or constitute a default under any indenture, lease, loan
or other agreement or any instrument to which the Borrower or any Subsidiary is
a party or by which its respective properties may be bound or affected; or (iii)
to the best of our knowledge after due inquiry, result in, or require the
creation or imposition of, any Lien (other than in favor of the Lender) upon or
with respect to any of the properties now owned or hereafter acquired by the
Borrower or any Subsidiary.
6. To the best of our knowledge after due inquiry, the Borrower is not in
violation of any law, rule or regulation applicable to it or any order, writ,
judgment, decree, determination or award or any indenture, lease, loan or other
agreement to which it is a party or by which it or its properties may be bound
or affected, the violations of which could have a Material Adverse Effect upon
the ability of the Borrower to perform any of its obligations under the
Agreement, the Note and the Collateral Documents.
7. To the best of our knowledge, there are no actions, suits or
proceedings pending or threatened against the Borrower or any Subsidiary, or any
of its respective properties, before any court, arbitrator, commission, board,
agency or other authority which, if determined adversely to the Borrower or the
Subsidiary, could result in a Material Adverse Effect.
8. Neither the Borrower nor any Subsidiary is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935.
9. Upon the filing of the UCC-1 Financing Statement with the California
Secretary of State, the security interest of the Lender in the Collateral shall
be fully perfected.
10. The Note, and the Lender as holder of the Note, are exempt from the
usury provisions of Section 1 of Article XV of the California Constitution.
E-2
FIRST AMENDMENT
---------------
to
SECURED CREDIT AGREEMENT
-----------------------------
THIS FIRST AMENDMENT TO SECURED CREDIT AGREEMENT (this "Amendment"), dated
as of October 30, 1995, is entered into by and between NEXGEN, INC., a Delaware
corporation (the "Borrower"), and ADVANCED MICRO DEVICES, INC., a Delaware
corporation (the "Lender").
Recitals:
--------
A. The Borrower and the Lender are parties to a Secured Credit Agreement
dated as of October 20, 1995 (the "Credit Agreement"), pursuant to which the
Lender has extended certain credit facilities to the Borrower.
B. The Borrower and the Lender desire to amend the Credit Agreement in
certain respects, subject to the terms and conditions of this Amendment.
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and for other good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms not otherwise defined herein shall
have the meanings given to them in the Credit Agreement.
2. Amendment of the Credit Agreement. The Lender and the Borrower hereby
acknowledge their mutual understanding that all sums of principal and accrued
interest with respect to the Loan, the Credit Agreement and the Note shall be
due and payable not later than June 30, 1997. In order to confirm this
understanding, Section 1.1 of the Credit Agreement is hereby amended by changing
the definition of "Maturity Date" to read as follows:
1
"Maturity Date" shall mean the first to occur of the following dates:
(i) June 30, 1997; (ii) the date which is twelve (12) months after the date
of any termination of the Merger Agreement in accordance with the
provisions of Section 10.1 of the Merger Agreement; and (iii) the date of
the acquisition by any one person or group of persons (other than the
Lender, AMD Merger Corporation or any other affiliate of the Lender) of, or
of the right to acquire, more than fifty percent (50%) of any class or
series of voting securities of the Borrower;
3. Representations and Warranties.
The Borrower hereby represents and warrants to the Lender as follows:
(a) The execution, delivery and performance by the Borrower of this
Amendment have been duly authorized by all necessary corporate and other action
and do not and will not require any registration with, consent or approval of,
notice to or action by, any person (including any governmental authority) in
order to be effective and enforceable. The Credit Agreement as amended by this
Amendment constitutes the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with its respective terms,
without defense, counterclaim or offset.
(b) All representations and warranties of the Borrower contained in the
Credit Agreement are true and correct.
4. Conditions to Effectiveness of Amendment.
This Amendment will become effective on the date on which all of the
following conditions precedent shall have been satisfied:
4.1 The Borrower and the Lender shall have executed and delivered this
Amendment; and
4.2 As necessary, the Borrower shall have delivered to the Lender a
certificate of the Secretary of the Borrower, dated as of the date hereof,
certifying that attached thereto is a true, correct and complete copy of the
resolutions duly adopted by the Board of Directors of the Borrower authorizing
the execution, delivery and performance of this Amendment.
5. Reservation of Rights. The Borrower acknowledges and agrees that the
execution and delivery by the Lender of this Amendment shall not be deemed to
create a course of dealing or otherwise obligate the Lender to forbear or
execute similar amendments under the same or similar circumstances in the
future.
2
6. Miscellaneous.
(a) Except as herein expressly amended, all terms, covenants and provisions
of the Credit Agreement are and shall remain in full force and effect and all
references therein to such Credit Agreement shall henceforth refer to the Credit
Agreement as amended by this Amendment. This Amendment shall be deemed
incorporated into, and a part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. No third party
beneficiaries are intended in connection with this Amendment.
(c) This Amendment shall be governed by and construed in accordance with
the laws of the State of California.
(d) This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this document (and any other document required
herein) may be delivered by any party hereto either in the form of an executed
original or an executed original sent by facsimile transmission to be followed
promptly by mailing of a hard copy original. Any failure by the Lender to
receive the hard copy executed original of any such document shall not diminish
the binding effect of receipt of the facsimile transmitted executed original of
such document of the Borrower whose hard copy page was not received by the
Lender.
(e) This Amendment, together with the Credit Agreement, contains the entire
and exclusive agreement of the parties hereto with reference to the matters
discussed herein and therein. This Amendment supersedes all prior drafts and
communications with respect to the subject matter hereof. This Amendment may
not be amended except in accordance with the provisions of Section 8.7 of the
Credit Agreement.
