REORGANIZATION AGREEMENT
by and between
ADVANCED MICRO DEVICES, INC.,
and
BOLDCO, INC.
dated as of May 21, 2000
REORGANIZATION AGREEMENT
This REORGANIZATION AGREEMENT dated as of the 21/st/ day of May, 2000
(the 'Agreement') by and between Advanced Micro Devices, Inc., a Delaware
corporation ('AMD'), and BoldCo, Inc., a California corporation (the 'Company').
RECITALS
A. AMD engages through its Communication Products Division ('CPD') in
the design, development, manufacture and sale of telecommunication products for
public communications infrastructure systems, customer premise equipment and
cordless telephony applications.
B. AMD believes that it is in the best interests of the Business that
the business, assets and operations of CPD be reorganized so that it is a
'stand-alone' business.
C. In furtherance of such reorganization, prior to the date hereof,
the transfers set forth in Section 2.1 were consummated.
D. The purpose of this Agreement is to finalize the reorganization of
the operations of CPD as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, conditions, representations, warranties and agreements hereinafter
set forth, the parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Previously Defined Terms. Each term defined in the first paragraph
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hereof and the Recitals shall have the meaning set forth above whenever used
herein.
1.2 General Definitions. Whenever used herein, the following terms shall
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have the meaning set forth below:
'Action' shall mean any action, order, writ, injunction, judgment or
decree, suit, litigation, proceeding, labor dispute, arbitral action or
investigation.
'Affiliate' means a Person that directly or indirectly through one or
more intermediaries controls, is controlled by or is under common control with
the Person specified.
'AMD's Books and Records' means the books and records (including
computerized records, ledgers, files and software) owned by AMD and its
Affiliates that relate to the Retained Business and are necessary to operate the
Retained Business, or are required by law to be retained by AMD, including,
without limitation, all files relating to any Action being retained by AMD as a
Retained Liability, original corporate minute books, stock ledgers and corporate
seals, and all licenses, leases, agreements and filings relating to AMD or the
Retained Business.
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'Ancillary Agreement' or 'Ancillary Agreements' means the agreements
set forth in Section 3.3(a), individually or collectively, respectively.
'Applicable Law' or 'Applicable Laws' shall mean, with respect to any
Person, any domestic, foreign, federal, state or local statute, law, ordinance,
rule, regulation, order, writ, injunction, directive, judgment, decree, permit,
authorization or opinion or any other requirement of law (including common law),
all as in effect as of the Effective Date, of any Governmental Authority
applicable to such Person or any of its Affiliates or any of their respective
properties, assets, officers, directors, employees, consultants or agents (in
connection with such officer's, director's, employee's, consultant's or agent's
activities on behalf of such Person or any of its Affiliates).
'Assumed Liabilities' means all of the Liabilities primarily related
to the Business; provided, that Assumed Liabilities shall not include the
Retained Liabilities.
'Assumption Agreement' has the meaning ascribed to such term in
Section 2.1(a).
'Available Employees' shall mean the employees of AMD set forth on
Schedule 1.2(g).
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'Business' means the business and operations of CPD, as conducted by
AMD immediately prior to the Effective Date.
'Closing' has the meaning ascribed to such term in Section 3.1.
'Company Shares' means the 138,888 shares of the Series A Preferred
Stock issued by the Company to AMD at Closing.
'Contract' shall mean any written agreement, understanding,
arrangement, contract, lease, note, loan, evidence of indebtedness, purchase
order, letter of credit, indenture, security or pledge agreement, franchise
agreement, undertaking, practice, covenant not to compete, employment agreement,
license, instrument, obligation or commitment to which AMD is a party that
relates primarily to, and is necessary for the conduct of, the Business,
together with those contracts set forth on Schedule 1.2(b).
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'CPD Accounts Receivable' means all net accounts receivable related to
the Business.
'CPD Assets' means the following assets, properties and rights which
are used in and necessary for the conduct of the Business (excluding Retained
Assets, and as modified in the ordinary course of business between the date
hereof and the Effective Date):
(A) the CPD Intellectual Property, including, but not limited to:
(i) the registered trademarks or service marks set forth on
Schedule 1.2(a)(i);
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(ii) the unregistered trademarks, service marks, trade
dress and/or trade names set forth on Schedule 1.2(a)(ii);
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(iii) the registered copyrights set forth on Schedule
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1.2(a)(iii);
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(iv) the registered mask works set forth on Schedule
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1.2(a)(iv); and
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(v) the registered domain names set forth on Schedule
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1.2(a)(v)
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(B) Permits, including all applications therefor, to the extent
such Permits are transferable;
(C) the CPD Inventory;
(D) the Contracts, including those set forth on Schedule 1.2(b),
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and right under the shared contracts set forth on Schedule 1.2(c);
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(E) the personal property set forth on Schedule 1.2(d);
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(F) the personal property leases set forth on Schedule 1.2(e);
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(G) the patents set forth on Schedule 1.2(f) (the 'CPD Patents');
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(H) the CPD Books and Records;
(I) the CPD Accounts Receivable; and
(J) all litigation and claim files (whether on paper, computer
disk, tape or other storage media) related to claims, actions, suits,
proceedings, or investigations pending or threatened against the Business
or the Company or any properties or rights of the Business or the Company,
in each case which constitutes an Assumed Liability.
