---------------------------
OMB APPROVAL
---------------------------
OMB Number: 3235-0145
Expires: December 31, 1997
Estimated average burden
hours per response... 14.90
---------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
-----
NEXGEN, INC.
-------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.0001 par value
---------------------------------------------------
(Title of Class of Securities)
653329 10 2
-----------------------------------------
(CUSIP Number)
Thomas M. McCoy, Vice President, General Counsel and Secretary
One AMD Place, Sunnyvale, California 94088
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 20, 1995
- -------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [X]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
- ----------------------- -----------------------
CUSIP NO. 653329 10 2 PAGE 2 OF 9 PAGES
- ----------------------- -----------------------
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Advanced Micro Devices, Inc.
I.R.S. Identification No. 94-1692300
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- --------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- --------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
5
[_]
- --------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- --------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -------------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
12,541,908
OWNED BY
-------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -------------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
12,541,908
- --------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- --------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
37.8%
- --------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 9 pages
Item 1. Security and Issuer.
- ------ -------------------
This Schedule 13D (the "Schedule") under the Securities Exchange Act of
1934, as amended, relates to the acquisition of beneficial ownership of shares
of the Common Stock, $0.0001 par value per share, of NexGen, Inc., a Delaware
corporation ("NexGen" and "NexGen Common Stock").
The principal executive offices of NexGen are located at 1623 Buckeye
Drive, Milpitas, California 95035.
Item 2. Identity and Background.
- ------ -----------------------
This Schedule is being filed by Advanced Micro Devices, Inc., a Delaware
corporation ("AMD").
AMD designs, develops, manufactures and markets complex monolithic
integrated circuits. AMD's principal engineering and manufacturing facilities
are located in Santa Clara County, California and in Texas. AMD maintains sales
offices in the United States, Europe and the Far East. The principal executive
offices of AMD are physically located at One AMD Place, Sunnyvale, California
94088. The mailing address for the principal executive offices is One AMD Place,
P.O. Box 3453, Sunnyvale, California 94088.
AMD has not, during the last five years, been the subject of any criminal
proceeding.
AMD has not, during the last five years, been a party to a civil proceeding
of a judicial or administrative body which resulted in a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
The attached Exhibit 1 provides certain information concerning each
executive officer, director and controlling person of AMD.
None of the persons named in the attached Exhibit 1 has, during the last
five years, been convicted in or been the subject of any criminal proceeding
(excluding traffic violations or similar misdemeanors).
None of the persons named in the attached Exhibit 1 has, during the last
five years, been a party to a civil proceeding of a judicial or administrative
body which resulted in a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Page 3 of 9 pages
Item 3. Source and Amount of Funds or Other Consideration.
------ -------------------------------------------------
No funds or other consideration were paid or given for the beneficial
ownership which is the subject of this Schedule.
On October 20, 1995, AMD and NexGen executed an Agreement and Plan of
Merger, which was amended on December 11, 1995 (as amended, the "Merger
Agreement"). A copy of the Merger Agreement is attached to this Schedule as
Exhibit 2 and incorporated by reference herein. Under the terms of the Merger
Agreement, NexGen would be merged with a wholly owned subsidiary of AMD or with
AMD (the "Merger"). AMD has the right to restructure the Merger so that NexGen
would be merged either into AMD's wholly owned subsidiary or into AMD itself,
provided that the Merger, as restructured, is tax free.
In connection with the Merger Agreement, AMD and ten stockholders of NexGen
executed Voting Agreements pursuant to which such stockholders have agreed to
vote 12,541,908 shares of NexGen Common Stock held of record or beneficially by
such stockholders in favor of the Merger Agreement and the Merger at the special
meeting of the stockholders of NexGen to be held pursuant to the Merger
Agreement (the "NexGen Meeting"). In addition, such stockholders have granted to
AMD irrevocable proxies to vote the shares with respect to the Merger Agreement
and the Merger. A copy of the form of Voting Agreement executed by the
stockholders is attached to the Merger Agreement as Exhibit A. A copy of the
irrevocable proxy executed by the stockholders is attached to the Voting
Agreements as Exhibit 1. Pursuant to the Voting Agreements, the stockholders
have also agreed not to sell, assign, otherwise transfer or encumber any of the
shares subject to the Voting Agreements prior to the NexGen Meeting or to
execute any proxy with respect to any of such shares or enter into any agreement
or other arrangement relating to the voting of any of such shares if such proxy,
agreement or arrangement would be in any way inconsistent with the proxy given
to AMD. The stockholders of NexGen which have executed Voting Agreements are
Kleiner Perkins Caufield & Byers IV, Olivetti Holdings, Mitsui Comtek Corp.,
Compaq Computer Corporation, ASCII Corporation, ASCII of America, Inc., Yasuko
Nishi, CSK Corporation, Yamaha Corporation and Isao Okawa. The number of shares
of NexGen Common Stock of each stockholder which are subject to the Voting
Agreements and the related proxies is set forth below:
Kleiner Perkins Caufield & Byers IV 1,360,869
Olivetti Holdings 1,144,655
Mitsui Comtek Corp. 666,667
Compaq Computer Corporation 3,057,424
ASCII Corporation 2,260,208
ASCII of America, Inc. 218,751
Yasuko Nishi 1,250,000
CSK Corporation 266,667
Yamaha Corporation 916,667
Isao Okawa 1,400,000
Kleiner Perkins Caufield & Byers IV, ASCII Corporation and ASCII of America,
Inc. have executed amendments to the Voting Agreements which extend until the
effective date of the Merger the restrictions imposed by such agreements upon
the sale or other transfer of shares of NexGen Common Stock owned by such
persons. A copy of the amendment is included with the copy of the Voting
Agreement attached as Exhibit A to the Merger Agreement.