(f) If any term or provision of this Amendment shall be deemed prohibited
by or invalid under any applicable law, such provision shall be invalidated
without affecting the remaining provisions of this Amendment or the Credit
Agreement, respectively.
3
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.
THE BORROWER:
NEXGEN, INC.,
a Delaware corporation
By
-------------------------------
S. Xxxx Xxxx
Chairman, President and
Chief Executive Officer
THE LENDER:
ADVANCED MICRO DEVICES, INC.,
a Delaware corporation
By
-------------------------------
Xxxxxx X. Xxxxxxx
Senior Vice President and
Chief Financial Officer
4
VOTING AGREEMENT
----------------
AGREEMENT (hereinafter referred to as the "Agreement") entered into as of
October ___, 1995, between ADVANCED MICRO DEVICES, INC., a Delaware corporation
(hereinafter referred to as "AMD"), and the undersigned officer, director, or
stockholder (such officer, director or stockholder being referred to below as
the "Stockholder") of NEXGEN, INC., a Delaware corporation (hereinafter referred
to as "NexGen").
WITNESSETH:
WHEREAS, NexGen, AMD and AMD Merger Corporation, a Delaware corporation
(hereinafter referred to as the "Subsidiary"), propose to enter into an
Agreement and Plan of Merger expected to be signed and dated on October 20, 1995
(hereafter referred to as the "Merger Agreement") pursuant to which the
Subsidiary, which is wholly-owned by AMD, will be merged into NexGen (the
"Merger"), and NexGen will become a wholly-owned subsidiary of AMD; and
WHEREAS, the Stockholder owns of record or beneficially the number of
outstanding shares of Common Stock, par value $.0001 per share, of NexGen
("NexGen Common Stock"), which is listed opposite the Stockholder's name on the
signature page to this Agreement; and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, AMD and the Subsidiary have requested the Stockholder to enter into
this Agreement; and
WHEREAS, to induce AMD and the Subsidiary to enter into the Merger
Agreement, the Stockholder has agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the entry into the Merger Agreement of
AMD and the Subsidiary and the mutual agreements, covenants, representations and
warranties contained herein and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Voting and Proxy. The Stockholder hereby agrees to vote all shares of
----------------
NexGen Common Stock now or at any time hereafter owned by the Stockholder of
record or beneficially (the "Shares") in favor of the Merger Agreement and the
Merger at any meeting of the stockholders of NexGen called for the purpose of
considering the Merger. Concurrently with the Stockholder's execution of this
Agreement, the Stockholder has executed and delivered to AMD an irrevocable
proxy (the "AMD Proxy") in the form of Exhibit 1 attached hereto, appointing the
officers of AMD named therein, or either of them, as proxy for the Stockholder
to vote the Shares in accordance with the preceding sentence.
Exhibit A
---------
2. Transfer Restriction. The Stockholder shall not, prior to the meeting
---------------------
of the stockholders of NexGen to be called for the purpose of considering the
Merger or the termination of the Merger Agreement, whichever is earlier, sell,
assign, otherwise transfer or encumber any of the Shares or execute any proxy
with respect to any of the Shares other than the AMD Proxy, or enter into any
agreement or other arrangement relating to the voting of any of the Shares which
proxy, agreement or arrangement is in any way inconsistent with the AMD Proxy.
3. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to AMD that:
(a) This Agreement is a valid and binding agreement of the
Stockholder, enforceable against the Stockholder in accordance with its terms;
(b) Neither the execution of this Agreement by the Stockholder nor
the consummation by the Stockholder of the transactions contemplated hereby will
constitute a violation of or default under, or conflict with, any contract,
commitment, agreement, understanding, arrangement or restriction of any kind by
which the Stockholder is bound;
(c) No consent, approval, order or authorization of any court,
administrative agency or other governmental entity or any other person as
required by or with respect to the Stockholder in connection with the execution
and delivery of this Agreement by the Stockholder;
(d) On the date hereof the Stockholder has, and at the Effective Time
(as defined in the Merger Agreement) the Stockholder shall have, sole voting
power or power to direct the vote with respect to the Shares, and the
Stockholder has not granted any proxy with respect to the Shares that is in
effect on the date hereof, and
(e) The Stockholder has not, with the exception of this Agreement and
the AMD Proxy, subjected the Shares to any voting trust or any other agreement,
understanding or arrangement.
4. Commitment of AMD. If, as a result of the Stockholder's execution of
-----------------
this Agreement and the AMD Proxy, any shares of AMD Common Stock received by the
Stockholder pursuant to the Merger are not deemed to have been registered under
the Securities Act of 1933, as amended, notwithstanding the fact that they have
been issued and sold pursuant to a registration statement on Form S-4, filed in
connection with the Merger, AMD will register such shares on a registration
statement on Form S-3 (the "S-3"). AMD will use its best efforts to have the S-
3 declared effective at the Effective Time, as defined in the Merger Agreement.
AMD shall use
2
its best efforts to keep the S-3 effective for a period of two (2) years.
5. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware.
6. Termination. This Agreement shall terminate upon the earlier of (a)
-----------
the Effective Time; or (b) the date as of which the Merger Agreement is
terminated in accordance with its terms or (c) nine months from the date hereof.
7. Specific Performance. The Stockholder acknowledges that irreparable
--------------------
damages would occur in the event any of the provisions hereof were not performed
in accordance with their specific terms or were otherwise breached.
Accordingly, the Stockholder agrees that AMD shall be entitled to an injunction
or injunctions to prevent breaches of the provisions hereof and to enforce
specifically the terms and provisions hereof in any court of competent
jurisdiction in the United States or any state thereof, in addition to any other
remedy with which AMD may be entitled at law or equity.