'CPD Books and Records' means the books and records (including
computerized records, files and software) owned by AMD that relate primarily to
the Business and are necessary to operate the Business, including, without
limitation, all licenses, leases, agreements and filings relating to the
Business (but not including AMD's Books and Records).
'CPD Intellectual Property' means the Intellectual Property owned by
AMD that relates solely to the Business and is necessary to operate the
Business.
'CPD Inventory' means the inventory owned by AMD and used exclusively
in connection with the Business, consisting of finished goods and work in
process (i) which has progressed beyond the point in the manufacturing process
where the inventory would be saleable to the Company under the terms of the
Wafer Fabrication Agreement in the form attached hereto as Exhibit F; (ii)
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consisting of unsorted wafers exfactory under the Logic Foundry Agreement
between AMD and UMC, dated as of March 17, 1998 and (iii) consisting of sorted
wafers exfactory under either the Wafer Supply Agreement between AMD and Sony
Microelectronics,
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dated as of April 3, 1995 or the Wafer Supply Agreement to be entered into by
the Company and Sony Microelectronics.
'Effective Date' has the meaning ascribed to such term in Section 3.1.
'Encumbrance' means, with respect to any CPD Asset, any mortgage,
pledge, encumbrance, title defect, security interest, hypothecation, adverse
claim, easement, right of way, including without limitation any lease, chattel
mortgage, conditional sales contract, collateral security arrangement and other
title or interest retention arrangement.
'Environmental Conditions' shall mean the state of the environment,
including natural resources (e.g., flora and fauna), soil, surface water, ground
water, any present or potential drinking water supply, subsurface strata, or
ambient air, relating to or arising out of the use, handling, storage,
treatment, recycling, generation, release, spilling, leaking, pumping, pouring,
emptying, discharging, injecting, escaping, leaching, disposal, dumping, or
threatened release of Hazardous Substances by AMD, or by its agents,
representatives, employees, or independent contractors when acting in such
capacity on behalf of AMD.
'Environmental Laws' shall mean all Applicable Laws that relate to or
impose liability or standards of conduct concerning the protection,
investigation or restoration of the environment or natural resources including,
without limitation: (i) all requirements pertaining to reporting, licensing,
permitting, controlling, investigating or remediating emissions, discharges,
releases or threatened releases of hazardous substances, chemical substances,
pollutants, contaminants or toxic substances, materials or wastes, whether
solid, liquid or gaseous in nature, into the air, surface water, groundwater or
land; (ii) all requirements relating to the manufacture, processing, generation,
distribution, use, treatment, storage, disposal, transports or handling of
hazardous substances, chemical substances, pollutants, contaminants or toxic
substances, materials or wastes, whether solid, liquid or gaseous in nature; and
(iii) the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Air Act, the
Water Pollution Control Act, the Safe Drinking Water Act (each as amended as of
the Effective Date) and all requirements promulgated pursuant to any of these or
analogous state or local statutes.
'Environmental Liabilities' means any and all Liabilities arising in
connection with or in any way relating to AMD (or any predecessor of AMD or any
prior owner of all or part of its business and assets), any property now or
previously owned, leased or operated by such AMD, the Business (as currently or
previously conducted), or the CPD Assets which (i) arise under or relate to any
Environmental Laws or Environmental Conditions and (ii) relate to actions
occurring or conditions existing on or prior to the Effective Date.
'Governmental Authority' means any foreign, domestic, federal, state
or local governmental authority, quasi-governmental authority, instrumentality,
court, government or self-regulatory organization, commission, tribunal or
organization or any regulatory, administrative or other agency, or any political
or other subdivision, department or branch of any of the foregoing.
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'Hazardous Substances' shall mean all pollutants, contaminants,
chemicals, wastes, and any other carcinogenic, ignitable, corrosive, reactive,
toxic or otherwise hazardous substances or materials (whether solids, liquids or
gases) subject to regulation, control or remediation under Environmental Laws,
including without limitation all flammable, explosive and radioactive materials,
PCBs, pesticides, herbicides, asbestos, sludge, slag, acids, metals, solvents,
waste waters, petroleum products or by-products and urea-formaldehyde
insulation.
