EXHIBIT 10.50(l)
AMD SAXONIA WAFER PURCHASE AGREEMENT
BETWEEN
AMD SAXONY HOLDING GMBH
AND
AMD SAXONY MANUFACTURING GMBH
AMD SAXONIA WAFER PURCHASE AGREEMENT
This AMD Saxonia Wafer Purchase Agreement (as amended, supplemented or
otherwise modified from time to time, this "AGREEMENT") dated as of 11 March,
1997 is between:
(1) AMD Saxony Holding GmbH, a Gesellschaft mit beschrankter Haftung organized
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and existing under the laws of Germany and registered in Dresden, Germany
("AMD HOLDING"); and
(2) AMD Saxony Manufacturing GmbH, a Gesellschaft mit beschrankter Haftung
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organized and existing under the laws of Germany and registered in Dresden,
Germany ("AMD SAXONIA").
RECITALS
WHEREAS, AMD Saxonia is a wholly-owned Subsidiary (such and other
capitalized terms having the meaning assigned thereto in Section 1.01) of AMD
Holding, which in turn is a wholly-owned Subsidiary of Advanced Micro Devices,
Inc., a corporation organized and existing under the laws of the State of
Delaware, United States of America ("AMD INC.");
WHEREAS, AMD Inc., AMD Holding and AMD Saxonia are currently involved in
the initial planning stages of a project pursuant to which AMD Saxonia will
construct, own and operate inter alia the Plant to be located in or near
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Dresden, Germany, to manufacture Wafers using high-volume semiconductor wafer
fabrication processes;
WHEREAS, concurrently herewith, AMD Inc. and AMD Holding are entering
into the AMD Holding Wafer Purchase Agreement (as amended, supplemented or
otherwise modified from time to time, the "AMD HOLDING WAFER PURCHASE
AGREEMENT"), pursuant to which, among other things, AMD Inc. will agree to
purchase from AMD Holding, and AMD Holding will agree to supply on an exclusive
basis to AMD Inc., all Wafers as are ordered from time to time by AMD Inc. from
AMD Holding, in each case on the terms and conditions of the AMD Holding Wafer
Purchase Agreement;
WHEREAS, on the terms and conditions of this Agreement, including the
payment terms of Article III, AMD Holding wishes the exclusive right to purchase
Wafers from AMD Saxonia in order to enable AMD Holding to fulfill its
obligations under the AMD Holding Wafer Purchase Agreement, and AMD Saxonia is
willing, on such exclusive basis, to manufacture and sell Wafers to AMD Holding,
all on the terms and conditions of this Agreement; and
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WHEREAS, concurrently herewith, (i) AMD Inc. and AMD Holding are
entering into the AMD Holding Research Agreement, (ii) AMD Inc., AMD Holding and
AMD Saxonia are entering into the License Agreement and the amendment and
restatement of the Management Service Agreement referred to in the definition
thereof, and (iii) AMD Holding and AMD Saxonia are entering into the AMD Saxonia
Research Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
INTERPRETATION
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SECTION 1.01. DEFINITIONS. The following terms shall, unless the context
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requires otherwise, have the respective meanings assigned to them as follows:
(1) "AAA" has the meaning assigned to it in Section 7.10;
(2) "ACTUAL SELLING PRICE PER WAFER" has the meaning assigned to it in
Section 3.02;
(3) "ACTUAL VOLUME" means, with respect to any Period or 4 Quarter Period,
as the case may be, the actual number of Wafers Shipped by AMD Saxonia
to AMD Holding during that Period or 4 Quarter Period;
(4) "ADJ.4QFC" has the meaning assigned to it in Section 3.06;
(5) "ADJUSTED ACTUAL VOLUME" has the meaning assigned to it in Section 3.12;
(6) "ADJUSTED SELLING PRICE PER WAFER" has the meaning assigned to it in
Section 3.03(b);
(7) "ADVANCE PAYMENT ADJUSTMENT AMOUNT" has the meaning assigned to it in
Section 3.05;
(8) "AFFILIATE" means, with respect to any Person, a Person which, directly
or indirectly, controls, is controlled by, or is under common control
with, such other Person; and, for purposes of this definition, the
concept of "control," with respect to any Person, signifies the
possession of the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, the possession of voting rights, by contract, or otherwise;
provided that FASL shall be deemed to be an Affiliate of AMD Inc. for
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purposes of this Agreement;
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(9) "AGENT" means Dresdner Bank AG, as Agent under the Loan Agreement,
including any successor to Dresdner Bank AG in that capacity;
(10) "AGREEMENT" has the meaning assigned to it in the introduction to this
Agreement;
(11) "AMD HOLDING" has the meaning assigned to it in the introduction to this
Agreement;
(12) "AMD HOLDING RESEARCH AGREEMENT" means that certain AMD Holding
Research, Design and Development Agreement entered into concurrently
herewith between AMD Inc. and AMD Holding, as such agreement may be
amended, supplemented or otherwise modified from time to time;
(13) "AMD HOLDING WAFER PURCHASE AGREEMENT" has the meaning assigned to it in
the Recitals to this Agreement;
(14) "AMD INC." has the meaning assigned to it in the Recitals to this
Agreement;
(15) "AMD INC.'S AVERAGE CAPACITY UTILIZATION" has the meaning assigned to it
in Section 3.12;
(16) "AMD SAXONIA" has the meaning assigned to it in the introduction to this
Agreement;
(17) "AMD SAXONIA RESEARCH AGREEMENT" means that certain AMD Saxonia
Research, Design and Development Agreement entered into concurrently
herewith between AMD Holding and AMD Saxonia, as such agreement may be
amended, supplemented or otherwise modified from time to time;
(18) "AMD SAXONIA'S CAPACITY UTILIZATION" has the meaning assigned to it in
Section 3.12;
(19) "ANNUAL PRICING COMPLIANCE CERTIFICATE" means a certificate
substantially in the form of Exhibit I to this Agreement;
(20) "ANTICIPATED CAPACITY" means,
(i) with respect to the Fiscal Year 2000, a capacity level of 177,000
Wafers per annum; and
(ii) with respect to the Fiscal Year 2001, a capacity level of 244,000
Wafers per annum;
(iii) with respect to any Fiscal Year thereafter, a capacity level of
300,000 Wafers, which is the capacity level specified in the
Management Plan;
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provided that in the event the Completion Date takes place other than on
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the first day of a Fiscal Year, the respective amount shall be reduced
proportionately according to the actual number of days during such 4
Quarter Period.
In the event that the capacity level at the Plant is changed in
accordance with the Approved Project Budget as defined in the Sponsors'
Support Agreement, the parties hereto shall meet and in good faith
adjust the Anticipated Capacity, if necessary to reflect such change,
which shall have effect from the date such change is made under the
Sponsors' Support Agreement.
(21) "APPLICABLE PERCENTAGE" has the meaning assigned to it in Section
3.03(b);
(22) "BANKS" means the banks from time to time party to the Loan Agreement;
(23) "BANKS' AUDITOR" shall have the meaning assigned to it in the Loan
Agreement;
(24) "BUDGETED START-UP COSTS" means DM [*], which is the amount of
aggregate Start-up Costs as determined in the Management Plan;
(25) "BUSINESS DAY" means any day of the year on which banks are open for the
purpose of conducting a commercial banking business in each of
Frankfurt, Dresden, San Francisco, and London, and when used with
reference to payment in any currency, on which dealings are carried out
in the London Interbank Market with respect to such currency;
(26) "CAPACITY" means, with respect to a Wafer Fabrication Plant and any 4
Quarter Period, and as determined in accordance with Section 1.02(c),
the maximum number of Wafers of satisfactory commercial quality that can
be manufactured at such Wafer Fabrication Plant during such 4 Quarter
Period operating at its then maximum capacity in the ordinary course of
business using installed machinery and equipment designated for the
manufacture of such Wafers and normal work schedules, allowing for the
normally experienced reliability of machinery, equipment, personnel and
manufacturing processes at such plant;
(27) "COMPARABLE PRODUCTS" means all Wafers manufactured at a Wafer
Fabrication Plant, except for any such Wafers where the individual
integrated circuits etched or otherwise imprinted thereon are
demonstrated to the reasonable satisfaction of the Technical Advisor not
to be Microsoft-compatible general purpose microprocessors; and all
Wafers purchased by AMD Inc. or one of its Subsidiaries from third-party
suppliers where such Wafers contain Microsoft-compatible general purpose
microprocessors;
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*CONFIDENTIAL INFORMATION OMITTED &
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION
(28) "COMPLETION DATE" means the date on which Completion (as defined in the
Sponsors' Support Agreement) takes place;
(29) "DESIGN CENTER" means the research, design and development facility,
owned and operated by AMD Saxonia and associated with the Plant, to be
used for the purpose of designing and developing a broad spectrum of
state-of-the-art and other digital components such as micro-processors
and circuits for the telecommunications and multi-media sectors, and
improvements thereof;
(30) "DISPUTE" has the meaning assigned to it in Section 7.10;
(31) "DM" means the lawful currency from time to time of Germany;
(32) "ECV" has the meaning assigned to it in Section 3.12;
(33) "EFFECTIVE DATE" means the earlier of (i) December 28, 1998, which day
is the first day of AMD Saxonia's first Fiscal Quarter of its Fiscal
Year 1999, or (ii) the first day of AMD Saxonia's Fiscal Quarter which
commences immediately following the first commercial shipment of
Products;
(34) "EVEN CAPACITY VOLUME" has the meaning assigned to it in Section 3.12;
(35) "EXCESS START-UP COSTS" means the excess, if any, of Start-up Costs over
Budgeted Start-up Costs;
(36) "FASL" means Fujitsu AMD Semiconductor Limited, a joint venture
organized under the laws of Japan between AMD Inc. and Fujitsu Limited;
(37) "FISCAL QUARTER" means each quarterly fiscal accounting period of AMD
Saxonia, ending on or about the last day of March, June, September or
the last Sunday in December and corresponding with the fiscal accounting
period of AMD Inc.;
(38) "FISCAL YEAR" means each annual fiscal period of AMD Saxonia, ending on
the last Sunday in December;
(39) "FIXED COST COMPENSATION AMOUNT" has the meaning assigned to it in
Section 3.06;
(40) "FIXED COSTS" for any period means Total Costs less Variable Costs for
that period;
(41) "FORCE MAJEURE" means with respect to AMD Saxonia or AMD Holding, as the
case may be, an event which is not within the reasonable control of the
Person seeking to rely on the existence of Force Majeure, where the
adverse effect of such event on such Person's compliance with its
obligations under
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this Agreement is not preventable by such Person using all reasonable
care and diligence. Such events may include, without limitation, the
following: acts of war (whether declared or undeclared), invasion, armed