3
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
Number of Shares of STOCKHOLDER:
NexGen Common Stock held:
________________
_________________________________
(Name)
_________________________________
_________________________________
(Address)
Accepted and agreed to as of ________________, 1995
ADVANCED MICRO DEVICES, INC.
By: _____________________________
Title: __________________________
4
AFFILIATE AGREEMENT
-------------------
AGREEMENT (hereinafter referred to as the "Agreement") entered into as of
October ___, 1995, between Advanced Micro Devices, Inc., a Delaware corporation
(hereinafter referred to as "AMD"), and the stockholder (the "Stockholder") of
NexGen, Inc., a Delaware corporation (hereinafter referred to as "NexGen").
WITNESSETH:
WHEREAS, NexGen, AMD and AMD Merger Corporation, a Delaware corporation
(hereinafter referred to as the "Subsidiary"), propose to enter, or have entered
into an Agreement and Plan of Merger expected to be dated, or dated October 20,
1995 (hereinafter referred to as the "Merger Agreement"), pursuant to which the
Subsidiary, which is wholly-owned by AMD, will be merged into NexGen (the
"Merger"), and NexGen will become a wholly-owned subsidiary of AMD;
WHEREAS, upon the consummation of the Merger and in connection therewith,
the Stockholder will become the owner of shares of Common Stock of AMD
(hereinafter referred to as the "AMD Shares"); and
WHEREAS, it is intended that the transactions contemplated by the Merger
Agreement will be treated as a "pooling of interests" in accordance with
generally accepted accounting principles and the applicable General Rules and
Regulations published by the Securities and Exchange Commission (the
"Commission").
NOW, THEREFORE, in consideration of the promises and the mutual agreements,
provisions and covenants set forth in the Merger Agreement, and hereinafter in
this Agreement, it is hereby agreed as follows:
1. The Stockholder hereby agrees that:
(a) He may be deemed to be (but does not hereby admit to be) an
"affiliate" of NexGen within the meaning of Rule 145 under the Securities Act of
1933, as amended (the "Securities Act"), and Accounting Series Release No. 130,
as amended, of the Commission.
(b) He will not sell or otherwise reduce his risk relative to the AMD
Shares or any part thereof until such time after the Effective Time, as defined
in the Merger Agreement, of the Merger as financial results covering at least
thirty (30) days of the post-Effective Time combined operations of AMD and
NexGen have been, within the meaning of said Accounting Series Release No. 130,
as amended, filed by AMD with the Commission or
Exhibit B
---------
published by AMD in an Annual Report on Form 10-K, a Quarterly Report on Form
10-Q, a Current Report on Form 8-K, a quarterly earnings report, a press release
or other public issuance which includes combined sales and income of NexGen and
AMD. AMD agrees to make such filing or publication as soon as practicable.
(c) Subject in any event to paragraph (b) of this Section 1, he
agrees not to offer, sell, pledge, transfer or otherwise dispose of any of the
AMD Shares unless at that time either:
(i) such transaction shall be permitted pursuant to the
provisions of Rule 145(d) under the Securities Act;
(ii) counsel representing the Stockholder, satisfactory to AMD,
shall have advised AMD in a written opinion letter satisfactory to AMD and AMD's
counsel and upon which AMD and its counsel may rely, that no registration under
the Securities Act would be required in connection with the proposed sale,
transfer or other disposition;
(iii) a registration statement under the Securities Act covering
the AMD Shares proposed to be sold, transferred or otherwise disposed of,
describing the manner and terms of the proposed sale, transfer or other
disposition, and containing a current prospectus under the Securities Act, shall
be effective under the Securities Act; or
(iv) an authorized representative of the Commission shall have
rendered written advice to the Stockholder (sought by the Stockholder or counsel
to the Stockholder, with a copy thereof and of all other related communications
delivered to AMD) to the effect that the Commission would take no action, or
that the staff of the Commission would not recommend that the Commission take
action, with respect to the proposed sale, transfer or other disposition if
consummated.
(d) (1) Until the financial results described in paragraph (b) of
this Section 1 have been filed or published as described therein, and until a
public sale of the AMD Shares represented by such certificate has been made in
compliance with one of the alternative conditions set forth in the subparagraphs
of paragraph (c) of this Section 1, all certificates representing the AMD Shares
deliverable to the Stockholder pursuant to the Merger Agreement and in
connection with the Merger and any certificates subsequently issued with respect
thereto or in substitution therefor shall bear a legend substantially as
follows:
2
"The shares represented by this certificate may not be offered, sold,
pledged, transferred or otherwise disposed of except in accordance with the
requirements of the Securities Act of 1933, as amended, and the other
conditions specified in the Affiliate Agreement dated as of October ___,
1995, between Advanced Micro Devices, Inc. and the registered holder, a
copy of which Affiliate Agreement may be inspected by the holder of this
certificate at the offices of Advanced Micro Devices, Inc., or Advanced
Micro Devices, Inc. will furnish a copy thereof to the holder of this
certificate upon written request and without charge."
AMD, at its discretion, may cause stop transfer orders to be placed with its
transfer agent(s) with respect to the certificates for the AMD Shares but not as
to the certificates for any part of the AMD Shares as to which said legend is no
longer appropriate as hereinabove provided.
(2) Notwithstanding paragraph (d)(1) of this Section 1, at any
time after the financial results described in paragraph (b) of this Section 1
have been filed or published as described therein, any or all certificates
representing the AMD Shares shall, at the written request of the Stockholder and
upon surrender of such certificates to the transfer agent for AMD Common Stock,
be replaced by stock certificates representing the AMD Shares bearing only the
following legend:
"The shares represented by this certificate may not be offered,
sold, pledged, transferred or otherwise disposed of except in
compliance with paragraph (d) of Rule 145 promulgated by the
Securities and Exchange Commission."