'Inactive Employee' means any employee of AMD set forth on Schedule
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1.2(g) who is not actively employed as of the Closing as a result of being on
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long-term disability.
'Intellectual Property' means all trademarks, service marks, trade
names, trade dress, domain names, logos, business and product names, slogans,
and registrations and applications for registration or renewal thereof;
copyrights and registrations or renewals thereof; mask works and registrations
thereof; inventions, processes, designs, formulae, trade secrets, know-how,
confidential and technical information; all other intellectual property and
proprietary rights; copies and tangible embodiments thereof (in whatever form or
medium, including electronic media); and licenses of any of the foregoing;
provided, however, that Intellectual Property shall not include the CPD Patents.
'International Employee' means any employee of AMD set forth on
Schedule 1.2(g) who is primarily employed outside the United States.
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'Liabilities' shall mean any and all debts, liabilities and
obligations, absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising,
including all costs and expenses relating thereto, and including, without
limitation, those debts, liabilities and obligations arising under any law,
rule, regulation, Action, threatened Action, order or consent decree of any
governmental entity or any award of any arbitrator of any kind, and those
arising under any contract, commitment or undertaking.
'Permits' means all material licenses, permits, orders, consents,
approvals, registrations, authorizations, qualifications and filings with and
under all federal, state, local or foreign laws and governmental or regulatory
bodies and all industry or other nongovernmental self-regulatory organizations,
in each case, primarily related to, or necessary to operate, the Business as
currently conducted by AMD.
'Permitted Encumbrances' means (i) Encumbrances for current taxes not
yet due and payable, (ii) purchase money security interests, (iii) liens imposed
by law, such as materialmen's, mechanics', workers', repairmen's, employees',
carriers', vendors', warehousemen's and other like liens arising in the ordinary
course of business in respect of obligations that are not yet due and payable or
will be paid by AMD in the ordinary course following the Effective Date or (iv)
Encumbrances that are insignificant, individually and in the aggregate, to the
operation of the Business.
'Person' means an individual, a partnership, a corporation, a limited
liability company, a trust, an unincorporated organization, a government or any
department or agency thereof or any other entity.
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'Reasonable Efforts' means the obligated party is required to make a
diligent, reasonable and good faith effort to accomplish the applicable
objective. Such obligation, however, does not require any expenditure of funds
or the incurrence of any liability, in either case which is unreasonable in
light of the related objective, nor does it require that the obligated party act
in a manner which would otherwise be contrary to prudent business judgment in
light of the objective attempted to be achieved. The fact that the objective is
not actually accomplished is not dispositive evidence that the obligated party
did not in fact utilize its Reasonable Efforts in attempting to accomplish the
objective.
'Retained Assets' means the assets of AMD and its Affiliates other
than the CPD Assets, including without limitation all cash (other than cash used
to meet the minimum capital requirements of the foreign subsidiaries referred to
in Sections 2.3 through 2.8, which amounts shall be paid to AMD by the Company
following the Closing).
'Retained Business' shall mean the businesses conducted by AMD and its
Affiliates other than the Business.
'Retained Liabilities' means any of the following liabilities or
obligations of AMD or its Affiliates, whether or not related to the Business and
whether direct or indirect, known or unknown, or absolute or contingent:
(a) any liabilities or obligations incurred by AMD or its Affiliates
in connection with the conduct of the Retained Business;
(b) any workers' compensation claims related to the operation of the
Business prior to the Closing and all obligations and liabilities under any
employee plan or benefit arrangement of AMD or its Affiliates in respect of each
employee or former employee (including any beneficiary thereof) who is not a
Transferred Employee and all liabilities and obligations in respect of benefits
accrued as of the Effective Date by Transferred Employees under any employee
plan or benefit arrangement of AMD or its Affiliates;
(c) any Liability resulting from any default or nonperformance by AMD
prior to the Effective Date under any Contract;
(d) any Liability in any pending or threatened litigation or
governmental proceeding, in either case, to which AMD or any of its Affiliates
is a party prior to the Closing;
(e) any Liability pertaining solely to a Retained Asset;
(f) Environmental Liabilities;
(g) obligations, as of the Effective Date, which are (1) obligations
for borrowed money; (2) obligations evidenced by notes, bonds, debentures or
similar instruments; or (3) obligations in the nature of guarantees of the
obligations described in clauses (1) or (2) of any Person, keep well agreements
or similar obligations, except to the extent expressly assumed by the Company;
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(i) any liabilities or obligations related to indemnification or other
provision under any contract or other agreement pursuant to which any sale or
disposition was made of any business or product line formerly owned or operated
by AMD or any predecessor but not presently so owned or operated;
(j) any Transferred Employee Liabilities;
(k) any liabilities or obligations of AMD or any of its Affiliates for
indemnification of any present or former director or officer of (or other person
serving in a fiduciary capacity at the request of) AMD or its Affiliates based
on actual or alleged breach of fiduciary duty of such person prior to Closing;