conflict, acts of one or more enemy of the United States of America,
Germany or any other country or jurisdiction; blockade or embargo,
revolution, riot, bombs, insurrection or other civil disturbance,
sabotage, terrorism or the threat of any of the foregoing, nuclear
explosion, radioactive or chemical contamination or ionizing radiation,
strikes, lockouts, industrial action or labor disputes, any effect of
the natural elements including without limitation lightning, fire,
earthquake, flood, strike and other unusual or extreme adverse weather
or environmental conditions or actions of the elements, epidemic or
plague, loss of or damage to the Plant and/or machinery, equipment or
materials at, for or in transit to the Plant, acts of God and any events
or circumstances analogous to any of the above;
(42) "4Q ANTICIPATED CAPACITY" has the meaning assigned to it in Section
3.06;
(43) "4Q ANTICIPATED CAPACITY LIMIT" has the meaning assigned to it in
Section 3.06;
(44) "4QAV" has the meaning assigned to it in Section 3.06;
(45) "4 QUARTER PERIOD" means (i) each Fiscal Year commencing after the
Completion Date and (ii) in the event the Completion Date takes place on
a day other than the last day of a Fiscal Year, the period from (and
excluding) the Completion Date through (and including) the end of the
Fiscal Year in which the Completion Date takes place; provided further
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that no 4 Quarter Period shall extend beyond, and the final 4 Quarter
Period shall end on, the Termination Date;
(46) "GERMAN GAAP" means accounting principles and practices generally
accepted in Germany, consistently applied throughout the periods
involved;
(47) "GERMANY" means the Federal Republic of Germany;
(48) "GOVERNMENTAL AUTHORITY" means any German domestic or foreign
government, court or governmental body, department, agency, commission,
authority or instrumentality;
(49) "IMPROVEMENTS" means any development, enhancement, improvements,
upgrades, modifications and updates (including error corrections),
translations and derivative works;
(50) "INITIAL TERMINATION DATE" has the meaning assigned to it in Section
6.01(a);
(51) "INTELLECTUAL PROPERTY" has the meaning assigned to it in Section 4.01;
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(52) "KNOW-HOW" means know-how, show-how, methods, techniques, procedures,
formulations, formulae, assembly, installation, operating and quality
control procedures and manuals, quality control standards, technical
information, technical and product specifications, equipment
requirements, writings, plans, drawings, designs, layouts, data,
equipment descriptions, masks, mask works, systems, toolings, software,
data, copyrightable material, trade secrets, inventions (whether
patentable or not), improvements, developments, discoveries and any
other information or intellectual property rights which may not lie
within, may only partially lie within or may lie completely within the
domain of public knowledge;
(53) "LAW" means all present and future laws, regulations, ordinances,
permits or other requirements having legal effect;
(54) "LICENSE AGREEMENT" means the License Agreement among AMD Inc., AMD
Holding and AMD Saxonia entered into concurrently herewith, as such
License Agreement may be amended, supplemented or otherwise modified
from time to time;
(55) "LOAN AGREEMENT" means the Loan Agreement, dated 11 March, 1997 among
AMD Saxonia, the Banks, the Agent, the Security Agent and the Paying
Agent, as such Loan Agreement may be amended, supplemented or otherwise
modified from time to time;
(56) "LOAN AGREEMENT TERMINATION DATE" means the first day on which (i) all
Obligations (under, and as defined in, the Loan Agreement) have been
paid in full, and (ii) the Banks have no Commitments (under, and as
defined in, the Loan Agreement);
(57) "MANAGEMENT PLAN" means that certain Management Plan of AMD Saxonia
dated February 1997;
(58) "MANAGEMENT SERVICE AGREEMENT" means, together, that certain Management
Service Agreement dated as of January 1, 1996 and that certain letter
agreement dated April 9, 1996 between AMD Inc. and AMD Saxonia, as
amended and restated among AMD Inc., AMD Holding and AMD Saxonia as of
the date hereof (a copy of which amendment and restatement is attached
hereto as Exhibit VII), and as such amended and restated agreement may
be further amended, supplemented or otherwise modified from time to
time;
(59) "NEW YORK CONVENTION" has the meaning assigned to it in Section 7.10;
(60) "PARI PASSU COMPENSATION AMOUNT" has the meaning assigned to it in
Section 3.12;
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(61) "PARI PASSU COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit II to this Agreement;
(62) "PAYING AGENT" means Dresdner Bank Luxembourg S.A., as paying agent
under the Loan Agreement, including any successor to Dresdner Bank
Luxembourg in that capacity;
(63) "PERIOD" means any Fiscal Quarter of AMD Saxonia commencing on or after
the Effective Date, including without limitation any Post Completion
Period; provided that the Period in which the Completion Date takes
place shall end on the Completion Date, and the next Period shall
commence on the day after the Completion Date and end on the last day of
the Fiscal Quarter in which the Completion Date takes place; provided
further that no Period shall extend beyond, and the final Period shall
end on, the Termination Date;
(64) "PERSON" means an individual, partnership, joint venture, trustee,
trust, corporation, unincorporated association or other entity, or a
government, state or agency or political subdivision thereof;
(65) "PLANT" means the advanced production facility to be constructed, owned
and operated by AMD Saxonia in or near Dresden, Germany to manufacture
Wafers using high-volume semiconductor wafer fabrication processes;
(66) "POST COMPLETION PERIOD" means each successive Period commencing after
the Completion Date, and the first Post Completion Period shall
accordingly begin the day following the Completion Date;
(67) "PRICE ADJUSTMENT AMOUNT" has the meaning assigned to it in Section
3.03(a);
(68) "PRODUCT" means a Wafer containing identical individual integrated
circuits meeting Specifications which have been supplied by or on behalf
of AMD Holding to AMD Saxonia in accordance with Sections 2.01 and
4.01(a);
(69) "PRODUCTION PROBLEMS" means any circumstances other than those resulting
from Force Majeure pertaining to AMD Saxonia which prevent or delay the
manufacture or shipment of a Product by AMD Saxonia, including any
temporary or permanent inability to apply or continue to apply
Intellectual Property in the manufacture of such Product;
(70) "QUALIFIED PERSONNEL" has the meaning assigned to it in Section 4.02;
(71) "QUARTERLY PRICING COMPLIANCE CERTIFICATE" means a certificate
substantially in the form of Exhibit III to this Agreement;
(72) "REQUIREMENTS FORECAST" has the meaning assigned to it in Section
3.02(a);
(73) "SECURITY AGENT" means Dresdner Bank AG, as security agent under the
Loan Agreement, including any successor to Dresdner Bank AG in such
capacity;
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(74) "SHIPPED" means, with respect to any Products and any Period or 4
Quarter Period (as the case may be), Products delivered by AMD Saxonia
F.O.B. Dresden, Germany pursuant to Section 3.09 during that Period or 4
Quarter Period in each case pursuant to one or more purchase orders
placed by AMD Holding and accepted by AMD Saxonia in accordance with
this Agreement;
(75) "SPECIFICATIONS" means, with respect to a Product, the tooling, masks,
mask-works, specifications, blueprints, drawings, assembly instructions
and other instructions required for the manufacture of that Product;
(76) "SPONSORS' SUPPORT AGREEMENT" means the Sponsors' Support Agreement
entered into concurrently herewith among AMD Inc., AMD Holding, the
Agent, and the Security Agent, as such agreement may be amended,
supplemented or otherwise modified from time to time;
(77) "START-UP COST ADJUSTMENT CERTIFICATION" means certification in the form
of a certificate substantially in the form of Exhibit IV to this
Agreement;
(78) "START-UP COSTS" means the aggregate amount of Total Costs incurred by
AMD Saxonia prior to the Effective Date;
(79) "START-UP COST SAVINGS" means the excess, if any, of Budgeted Start-up
Costs over Start-up Costs;
(80) "SUBORDINATED SHAREHOLDER LOAN" means a loan made pursuant to and in
accordance with the terms of the Sponsors' Loan Agreement (as defined in
the Sponsors' Support Agreement);
(81) "SUBSIDIARY" means, with respect to any Person, any other Person of
which more than 50% of the total voting power of shares of stock or
other ownership interest entitled to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof;
(82) "SURCHARGE" has the meaning assigned to it in Section 3.07;
(83) "TECHNICAL ADVISOR" has the meaning assigned to it in the Sponsors'
Support Agreement;
(84) "TECHNICAL DOCUMENTATION" for any Know-how means manuals and other
documentation in which such Know-how is recorded and all specifications,
programs, software, formulae, drawings, sketches, plans, blueprints,
design materials, manuals and other technical or organizational
documentation for such Know-how;
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(85) "TERMINATION DATE" has the meaning assigned to it in Section 6.01;
(86) "TOTAL COSTS" means, for any period, all costs incurred, paid or accrued
by AMD Saxonia and included for that period in the "Results from
ordinary activities" (Ergebnis der gewohnlichen Geschaftstatigkeit) in
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accordance with German GAAP (i.e., (S) 275 of the German Commercial Code
(Handelsgesetzbuch), an English translation of which is attached as
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Exhibit V to this Agreement) plus extraordinary expenses plus all taxes
other than corporation tax (Korperschaftsteuer), solidarity levy
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(Solidaritatszuschlag) and value added tax (Umsatzsteuer), all as shown
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in the statutory income statement of AMD Saxonia; provided that
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(a) German GAAP, solely for purposes of this definition, shall be
applied according to the accounting options specified under items
(i) through (x) of this definition below regardless of whether
German GAAP is so applied in the statutory income statement of AMD
Saxonia;
(b) Total Costs shall be reduced by any revenue or income (other than
revenue under this Agreement and the AMD Saxonia Research
Agreement) accrued or received by AMD Saxonia, which revenue or
income shall include any interest accrued or received by AMD
Saxonia including income earned on deposits and investments, as
well as net payments received in respect of hedging transactions;
(c) Total Costs shall not include any AMD Saxonia costs reimbursed by
AMD Inc. pursuant to Article II of the AMD Saxonia Research
Agreement;
(d) Total Costs shall include all interest expense paid or accrued by
AMD Saxonia, including without limitation all interest expense
relating to loans to AMD Saxonia from third parties and from
Affiliates of AMD Saxonia.