The reference in the foregoing legend to Rule 145 shall not preclude, however,
the alternative of a transaction in compliance with subparagraphs (ii), (iii) or
(iv) of paragraph (c) of this Section 1.
(e) The Stockholder will observe and comply with the Securities Act
and the General Rules and Regulations thereunder, as now in effect and as from
time to time amended and including those hereafter enacted or promulgated, in
connection with any offer, sale, pledge or transfer or other disposition of the
AMD Shares or any part thereof.
2. From and after the Effective Time of the Merger and for so long as
necessary in order to permit the Stockholder to sell the AMD Shares pursuant to
Rule 145 and, to the extent applicable, Rule 144 under the Securities Act, AMD
will use its best efforts to file on a timely basis all reports required to be
filed by it pursuant to Section 13 of the Securities Exchange Act
3
of 1934, referred to in paragraph (c)(l) of Rule 144 under the Securities Act
(or, if applicable, AMD will use its best efforts to make publicly available the
information regarding itself referred to in paragraph (c)(2) of Rule 144) in
order to permit the Stockholder to sell, pursuant to the terms and conditions of
Rule 145 and the applicable provisions of Rule 144, the AMD Shares.
3. No waiver by any party hereto of any condition or of any breach of any
provision of this Agreement shall be effective unless in writing.
4. All notices, requests, demands or other communications which are
required or may be given pursuant to the terms of this Agreement shall be in
writing and shall be deemed to have been duly given if delivered by hand or
(except where receipt thereof is specifically required for purposes of this
Agreement) mailed by registered or certified mail, postage prepaid, as follows:
If to the Stockholder, at the address set forth below the
Stockholder's signature at the end hereof.
If to AMD or the other Indemnified Persons:
To: Copies to:
Advanced Micro Devices, Inc. Xxxxxxx, Xxxxxxx & XxXxxxxx
Attention: General Counsel 000 Xxxxxxxxxx Xxxxxx
X.X. Xxx 0000 M\S 000 Xxx Xxxxxxxxx, XX 00000-0000
Xxxxxxxxx, XX 00000-0000 Attention: Xxxxxx X. Xxxxxxxxxx
or to such other address as any party hereto or any Indemnified Person may
designate for itself by notice given as herein provided.
5. For the convenience of the parties hereto 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 document.
6. This Agreement shall be enforceable by, and shall inure to the benefit
of and be binding upon, the parties hereto and their respective successors and
assigns. Moreover, this Agreement shall be enforceable by, and shall inure to
the benefit of, the Indemnified Persons and their respective successors and
assigns. As used herein, the term "successors and assigns" shall mean, where the
context so permits, heirs, executors, administrators, trustees and successor
trustees, and personal and other representatives.
4
7. This Agreement shall be governed by and construed, interpreted and
enforced in accordance with the laws of the State of Delaware.
8. This Agreement shall become effective on the Effective Time of the
Merger. If a court of competent jurisdiction determines that any provision of
this Agreement is unenforceable or enforceable only if limited in time and/or
scope, this Agreement shall continue in full force and effect with such
provision stricken or so limited.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
Stockholder:
_________________________________________
_________________________________________
_________________________________________
Accepted and agreed to as of October ___, 1995.
AMD:
Advanced Micro Devices, Inc.
By: _____________________________________
Title: __________________________________
5
NO SALE AGREEMENT
-----------------
AGREEMENT (hereinafter referred to as the "Agreement") entered into as of
October ___, 1995, between ADVANCED MICRO DEVICES, INC., a Delaware corporation
(hereinafter referred to as "AMD"), and the undersigned officer, director, or
stockholder (such officer, director or stockholder being referred to below as
the "Stockholder") of NEXGEN, INC., a Delaware corporation (hereinafter referred
to as "NexGen").
WITNESSETH:
WHEREAS, NexGen, AMD and AMD Merger Corporation, a Delaware corporation
(hereinafter referred to as the "Subsidiary"), propose to enter into an
Agreement and Plan of Merger expected to be signed and dated on October 20, 1995
(hereafter referred to as the "Merger Agreement") pursuant to which the
Subsidiary, which is wholly-owned by AMD, will be merged into NexGen (the
"Merger"), and NexGen will become a wholly-owned subsidiary of AMD; and
WHEREAS, the Stockholder owns of record or beneficially the number of
outstanding shares of Common Stock, par value $.0001 per share, of NexGen
("NexGen Common Stock"), which is listed opposite the Stockholder's name on the
signature page to this Agreement; and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, AMD and the Subsidiary have requested the Stockholder to enter into
this Agreement; and
WHEREAS, to induce AMD and the Subsidiary to enter into the Merger
Agreement, the Stockholder has agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the entry into the Merger Agreement of
AMD and the Subsidiary and the mutual agreements, covenants, representations and
warranties contained herein and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Transfer Restriction. The Stockholder shall not, prior to the meeting
--------------------
of the stockholders of NexGen to be called for the purpose of considering the
Merger or the termination of the Merger Agreement, whichever is earlier, sell,
assign, otherwise transfer or encumber any of the shares of NexGen Common Stock
now or at any time hereafter owned by the Stockholder of record or beneficially
(the "Shares")
2. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to AMD that:
Exhibit C
---------
(a) This Agreement is a valid and binding agreement of the
Stockholder, enforceable against the Stockholder in accordance with its terms;
(b) Neither the execution of this Agreement by the Stockholder nor
compliance by the Stockholder with the provisions hereof will constitute a
violation of or default under, or conflict with, any contract, commitment,
agreement, understanding, arrangement or restriction of any kind by which the
Stockholder is bound;
(c) No consent, approval, order or authorization of any court,
administrative agency or other governmental entity or any other person as
required by or with respect to the Stockholder in connection with the execution
and delivery of this Agreement by the Stockholder;
(d) On the date hereof the Stockholder has, and at the Effective Time
(as defined in the Merger Agreement) the Stockholder shall have, sole voting
power or power to direct the vote with respect to the Shares, and the
Stockholder has not granted any proxy with respect to the Shares to any person
other than NexGen or representatives of NexGen that is in effect on the date
hereof, and
(e) The Stockholder has not subjected the Shares to any voting trust
or any similar agreement, understanding or arrangement.
3. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware.
4. Termination. This Agreement shall terminate upon the earlier of (a)
-----------
the Effective Time; or (b) the date as of which the Merger Agreement is
terminated in accordance with its terms or (c) nine months from the date hereof.
5. Specific Performance. The Stockholder acknowledges that irreparable
--------------------
damages would occur in the event any of the provisions hereof were not performed
in accordance with their specific terms or were otherwise breached.
Accordingly, the Stockholder agrees that AMD shall be entitled to an injunction
or injunctions to prevent breaches of the provisions hereof and to enforce
specifically the terms and provisions hereof in any court of competent
jurisdiction in the United States or any state thereof, in addition to any other
remedy with which AMD may be entitled at law or equity.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
2
Number of Shares of STOCKHOLDER:
NexGen Common Stock held:
________________
_________________________________
(Name)
_________________________________
_________________________________
(Address)
Accepted and agreed to as of ________________, 1995
ADVANCED MICRO DEVICES, INC.
By: _____________________________
Title: __________________________
3
________ __, 199_
Board of Directors
Advanced Micro Devices, Inc.
Xxx XXX Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Re: Merger of AMD Merger
Corporation and NexGen, Inc.
----------------------------
Gentlemen:
This opinion is furnished to you pursuant to Section 8.7 of the Agreement
and Plan of Merger dated October 20, 1995 (the "Agreement") among Advanced Micro
Devices, Inc. ("AMD"), AMD Merger Corporation ("AMD Merger") and NexGen, Inc.
("NexGen"). We have acted as counsel for NexGen in connection with the
transactions contemplated by the Agreement. Unless otherwise defined or unless
the context otherwise requires, all capitalized terms used herein shall have the
meanings given them in the Agreement.
We have performed such investigation, research and review as we deem
reasonably sufficient for the purpose of rendering our opinion, and as to
questions of fact, we have relied, to the extent we deem proper, upon
certificates of officers and other representatives of NexGen and of government
officials. We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures on original documents and the
conformity to original documents of all copies submitted to us. As used in our
opinion, the expressions "to our knowledge" and "known to us" mean that solely
after an inquiry of attorneys within this firm who perform legal services for
NexGen and its subsidiaries, receipt of a certificate executed by one or more
officers of NexGen covering such matters which we believe are sufficient for the
purpose of expressing the opinions contained herein, and such other
investigation, research, and review as we have performed in the course of our
services for NexGen and its subsidiaries in connection with the preparation of
the Agreement, the S-4, the Prospectus and the Proxy Statement, nothing has come
to our attention which causes us to believe that the opinions expressed herein
are factually incorrect, but beyond
Exhibit D
---------
Board of Directors
Advanced Micro Devices, Inc.
________ __, 199_
Page 2
that, we have made no independent factual investigation for the purpose of
rendering this opinion.
Our opinion is subject to the following qualifications:
(1) Our opinion is subject to (a) the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws now or hereafter
in effect generally affecting creditors' rights; (b) the limitations imposed by
applicable state law, federal law and equitable principles upon the
enforceability of any of the remedies, covenants or other provisions of the
Agreement and upon the availability of injunctive relief or other equitable
remedies, including, without limitation, the effect of court decisions invoking
statutes or principles of equity, which have held that certain covenants and
provisions of agreements are unenforceable where: (i) the breach of such
covenants or provisions imposes restrictions or burdens upon a party and it
cannot be demonstrated that the enforcement of such restrictions or burdens is
reasonably necessary for the protection of the other party, or (ii) a party's
enforcement of such covenants or provisions under the circumstances would
violate such party's implied covenants of good faith and fair dealing; and (c)
the power of the federal and state courts to refuse to enforce (or to stay the
enforcement of) any provision which purports to waive the rights of NexGen to
assert claims or defenses available to it by statute, common law or equity;
(2) Except with respect to paragraphs 2, 3, 4 and 8 below, our
opinion is limited to the effect of the laws of the State of Delaware, the State
of California and the federal laws of the United States, and we express no
opinion with respect to the laws of any other jurisdiction, or the effect
thereof on the transactions contemplated by the Agreement. To the extent the
opinions set forth in paragraphs 2, 3, 4 and 8 relate to matters involving
subsidiaries of NexGen which are incorporated in a jurisdiction other than one
of the states of the United States of America, such opinions are based upon and
subject to the opinions of foreign counsel attached hereto (the "Foreign
Opinions") and shall be interpreted to be (i) no broader in scope than the
Foreign Opinions and (ii) subject to any limitations, exceptions or exclusions
set forth in the Foreign Opinions.
Board of Directors
Advanced Micro Devices, Inc.
________ __, 199_
Page 3
(3) In making our examination of documents and instruments executed
by persons or entities other than NexGen, we have assumed, without
investigation, the power and legal capacity of each such person or other entity
to enter into and perform all its obligations under such documents and
instruments, the due authorization by each such other person or entity of all
requisite action with respect to such documents and instruments and the due
execution and delivery by each such other person or entity of such documents and
instruments.