The Voting Agreements and the irrevocable proxies were entered into by
stockholders of NexGen to induce AMD to enter into the Merger Agreement.
Pursuant to the Merger Agreement, AMD will issue 0.8 of a share of its Common
Stock, $0.01 par value ("AMD Common Stock"), in exchange for each share of
NexGen Common Stock outstanding upon the effectiveness of the Merger. The shares
of AMD Common Stock so issued will be newly issued shares. NexGen is presently
authorized to issue up to 125,000,000 shares of NexGen Common Stock, of which
33,219,499 shares were outstanding on October 20, 1995. In addition, AMD will
make cash payments in lieu of issuing fractional shares of AMD Common Stock. AMD
presently intends to finance all such cash payments with internally generated
corporate funds. AMD does not
Page 4 of 9 pages
currently intend to purchase any shares of NexGen Common Stock on the market or
otherwise prior to the consummation of the Merger.
Item 4. Purpose of Transaction.
- ------ ----------------------
Officers of AMD and NexGen signed the Agreement and Plan of Merger on
October 20, 1995, and signed an amendment thereto on December 11, 1995. The
Merger Agreement provides that each issued and outstanding share of NexGen
Common Stock will be converted into, and exchanged for, 0.8 of a share of AMD
Common stock, except that cash will be paid in lieu of issuing fractional
shares. The transaction is intended to be a tax free reorganization and to
qualify for accounting purposes as a pooling-of-interests.
The Merger Agreement, which has been approved by the boards of directors of
both companies, is subject to the approval of the stockholders of both
companies, regulatory approvals and various other closing conditions. It is
anticipated that the Merger will be consummated during the first quarter of
calendar 1996. Both companies have scheduled special meetings of their
stockholders for January 16, 1996, to consider the transaction and have
transmitted proxy statements related thereto.
In connection with and in contemplation of the consummation of the proposed
merger, ten stockholders of NexGen executed Voting Agreements and granted
irrevocable proxies to AMD pursuant to which they have agreed to vote 12,541,908
shares of NexGen Common Stock in favor of the Merger Agreement and the Merger,
as described in Item 3. Because the transaction is to be treated for accounting
purposes as a pooling-of-interests, AMD has entered into agreements with each of
NexGen's officers and directors and certain NexGen stockholders restricting, for
a limited period following the Merger, the transfer of any shares of AMD Common
Stock received by such person pursuant to the Merger. Agreements of this nature
have been executed by Kleiner Perkins Caufield & Byers, Compaq Computer
Corporation, ASCII Corporation, ASCII of America, Inc., Paul R. Low, Marshall G.
Cox, James M. Voytko, Kazuhiko Nishi, S. Atiq Raza, Vinod Khosla, Anthony S.S.
Chan, Vinod Dham, Dana B. Krelle, David M. Rickey and Neeru Khosla, the wife of
Vinod Khosla. A copy of the agreement executed by Compaq Computer Corporation is
attached as Exhibit 3 to this Schedule and incorporated by reference herein. A
copy of the form of Agreement executed by the other thirteen stockholders (the
"Affiliate Agreement") is attached as Exhibit B to the Merger Agreement. In
addition, AMD has entered into agreements with certain AMD stockholders
restricting, for a limited period both prior to and following the Merger, the
transfer of shares of AMD Common stock held by such stockholder. AMD and the
officers and directors of NexGen and Neeru Khosla have executed No Sale
Agreements and amendments to such agreements which, together, provide that
officers and directors and Neeru Khosla will not, prior to the NexGen Meeting or
the termination of the Merger Agreement, whichever is earlier, sell, assign,
otherwise transfer or encumber any of the shares of NexGen Common Stock held of
record or beneficially owned by such individuals. A copy of the form of No Sale
Agreement with the related amendment is attached
Page 5 of 9 pages
to the Merger Agreement as Exhibit C. The officers and directors of NexGen who
have executed the No Sale Agreements are Paul R. Low, Marshall G. Cox, James M.
Voytko, Kazuhiko Nishi, S. Atiq Raza, Vinod Khosla, Anthony S.S. Chan, Vinod
Dham, Dana B. Krelle and David M. Rickey.
Concurrently with the signing of the Merger Agreement, AMD and NexGen
entered into the Secured Credit Agreement dated October 20, 1995. AMD and
NexGen also entered into a First Amendment to Secured Credit Agreement dated
October 30, 1995. The Secured Credit Agreement, as amended, is referred to
herein as the "Credit Agreement" and is attached to the Merger Agreement as
Annex 1. Under the terms of the Credit Agreement, AMD has agreed to make
available to NexGen a line of credit in an aggregate principal amount of up to
$60.0 million (the "Loan"). The Loan is to be used for general corporate
purposes. During the term of the Credit Agreement, AMD has agreed to make
advances to NexGen under a revolving line of credit facility in the maximum
aggregate principal amount of $60.0 million. NexGen has executed and delivered
to AMD a secured promissory note dated October 20, 1995 (the "Secured Promissory
Note"), in this maximum principal amount. A copy of the Secured Promissory Note
is attached to the Credit Agreement as Exhibit C. NexGen has the right to make
payments in reduction of the outstanding balance of the line of credit at any
time, and any amount of principal repaid by NexGen may be reborrowed within the
limit specified.