(e) Without limiting the generality of clause (d) of this definition,
interest expenses shall include interest at the rate of 7% per
annum (calculated on the basis of actual days and months and
compounded monthly) on each Class A Sponsors' Loan (as defined in
the Sponsors' Support Agreement) from the date made, irrespective
of whether such Class A Sponsors' Loan is made as a loan or as an
equity contribution, whether such Class A Sponsors' Loan bears
interest at such rate, whether such interest has been paid, waived
or capitalized or whether the obligation to pay such interest has
been deferred;
(f) Total Costs shall be reduced by the amount of any grants,
allowances, interest subsidies, and expense reimbursements received
by AMD Saxonia from the Republic of Germany, the Sachsiche
Aufbaubank,
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the Free State of Saxony, the City of Dresden, or from
any other Governmental Authority, and such reduction shall be made
in the manner specified in (iv) or (v) below (as applicable);
(g) Total Costs in a Period in which amounts are paid by AMD Holding
to AMD Saxonia pursuant to Section 3.07 below shall be reduced by
such amount; provided that such Total Costs shall not be reduced
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by the amount of the Surcharge;
(h) Total Costs for any Period after the Effective Date shall be
increased by the amount of the Total Costs in the immediately
preceding Period (if any) if no Products were shipped during such
preceding Period (and the parties hereto acknowledge that the
amount by which the Total Costs shall be increased pursuant to
this clause (h) therefore corresponds to the aggregate Total Costs
for all immediately preceding consecutive Periods in which no
Products were Shipped, in each case without giving effect to this
clause (h));
(i) For the avoidance of doubt, Total Costs for each Period shall
neither be (a) decreased for that Period by the amount by which
the inventory at the end of that Period exceeds the amount of the
inventory at the end of the immediately preceding Period, nor (b)
increased for that Period by the amount by which the inventory at
the end of that Period is less than the amount of the inventory at
the end of the immediately preceding Period.
With reference to clause (a) of this definition above,
(i) Start-up Costs will not be capitalized;
(ii) depreciation of fixed assets will be applied on a straight-line
basis on the assumption of useful lives of 25 years for buildings
(shell), ten years for other non-movables (i.e., installations
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(Betriebsvorrichtungen) including, without limitation, the "clean
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room") and five years for movables (machinery, tools and other
equipment);
(iii) exceptional depreciation in order to state fixed assets at a lower
value, and reversals of such depreciation in the case that the
reasons for an exceptional depreciation no longer exist, will be
included;
(iv) revenues from investment grants (Investitionszuschusse) and
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allowances (Investitionszulagen) will be allocated chronologically
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to the investments in buildings, machinery, tools and other
equipment to which they relate for the AMD Saxonia fiscal years
1996 to 2000. They will be amortized parallel to the depreciation
of the
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corresponding fixed assets and so will reduce these depreciation
costs. Without limiting the generality of clause (a) of this
definition, such amortization shall occur regardless of whether
AMD Saxonia elects to treat some or all of such grants and
allowances as income in the year received for purposes of AMD
Saxonia's statutory financial statements;
(v) all grants, allowances, interest subsidies, or expense
reimbursements described in clause (f) of this definition but
which are not investment grants (Investitionszuschusse) or
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allowances (Investitionszulagen) will reduce Total Costs in the
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Period received by the full amount received in that Period;
(vi) write-downs on current assets due to obsoleteness or solvency
reasons will be included;
(vii) inventory will be valued at the lower valuation limit according
to German Income Tax Regulation (R 33 Einkommensteuerrichtlinien)
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in effect on the date of this Agreement;
(viii) if there is a fiscal unit (Organschaft) implemented for trade tax
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purposes, the portion of trade taxes (Gewerbeertragsteuer) paid
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by AMD Holding and attributable to the trading profit and capital
of AMD Saxonia will be included;
(ix) deferred taxes (latente Steuern specified in (S) 274 of the
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German Commercial Code (Handelsgesetzbuch)) will not be included;
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and
(x) accruals for repairs and maintenance expenses, necessary
demolition and/or dismantlement, environmental obligations and
other future expenses (so-called Aufwandsruckstellungen, (S) 249
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Section 2 of the German Commercial Code (Handelsgesetzbuch)) will
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be included to the extent they are made in the statutory
financial statements of AMD Saxonia;
(87) "UNEVEN CAPACITY ALLOCATION" has the meaning assigned to it in Section
3.12;
(88) "VARIABLE COSTS" for any period means the cost of raw materials,
consumables and supplies used for or in connection with the manufacture
of Products during that period;
(89) "WAFER" means a silicon wafer onto which many identical individual
integrated circuits have been etched or otherwise imprinted; and
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(90) "WAFER FABRICATION PLANT" means (a) the Plant, (b) for so long as such
plant is owned or controlled (including under lease) by AMD Inc. or one
or more of its Subsidiaries, AMD Inc.'s plant located in Austin, Texas
and known as "Fab 25", and (c) any other high volume semiconductor wafer
fabrication plant constructed or otherwise acquired by AMD Inc. and/or
one or more of its Subsidiaries after the date hereof which produces
Wafers containing Microsoft-compatible general purpose microprocessors.
SECTION 1.02. CONSTRUCTION OF CERTAIN TERMS.
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(a) Unless otherwise specifically provided, (i) references to the
singular shall include the plural and vice versa, and references by way of
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masculine pronoun or adjective shall include references by way of the feminine;
(ii) references to Articles, Sections and Subsections shall be to Articles,
Sections and Subsections of this Agreement; (iii) accounting terms are to be
construed in accordance with German GAAP; (iv) all references to money, costs
and payments in this Agreement are to money, costs and payments in DM; and (v)
references to days in this Agreement shall be to calendar days.
(b) The index to and headings in this Agreement are inserted for
convenience only and are to be ignored in construing this Agreement.
(c) For purposes of this Agreement, "Capacity" shall be determined in
good faith by AMD Saxonia (in the case of the Plant) or AMD Holding (in the case
of each other Wafer Fabrication Plant); provided that the Agent, through its
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Technical Advisor, may, at any time prior to the Loan Agreement Termination
Date, review any such determination, and in the event the Agent and AMD Holding
or AMD Saxonia (as the case may be) do not agree as to such Capacity, Section
7.10 (k) shall apply.
ARTICLE II
MANUFACTURE OF PRODUCTS
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SECTION 2.01. MANUFACTURE BY AMD SAXONIA OF PRODUCTS FOR SALE TO AMD
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HOLDING.
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(a) On the terms and subject to the conditions of this Agreement, AMD
Saxonia hereby agrees to manufacture and sell Products to AMD Holding; provided
that prior to the Completion Date AMD Saxonia (i) shall be required only to use
its reasonable efforts to manufacture and sell such Products in accordance with
the requirements of this sentence, and (ii) shall not be required to take any
steps hereunder to manufacture and sell such Products to the extent such steps
at such time could reasonably be expected to delay Completion (as defined in the
Loan Agreement) of the Plant. AMD Saxonia further agrees that, during the term
of this Agreement, unless AMD Inc., AMD Holding and, prior to the Loan Agreement
Termination Date, the Agent, otherwise consent thereto, it shall not, directly
or indirectly, (i) market, distribute or sell any Products or any other goods or
services to any
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Person other than AMD Holding, AMD Inc. or one or more of AMD Inc.'s other
Subsidiaries under any circumstances, or (ii) engage in any activities other
than (v) construction of the Plant and the Design Center, (w) provision of the
services contemplated by the AMD Saxonia Research Agreement, (x) manufacture and
sale of Products to be Shipped pursuant to this Agreement and (y) activities
reasonably incidental to any of the foregoing.
(b) On the terms and subject to the conditions of this Agreement, AMD
Holding hereby agrees to purchase from AMD Saxonia and pay for the Products
Shipped to it pursuant to the terms of this Agreement.
(c) AMD Holding shall from time to time provide, or shall arrange for
AMD Inc. to provide, to AMD Saxonia technical assistance as required in Article
IV, including disclosure to AMD Saxonia of such of the Know-how and
Specifications of AMD Inc. and its Subsidiaries, or which AMD Inc. or its
Subsidiaries have the right to use, as is necessary or, in the reasonable
opinion of AMD Saxonia, desirable, to enable AMD Saxonia to manufacture Products
on a timely basis, in accordance with the Specifications for the relevant
Product, as required by AMD Inc. under the AMD Holding Wafer Purchase Agreement.