(4) As used in our opinion, the term "material" means material to the
assets, properties, business or financial condition of NexGen and its
subsidiaries taken as a whole.
Based upon and subject to the foregoing, we are of the opinion that:
(1) NexGen is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with all requisite
corporate power to own, lease and operate all of its properties and assets, to
carry on its business as it is now being conducted, and to merge with AMD Merger
pursuant to the terms of the Agreement.
(2) Each subsidiary of NexGen is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, with all requisite corporate power to own, lease and operate all
of its properties and assets and to carry on its business as it is now being
conducted, subject to the exceptions and qualifications set forth in the Foreign
Opinions.
(3) NexGen is and each subsidiary of NexGen is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which the nature
of its business or the owning and leasing of its properties makes such
qualification necessary, except where the failure to so qualify would not have a
material adverse effect on NexGen, subject to the exceptions and qualifications
set forth in the Foreign Opinions.
Board of Directors
Advanced Micro Devices, Inc.
________ __, 199_
Page 4
(4) Except as disclosed in the schedules to the Agreement and
subject to the exceptions and qualifications set forth in the Foreign Opinions,
the execution and delivery of the Agreement does not violate any terms or
provisions of any law or regulation, or of the certificate of incorporation or
bylaws of NexGen or, to our knowledge, of any material indenture, mortgage or
other agreement or instrument by which NexGen or any of its subsidiaries is
bound or, to our knowledge, conflict with or constitute a material default, or
result in the material breach of or acceleration of any material obligation (or
entitle any party so to accelerate, assuming the giving of notice or lapse of
time or both) or the creation of any material lien, charge, pledge, security
interest or other encumbrance upon any of the property of NexGen or any
subsidiary of NexGen, under any term or provision of the certificate of
incorporation or bylaws of NexGen or any subsidiary of NexGen, or under any
material mortgage, lien, lease, agreement, instrument, judgment, decree, order,
arbitration award, writ or injunction to which NexGen or any subsidiary of
NexGen is a party or by which NexGen or any subsidiary of NexGen is bound.
(5) The Board of Directors and stockholders of NexGen have taken all
corporate action required by law, NexGen's certificate of incorporation or
bylaws or otherwise required and known to us, to authorize the execution and
delivery of the Agreement and the consummation of the Merger. The Agreement is
a valid and binding agreement of NexGen, enforceable as to NexGen in accordance
with its terms, except as rights to indemnity under the Agreement may be limited
under applicable law.
(6) The stockholders of NexGen have approved the Merger in compliance
with the Delaware General Corporation Law and NexGen's certificate of
incorporation and bylaws, and to our knowledge no other consent, approval or
other action by, or notice to or filing with, any governmental or administrative
agency or authority is required or necessary to be obtained by NexGen in
connection with the Merger other than the filing of a Form 8-K reporting the
Closing with the SEC.
(7) The authorized and outstanding capital stock of NexGen is as set
forth Section 2.2 of the Agreement, and all of such shares of the capital stock
of NexGen outstanding as of the date hereof are, validly issued, fully paid,
nonassessable and free of preemptive rights.
Board of Directors
Advanced Micro Devices, Inc.
________ __, 199_
Page 5
(8) Other than directors' qualifying shares and subject to the
exceptions and qualifications set forth in the Foreign Opinions, the shares of
capital stock of each subsidiary of NexGen are owned directly or indirectly by
NexGen, are validly issued, fully paid and nonassessable and are, to our
knowledge, owned free and clear of any liens, claims, charges or encumbrances.
(9) (a) To our knowledge, there are no franchises, leases,
contracts, agreements or documents relating to NexGen of a character required to
be disclosed in the S-4, the Prospectus or the Proxy Statement or in any
amendment or supplement thereto, or to be filed as exhibits to the S-4, which
are not disclosed or filed, as required.
(b) To our knowledge, the statements in the S-4, the Prospectus
and the Proxy Statement, and in information incorporated by reference in the
Prospectus, describing legal matters, proceedings or documents relating to
intellectual property, real property, leases, contracts, agreements or
litigation relating to NexGen, and describing the income tax consequences of the
Merger to the stockholders of NexGen, are accurate in all material respects and
such descriptions fairly present all material information required to be
included with respect thereto.
(c) The S-4, the Prospectus and the Proxy Statement, and any
amendment or supplement thereto and each document incorporated by reference in
the Prospectus, insofar as they relate to NexGen, comply as to form in all
material respects with the requirements of the Act and the rules and regulations
promulgated thereunder. We express no opinion as to the financial statements or
other financial data included in any of the documents mentioned in this
paragraph.
(d) We have participated in conferences with representatives of
AMD and NexGen, accountants for AMD and NexGen, and counsel for AMD concerning
the Agreement, the S-4, the Prospectus and the Proxy Statement. Although we have
not independently verified the accuracy, completeness or fairness of the
statements contained in the S-4, the Prospectus and the Proxy Statement, nothing
has come to our attention, as a result of our participation in such discussions,
to cause us to believe that, either on the effective date of the S-4 or on the
date hereof, the S-4, the Prospectus, the Proxy Statement, or any amendment or
supplement thereto, insofar as they relate to NexGen, contained
Board of Directors
Advanced Micro Devices, Inc.
________ __, 199_
Page 6
or contain any untrue statement of a material fact or omitted or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. We express no opinion as to the financial statements or other
financial data included in any of the documents mentioned in this paragraph.
This opinion is solely for the benefit of AMD in connection with the
closing of the Merger and may not be relied upon in any manner by any other
person or for any other purpose and shall not be made available to or filed with
any other person or governmental agency by AMD, except as required by law,
without the prior written consent of the undersigned.