The line of credit is available to NexGen as follows: on or before
December 31, 1995, advances in an aggregate principal amount not exceeding $30.0
million; after December 31, 1995, and before March 31, 1996, advances in an
aggregate principal amount not exceeding $50.0 million; after March 31, 1996,
and on or before June 30, 1996, advances in an aggregate principal amount not
exceeding $60.0 million. Any unused portion of the line of credit existing on
June 30, 1996, will be canceled and no longer available for drawdown. The first
drawdown under the line of credit was effected on October 24, 1995. On that
date, AMD advanced $30.0 million to NexGen, representing the entire availability
for the period ending December 31, 1995.
Page 6 of 9 pages
Each advance under the line of credit will bear interest at a fluctuating
rate per annum equal to the "Index Base Rate," defined as the prime, base or
reference rate ("Index Rate") established from time to time by Bank of America
National Trust & Savings Association, plus 350 basis points (3.50%). Since the
current Index Rate is 8.75%, the Index Base Rate is 12.25%. Interest at the
Index Base Rate is calculated daily, and any change in the Index Base Rate due
to a change in the Index Rate is effective on the effective date of such change
in the Index Rate. All sums of principal and accrued interest outstanding will
be due and payable by NexGen on the first to occur of the following dates: (1)
June 30, 1997; (2) the date which is 12 months after the date of any termination
of the Merger Agreement; and (3) the date of the acquisition by any one person
or group of persons (other than AMD and its affiliates) of, or the right to
acquire, more than 50% of any class or series of voting securities of NexGen.
As collateral security for the satisfaction of its obligations under the
Credit Agreement and the Secured Promissory Note, NexGen has entered into a
Security Agreement dated October 20, 1995, with AMD, granting AMD a security
interest in all of the tangible and intangible assets of NexGen, as described
therein. A copy of the Security Agreement is attached to the Credit Agreement
as Exhibit D. The liens granted to AMD to secure the Loan are intended by the
parties to be first and prior liens on the property of NexGen, except for
certain permitted liens. AMD has agreed that the obligations of NexGen under
the Credit Agreement, and the liens granted to AMD pursuant to the Credit
Agreement and the Security Agreement, are subordinate to the prior payment in
full of the indebtedness of NexGen owing to ASCII Corporation, ASCII of
America, Inc. and Phemus Corporation and junior in priority to the existing
liens in favor of such parties. NexGen has agreed with AMD that, so long as any
of the obligations of NexGen under the Credit Agreement remain outstanding,
NexGen will not, either directly or indirectly, incur or assume any additional
indebtedness secured by a lien on any of its properties or assets except for
permitted liens.
On and after the effective date of the merger, the board of directors of
NexGen will be W.J. Sanders III, Richard Previte and S. Atiq Raza all of whom
are now senior officers of AMD or NexGen. Following the effective date of the
Merger, S. Atiq Raza will continue as the president and secretary of NexGen, and
Anthony S.S. Chan will continue as the treasurer of NexGen.
Page 7 of 9 pages
After consummation of the Merger, NexGen Common Stock will cease to be
designated for quotation on the Nasdaq National Market and will become eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended.
AMD does not have any present plans or proposals relating to or which would
result in:
(a) the sale or transfer of a material amount of assets of NexGen or any
of its subsidiaries;
(b) any material change in the business of NexGen; or
(c) any action similar to those enumerated above.
Item 5. Interest in Securities of the Issuer.
- ------ ------------------------------------
Pursuant to the Voting Agreements and the related irrevocable proxies, AMD
has the right to vote 12,541,908 shares of NexGen Common Stock, or approximately
37.8% of the NexGen Common Stock outstanding, in favor of the Merger Agreement
and the Merger at the NexGen Meeting. Notwithstanding anything to the contrary
contained in this Schedule, the filing of this Schedule shall not be construed
as an admission that AMD is the beneficial owner of such shares.
Except as described in Item 4, AMD has not engaged in any transaction
involving any securities issued by NexGen within the sixty-day period
immediately preceding the date of this Schedule.
With the exception of the 12,541,908 shares of NexGen Common Stock which
are subject to the Voting Agreements and related proxies, neither AMD nor any of
the other persons named in Item 2 beneficially owns any securities issued by
NexGen.
Except AMD, none of the persons named in Item 2 has engaged in any
transaction, during the past sixty days, involving any securities issued by
NexGen.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
- ------ ---------------------------------------------------------------------
to Securities of the Issuer.
---------------------------
Except as described in Item 4, none of the persons named in Item 2 is a
party to any contracts, arrangements, understandings or relationships (legal or
otherwise) with respect to any securities of NexGen.
Item 7. Material To Be Filed as Exhibits.
- ------ --------------------------------
1. Information concerning each director, executive officer and
controlling person of AMD.
Page 8 of 9 pages
2. Agreement and Plan of Reorganization dated as of October 20, 1995;
among AMD, AMD Merger Corporation and NexGen, as amended
December 11, 1995.
3. Form of Agreement between Compaq and AMD relating to NexGen Common
Stock.
SIGNATURE
---------
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
DATED: December 19, 1995
ADVANCED MICRO DEVICES, INC.
By /s/ Thomas M. McCoy
----------------------------------------------
Thomas M. McCoy,
Vice President, General
Counsel and Secretary
Page 9 of 9 pages
EXHIBIT INDEX
-------------
Sequential
Page No.
----------
1. Information concerning each director,
executive officer and controlling
person of AMD.
2. Agreement and Plan of Merger dated
October 20, 1995, among AMD, AMD Merger
Corporation and NexGen, as amended
December 11, 1995.
3. Form of Agreement between Compaq
and AMD relating to NexGen Common Stock.