Any disclosure of Know-how and Specifications (including without limitation by
way of technical assistance pursuant to Article IV) to AMD Saxonia by or on
behalf of AMD Holding (including without limitation any such disclosure arranged
by AMD Holding as contemplated hereby) shall be subject to the License
Agreement.
(d) AMD Saxonia shall, as soon as is reasonably practicable (i) after
the disclosure to it of the Know-how and Specifications for a Product as
contemplated in Subsection 2.01(c) and Article IV, and (ii) without at any time
prior to the Completion Date being required to take any steps hereunder to
manufacture and sell such Products to the extent such steps at such time could
reasonably be expected to delay Completion (as defined in the Loan Agreement) of
the Plant, submit to AMD Holding (or as directed by AMD Holding) for approval
pre-production samples of the Product. AMD Holding shall communicate its
approval or disapproval of any such samples no later than two weeks after such
samples are submitted to AMD Holding for such approval (and shall be deemed to
have approved such samples under this Section 2.01(d) for all purposes of this
Agreement if it has not communicated any such disapproval within such two week
period). AMD Saxonia shall not commence manufacture of such Product until AMD
Holding has approved or is deemed to have approved the samples. Approval shall
not be unreasonably withheld or delayed by AMD Holding (each of the parties
hereto agrees that, for this purpose, disapproval by AMD Holding because of any
reasonable disapproval by AMD Inc. of such samples pursuant to the AMD Holding
Wafer Purchase Agreement, shall not be deemed unreasonable) and, once given,
shall constitute irrevocable confirmation that the Products manufactured in
conformity with the samples (or differing only within normal silicon computer
chip industry limits) will comply with the Specifications and will meet the
requirements of quality specified in Section 2.03, except in respect of defects
in such samples or future production which are not capable of being revealed on
reasonable inspection by AMD Holding.
(e) Each of AMD Holding and AMD Saxonia shall nominate one or more
senior managers or representatives (which representatives, in the case of AMD
Holding, may
14
include or be senior managers of AMD Inc.) who shall be responsible for liaising
in connection with the manufacture and development of the Products.
SECTION 2.02. COMPLIANCE WITH LAWS AND REQUIRED PERMITS. AMD Saxonia
-----------------------------------------
shall, at its cost and expense, use commercially reasonable efforts to (i)
comply with all applicable Laws relating to the manufacture and sale of the
Products, and (ii) obtain all requisite consents, authorizations, permits and
approvals for the manufacturing and sale to AMD Holding and the sale by AMD
Holding to AMD Inc. of the Products from each Governmental Authority having
jurisdiction over the manufacture and sale of the Products by AMD Saxonia and
AMD Holding; provided, however, that AMD Saxonia shall not be responsible for
obtaining any consents, authorizations, permits or approvals in connection with
the import of Products into any territory outside Germany.
SECTION 2.03. QUALITY OF PRODUCTS; INSPECTION AND REJECTION;
----------------------------------------------
REPLACEMENT PRODUCTS. Without prejudice to AMD Holding's obligation to make
--------------------
payment for Products Shipped pursuant to Section 3.10:
(a) AMD Saxonia shall use all reasonable efforts to ensure that each
Product Shipped meets the Specifications for that Product. In order to assist
AMD Saxonia in such efforts and for the purpose of assuring to AMD Holding the
quality of the Products required under this Agreement, AMD Saxonia shall permit
the duly authorized representatives of AMD Holding and/or AMD Inc., at any time
during normal working hours and on reasonable notice, to inspect any premises of
AMD Saxonia, and shall use all reasonable efforts to permit such
representatives, at such time and on such notice, to inspect any premises of any
third party where any of the Products, or any labeling or packaging for them,
are manufactured or stored by or for AMD Saxonia.
(b) AMD Holding shall promptly notify AMD Saxonia in writing should the
quality of the Products Shipped vary materially from the typical quality of the
four previous shipments or, in the case of the first four shipments, from the
quality of the previous shipments. In such event, AMD Saxonia shall use its
reasonable commercial efforts to restore the quality of the Products delivered
hereunder to again meet such typical quality as soon as reasonably possible.
ARTICLE III
PURCHASE PRICE AND DELIVERY OF PRODUCTS
---------------------------------------
SECTION 3.01. DESCRIPTIVE OVERVIEW OF PRODUCT PRICING. Without
---------------------------------------
derogating from Sections 3.02 through 3.12 hereunder:
It is the intention of the parties hereto that from and after the
Effective Date AMD Holding shall purchase Products which it orders from AMD
Saxonia and are Shipped by AMD Saxonia in accordance with the requirements of
this Agreement. The purchase price for the Products will be set at a price per
Wafer equal to the Adjusted Selling Price Per Wafer,
15
which will be determined on a "cost-plus" basis for any Period. Before the
beginning of each Period, AMD Saxonia will prepare a budget for that Period
pursuant to Section 3.02 setting out all relevant estimated costs for that
Period, and shall determine the Actual Selling Price Per Wafer based on such
budgets and on the quarterly Requirements Forecast to be provided by AMD
Holding.
For all Products Shipped during any Period, AMD Holding shall make
payments to AMD Saxonia based on the Actual Selling Price Per Wafer. In the
event no shipments of Products are made during any Period following the
Effective Date (regardless of whether before or after the Completion Date),
other than where no shipments are made as a result of Force Majeure in any Post
Completion Period, AMD Holding shall at the end of such Period make advance
payments to AMD Saxonia, against Products to be Shipped during the following
Period, in an amount corresponding to the Applicable Percentage (as defined in
Section 3.03(b)) of AMD Saxonia's Total Costs incurred in that Period. Such
advance payments shall be included as Total Costs in the next Period in which
Products are shipped.
Within 25 days after the end of each Period (other than one in which no
Products are Shipped), AMD Saxonia shall determine the Adjusted Selling Price
Per Wafer for such Period on the basis of its Total Costs actually incurred
during that Period and the Applicable Percentage in accordance with Section
3.03. In the event the Actual Selling Price Per Wafer and the Adjusted Selling
Price Per Wafer differ for such Period, the aggregate price difference shall be
paid within 30 days after the end of such Period by AMD Saxonia to AMD Holding,
or by AMD Holding to AMD Saxonia, as the case may be, pursuant to Section
3.03(a). The parties acknowledge that this pricing mechanism may have the result
of dictating a high price per Wafer for any Period in which only relatively few
Wafers are Shipped and that after the Effective Date it will result in a full
cost reimbursement during each year (except for the first four Periods after the
Effective Date during which the Applicable Percentage is 75%). Furthermore, the
amount of Fixed Costs compensated will be adjusted retroactively pursuant to
Section 3.06, where the Actual Volumes over any 4 Quarter Period after
Completion are lower than 75% or exceed 100% of Anticipated Capacity for that
year, to reduce or increase such reimbursement, respectively.
In the event Start-up Cost Savings are realized or Excess Start-up Costs
are incurred prior to the Effective Date, these will be compensated in eight
equal quarterly payments after the Effective Date pursuant to Section 3.04.
SECTION 3.02. DETERMINATION OF THE ACTUAL SELLING PRICE PER WAFER
---------------------------------------------------
PRIOR TO BEGINNING OF EACH PERIOD BASED ON FORECASTS.
----------------------------------------------------
(a) Not later than ten (10) days before the commencement of each
Period:
(i) AMD Saxonia shall prepare and deliver to AMD Holding (with a
copy to the Agent) a written estimate reasonably acceptable to AMD
Holding showing in reasonable detail AMD Saxonia's good faith and
reasonable estimate of the Products and Capacity of the Plant for each
such Product for the succeeding Period; and
16
(ii) AMD Holding shall prepare and deliver to AMD Saxonia (with a
copy to the Agent) a written forecast, showing in reasonable detail AMD
Holding's good faith and reasonable estimate of the volume (the
"REQUIREMENTS FORECAST") of each Product that AMD Holding anticipates
ordering from AMD Saxonia in accordance with the terms of this
Agreement for delivery during the course of the Period, provided that
--------
the Requirements Forecast shall be not less than 1 for any Period
commencing on or after the Completion Date.
(b) Not later than seven (7) days before the commencement of each
Period, AMD Saxonia shall prepare and deliver to AMD Holding (with a copy to the
Agent) a written forecast reasonably acceptable to AMD Holding, showing AMD
Saxonia's good faith and reasonable estimate of the Adjusted Selling Price Per
Wafer for the Period (such estimate being the "ACTUAL SELLING PRICE PER WAFER").
Such estimate shall include a detailed itemization of the costs and volumes
making up such Actual Selling Price Per Wafer. The Actual Selling Price Per
Wafer shall be calculated based on the Requirements Forecast and the estimated
Total Cost for such Period using the formula set out in the definition of
"Adjusted Selling Price Per Wafer" in Section 3.03(b).
(c) Each of AMD Holding and AMD Saxonia agrees to consult with each
other in the preparation of such forecasts and estimates, and to cooperate with
one another in complying with their respective obligations under Sections
3.02(a) and (b) on a timely basis.
(d) The Actual Selling Price Per Wafer, as determined for any Period
pursuant to this Section 3.02, shall apply to all Products Shipped by AMD
Saxonia during the Period.
(e) Each forecast and estimate referred to in Section 3.02(a) and (b)
shall be in the applicable form attached as Exhibit VI hereto.