(l) any liabilities or obligations incurred on or prior to the
Effective Date related to intercompany trade payables or intercompany debt;
(m) any (x) Tax of the Company or AMD described in clause (i) of the
definition of Tax related to all taxable periods ending on or prior to the
Effective Date or the pre-Closing portion of all complete taxable periods that
include, but do not end on, the Closing and (y) Tax described in clause (ii) or
(iii) of the definition of Tax, and any liability as transferee. For purposes
of this Agreement, 'Tax' means (i) any net income, alternative or add-on minimum
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tax, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, profits, license, registration, recording, documentary,
conveyancing, gains, withholding on amounts paid to or by AMD or the Company,
payroll, employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom duty or other tax, governmental fee
or other like assessment or charge of any kind whatsoever, together with any
interest, penalty, addition to tax or additional amount imposed by any
governmental authority responsible for the imposition of any such tax (domestic
or foreign), (ii) in the case of the Company, liability for the payment of any
amount of the type described in clause (i) as a result of being or having been
before the Effective Date a member of an affiliated, consolidated, combined or
unitary group and (iii) liability for the payment of any amounts of the type
described in (i) as a result of being party to any agreement or any express or
implied obligation to indemnify any other Person; and
(n) any liabilities incurred for sales commissions to be paid to sales
representatives selling products of the Business with respect to periods prior
to the Effective Date for which the corresponding accounts receivable upon which
such sales commissions liabilities have been incurred have been collected by
AMD.
'Series A Preferred Stock' means the Series A Preferred Stock of the
Company.
'Transferred Employee Liabilities' means with respect to Transferred
Employees (i) liabilities incurred for payroll and payroll taxes with respect to
periods prior to the Effective Date and (ii) liabilities incurred for retention
and incentive bonuses under programs implemented by AMD with respect to periods
prior to the Effective Date.
'Transferred Employees' shall mean the employees of AMD set forth on
Schedule 1.2(g) but excluding Available Employees, Inactive Employees,
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International Employees and Visa Employees.
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'Visa Employee' means any employee of AMD set forth on Schedule 1.2(g)
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who is so designated on such Schedule.
1.3 Interpretation. Unless the context of this Agreement otherwise
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requires, (a) words of any gender shall be deemed to include each other gender,
(b) words using the singular or plural number shall also include the plural or
singular number, respectively, and (c) reference to 'hereof', 'herein', 'hereby'
and similar terms shall refer to this entire Agreement.
ARTICLE II.
TRANSFERS
2.1 Prior Transfers. Prior to the date of this Agreement or at such other
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time as set forth in this Section 2.1, as part of the reorganization of the
operations of CPD as a stand-alone business, the following transactions have
been or will be consummated:
(a) In connection with the transactions contemplated herein, AMD
assumed and agreed to perform, pay and discharge all Liabilities and obligations
of the Company arising on or prior to May 21, 2000 and that relate to activities
the Company engaged in on or prior to May 21, 2000. AMD and the Company
executed and delivered the Assumption Agreement (the 'Assumption Agreement'), a
true and correct copy of which is attached hereto as Exhibit A and incorporated
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by reference herein.
(b) AMD contributed to the Company, free and clear of any Encumbrances
(other than Permitted Encumbrances) such of the CPD Assets owned by or held by
AMD and set forth on Schedule 2.1(b) hereto. In connection with the
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transactions referred to in this Section 2.1(b), AMD and the Company executed
and delivered the transfer documents (the 'Transfer Documents'), true and
correct copies of which are attached hereto as Exhibit B and incorporated by
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reference herein.
(c) The Company and AMD shall execute and deliver such other transfer
documents as are necessary and appropriate to consummate the transactions
contemplated in this Section 2.1.
2.2 Closing.
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(a) At the Closing on the Effective Date (i) AMD shall transfer,
assign, convey and license to the Company, free and clear of any Encumbrances
(other than Permitted Encumbrances), the CPD Assets (to the extent not
previously transferred pursuant to the Transfer Documents and excluding CPD
Assets being transferred pursuant to Sections 2.3 through 2.8); (ii) the Company
shall assume, agree to perform, and in due course pay and discharge, the Assumed
Liabilities (excluding Assumed Liabilities being transferred pursuant to
Sections 2.3 through 2.8); and (iii) AMD shall use its Reasonable Efforts to
cause the Transferred Employees, Inactive Employees, International Employees and
Visa Employees to become employees of the Company (or of an appropriate
subsidiary of the Company). The Inactive Employees, International Employees and
Visa Employees will not become employees of the Company (or of an appropriate
subsidiary of the Company) on the Effective Date but may become employees of the
Company (or of an appropriate subsidiary of the Company) at a future date. Such
transactions shall be effected pursuant to transfer documents in forms
reasonably agreed to by
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the parties. The Company shall not assume or pay and AMD hereby agrees that it
shall continue to be responsible for the Retained Liabilities.