EXHIBIT 1
---------
Item 2. Identity and Background.
- ------ -----------------------
I. Directors of AMD. Set forth below are the name, business address
----------------
and present occupation or employment of each director of AMD, together with the
name and principal business of any corporation or organization in which such
employment is conducted. The address of each such corporation or organization
is the same as the director's business address. Each director of AMD is a
citizen of the United States except Dr. Baur who is a German citizen.
W. J. Sanders III
Chairman of the Board
and Chief Executive Officer
Advanced Micro Devices, Inc.
One AMD Place
P.O. Box 3453
Sunnyvale, CA 94088
Dr. Friedrich Baur
President and Managing Partner
MST Beteiligungs und Unternehmensberatungs GmbH
Brummstrasse 3 (Im Asamhof)
Munich D80331
Germany
Charles M. Blalack
Chairman of the Board
and Chief Executive Officer
Blalack and Company
130 South San Rafael
Pasadena, CA 91150
Dr. R. Gene Brown
Senior Advisor
Putnam, Hayes & Bartlett, Inc.
100 Hamilton Avenue, Suite 200
Palo Alto, CA 94301
Anthony B. Holbrook
Vice Chairman of the Board of Directors
Advanced Micro Devices, Inc.
One AMD Place
P.O. Box 3453
Sunnyvale, CA 94088
Richard Previte
President and Chief Operating Officer
Advanced Micro Devices, Inc.
One AMD Place
P.O. Box 3453
Sunnyvale, CA 94088
Joe L. Roby
Chief Operating Officer
Donaldson, Lufkin & Jenrette, Inc.
140 Broadway, 49th Floor
New York, NY 10005
Dr. Leonard Silverman
Dean of the School of Engineering
University of Southern California
Olin Hall of Engineering, Room 200
University Park
Los Angeles, CA 90089-1450
II. Executive Officers of AMD. Set forth below is the name and title of
-------------------------
each executive officer of AMD. The business address for each such officer is
One AMD Place, Sunnyvale, California 94088. The mailing address for each such
officer is One AMD Place, P.O. Box 3453, Sunnyvale, California 94088. Each such
officer is a citizen of the United States.
W.J. Sanders III Chairman of the Board and
Chief Executive Officer
Richard Previte Director, President and
Chief Operating Officer
Marvin D. Burkett Senior Vice President,
Chief Financial and
Administrative Officer and Treasurer
Eugene D. Conner Senior Vice President, Operations
Stanley Winvick Senior Vice President, Human Resources
Stephen J. Zelencik Senior Vice President and
Chief Marketing Executive
Thomas M. McCoy Vice President, General Counsel
and Secretary
III. Controlling Persons of AMD. The controlling persons of AMD are the
--------------------------
directors whose names are set forth in part I above.
EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
DATED OCTOBER 20, 1995
AMONG
ADVANCED MICRO DEVICES, INC.,
AMD MERGER CORPORATION
AND
NEXGEN, INC.
AS AMENDED
DECEMBER 11, 1995
TABLE OF CONTENTS
PAGE
----
SECTION 1
THE MERGER.............................................................. A-6
1.1 Merger........................................................... A-6
1.2 Closing.......................................................... A-6
1.3 Consummation of Transactions..................................... A-6
1.4 Effect of Transactions........................................... A-7
1.5 Conversion of NexGen Common Stock................................ A-7
1.6 Surrender and Payment............................................ A-7
1.7 Fractional Shares................................................ A-8
1.8 Assumption of Stock Options and Warrants......................... A-8
1.9 Stockholders' Approvals.......................................... A-8
Certificate of Incorporation, By-laws, Directors and Officers of
1.10 Surviving Corporation........................................... A-8
1.11 Accounting Treatment............................................. A-9
1.12 Tax Consequences................................................. A-9
1.13 Stock Subject to Conditions of Forfeiture........................ A-9
SECTION 2
REPRESENTATIONS AND WARRANTIES OF NEXGEN................................ A-9
2.1 Organization; Qualification...................................... A-9
2.2 Capitalization................................................... A-9
2.3 Subsidiaries..................................................... A-10
2.4 Authority Relative to Agreements................................. A-10
2.5 Consents and Approvals; No Violation............................. A-10
2.6 SEC Reports and Financial Statements............................. A-11
2.7 Undisclosed Liabilities.......................................... A-11
2.8 Absence of Certain Changes or Events............................. A-11
2.9 Proxy Statement.................................................. A-12
2.10 Certain Contracts and Arrangements............................... A-12
2.11 Legal Proceedings................................................ A-13
2.12 No Violation..................................................... A-13
2.13 Taxes and Tax Returns............................................ A-13
(a)General Tax Representations................................... A-13
(b)Withholding................................................... A-13
(c)Tax Sharing Agreements........................................ A-14
(d)Taxes Since June 30, 1995..................................... A-14
(e)Tax Methods................................................... A-14
(f)Definitions................................................... A-14
2.14 Employee Benefit Plans........................................... A-14
2.15 Intellectual Property............................................ A-15
2.16 Title to Properties.............................................. A-16
2.17 Insurance........................................................ A-16
2.18 Transactions with Management..................................... A-17
2.19 Disclosure....................................................... A-17
2.20 Brokerage and Finders' Fees...................................... A-17
2.21 Actions Affecting Pooling........................................ A-17
2.22 Takeover Statutes................................................ A-17
2.23 Agreements of Affiliates and Others.............................. A-17
2.24 Employee Relations............................................... A-18
2.25 Environmental Matters............................................ A-18
2.26 Commercial Relationships......................................... A-18
A-2
PAGE
----
SECTION 3
REPRESENTATIONS AND WARRANTIES OF AMD AND AMD MERGER..................... A-18
3.1 Organization; Qualification....................................... A-18
3.2 Capitalization.................................................... A-18
3.3 Subsidiaries...................................................... A-19
3.4 Authority Relative to this Agreement.............................. A-19
3.5 Consents and Approvals; No Violation.............................. A-19
3.6 SEC Reports and Financial Statement............................... A-20
3.7 Undisclosed Liabilities........................................... A-20
3.8 Absence of Certain Changes or Events.............................. A-20
3.9 Proxy Statement................................................... A-21