(f) In the event the Bank's Auditor ("Wirtschaftsprufer der Banken") as
defined in the Loan Agreement determines a different Actual Selling Price Per
Wafer for any Period in accordance with Section 17.1 of the Loan Agreement, the
parties agree that such price as determined by the Bank's Auditor shall be
deemed to be the Actual Selling Price Per Wafer for that Period from and after
the date three Business Days after the Bank's Auditor notifies them of such
determination, notwithstanding the initial determination thereof by AMD Saxonia
under Section 3.02(b) and regardless of whether invoices containing the original
Actual Selling Price Per Wafer may have already been issued for Products Shipped
during such Period. Provided that all payments required under this Section
3.02(f) have been made in full, the Adjusted Selling Price Per Wafer and Price
Adjustment Amount for that Period shall be calculated using the Actual Selling
Price Per Wafer as so determined by the Bank's Auditor. In the event that during
such Period any Products have already been Shipped and AMD Holding has already
paid the Actual Selling Price Per Wafer for such Products (as calculated by AMD
Saxonia), AMD Holding shall promptly (but in no event later than 10 Business
Days) pay to AMD Saxonia in cash the difference in the aggregate purchase price
for such Products resulting from the change in the Actual Selling Price Per
Wafer.
17
SECTION 3.03. PAYMENT TO REFLECT CERTAIN VARIATIONS BETWEEN ESTIMATED
-------------------------------------------------------
AND ACTUAL FIGURES IN THE PRIOR PERIOD; DEFINITION OF ADJUSTED SELLING PRICE PER
--------------------------------------------------------------------------------
WAFER.
-----
(a) Promptly, but in any event not later than 25 days after the end of
each Period, the Adjusted Selling Price Per Wafer for that Period shall be
calculated in accordance with the formula contained in Section 3.03(b) by AMD
Saxonia and certified by AMD Saxonia to AMD Holding (with a copy to the Agent).
Such calculation shall be based on the Total Costs actually incurred during such
Period and the Actual Volume for such Period and shall be accompanied by a
detailed itemization of the Total Costs and Actual Volume reflected therein. In
the event the Adjusted Selling Price Per Wafer for that Period is not equal to
the Actual Selling Price Per Wafer for that Period, then the "PRICE ADJUSTMENT
AMOUNT" shall be calculated for that Period in accordance with the following
formula:
Price
Adjustment
Amount = (AdjustedSPPW x AV) - (ActualSPPW x AV)
where:
"ACTUALSPPW" means the Actual Selling Price Per Wafer for that
Period;
"AV" means the Actual Volume for that Period; and
"ADJUSTEDSPPW" means the Adjusted Selling Price Per Wafer for that
Period.
(i) to the extent the Price Adjustment Amount for that Period is a
positive number, the Price Adjustment Amount shall be paid by AMD
Holding to AMD Saxonia within 30 days after the end of that Period; and
(ii) to the extent the Price Adjustment Amount for that Period is a
negative number, the Price Adjustment Amount shall be credited by AMD
Saxonia against amounts owed or to be owed by AMD Holding under this
Agreement.
(b) For any Period the "ADJUSTED SELLING PRICE PER WAFER" shall be
calculated in accordance with the following formula:
Adjusted
Selling Price Applicable
Per Wafer = TC x Percentage
_________________
AV
where (whether for the purpose of calculating the Adjusted Selling Price Per
Wafer or estimating the Adjusted Selling Price Per Wafer pursuant to Section
3.02(b):
18
"APPLICABLE
PERCENTAGE" shall be (i) 75% in the case of the first four Periods,
(ii) 105% in the case of the next four Periods and (iii)
110% in the case of each subsequent Period;
"AV" means the Actual Volume for that Period;
"TC" is AMD Saxonia's Total Costs for or in respect of that
Period.
SECTION 3.04. PAYMENT IN FIRST EIGHT PERIODS TO REFLECT CERTAIN EXCESS
--------------------------------------------------------
COSTS OR COSTS SAVINGS.
----------------------
(a) In the first eight Periods only, one-eighth the amount of any (i)
Excess Start-up Costs shall be paid by AMD Holding to AMD Saxonia no later than
30 days after the end of each such Period, and (ii) Start-up Cost Savings shall
be credited by AMD Saxonia against amounts owed or to be owed by AMD Holding
under this Agreement.
(b) The amount of Excess Start-up Costs and Start-up Cost Savings shall
be determined in any event not later than 60 days after the Effective Date. In
the event Start-up Costs have not been conclusively determined prior to the date
30 days after the end of the first Period, such Start-up Costs shall be
estimated for purposes of the payment contemplated for that first Period under
Section 3.04(a), and the payment required under Section 3.04(a) for the next
Period shall be increased or decreased by the shortfall or excess, respectively,
in the amount of the payment for that first Period from the amount it would have
been if it had been made based on actual instead of estimated Start-up Costs.
SECTION 3.05. ADVANCE PAYMENT ADJUSTMENT TO REIMBURSE TOTAL COSTS IN
------------------------------------------------------
CERTAIN PERIODS DURING WHICH NO WAFERS ARE SHIPPED. For any Period after the
--------------------------------------------------
Effective Date during which no Products are Shipped, promptly after the end but
in any event not later than 30 days after such Period, AMD Holding shall make an
advance payment in the amount of AMD Saxonia's Total Costs (without giving
effect to clause (h) of the definition thereof) during that Period multiplied by
the Applicable Percentage for that Period (the "ADVANCE PAYMENT ADJUSTMENT
AMOUNT") against the first Wafers Shipped in the succeeding Period in which
Wafers are Shipped; provided that (without prejudice to the inclusion of the
--------
relevant costs in the Total Costs for a subsequent Post Completion Period) no
such Advance Payment Adjustment Amount shall be paid with respect to a Post
Completion Period in which no Wafers are Shipped as a result of Force Majeure.
SECTION 3.06. FIXED COST COMPENSATION ADJUSTMENT TO ACHIEVE PARTIAL
-----------------------------------------------------
FIXED COST COMPENSATION IN POST COMPLETION PERIODS. AMD Holding and AMD Saxonia
--------------------------------------------------
agree that, to the extent the Actual Volume for any 4 Quarter Period is less
than 75% or greater than 100% of the Anticipated Capacity for such 4 Quarter
Period, and (i) the Fixed Cost Compensation Amount (as defined below) for such 4
Quarter Period is a positive number, then AMD Saxonia shall credit AMD Holding
for such amount (against amounts owed or to be owed by AMD Holding under this
Agreement), and (ii) such Fixed Cost Compensation Amount is a negative number,
AMD Holding shall pay to AMD Saxonia such
19
amount, in either case within 60 days after the end of such 4 Quarter Period.
For this purpose, the Fixed Cost Compensation Amount shall be calculated in
accordance with the following formula:
Fixed Cost
Compensation = Adj.4QFC - Adj.4QFC x 4QAV
Amount ___________________
4Q Anticipated Capacity Limit
where:
"ADJ.4QFC" means the sum of the amount, calculated for each Period or
part thereof comprising such 4 Quarter Period, represented
by the Fixed Costs for such Period or part thereof, as
applicable, multiplied by the Applicable Percentage under
Section 3.03(b) for such Period or part thereof.
"4QAV" means the aggregate amount of Actual Volume during such 4
Quarter Period.
"4Q ANTIC-
IPATED
CAPACITY
LIMIT" means (i) 75% of 4Q Anticipated Capacity in all cases where
the 4QAV is less than 75% of 4Q Anticipated Capacity and
(ii) 100% of 4Q Anticipated Capacity in all cases where the
4QAV exceeds 100% of 4Q Anticipated Capacity.
"4Q ANTIC-
IPATED
CAPACITY" means the aggregate amount of Anticipated Capacity during
such 4 Quarter Period.
SECTION 3.07. ANNUAL COMPENSATION FOR CERTAIN ADMINISTRATIVE COSTS.
----------------------------------------------------
AMD Holding shall compensate AMD Saxonia for any administrative costs, including
without limitation bookkeeping, legal and accounting costs, incurred by AMD
Saxonia from time to time for the direct benefit of AMD Holding, as follows.
The parties agree that the amount payable by AMD Holding to AMD Saxonia under
this Section 3.07 shall be DM 50,000 per annum for each Fiscal Year (and pro-
rated for any portion of a Fiscal Year) from the date hereof until the Effective
Date, payable no later than 30 days after the end of each Fiscal Year. In
addition, AMD Holding shall compensate AMD Saxonia for any such costs,
determined in accordance with German GAAP, incurred by AMD Saxonia on or after
the Effective Date, plus a surcharge thereon of 7.5% (the "SURCHARGE"), no later
than 30 days after the end of each Fiscal Year.
SECTION 3.08. ORDERING PROCEDURE.
------------------
20
(a) AMD Holding shall place written orders for Products from AMD
Saxonia, to be Shipped during a Fiscal Quarter, at least 7 days prior to the
beginning of such Fiscal Quarter and shall specify the volume of Products
ordered, the Actual Selling Price Per Wafer, the desired destination, a
reasonable requested shipment date and any other relevant shipping terms for the
Products covered by each such order. All orders shall be subject to acceptance
by AMD Saxonia. AMD Saxonia shall use its best efforts to advise AMD Holding in
advance of any inability to make full and timely delivery of any Products
ordered by AMD Holding. AMD Holding shall take delivery of, and be solely
responsible for the disposition of, any Product with respect to any order which
it has placed with AMD Saxonia.
(b) AMD Holding may change the destination of any order prior to the
Product shipment date. AMD Saxonia shall use its best efforts to ship each order
of Products on the shipment date requested and to the destination specified by
AMD Holding, unless AMD Holding gives notice to AMD Saxonia of a different
destination for such order in accordance with this Section 3.08, in which event
AMD Saxonia shall use its best efforts to ship such order of Products to the
revised destination, if any.