(b) At the Closing on the Effective Date, in consideration of the
transfers of the CPD Assets made pursuant to this Article II, the Company shall
issue to AMD: (i) the Company Shares; and (ii) a warrant to purchase 11,000,000
shares of the Company's common stock in the form attached hereto as Exhibit C
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(the 'Common Warrant').
2.3 Germany.
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(a) As soon as practicable after the execution of this Agreement, the
Company shall use its Reasonable Efforts to incorporate or acquire a shelf
company in the form of a GmbH wholly owned by the Company (the 'Germany
Subsidiary').
(b) At the Closing or as soon as reasonably practicable thereafter,
(i) AMD shall cause Advanced Micro Devices GmbH to transfer, assign, convey and
deliver to the Germany Subsidiary, free and clear of any Encumbrances (other
than Permitted Encumbrances), such of the CPD Assets and Assumed Liabilities
that relate to the operations of the Business in Germany owned or held by
Advanced Micro Devices GmbH. Such transactions shall be effected pursuant to
transfer documents reasonably satisfactory to AMD and the Company.
2.4 France.
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(a) As soon as practicable after the execution of this Agreement, the
Company shall use its Reasonable Efforts to incorporate or acquire a shelf
company in the form of a Sarl, Eurl, or SAS wholly owned by the Company (the
'France Subsidiary').
(b) At the Closing or as soon as practicable thereafter, (i) AMD shall
cause Advanced Micro Devices S.A. to transfer, assign, convey and deliver to the
France Subsidiary, free and clear of any Encumbrances (other than Permitted
Encumbrances), such of the CPD Assets and Assumed Liabilities that relate to the
operations of the Business in France owned or held by Advanced Micro Devices
S.A.. Such transactions shall be effected pursuant to transfer documents
reasonably satisfactory to AMD and the Company.
2.5 Italy.
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(a) As soon as practicable after the execution of this Agreement, the
Company shall use its Reasonable Efforts to incorporate or acquire a shelf
company in the form of an Srl owned 99.9% by the Company and .1% by CPD
International (as defined below) (the 'Italy Subsidiary').
(b) At the Closing or as soon as reasonably practicable thereafter,
(i) AMD shall cause Advanced Micro Devices S.p.A. to transfer, assign, convey
and deliver to the Italy Subsidiary, free and clear of any Encumbrances (other
than Permitted Encumbrances), such of the CPD Assets and Assumed Liabilities
that relate to the operations of the Business in Italy owned or held by Advanced
Micro Devices S.p.A. Such transaction shall be effected pursuant to transfer
documents reasonably satisfactory to AMD and the Company.
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2.6 United Kingdom.
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(a) As soon as practicable after the execution of this Agreement, the
Company shall use its Reasonable Efforts to incorporate or acquire a shelf
company in the form of a limited company, wholly owned by the Company (the 'UK
Subsidiary').
(b) At the Closing or as soon as reasonably practicable thereafter,
(i) AMD shall cause Advanced Micro Devices (U.K.) Limited to transfer, assign,
convey and deliver to the UK Subsidiary, free and clear of any Encumbrances
(other than Permitted Encumbrances), such of the CPD Assets and Assumed
Liabilities that relate to the operations of the Business in England owned or
held by Advanced Micro Devices (U.K.) Limited. Such transaction shall be
effected pursuant to transfer documents reasonably satisfactory to AMD and the
Company.
2.7 Japan.
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(a) As soon as practicable after the execution of this Agreement, the
Company shall use its Reasonable Efforts to incorporate or acquire a shelf
company in the form of a KK, wholly owned by the Company (the 'Japan
Subsidiary').
(b) At the Closing or as soon as reasonably practicable thereafter,
(i) AMD shall cause AMD Japan Ltd. to transfer, assign, convey and deliver to
the Japan Subsidiary, free and clear of any Encumbrances (other than Permitted
Encumbrances), such of the CPD Assets and Assumed Liabilities that relate to the
operations of the Business in Japan owned or held by AMD Japan Ltd. Such
transaction shall be effected pursuant to transfer documents reasonably
satisfactory to AMD and the Company.
2.8 Barbados.
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(a) As soon as practicable after the execution of this Agreement, the
Company shall use its Reasonable Efforts to incorporate or acquire a shelf
company in the form of a corporation, wholly owned by the Company (the 'Barbados
Subsidiary').