3.10 Material Contracts................................................ A-21
3.11 Legal Proceedings................................................. A-21
3.12 No Violation...................................................... A-22
3.13 Taxes and Tax Returns............................................. A-22
(a)General Tax Representations.................................... A-22
(b)Withholding.................................................... A-22
(c)Tax Sharing Agreements......................................... A-22
(d)Taxes Since July 2, 1995....................................... A-22
(e)Tax Methods.................................................... A-23
(f)Definitions.................................................... A-23
3.14 Employee Benefit Plans............................................ A-23
3.15 Intellectual Property............................................. A-24
3.16 Title to Properties............................................... A-25
3.17 Insurance......................................................... A-25
3.18 Transactions with Management...................................... A-25
3.19 Disclosure........................................................ A-25
3.20 Brokerage and Finders' Fees....................................... A-25
3.21 Actions Affecting Pooling......................................... A-25
3.22 Takeover Statutes................................................. A-26
3.23 Environmental Matters............................................. A-26
3.24 NexGen Commercial Relationships................................... A-26
SECTION 4
COVENANTS OF NEXGEN...................................................... A-26
4.1 Negative Covenants................................................ A-26
4.2 Affirmative Covenants............................................. A-27
4.3 No Solicitation................................................... A-29
SECTION 5
COVENANTS OF AMD AND AMD MERGER.......................................... A-30
5.1 Negative Covenants................................................ A-30
5.2 Affirmative Covenants............................................. A-31
5.3 Stock Options, Warrants and Convertible Instruments............... A-33
5.4 Employee Benefits................................................. A-33
SECTION 6
INDEMNIFICATION.......................................................... A-34
6.1 Indemnification by NexGen......................................... A-34
6.2 Indemnification by AMD............................................ A-34
6.3 Defense of Action................................................. A-34
6.4 Additional Indemnification by AMD................................. A-35
A-3
PAGE
----
SECTION 7
MUTUAL CONDITIONS....................................................... A-35
7.1 Absence of Restraint............................................. A-35
7.2 Absence of Termination........................................... A-35
7.3 Required Approvals............................................... A-35
7.4 Securities Law Requirements...................................... A-35
7.5 Hart-Scott-Rodino Antitrust Improvements Act..................... A-35
7.6 NexGen Stockholders' Approval.................................... A-35
7.7 AMD Stockholders' Approval....................................... A-35
7.8 New York Stock Exchange Listing.................................. A-35
SECTION 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF AMD AND AMD MERGER............... A-36
Compliance with Covenants; Representations and Warranties
8.1 Correct......................................................... A-36
8.2 No Material Adverse Change....................................... A-36
8.3 Section 2.23 Documents........................................... A-36
8.4 Key Employees.................................................... A-36
8.5 Fairness Opinion................................................. A-36
8.6 Comfort Letter................................................... A-36
8.7 Legal Opinion.................................................... A-37
8.8 Resignations..................................................... A-37
8.9 Tax Opinion...................................................... A-37
8.10 Pooling-of-Interests Accounting Treatment........................ A-37
SECTION 9
CONDITIONS PRECEDENT TO NEXGEN'S OBLIGATIONS............................ A-37
Compliance with Covenants; Representations and Warranties
9.1 Correct......................................................... A-37
9.2 No Material Adverse Change....................................... A-37
9.3 Tax Opinion...................................................... A-38
9.4 Fairness Opinion................................................. A-38
9.5 Legal Opinion.................................................... A-38
SECTION 10
TERMINATION OF AGREEMENT................................................ A-38
10.1 Termination...................................................... A-38
10.2 Effect of Termination............................................ A-39
10.3 Fees and Expenses................................................ A-39
10.4 Return of Information; Confidentiality........................... A-40
10.5 Extension of Time; Waivers....................................... A-40
(a) By AMD and AMD Merger........................................ A-40
(b) By NexGen.................................................... A-40
SECTION 11
MISCELLANEOUS........................................................... A-41
11.1 Amendment........................................................ A-41
11.2 No Survival of Representations and Warranties.................... A-41
11.3 Entire Agreement; Counterparts; Applicable Law................... A-41
11.4 Attorneys' Fees.................................................. A-41
11.5 Assignability.................................................... A-41
11.6 Notices.......................................................... A-41
11.7 Titles........................................................... A-42
11.8 Third Party Beneficiary.......................................... A-42
11.9 Cooperation...................................................... A-42
A-4
PAGE
----
ANNEXES
Annex 1 Credit Agreement............................................ A-43
EXHIBIT
Exhibit A Form of Voting Agreement.................................... A-68
Exhibit B Form of Affiliate Agreement................................. A-72
Exhibit C Form of No Sale Agreement................................... A-75
A-5
AGREEMENT AND PLAN OF MERGER AS AMENDED
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 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
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
consummated at a closing (the "Closing") which will take place at the offices
of Bronson, Bronson & McKinnon, 505 Montgomery Street, San Francisco,
California 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 April 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
A-6
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 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 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.