SECTION 3.09. SHIPPING TERMS. AMD Saxonia shall deliver the Products
--------------
purchased hereunder F.O.B. Dresden, Germany. AMD Holding will arrange and be
responsible for and pay all freight, trucking, insurance and other charges
incurred in connection with the shipment of the Products from Dresden, Germany,
to such place or places of delivery as specified by AMD Holding pursuant to
Section 3.08.
SECTION 3.10. PAYMENTS; SET OFF.
-----------------
(a) AMD Holding shall pay to AMD Saxonia the Actual Selling Price Per
Wafer for all Products Shipped by AMD Saxonia and, to the extent paid by AMD
Saxonia, the costs and expenses for freight and insurances, unconditionally
within 30 days after receipt of invoices denominated in DM from AMD Saxonia in
accordance with this Section 3.10. AMD Saxonia shall be entitled to issue
invoices to AMD Holding as soon as the relevant Products are Shipped. Payment
for all other amounts due hereunder from either party (including any adjustment
amount) shall be unconditionally due on or before the date specified in this
Agreement for such amount.
(b) All amounts under this Agreement not paid when due from AMD Holding
shall bear interest at the rate of 7.0% per annum from the date due until paid,
calculated on the basis of actual days and months elapsed. Such interest shall
be due and payable at the end of each calendar month. In no event shall the
interest charged exceed the maximum amount permitted under law.
(c) The obligations of AMD Holding under this Agreement are intended by
the parties to be absolute and unconditional under any and all circumstances
except to the extent expressly stated in this Agreement, and are intended to be
independent of the rights and obligations of AMD Saxonia and AMD Holding or of
any of their Affiliates or of any third party under this Agreement or any other
agreement or arrangement in each case except as expressly stated in this
Agreement.
21
(d) The parties hereto hereby expressly acknowledge, agree, and
understand that the payment by AMD Holding of all amounts payable by it
hereunder as required by this Agreement shall in no way be prevented, delayed,
or otherwise affected as a result of any dispute between the parties (or between
any of the parties and their Affiliates) or by any breach of this Agreement or
any other agreement entered into in connection herewith and/or any adverse
change in the financial or economic condition of AMD Saxonia or any Affiliate
thereof, including without limitation AMD Saxonia's or any such Affiliate's
liquidation or bankruptcy, or any kind of insolvency proceeding in respect
thereof.
(e) Except as otherwise expressly provided herein, no obligations of AMD
Holding under this Agreement shall be subject to any counterclaim, set-off,
deduction, withholding, or defense based upon (and without prejudice to) any
claim that AMD Holding may have against AMD Saxonia, any of its Affiliates, or
any other Person, or released, discharged, or in any way affected for any reason
or through any circumstances whatsoever (other than as required by any mandatory
non-waivable requirements of law) including, without limitation, (i) any breach
of any representation or warranty on the part of AMD Saxonia under or in
connection with this Agreement or any other agreement entered into in connection
herewith or any failure of AMD Saxonia to perform any of its agreements,
covenants, or other obligations hereunder or thereunder, or (ii) any other
circumstance which might constitute a legal or equitable discharge or defense of
AMD Holding; provided that, as between AMD Holding and AMD Saxonia (and without
prejudice to any rights of subrogation that may arise), payment or performance
by AMD Inc. or any other Person of any obligation of AMD Holding hereunder shall
constitute payment or performance (as applicable) of such obligation hereunder.
(f) Any amounts that are due from AMD Saxonia to AMD Holding hereunder
shall be payable only in the form of credit against amounts owed or to be owed
by AMD Holding to AMD Saxonia under this Agreement, except to the extent
expressly provided in Section 4.04. Any amount that is due from AMD Holding to
AMD Saxonia hereunder may be set-off against any payment then due (whether as a
credit or otherwise) under Sections 3.03, 3.04, 3.06, 3.10, 3.12 or 6.02,
Article IV or the Management Service Agreement, from AMD Saxonia to AMD Holding.
SECTION 3.11. METHOD OF PAYMENT. Payments under this Agreement from
-----------------
AMD Holding to AMD Saxonia, if made other than by set-off permitted by Section
3.10, shall be made by wire transfer deposited into [*] or such other account of
AMD Saxonia specified by AMD Saxonia with the prior written consent of the Agent
(a copy of which consent shall be delivered by AMD Saxonia to AMD Holding) with
not less than 15 days written notice to AMD Holding, and all such payments shall
be made in DM.
SECTION 3.12. POST COMPLETION ALLOCATION OF ORDERS BETWEEN THE PLANT AND
----------------------------------------------------------
OTHER AMD INC. FACILITIES.
-------------------------
(a) AMD Holding agrees that, to the extent (i) the Actual Volume for
any 4 Quarter Period following Completion is less than 75% of Anticipated
Capacity for such 4
22
* CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
Quarter Period and (ii) there is an Uneven Capacity Allocation, AMD Holding
shall pay, no later than 60 days after the end of that 4 Quarter Period, to AMD
Saxonia a "PARI PASSU COMPENSATION AMOUNT", calculated according to the formula
set forth below:
Pari Passu
Compensation = Adj.4QTC x ECV - Adj.4QTC x 4QAV + [4QVC x [ ECV - 1] x .10]
Amount _____________________________ ____________________________ ____
Amount 4Q Anticipated Capacity Limit 4Q Anticipated Capacity Limit [ [ 4QAV ] ]
where:
"ADJ.4QTC" means the Total Costs (without giving effect to clause
(h) of the definition thereof) for such 4 Quarter Period,
multiplied by the Applicable Percentage under Section
3.03(b) for the Periods included in such 4 Quarter
Period;
"ECV" means the "EVEN CAPACITY VOLUME" for such 4 Quarter
Period, which is the minimum number of Wafers that would
have been Shipped during that 4 Quarter Period if there
were no Uneven Capacity Allocation (as defined below),
provided that if such minimum number exceeds 75% of the 4
--------
Quarter Anticipated Capacity for that 4 Quarter Period,
the Even Capacity Volume shall be such number of Wafers
that represents 75% of such 4 Quarter Anticipated
Capacity;
"4QAV" has the meaning assigned to it in Section 3.06 for such 4
Quarter Period; and
"4Q ANTICI-
PATED
CAPACITY
LIMIT" has the meaning assigned to it in Section 3.06 for such 4
Quarter Period;
"4QVC" means the Variable Costs for such 4 Quarter Period.
(b) In this regard, an "UNEVEN CAPACITY ALLOCATION" shall be determined
to exist with respect to any 4 Quarter Period where AMD Saxonia's Capacity
Utilization for that 4 Quarter Period is less than the AMD Inc.'s Average
Capacity Utilization for that 4 Quarter Period, where:
(i) "AMD SAXONIA'S CAPACITY UTILIZATION" for a particular 4 Quarter
Period means the fraction (x) whose numerator is the Adjusted Actual Volume
(as defined below for such 4 Quarter Period), and (y) whose denominator is
the Plant's Anticipated Capacity for Products during each 4 Quarter Period;
(ii) "ADJUSTED ACTUAL VOLUME" means the Actual Volume during such 4
Quarter Period plus (without duplication) (x) the number of Wafers that
----
would reasonably have been expected to have been Shipped during that period
but for the
23
occurrence of Force Majeure with respect to AMD Saxonia and (y) the number
of Wafers that would reasonably have been expected to have been Shipped
during that period but for Production Problems but expressly excluding from
such Wafers, Wafers in respect of each Production Problem, to the extent
lasting more than 30 days, from the 30th day of such Production Problem;
(iii) "AMD INC.'S AVERAGE CAPACITY UTILIZATION" means the fraction (x)
whose numerator is the sum of:
(A) the actual number of Comparable Products, the manufacture of
which is completed by AMD Inc. and its Subsidiaries and Affiliates,
excluding AMD Saxonia and third party suppliers, during that 4 Quarter
Period; and
(B) the number of Comparable Products delivered to AMD Inc. or
one of its Subsidiaries by third party suppliers during that 4 Quarter
Period;
and (y) whose denominator is the sum of:
(A) the Capacity of any Wafer Fabrication Plant (other than the
Plant) for Comparable Products for the part of that 4 Quarter Period
during which it is owned or operated by AMD Inc. or one or more of its
Subsidiaries and Affiliates; and
(B) the number of Comparable Products delivered to AMD Inc. or
one of its Subsidiaries by third party suppliers during that 4 Quarter
period.
(c) The above calculations shall be prepared by AMD Saxonia and
delivered to AMD Holding and the Agent as soon as reasonably practicable
following the conclusion of each 4 Quarter Period in which Actual Volume is less
than 75% of Anticipated Capacity for such 4 Quarter Period, but in any event
within 60 days of the end of such 4 Quarter Period accompanied by a certificate
signed by one of its managing directors setting out the Actual Volume during
such 4 Quarter Period.
(d) AMD Holding shall supply, or arrange to be supplied by AMD Inc., to
AMD Saxonia and the Agent as soon as reasonably practicable but in any event
within 60 days of the end of each 4 Quarter Period in which Actual Volume is
less than 75% of Anticipated Capacity for such 4 Quarter Period, a certificate
signed by one of its officers setting out in reasonable detail the information
specified in the fraction set out in Section 3.12(b).