(b) AMD shall (i) timely and properly file an election pursuant to
section 927(f) of the Code to treat the Barbados Subsidiary as a foreign sales
corporation within the meaning of section 922 of the Code, and (ii) take any
other actions necessary in order to ensure that the Barbados Subsidiary
qualifies as a foreign sales corporation within the meaning of section 922 of
the Code for its initial taxable year.
2.9 United States.
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(a) Promptly after the execution of this agreement, the Company shall
use its Reasonable Efforts to cause to be incorporated a Delaware corporation
wholly owned by the Company ('CPD International').
(b) The Company shall use its Reasonable Efforts to cause CPD
International to establish branches in Hong Kong, China, Taiwan, Singapore,
Korea and Sweden prior to the Closing, and shall use its Reasonable Efforts to
take all actions to ensure that such branches are
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properly organized including but not limited to ensuring that proper
registration, licenses, permits and minimal capital requirements are met.
2.10 Foreign Subsidiaries. AMD will use Reasonable Efforts to cause the
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Company to establish the subsidiaries and branches and to complete the transfers
enumerated in Sections 2.3 through 2.8 on or before the Effective Date. If,
however, the Company is unable to establish one or more of the subsidiaries or
branches or complete one or more of the transfers by the Effective Date, AMD
will enter into one or more services agreements with the Company, in forms to be
reasonably agreed upon by the parties, such that the Company can continue to
operate in each of the locations specified in Sections 2.3 through 2.8 in
substantially the manner in which it was operating before the Effective Date
until such time that a transfer can reasonably be completed.
ARTICLE III.
CLOSING AND CLOSING DELIVERIES
3.1 Effective Date. The term 'Closing' as used herein shall refer to the
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actual transfers, assignments, conveyances and deliveries contemplated by
Article II as taking place at the Closing. The Closing shall take place as soon
as reasonably practical following the date upon which the conditions precedent
set forth in Section 5.1 are satisfied or such other effective time as the
parties may agree (the 'Effective Date').
3.2 Deliveries at Closing.
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(a) With respect to the transactions contemplated by Article II:
(i) AMD shall deliver to the Company the following:
(A) the transfer documents and all such deeds, bills of sale,
lease assignments and other contract assignments and other documents and
instruments of sale, transfer, assignment, conveyance and deliverance as may be
necessary and appropriate to implement the intended transfers contemplated by
Article II; and
(B) such other documents and instruments as may be reasonably
necessary to implement the transfers contemplated hereby.
(ii) The Company shall deliver to AMD the following:
(A) an Assumption Agreement in the form agreed to by the
parties, pursuant to which the Company covenants and agrees to assume the
Assumed Liabilities;
(B) transfer documents and such other documents and
instruments as may be reasonably necessary to implement the transfers and
assumption of the Assumed Liabilities;
(C) the Company Shares; and
(D) the Common Warrant.
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(iii) The consents and approvals of the Governmental Authorities
and other Persons listed on Schedule 3.2(a) hereto shall be obtained, subject to
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any changes in applicable law after the date hereof.
3.3 Ancillary Agreements.
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(a) At the Closing, AMD and the Company shall enter into, execute and
deliver the following additional documents:
(i) an Administrative Services Agreement in the form attached
hereto as Exhibit D;
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(ii) a Wafer Fabrication Agreement in the form attached hereto as
Exhibit E;
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(iii) an Assembly, Test, Mark and Pack Agreement in the form
attached hereto as Exhibit F;
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(iv) a Patent Assignment Agreement in the form attached hereto as
Exhibit G; and
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(v) a Intellectual Property Cross-License Agreement in the form
attached hereto as Exhibit H.
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3.4 Cooperation. Each of AMD and the Company shall, at the request of the
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other party, prior to, on and after the Closing, cooperate with one another by
furnishing any additional information, executing and delivering any additional
documents and/or instruments and doing any and all such other things as may be
reasonably required to consummate or otherwise implement the transactions
contemplated by this Agreement.
ARTICLE IV.
PRE-CLOSING FILINGS, CONSENTS AND OTHER MATTERS
4.1 Governmental Filings. The parties hereto covenant and agree with each
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other to (a) promptly file, or cause to be promptly filed, with any Governmental
Authority all such notices, applications (including applications for permits,
licenses and other similar instruments), forms or other documents as may be
necessary to consummate the transactions contemplated hereby and to permit the
Company to operate that portion of the Business transferred to it, including,
without limitation, the consents, approvals of the Governmental Authorities and
applications for permits and licenses set forth on Schedule 3.2(a) hereto and
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(b) thereafter diligently pursue all such consents, approvals and applications.