A-7
(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, 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
A-8
corporation until thereafter amended in accordance with applicable law and
(ii) the officers and directors of NexGen shall be as set forth below:
Directors: W.J. Sanders III
Richard Previte
S. Atiq Raza
Officers: S. Atiq Raza, President and
Secretary
Anthony S.S. Chan, Treasurer
1.11 Accounting Treatment. The parties intend that the Merger will be
treated as a pooling-of-interests for accounting purposes by AMD.
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 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
A-9
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 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 Hart-Scott-Rodino 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
A-10
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
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
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;
A-11
(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 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 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.
A-12
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 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 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
A-13
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 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 ERISA and of the
Code and all other
A-14
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 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.
A-15
(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 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 mark 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 mark, 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 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'
A-16
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 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 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."
A-17
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 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
A-18
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, 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.
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
A-19
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.
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 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-20
(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;
(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
A-21
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 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 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.
A-22
(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
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.
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.
A-23
(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 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 mark 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 mark, 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 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.
A-24
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 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 Donaldson, Lufkin & Jenrette 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 Donaldson, Lufkin & Jenrette Securities Corporation regarding
the services to be rendered by Donaldson, Lufkin & Jenrette Securities
Corporation in connection with the Merger, and the fee to be paid to
Donaldson, Lufkin & Jenrette Securities Corporation will not exceed $4,500,000
plus expenses. AMD has received the fairness opinion rendered by Donaldson,
Lufkin & Jenrette 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.
A-25
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.
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.
SECTION 4
COVENANTS OF NEXGEN
NexGen 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 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;
A-26
(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 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 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;
A-27
(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 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 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;
A-28
(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.
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.
A-29
(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 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 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).
A-30
(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 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 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
A-31
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;
(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;
(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;
A-32
(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 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.
A-33
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 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.
A-34
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:
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 Hart-Scott-Rodino Antitrust Improvements Act. AMD and NexGen shall have
made all required filings under the Hart-Scott-Rodino 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 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.
A-35
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
Donaldson, Lufkin & Jenrette 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 Donaldson, Lufkin and Jenrette 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
A-36
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 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 Bronson,
Bronson & McKinnon, 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:
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
A-37
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 Bronson, Bronson
& McKinnon, counsel to AMD, dated the Closing Date, in substantially the form
attached hereto as Exhibit E.
SECTION 10
TERMINATION OF AGREEMENT
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 April 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 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
A-38
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
Donaldson, Lufkin & Jenrette 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 thereto.
(b) NexGen shall pay AMD a fee of $25,000,000 (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 April 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 April 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;
A-39
provided, however, that no payment hereunder shall be due with respect to any
of such events which occurs after the earlier of April 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 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 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.
A-40
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 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.
1623 Buckeye Drive
Milpitas, CA 95035
Attention: S. Atiq Raza, Chairman
With a copy to:
Pillsbury, Madison & Sutro
2700 Sandhill Road
Menlo Park, California 95113
Attention: Jorge A. del Calvo, Esq.
To AMD: Advanced Micro Devices, Inc.
Attention: General Counsel
P. O. Box 3453 M/S 150
Sunnyvale, CA 94088-3453
A-41
With a copy to:
Bronson, Bronson & McKinnon
505 Montgomery Street
San Francisco, California 94111-2514
Attention: Victor J. Bacigalupi, 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first set forth above.
ADVANCED MICRO DEVICES, INC.
/s/ W. J. Sanders III
By __________________________________
AMD MERGER CORPORATION
/s/ W. J. Sanders III
By __________________________________
NEXGEN, INC.
/s/ S. Atiq Raza
By __________________________________
A-42
ANNEX 1
SECURED CREDIT AGREEMENT
BETWEEN
ADVANCED MICRO DEVICES, INC.
AND
NEXGEN, INC.
OCTOBER 20, 1995
A-43
TABLE OF CONTENTS
PAGE
----
ARTICLE I: DEFINITIONS................................................... A-46
1.1 Defined Terms...................................................... A-46
1.2 Accounting Terms................................................... A-49
1.3 Terms Generally.................................................... A-49
ARTICLE II: THE LOAN..................................................... A-49
2.1 The Line of Credit................................................. A-49
2.2 Availability of the Line of Credit................................. A-50
2.3 Disbursements...................................................... A-50
a. Advances........................................................ A-50
b. Notice of Advances.............................................. A-50
c. Method of Disbursement.......................................... A-50
2.4 The Note........................................................... A-50
2.5 Repayment of Principal............................................. A-50
2.6 Interest Rate and Payments of Interest............................. A-50
a. Interest Rate................................................... A-50
b. Interest on Overdue Amounts; Alternative Rate of Interest....... A-51