SECTION 3.13. ADJUSTMENTS FOR CHANGES IN LAWS OR GERMAN GAAP. In the
----------------------------------------------
event that there is a change in applicable Law or in German GAAP, and such
change results in (i) payments due from AMD Holding to AMD Saxonia, or due from
AMD Saxonia to AMD Holding (as the case may be), being materially different in
aggregate amount or (ii) the timing of the receipt of such payments being
materially different from the payments contemplated by this Article III without
giving effect to such change, the affected party shall
24
promptly notify the other party, AMD Inc. and the Agent, and AMD Holding and AMD
Saxonia shall negotiate in good faith with a view to agreeing to such reasonable
amendments to this Article III and the definitions used therein (which
amendments shall be made only with the prior written consent of the Agent), as
are necessary as a result of such change. In order to restore the position
contemplated by this Article III in the event AMD Holding and AMD Saxonia fail
to reach agreement on such amendments within 30 days of becoming aware of such
change, or if the Agent reasonably withholds its consent to any proposed
amendments, all payments under this Article III shall be calculated without
giving effect to such change.
SECTION 3.14. PRODUCT WARRANTY. Subject to Section 3.15, AMD Saxonia
----------------
represents and warrants that all Products sold to AMD Holding pursuant to this
Agreement shall conform in all material respects to the Specifications for such
Products and, if expressly agreed by AMD Saxonia in writing in advance, to any
specific changes thereto contained in a specific purchase order.
SECTION 3.15. DISCLAIMER. THE WARRANTY CONTAINED IN SECTION 3.14 IS THE
----------
SOLE AND EXCLUSIVE WARRANTY AS TO THE PRODUCTS AND IS EXPRESSLY IN LIEU OF ANY
EXPRESS OR IMPLIED WARRANTIES, IN FACT OR IN LAW, INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY SIMILAR
WARRANTIES IMPLIED BY APPLICABLE LAW. REPAIR OR REPLACEMENT OF DEFECTIVE
PRODUCTS SHALL BE AMD HOLDING'S EXCLUSIVE REMEDY WITH RESPECT TO DEFECTIVE
PRODUCTS. AMD SAXONIA ASSUMES NO LIABILITY IN TORT OR STRICT LIABILITY, NOR
SHALL AMD SAXONIA BE LIABLE TO AMD HOLDING OR ANY SUBSIDIARY OR AFFILIATE
THEREOF FOR LOSS OR USE OF PRODUCTS OR ANY OTHER INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES INCURRED BY AMD HOLDING OR ANY SUBSIDIARY OR AFFILIATE
THEREOF. IN NO EVENT SHALL THE LIABILITY OF AMD SAXONIA ARISING IN CONNECTION
WITH ANY PRODUCTS SOLD HEREUNDER EXCEED THE ACTUAL AMOUNT PAID BY AMD HOLDING TO
AMD SAXONIA FOR PRODUCTS INVOLVED IN SUCH CLAIM.
SECTION 3.16. LIMITATION OF LIABILITY. In furtherance of the parties'
-----------------------
selection of California law to govern this Agreement, the parties hereby
expressly exclude rescission (Wandlung) and price reduction (Minderung) as
-------- ---------
remedies for defective Products and agree that in no event shall German Civil
Code Paragraph 462 be applicable. To the extent permissible under applicable
law, AMD Saxonia assumes no liability in tort or strict liability, nor shall AMD
Saxonia be liable to AMD Holding, AMD Inc. or any AMD Inc. Affiliate for loss of
use of Products or any other incidental, special, indirect or consequential
damages or lost profits incurred by AMD Holding, AMD Inc. or an AMD Inc.
Affiliate. Without prejudice to Section 3.15, in no event shall the liability
of AMD Saxonia arising in connection with any Products sold hereunder exceed the
actual amount paid by AMD Holding to AMD Saxonia for Products involved in such
claim.
25
ARTICLE IV
TECHNICAL ASSISTANCE
--------------------
SECTION 4.01. PROVISION OF KNOW-HOW AND ADVICE BY OR ON BEHALF OF AMD
-------------------------------------------------------
HOLDING TO AMD SAXONIA.
----------------------
(a) AMD Holding shall from time to time disclose, or shall arrange for
AMD Inc. to disclose, to AMD Saxonia such of the Know-how and Specifications of
AMD Inc. and its Subsidiaries, and any Improvements to such Know-how and
Specifications made by AMD Inc. or one or more of its Subsidiaries after such
disclosure, as is necessary or, in the judgment of AMD Saxonia, reasonably
desirable to enable AMD Saxonia to manufacture Products on an efficient and
timely basis in accordance with the Specifications for the relevant Product
(such Know-how, Specifications and Improvements together being the "INTELLECTUAL
PROPERTY"). Without limiting the generality of the foregoing, AMD Holding shall
from time to time provide, or shall arrange for AMD Inc. to provide, one (1)
copy (or if requested by AMD Saxonia, two (2) copies), on a non-exclusive basis,
of any Technical Documentation for such Intellectual Property in the possession
of AMD Inc. or one or more of its Subsidiaries.
(b) To the extent necessary or, in the judgment of AMD Saxonia,
reasonably desirable, AMD Holding shall from time to time advise, or shall
arrange for AMD Inc. to advise, AMD Saxonia, upon AMD Saxonia's request in
writing, in relation to (i) the configuration of the equipment installed or to
be installed at the Plant and used for the production of each Product, the
Specifications for which are disclosed to AMD Saxonia hereunder, and (ii) the
requirements for such configuration, the installation of the equipment and the
machinery in the Plant necessary for the manufacture of such Products and the
calibration and testing of such equipment and machinery.
(c) AMD Holding shall from time to time permit, or shall arrange for AMD
Inc. to permit, AMD Saxonia to make such number of copies of the Technical
Documentation, or any part thereof, provided or disclosed to it hereunder or in
connection herewith as AMD Saxonia may require for the purposes of this
Agreement.
(d) AMD Holding shall from time to time notify, or shall arrange for AMD
Inc. to notify, AMD Saxonia promptly of any material errors in the Intellectual
Property or Technical Documentation provided or disclosed to AMD Saxonia
hereunder or in connection herewith upon AMD Inc. or one or more of its other
Subsidiaries becoming aware thereof and, to the extent AMD Inc. or one or more
of its Subsidiaries develops or obtains a correction for such error, shall
promptly provide, or shall arrange for AMD Inc. to promptly provide, to AMD
Saxonia the Intellectual Property and/or Technical Documentation to enable AMD
Saxonia to correct such error.
(e) Without derogating from AMD Holding's obligation to provide, or to
arrange for AMD Inc. to provide, disclosure to AMD Saxonia of such of the Know-
how and Specifications of AMD Inc. and its Subsidiaries, or which AMD Inc. or
its Subsidiaries have
26
the right to use, as is necessary to enable AMD Saxonia to manufacture Products
hereunder, but notwithstanding any other provision of this Section 4.01, AMD
Holding shall not be required to disclose or arrange for AMD Inc. to disclose
any Intellectual Property or Technical Documentation which AMD Inc. and its
Subsidiaries do not have a right to disclose or the disclosure of which would
require the payment of compensation to a third party.
SECTION 4.02. EXPERT SUPPORT, TRAINING AND TECHNICAL ASSISTANCE.
-------------------------------------------------
(a) AMD Holding shall, upon AMD Saxonia's request in writing, provide,
or arrange for AMD Inc. to provide, to AMD Saxonia, at the Plant, technical
discussions, lectures, guidance and/or technical training in order to enable AMD
Saxonia to use, on a continuing basis for the purposes of this Agreement, the
Intellectual Property and Technical Documentation disclosed or to be disclosed
to AMD Saxonia hereunder or in connection herewith. Such discussions, lectures,
guidance and training shall be by AMD Holding and/or AMD Inc. personnel who are
qualified to provide advice with respect to the relevant Intellectual Property
and Technical Documentation ("QUALIFIED PERSONNEL").
(b) The timing of visits of such AMD Holding and/or AMD Inc. personnel
shall be arranged by agreement between AMD Holding and AMD Saxonia.
(c) AMD Holding shall, upon AMD Saxonia's request in writing, provide,
or arrange for AMD Inc. to provide, to AMD Saxonia, at the Plant, all technical
assistance necessary to remedy a Production Problem.
SECTION 4.03. ACCESS TO COMPARABLE PLANTS. AMD Holding shall arrange for
---------------------------
AMD Inc. to permit AMD Saxonia to send, at the expense of AMD Saxonia or as
otherwise agreed by AMD Inc., employees of AMD Saxonia to visit AMD Inc.'s Wafer
Fabrication Plants, including in particular AMD Inc.'s plant in Austin, Texas
known as "Fab 25" for so long as such plant is owned or controlled by AMD Inc.
or one or more of its Subsidiaries, at reasonable times for the purpose of
witnessing and training in the use of any of the Intellectual Property and
Technical Documentation provided or disclosed to it hereunder. AMD Holding shall
upon AMD Saxonia's request in writing, provide, or arrange for AMD Inc. to
provide, to such AMD Saxonia employees at such Wafer Fabrication Plants
technical discussions, lectures, guidance and/or technical training by Qualified
Personnel in order to enable such AMD Saxonia employees to understand the usage
being made at such Wafer Fabrication Plants of the relevant Intellectual
Property and Technical Documentation.
SECTION 4.04. CHARGE FOR TECHNICAL ASSISTANCE.
-------------------------------
(a) As compensation in full for the performance of the services
contemplated under this Article IV, AMD Saxonia shall reimburse AMD Holding for
(i) all reasonable out-of-pocket expenses incurred by AMD Holding or AMD Inc.,
as the case may be, in connection with providing such services, plus (ii) the
reasonable salaries and other remuneration of the relevant personnel involved.
In this regard, AMD Holding shall issue quarterly invoices to AMD Saxonia
itemizing in detail the basis for each invoiced amount.
27
Prior to the Effective Date, all such invoiced amounts shall, notwithstanding
Section 3.10, be paid by AMD Saxonia within thirty (30) days of its receipt of
the relevant invoice. Payments shall be made in DM by wire transfer. From and
after the Effective Date and subject to Section 6.02(c), payments shall be made
only in the form of credits against amounts owed or to be owed by AMD Holding to
AMD Saxonia under this Agreement.