Very truly yours,
PILLSBURY MADISON & SUTRO
By: ______________________________
Member of the Firm
__________ __, 199_
Board of Directors
NexGen, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Re: Merger of AMD Merger
Corporation and NexGen, Inc.
----------------------------
Gentlemen:
This opinion is furnished to you pursuant to Section 9.5 of the Agreement
and Plan of Merger dated October 20, 1995 (the "Agreement") among Advanced Micro
Devices, Inc. ("AMD"), AMD Merger Corporation ("AMD Merger") and NexGen, Inc.
("NexGen"). We have acted as counsel for AMD and AMD Merger in connection with
the transactions contemplated by the Agreement. Unless otherwise defined or
unless the context otherwise requires, all capitalized terms used in this
opinion shall have the meanings assigned them in the Agreement.
We have performed such investigation, research and review as we deem
reasonably sufficient for the purpose of rendering our opinion, and as to
questions of fact, we have relied, to the extent we deem proper, upon
certificates of officers and other representatives of AMD and AMD Merger and of
government officials. We have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all signatures on original
documents and the conformity to original documents of all copies submitted to
us. As used in our opinion, the expressions "to our knowledge" and "known to us"
mean that solely after an inquiry of attorneys within this firm who perform
legal services for AMD and AMD Merger, receipt of a certificate executed by one
or more officers of AMD and AMD Merger covering such matters which we believe
are sufficient for the purpose of expressing the opinions contained herein, and
such other investigation, research and review as we have performed in the course
of our services for AMD and AMD Merger in connection with the preparation of the
Agreement, the S-4, the Prospectus and the Proxy Statement, nothing has come to
our attention which causes us to believe that the opinions expressed herein are
factually
Exhibit E
---------
Board of Directors
________ __, 199_
Page 2
incorrect, but beyond that, we have made no independent factual investigation
for the purpose of rendering this opinion.
Our opinion is subject to the following qualifications:
(1) Our opinion is subject to (a) the effect of bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereafter in effect
generally affecting creditors' rights; (b) the limitations imposed by applicable
state law, federal law and equitable principles upon the enforceability of any
of the remedies, covenants and other provisions of the Agreement and upon the
availability of injunctive relief or other equitable remedies, including,
without limitation, the effect of court decisions invoking statutes or
principles of equity, which have held that certain covenants and provisions of
agreements are unenforceable where: (i) the breach of such covenants or
provisions imposes restrictions or burdens upon a party and it cannot be
demonstrated that the enforcement of such restrictions or burdens is reasonably
necessary for the protection of the other party, or (ii) a party's enforcement
of such covenants or provisions under the circumstances would violate such
party's implied covenants of good faith and fair dealing; and (c) the power of
the federal and state courts to refuse to enforce (or to stay the enforcement
of) any provision which purports to waive the rights of AMD to assert claims or
defenses available to it by statute, common law or equity.
(2) Except with respect to paragraphs 2, 3, 9 and 12, our opinion is
limited to the effect of the laws of the State of Delaware, the State of
California and the federal laws of the United States, and we express no opinion
with respect to the laws of any other jurisdiction, or the effect thereof on the
transactions contemplated by the Agreement. Our opinion set forth in paragraph
12 is based on our examination of the securities laws of the several states and
the rules and regulations of the authorities administering such laws, all as
reported in unofficial compilations conveniently available to us. We have not
obtained any special rulings of such authorities or opinions of counsel in such
jurisdictions. To the extent the opinions set forth in paragraphs 2, 3, 4 and 9
relate to matters involving subsidiaries of AMD which are incorporated in a
jurisdiction which is other than one of the states of the United States of
America and to the extent the opinions set forth in paragraph 3 relate to the
good standing of AMD International Sales and Service, Ltd. as a foreign
corporation in any jurisdiction other than one of the states of the United
States of America, such opinions are based upon and subject to the opinions of
foreign counsel attached hereto (the "Foreign Opinions") and shall be
Board of Directors
________ __, 199_
Page 3
interpreted to be (i) no broader in scope than the Foreign Opinions and (ii)
subject to any limitations, exceptions or exclusions set forth in the Foreign
Opinions.
(3) In making our examination of documents and instruments executed by
persons or entities other than AMD and AMD Merger, we have assumed, without
investigation, the power and legal capacity of each such person or other entity
to enter into and perform all its obligations under such documents and
instruments, the due authorization by each such other person or entity of all
requisite action with respect to such documents and instruments and the due
execution and delivery by each such other person or entity of such documents and
instruments.
(4) As used in our opinion, the term "material" means material to the
assets, properties, business or financial condition of AMD and its subsidiaries
taken as a whole.
Based upon and subject to the foregoing, we are of the opinion that:
(1) AMD is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with all requisite corporate
power to own, lease and operate all of its properties and assets, and to carry
on its business as it is now being conducted.
(2) Each subsidiary of AMD is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, with all requisite corporate power to own all of its properties
and assets, to carry on its business as it is now being conducted; and AMD
Merger has all requisite power to merge into NexGen pursuant to the terms of the
Agreement.
(3) AMD is, and each subsidiary of AMD is, duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the nature of
its business or the owning and leasing of its properties makes such
qualification necessary, except where the failure to so qualify would not have a
material adverse effect on AMD.