c. Usury Law....................................................... A-51
2.7 Prepayments........................................................ A-51
2.8 Payment to the Lender.............................................. A-51
2.9 Other Secured Indebtedness......................................... A-52
2.10 Subordination...................................................... A-52
ARTICLE III: THE CLOSING................................................. A-52
3.1 Closing Date....................................................... A-52
3.2 Failure to Meet Conditions......................................... A-52
ARTICLE IV: CONDITIONS PRECEDENT......................................... A-52
4.1 Documents Required Prior to Initial Disbursement................... A-52
4.2 Conditions Precedent to Each Disbursement.......................... A-53
ARTICLE V: COLLATERAL SECURITY........................................... A-53
5.1 Secured Obligations................................................ A-53
5.2 The Collateral..................................................... A-53
5.3 Priority of Liens.................................................. A-54
5.4 Financing Statements and Perfection................................ A-54
ARTICLE VI: REPRESENTATIONS AND WARRANTIES OF THE BORROWER............... A-54
6.1 Organization....................................................... A-54
6.2 Authorization...................................................... A-54
6.3 Enforceability..................................................... A-54
6.4 No Proceedings..................................................... A-55
6.5 Compliance with Laws and Agreements................................ A-55
6.6 Title to Assets.................................................... A-55
6.7 Financial Condition................................................ A-55
6.8 Absence of Undisclosed Liabilities................................. A-55
6.9 Taxes.............................................................. A-55
6.10 Misleading Statements.............................................. A-55
6.11 Consents........................................................... A-55
6.12 Federal Reserve Regulations........................................ A-56
6.13 Finder's or Broker's Fee........................................... A-56
6.14 Subsidiaries....................................................... A-56
6.15 Investment Company Act; Public Utility Holding Company Act......... A-56
A-44
PAGE
----
ARTICLE VII: DEFAULT..................................................... A-56
7.1 Event of Default................................................... A-56
7.2 Remedies........................................................... A-56
ARTICLE VIII: GENERAL PROVISIONS......................................... A-56
8.1 Construction....................................................... A-56
8.2 Further Assurances................................................. A-56
8.3 Enforcement and Waiver by the Lender............................... A-56
8.4 Notices............................................................ A-57
8.5 Waiver and Release by the Borrower................................. A-57
8.6 Choice of Law and Forum............................................ A-57
8.7 Binding Effect, Assignment and Entire Agreement.................... A-57
8.8 Severability....................................................... A-58
8.9 Attorneys' Fees and Costs.......................................... A-58
8.10 Headings........................................................... A-58
8.11 Survival........................................................... A-58
8.12 Counterparts....................................................... A-58
EXHIBIT A: NAMES OF AUTHORIZED INDIVIDUALS............................... A-1
EXHIBIT B: FORM OF ADVANCE REQUEST....................................... B-1
EXHIBIT C: SECURED PROMISSORY NOTE....................................... A-59
EXHIBIT D: SECURITY AGREEMENT............................................ A-61
A-45
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.
"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.
A-46
"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 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 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.
A-47
"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 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;
(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;
A-48
(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.
"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
A-49
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:
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 10-10-435-7417910, with
Bank of America National Trust and Savings Association, Account Administration
(South) [bank routing (ABA) number 121-000-358], 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:
A-50
(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 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 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.
A-51
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 Bronson, Bronson & McKinnon at 10 Almaden
Boulevard, Suite 600, San Jose, California, 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.
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;
A-52
(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 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");
(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");
A-53
(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 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
application from time to time affecting the rights of creditors generally.
A-54
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.
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.
A-55
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.
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 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
A-56
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.
1623 Buckeye Drive
Milpitas, CA 95035
Attention: Chief Financial Officer
With a copy to:
Pillsbury Madison & Sutro
Ten Almaden Boulevard
San Jose, CA 95113
Attention: Jorge A. del Calvo, Esq.
b. If to the Lender:
Advanced Micro Devices, Inc.
One AMD Place
Sunnyvale, CA 94088
Attention: Chief Financial Officer
With a copy to:
Bronson, Bronson & McKinnon
505 Montgomery Street
San Francisco, CA 94111
Attention: Victor J. Bacigalupi, 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.
A-57
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.
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
/s/ S. Atiq Raza
By: _________________________________
Its Chairman of the Board, President
and Chief Executive Officer
THE LENDER:
ADVANCED MICRO DEVICES, INC.,a
Delaware corporation
/s/ W. J. Sanders III
By: _________________________________
Its Chairman of the Board, President
and Chief Executive Officer
A-58
EXHIBIT C
SECURED PROMISSORY NOTE
$60,000,000 October 20, 1995
San Jose, California
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 One AMD Place, Sunnyvale, California 94088,
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.
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: ________________________________
A-59
BORROWINGS AND PAYMENTS OF PRINCIPAL
PRINCIPAL
OR FACE DATE OF AMOUNT OF
DATE OF AMOUNT OF INTEREST REPAYMENT/ REPAYMENT/ NOTATION
ADVANCE ADVANCE RATE PREPAYMENT PREPAYMENT MADE BY
- ------- --------- -------- ---------- ---------- --------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
A-60
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");
(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,
A-61
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 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;
(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
A-62
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;
(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.
A-63
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.
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
A-64
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 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 _________________________________
A-65
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:
"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.
A-66
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.
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
/s/ Anthony S.S. Chan
By __________________________________
ANTHONY S.S. CHAN
CHIEF FINANCIAL OFFICER
THE LENDER:
ADVANCED MICRO DEVICES, INC.,
a Delaware corporation
/s/ Marvin D. Burkett
By __________________________________
MARVIN D. BURKETT
SENIOR VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
A-67
EXHIBIT A
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.
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;
A-68
(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 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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as
of the date first above written.
Number of Shares of NexGen Common
Stock held:
STOCKHOLDER:
_____________________________________ _____________________________________
(NAME)
_____________________________________
_____________________________________
(ADDRESS)
Accepted and agreed to as of _ , 1995
ADVANCED MICRO DEVICES, INC.