4.2 Consent of Third Parties. AMD shall use its Reasonable Efforts to
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obtain prior to the Closing any consents, approvals, authorizations and
agreements of and to give all notices and make all other filings with, any third
parties, including Governmental Authorities, necessary to authorize, permit or
approve the consummation of the transactions contemplated hereby or to continue
in effect and to assure that the Company shall be entitled to all of the
material benefits of the Contracts set forth on Schedule 4.2 hereto (the
------------
'Material Contracts'), including without
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limitation: (i) as required, the consent of third parties to the assignment to,
and assumption by, the Company of the Material Contracts; and (ii) the consent
of any Governmental Authority to the assignment to the Company of the Permits.
The Company and AMD shall cooperate with each other with respect thereto.
4.3 Shared Contracts. (a) At the request of the Company, AMD shall, and
----------------
shall cause its Affiliates to, use its Reasonable Efforts to make available to
the Company (or its designated Affiliates) the benefits and rights under the
Shared Contracts which are as equivalent as practicable to the benefits and
rights enjoyed by AMD under each such contract, to the extent such benefits
relate to the Business; provided, however, that the Company shall assume and
discharge (or reimburse AMD for) the obligations and liabilities under the
relevant Shared Contracts associated with the benefits and rights so made
available to the Company.
(b) At the request of AMD, the Company shall, and shall cause its
Affiliates to, use its Reasonable Efforts to make available to AMD (or its
designated Affiliates) the benefits and rights under the Shared Contracts which
are as equivalent as practicable to the benefits and rights enjoyed by the
Company under each such contract, to the extent such benefits relate to the
Retained Business, provided, however, that AMD shall assume and discharge (or
reimburse the Company for) the obligations and liabilities under the relevant
Shared Contracts associated with the benefits and rights so made available to
AMD.
(c) 'Shared Contract' shall mean, for the purposes of Section 4.3(a),
all arrangements, contracts, leases and other agreements set forth on Schedule
--------
1.2(c).
------
4.4 Entity Classification. If an election pursuant to Treasury Regulation
---------------------
section 301.7701-3 is required for an entity listed on Schedule 4.4 to be
------------
classified for U.S. federal income tax purposes in the manner set forth on
Schedule 4.4, AMD shall cause such entity to make such an election as promptly
------------
as possible and where possible in such a manner that the election is effective
on the date of the formation of such entity. For such time as any such entity
is an Affiliate of AMD, AMD shall not permit any entity to make an election
pursuant to Treasury Regulation section 301.7701-3 that would cause such entity
to be classified other than in the manner set forth in Schedule 4.4.
------------
4.5 Available Employees. The Company may solicit to hire or hire any of
-------------------
the Available Employees. To the extent the Company hires any Available
Employees, such Available Employees shall be deemed Transferred Employees
hereunder.
ARTICLE V.
CONDITIONS PRECEDENT
5.1 Conditions to Closing.
---------------------
The obligations of the parties hereto to close the transactions
hereunder are subject to the following conditions precedent:
(a) No investigation, action, suit or proceeding by any Governmental
Authority, and no action, suit proceeding by any other Person, shall be pending
on the Effective Date which challenges, or might reasonably result in a
challenge to, this Agreement or any of the
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transactions contemplated hereby, or which claims, or might reasonably give rise
to a claim for, damages in a material amount as a result of the consummation of
this Agreement.
(b) All documents and instruments to be executed and delivered
pursuant to this Agreement, including, without limitation, the documents and
instruments to be delivered pursuant to Article III, shall be reasonably
satisfactory to the parties hereto to whom such documents are to be delivered.
(c) AMD and the Company shall have agreed to the form of each of the
Ancillary Agreements.
(d) All required consents and approvals of any Governmental Authority
and the consents and approvals of any other Persons and all permits, licenses
and similar instruments set forth on Schedule 3.2(a) hereto shall have been
---------------
obtained and be in full force and effect as of the Effective Date and such
consents, approvals, permits, licenses and other instruments shall not impose
any restrictions, limitations or conditions which would have a material adverse
effect on the financial condition or results of operations of the Business.
ARTICLE VI.
TERMINATION
6.1 Termination. This Agreement shall be terminated upon the occurrence
-----------
of either of the following:
(a) if the Closing shall not have occurred on or before September 30,
2000, unless AMD elects to extend such date; or
(b) upon mutual agreement of AMD and the Company.
ARTICLE VII.
MISCELLANEOUS
7.1 Further Actions.
------------------
(a) The parties hereto agree to use Reasonable Efforts to take all
actions and to do all things necessary, proper or advisable to consummate the
transactions contemplated hereby at or prior to the Closing.