(4) Except as disclosed in the schedules to the Agreement, the execution
and delivery of the Agreement does not violate any terms or provisions of any
law or regulation, or of the certificate of incorporation or bylaws of AMD or
AMD Merger or, to our knowledge, of any material indenture, mortgage or other
agreement or instrument by which AMD or any of its subsidiaries
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is bound or, to our knowledge, conflict with or constitute a material default,
or result in the material breach of or acceleration of any material obligation
(or entitle any party to so accelerate, assuming the giving of notice or lapse
of time or both) or the creation of any material lien, charge, pledge, security
interest or other encumbrance upon any of the property of AMD or any of its
subsidiaries, under any term or provision of the certificate of incorporation or
bylaws of AMD or any of its subsidiaries, or under any material mortgage, lien,
lease, agreement, instrument, judgment, decree, order, arbitration award, writ
or injunction to which AMD or any of its subsidiaries is a party or by which AMD
or any of its subsidiaries is bound.
(5) The Boards of Directors of AMD and AMD Merger have taken all corporate
action required by law, their certificates of incorporation, or bylaws or
otherwise required and known to us, to authorize the execution and delivery of
the Agreement and the consummation of the Merger. The Agreement is a valid and
binding agreement of AMD and AMD Merger, enforceable as to AMD and AMD Merger in
accordance with its terms, except as rights to indemnity under the Agreement may
be limited under applicable law.
(6) The execution and delivery of the Agreement and the consummation of
the Merger have been authorized and approved by AMD as the sole stockholder of
AMD Merger.
(7) Neither AMD's certificate of incorporation nor its bylaws require the
Merger to be approved by the stockholders of AMD; the stockholders of AMD have
approved the Merger in compliance with the applicable policies of the New York
Stock Exchange, Inc. ("NYSE"), and no other consent, approval or other action
by, or notice to or filing with, any governmental or administrative agency or
authority is required or necessary to be obtained by AMD in connection with the
Merger other than the filing of a Form 8-K reporting the Closing with the SEC
and the filing of a notice with the NYSE of issuance of the shares of AMD common
stock to be issued in connection with the Merger.
(8) Other than for transactions between AMD and its employees, the
authorized and outstanding capital stock of AMD is as set forth in Section 3.2
of the Agreement, and all of such outstanding shares of the capital stock of
AMD, including those issued in transactions between AMD and its employees, are
validly issued, fully paid, nonassessable and free of preemptive rights.
(9) Other than directors' qualifying shares, the shares of capital stock
of each subsidiary of AMD are owned directly or
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indirectly by AMD, are validly issued, fully paid and nonassessable and are, to
our knowledge, owned free and clear of any liens, claims, charges or
encumbrances.
(10) The certificates evidencing the AMD shares to be delivered under the
Agreement by AMD are in due and proper form, and when duly countersigned by the
Exchange Agent, and delivered in accordance with the provisions of the
Agreement, the AMD shares represented thereby will be duly authorized and
validly issued, fully paid and nonassessable, will not have been issued in
violation of or subject to any preemptive rights and will conform as to matters
of law in all material respects to the description thereof contained in the S-4,
the Prospectus and the Proxy Statement. In expressing the opinion in this
paragraph we have assumed that the certificates conform as to form with the
specimen of the certificates examined by us, which fact we have not verified by
inspection of the individual certificates.
(11) (a) The S-4 has become effective under the Act, and to our knowledge,
no stop order suspending the effectiveness of the S-4 or preventing the use of
the Proxy Statement has been issued and, to the best of our knowledge, no
proceedings for that purpose have been instituted or are pending or threatened
by the SEC.
(b) To our knowledge, there are no franchises, leases, contracts,
agreements or documents relating to AMD of a character required to be disclosed
in the S-4, the Prospectus or the Proxy Statement or in any amendment or
supplement thereto, or to be filed as exhibits to the S-4, which are not
disclosed or filed, as required.
(c) To our knowledge, the statements in the S-4, the Prospectus and
the Proxy Statement, and in each amendment and supplement thereto, and in each
document incorporated by reference in the Prospectus, describing legal matters,
proceedings or documents relating to intellectual property, real property,
leases, contracts, agreements or litigation relating to AMD and describing the
income tax consequences of the Merger to the stockholders of NexGen, are
accurate in all material respects and such descriptions fairly present all
material information required to be included with respect thereto.
(d) The S-4, the Prospectus and the Proxy Statement, and any
amendment or supplement thereto, and each document incorporated by reference in
the Prospectus, insofar as they relate to AMD, comply as to form in all material
respects with the requirements of the Act and the rules and regulations
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promulgated thereunder. We express no opinion as to the financial statements or
other financial data included in any of the documents mentioned in this
paragraph.
(e) We have participated in conferences with representatives of AMD
and NexGen, AMD's and NexGen's accountants, and counsel for NexGen concerning
the Agreement, the S-4, the Prospectus and the Proxy Statement. Although we have
not independently verified the accuracy, completeness or fairness of the
statements contained in the S-4, the Prospectus and the Proxy Statement, nothing
has come to our attention, as a result of our participation in such discussions,
to cause us to believe that, either on the effective date of the S-4 or on the
date hereof, the S-4, the Prospectus and the Proxy Statement, or any amendment
or supplement thereto, insofar as they relate to AMD, contained or contain any
untrue statement of a material fact or omitted or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. We
express no opinion as to the financial statements or other financial data
included in any of the documents mentioned in this paragraph.
(12) AMD has obtained such consents, approvals, orders and authorizations
of, and has made such registrations, qualifications, designations, declarations
and filings with, such state securities administrators as are necessary to issue
the AMD shares to be issued in connection with the Merger in compliance with the
securities registration or qualification laws, rules and regulations of such
states, except for those filings that may be made after the Effective Date of
the Merger.
The opinion set forth above is solely for the benefit of NexGen in
connection with the Merger and may not be relied upon in any manner by any other
person or for any other purpose and shall not be made available to or filed with
any other person or governmental agency by NexGen, except as required by law,
without the prior written consent of the undersigned.
Very truly yours,