By: _________________________________
Title: ______________________________
A-69
IRREVOCABLE PROXY
The undersigned, as owner of shares of Common Stock of NexGen, Inc. (the
"Corporation"), a Delaware corporation, the number and description of which
shares are set forth below, hereby revokes all previous proxies and appoints
W.J. Sanders III and Marvin D. Burkett, and each of such persons acting alone,
as proxy holder to attend and to vote all shares of the Common Stock of the
Corporation held by the undersigned in favor of the Agreement and Plan of
Merger expected to be signed and dated on October 20, 1995, among Advanced
Micro Devices, Inc., AMD Merger Corporation and the Corporation (the
"Agreement") and the Merger, as such term is defined in the Agreement, at any
and all meetings of the stockholders of the Corporation called to consider the
Agreement or the Merger or both, and any adjournments thereof, held on or
after the date of the giving of this proxy and prior to the termination of the
Agreement, and to execute any and all written consents of stockholders of the
Corporation executed on or after the date of the giving of this proxy and
prior to the termination of the Agreement in favor of the Agreement or the
Merger or both, with the same effect as if the undersigned had personally
attended the meeting or had personally voted the shares or had personally
signed a written consent.
The undersigned authorizes and directs the proxy holder to file this proxy
appointment with the Secretary of the Corporation and authorizes the proxy
holder to substitute another person as proxy holder and to file the
substitution instrument with the Secretary of the Corporation.
This proxy is given pursuant to a Voting Agreement of even date with the
Agreement between the undersigned and Advanced Micro Devices, Inc. as a
condition to the execution by Advanced Micro Devices, Inc. of the Agreement
and the extension by Advanced Micro Devices, Inc., of credit to the
Corporation pursuant to the Credit Agreement of even date with the Agreement
and is, therefore, coupled with an interest and may not be revoked without the
written consent of Advanced Micro Devices, Inc. for a period of nine months
from the date hereof unless the Agreement is terminated.
Dated: October , 1995
Number and Description of Shares:
shares of common stock of NexGen, Inc.
_____________________________________
(Signature)
_____________________________________
(Printed Name)
A-70
AMENDMENT NO. 1
TO
VOTING AGREEMENT
This Amendment No. 1 to Voting Agreement is entered into as of November 30,
1995, by and 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, AMD and the Stockholder have entered into the Voting Agreement (the
"Voting Agreement") as of October , 1995; and
WHEREAS, AMD and the Stockholder have agreed to amend the Voting Agreement
as set forth below;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Paragraph 2 of the Voting Agreement is hereby amended to
read as follows:
The Stockholder shall not, prior to the Effective Time of the Merger
(as defined in the Merger Agreement) 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.
2. Continued Effectiveness. Except as amended by this Amendment No. 1,
the Voting Agreement remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this agreement to be executed as
of the date first above written.
STOCKHOLDER:
_____________________________________
(Signature)
_____________________________________
(Printed name)
ADVANCED MICRO DEVICES, INC.
By: _________________________________
Its _________________________________
A-71
EXHIBIT B
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 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
A-72
(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:
"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 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
A-73
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. Bronson, Bronson & McKinnon
Attention: General Counsel 505 Montgomery Street
P.O. Box 3453 M\S 150 San Francisco, CA 94111-2514
Sunnyvale, CA 94088-3453 Attention: Victor J. Bacigalupi
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.
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: ______________________________
A-74
EXHIBIT C
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:
(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.
A-75
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.
Number of Shares of NexGen Common STOCKHOLDER:
Stock held:
_____________________________________ _____________________________________
(NAME)
_____________________________________
(ADDRESS)
Accepted and agreed to as of _ , 1995
ADVANCED MICRO DEVICES, INC.
By: _________________________________
Title: ______________________________
A-76
AMENDMENT NO. 1
TO
NO SALE AGREEMENT
This Amendment No. 1 to No Sale Agreement is entered into as of November 30,
1995, by and 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, AMD and the Stockholder have entered into the No Sale Agreement
(the "No Sale Agreement") as of October , 1995; and
WHEREAS, AMD and the Stockholder have agreed to amend the No Sale Agreement
as set forth below;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment. Paragraph 1 of the No Sale Agreement is hereby amended to
read as follows:
The Stockholder shall not, prior to the Effective Time of the Merger
(as defined in the Merger Agreement) 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. Continued Effectiveness. Except as amended by this Amendment No. 1,
the No Sale Agreement remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this agreement to be executed as
of the date first above written.
STOCKHOLDER:
_____________________________________
(Signature)
_____________________________________
(Printed name)
ADVANCED MICRO DEVICES, INC.
By: _________________________________
Its _________________________________
A-77
EXHIBIT 3
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 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 Accounting Series Release No. 130, as
amended, filed by AMD with the Commission or 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.
(b) (1) Until the financial results described in paragraph (a) of this
Section 1 have been filed or published as described therein, 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:
"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) After the financial results described in paragraph (a) 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 unlegended stock certificates representing the
AMD Shares; provided, however, that this shall be done only if the Stockholder
shall have then presented to AMD an opinion of counsel to AMD, satisfactory to
AMD, to the effect that the Stockholder was not an "affiliate" of NexGen within
the meaning of Rule 145 under the Securities Act of 1933, as amended, and
Accounting Series Release No. 130, as amended, of the Commission, as of the date
hereof or at any later time prior to the Effective Time.
(c) 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
2
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 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. Bronson, Bronson & McKinnon
Attention: General Counsel 505 Montgomery Street
P.O. Box 3453 M\S 150 San Francisco, CA 94111-2514
Sunnyvale, CA 94088-3453 Attention: Victor J. Bacigalupi
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.
3
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:
Compaq Computer Corporation
By: /s/ Eckhard Pfeiffer
-------------------------------
President and Chief Executive
Officer
Accepted and agreed to as of October ___, 1995.
AMD:
Advanced Micro Devices, Inc.
By: _______________________________
Title: ____________________________
4