(b) AMD shall, and shall cause its Affiliates to, use Reasonable
Efforts to enter into such agreements and other arrangements (including
sublicenses and subleases) with the appropriate parties as are necessary to
ensure that the Company and its subsidiaries after the Closing own or hold the
assets, properties and rights (together with the benefits provided under the
Ancillary Agreements) of CPD sufficient to operate the Business as operated on
the date hereof.
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(c) The Company shall pay or cause to be paid the fees and expenses
(including the contribution of minimum capital requirements) incurred in
connection with the establishment of the entities referred to in Sections 2.3
through 2.8 or, following the Closing, shall reimburse AMD for any such amounts,
which amounts shall not constitute Retained Liabilities.
7.2 Notices. Unless otherwise provided herein, any notice, request,
-------
instruction or other document to be given hereunder by any party to the others
shall be in writing and effective when delivered in person or by courier or
nationally recognized overnight delivery service (with a receipt obtained
therefor), or by facsimile transmission (with an executed copy mailed as
described below), or effective on the date receipt is acknowledged when mailed
by certified mail, postage prepaid, return receipt requested, as follows:
If to AMD: Advanced Micro Devices, Inc.
One AMD Place
P.O. Box 3453
Sunnyvale, California 94088-3453
Facsimile: (408) 774-7399
Attention: General Counsel
With a copy to: Latham & Watkins
135 Commonwealth Drive
Menlo Park, California 94025
Facsimile: (650) 463-2600
Attention: Christopher L. Kaufman
If to the Company BraveTwo Acquisition, L.L.C.
following the Closing: c/o Francisco Partners, L.P.,
One Maritime Plaza, Suite 2500
Francisco, California 94111
Attention: General Counsel
Facsimile: (415) 986-1320
With a copy to: Davis Polk & Wardwell
1600 El Camino Real
Menlo Park, California 94025
Attention: William M. Kelly
Facsimile: (650) 752-2111
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
7.3 Entire Agreement. The agreement of the parties, which is comprised of
----------------
this Agreement, the Exhibits and the Schedules hereto and the documents referred
to herein, sets forth the entire agreement and understanding between the parties
and supersedes any prior agreement or understanding, written or oral, relating
to the subject matter of this Agreement.
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7.4 Assignment; Binding Effect; Severability. This Agreement may not be
----------------------------------------
assigned by any party hereto without the written consent of the other party
hereto, except that the Company may assign this Agreement and its rights and
obligations hereunder to or for the account of lenders providing financing to
the Company solely and specifically for the purpose of securing such financing.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the successors, legal representatives and permitted assigns of
each party hereto. The provisions of this Agreement are severable, and in the
event that any one or more provisions are deemed illegal or unenforceable, the
remaining provisions shall remain in full force and effect unless the deletion
of such provision shall cause this Agreement to become materially adverse to any
party, in which event the parties shall use Reasonable Efforts to arrive at an
accommodation which best preserves for the parties the benefits and obligations
of the offending provision.
7.5 Governing Law. This Agreement shall be construed, interpreted and the
-------------
rights of the parties determined in accordance with the laws of the State of
California, as applied to agreements among California residents entered into and
wholly to be performed within the State of California (without reference to any
choice of law rules that would require the application of the laws of any other
jurisdiction).
7.6 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.7 Headings. The headings of the Articles and Sections herein are
--------
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
7.8 Amendment and Waiver. The parties may by mutual agreement amend this
--------------------
Agreement in any respect, and any party, as to such party, may (a) extend the
time for the performance of any of the obligations of any other party, (b) waive
any inaccuracies in representations by any other party, (c) waive compliance by
any other party with any of the agreements contained herein and performance of
any obligations by such other party, and (d) waive the fulfillment of any
condition that is precedent to the performance by such party of any of its
obligations under this Agreement. To be effective, any such amendment or waiver
must be in writing and be signed by the party against whom enforcement of the
same is sought.
7.9 U.S. Currency. Unless otherwise stated, all dollars specified in this
-------------
Agreement, and the Exhibits and Schedules attached or referred to herein, shall
be in U.S. dollars.
[signature page follows]
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IN WITNESS WHEREOF, each of AMD and the Company has caused this
Reorganization Agreement to be duly executed on its behalf by its duly
authorized officer as of the day and year first written above.
ADVANCED MICRO DEVICES, INC., a
Delaware corporation
/s/ Thomas M. McCoy
----------------------------
Name: Thomas M. McCoy
-----------------------
Title: Senior Vice President
----------------------
BOLDCO, INC., a California corporation
/s/ Thomas M. McCoy
----------------------------
Name: Thomas M. McCoy
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Title: President
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Communication Products Division Reorganization Agreement - Advanced Micro Devices Inc. and Boldco Inc.
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