(b) The parties agree that any invoiced amounts to be paid or credited
by AMD Saxonia under this Section 4.04 shall not duplicate amounts charged for
services provided directly by AMD Inc. pursuant to the Management Service
Agreement.
(c) The foregoing notwithstanding, (i) in no event shall the aggregate
amounts to be paid by AMD Saxonia under this Section 4.04 and under the
Management Service Agreement prior to the Effective Date exceed DM 135,000,000
(One Hundred Thirty-Five Million), and (ii) the parties agree that, without
prejudice to the License Agreement, any Intellectual Property provided in any
form to AMD Saxonia for its use hereunder is provided at no charge.
ARTICLE V
ACCOUNTING REPORTS; OTHER REPORTS;
----------------------------------
RIGHT OF INSPECTION BY OR ON BEHALF OF AMD HOLDING
--------------------------------------------------
SECTION 5.01. ANNUAL ACCOUNTING REPORTS FROM AMD SAXONIA. AMD Holding
------------------------------------------
and its duly authorized representatives (which may include duly authorized
representatives of AMD Inc.) and, if the Loan Agreement Termination Date has not
yet taken place, the Agent shall at all reasonable times have access to the
books and accounts kept by AMD Saxonia and annually upon the closing of the
Fiscal Year all such books and accounts shall be audited by Ernst & Young GmbH
or such other firm of independent and internationally known public accountants
as may be selected by AMD Saxonia with the approval of AMD Holding and, if the
Loan Agreement Termination Date has not yet taken place, the Agent (the consent
of the Agent not to be unreasonably withheld). A copy of each such report of
audit, together with a reconciliation of AMD Saxonia's fiscal year figures to
the statutory financial statements of AMD Saxonia, shall be sent promptly to AMD
Holding and, prior to the Loan Agreement Termination Date, the Agent. AMD
Holding and its duly authorized representatives (which may include duly
authorized representatives of AMD Inc.) shall also have the right to examine and
inspect at any reasonable time all properties and operations of AMD Saxonia to
which this Agreement relates.
SECTION 5.02. PERIODIC WRITTEN REPORT REGARDING AMD INC. AMD Holding
-----------------------------------------
shall prepare and deliver, or shall arrange for AMD Inc. to prepare and deliver,
to AMD Saxonia and, if the Loan Agreement Termination Date has not yet taken
place, the Agent not later than 30 days after the end of each Period commencing
on or after the Effective Date a written report in form and substance reasonably
satisfactory to the Agent and AMD Saxonia discussing in reasonable detail AMD
Inc.'s production volumes of all Comparable Products and AMD Inc.'s purchase
volumes of Comparable Products produced
28
by third parties and the Capacity as well as Capacity Utilization levels of
other AMD Inc. Wafer Fabrication Plants producing Comparable Products and, to
the extent relevant to this Agreement, other information that AMD Saxonia
and/or, if the Loan Agreement Termination Date has not yet taken place, the
Agent may reasonably request in connection with this Agreement.
SECTION 5.03. ACCOUNTANTS' CERTIFICATION; OFFICER'S CERTIFICATE.
-------------------------------------------------
(a) The amount of Excess Start-up Cost or Start-up Cost Savings
shall be determined promptly, but in no event later than 60 days, after the
Effective Date pursuant to Section 3.04(b). Such determination shall be
evidenced by a Start-up Cost Adjustment Certification duly signed by AMD Saxonia
and duly signed by AMD Saxonia's certified public accountants.
(b) Promptly, but in no event later than 60 days, after the end of each
4 Quarter Period, AMD Saxonia shall provide AMD Holding and, if the Loan
Agreement Termination Date has not yet taken place, the Agent with an Annual
Pricing Compliance Certificate duly examined and certified by AMD Saxonia's
certified public accountant stating that the Adjusted Selling Price Per Wafer
has been calculated in accordance with the formulas set out in Section 3.03, and
that all necessary adjustments pursuant to Sections 3.04 through 3.06 have been
made.
(c) Promptly, but in no event later than 30 days, after the end of each
Period, AMD Saxonia shall provide AMD Holding and, if the Loan Agreement
Termination Date has not yet taken place, the Agent with a Quarterly Pricing
Compliance Certificate duly signed by one of its managing directors stating that
the Adjusted Selling Price Per Wafer has been calculated in accordance with the
formulas set out in Section 3.03 and that all necessary adjustments pursuant to
Sections 3.04 and 3.05 have been made.
(d) Promptly, but in no event later than 60 days, after the end of each
4 Quarter Period following Completion in which Actual Volume for such 4 Quarter
Period was less than 75% of Anticipated Capacity for such 4 Quarter Period, AMD
Saxonia shall provide AMD Holding and, if the Loan Agreement Termination Date
has not yet taken place, the Agent with a Pari Passu Compliance Certificate duly
signed and certified by AMD Saxonia's certified public accountant confirming
whether or not there has been an Uneven Capacity Allocation and setting out all
relevant details therefor.
(e) Promptly, but in no event later than 30 days, after the end of each
Period, AMD Saxonia shall provide AMD Holding and, if the Loan Agreement
Termination Date has not yet taken place, the Agent with a Certificate
certifying the amounts invoiced and/or paid or credited under the Management
Service Agreement and Section 4.04. Promptly, but in no event later than 60
days, after the end of each 4 Quarter Period, AMD Saxonia shall provide AMD
Holding and, if the Loan Agreement Termination Date has not taken place, the
Agent with a certificate duly signed and certified by AMD Saxonia's certified
public accountant confirming the amounts invoiced and/or paid or credited under
the Management Service Agreement and Section 4.04.
29
SECTION 5.04. ACCESS TO AMD INC. FACILITIES. If the Loan Agreement
-----------------------------
Termination Date has not yet taken place, AMD Holding agrees to arrange for AMD
Inc. to give reasonable access upon reasonable notice, to any Person duly
designated by the Agent, to any of AMD Inc.'s Wafer Fabrication Plants and other
AMD Inc. manufacturing or research facilities and all books, records, facilities
and information the Agent may reasonably require for purposes of this Agreement.
ARTICLE VI
EFFECTIVENESS; TERMINATION
--------------------------
SECTION 6.01. EFFECTIVENESS; TERMINATION.
-----------------------------------------
(a) This Agreement shall become effective on the date hereof and
(unless otherwise extended as hereinafter provided) shall terminate on the date
(the "INITIAL TERMINATION DATE") which is the earlier of (i) the Loan Agreement
Termination Date and (ii) the Termination Date. At the option of AMD Holding,
exercised by giving notice to AMD Saxonia and AMD Inc. at least six months prior
to the Loan Agreement Termination Date, and provided that no Termination Event
has occurred and is continuing, this Agreement may be extended for one
additional three year term. At the option of AMD Saxonia, exercised by giving
notice to AMD Holding and AMD Inc. at least six months prior to the Loan
Agreement Termination Date, and provided that no Termination Event has occurred
and is continuing, the initial term of this Agreement may be extended for one
additional three year term (to the extent not previously extended by AMD Holding
pursuant to the preceding sentence).
(b) Each of the events described in this Section 6.01(b), whether or not
such events directly or indirectly affect AMD Saxonia or AMD Holding, shall
constitute a Termination Event. If a Termination Event has occurred and is
continuing, AMD Saxonia (or, if prior to the Loan Agreement Termination Date,
the Security Agent on behalf of AMD Saxonia pursuant to and in accordance with
the Security Documents (as defined in the Sponsors' Support Agreement)) may, by
notice to AMD Holding and AMD Inc. and, if prior to the Loan Termination Date,
with the consent of the Agent, which consent shall be communicated by the Agent
to both AMD Holding and AMD Inc., terminate this Agreement in case of any of the
Termination Events described in clauses (vii) through (xv) below. In addition,
this Agreement shall automatically terminate (without any requirement for any
action by any party hereto) immediately upon the occurrence of the Termination
Event described in clauses (i) through (vi) below, and in the case of any other
Termination Event shall terminate on the date any such notice is given (the date
of any such automatic or other termination being the "TERMINATION DATE"). The
Termination Events are as follows:
(i) the expropriation or condemnation of the Plant or any substantial
part of the assets or business of AMD Saxonia or AMD Holding by any
Governmental Authority, or the involuntary suspension, or curtailment below
seventy-five percent of capacity, by AMD Saxonia of the operation of the
Plant for six months or more as a
30
result of any change in or introduction of any Law, or any change in the
interpretation or application thereof, in each case occurring after the
date hereof;
(ii) AMD Inc. or AMD Holding being required by any Governmental
Authority to divest itself of all or a substantial portion of its direct or
indirect interest in AMD Saxonia, or AMD Saxonia being required by any
Governmental Authority to divest itself or all or a substantial portion of
the Plant;
(iii) the destruction of the Plant or a substantial portion thereof and
a decision by AMD Saxonia not to rebuild the same after having received
insurance proceeds in respect of such destruction in an amount at least
equal to the depreciated book value of such Plant or substantial portion
thereof;
(iv) obligations of AMD Saxonia being accelerated following lapse of
any applicable grace periods as a result of the occurrence of an event
described in Section 21 of the Loan Agreement which would allow the Banks
to terminate the Loan Agreement, and/or the Agent, Security Agent or any of
the Banks exercising remedies pursuant to any of the Security Documents (as
defined in the Loan Agreement);
(v) the involuntary (including without limitation as a result of
enforcement of any rights of security granted in shares of AMD Holding
and/or AMD Saxonia or performance of any undertakings to transfer such
shares made to secure obligations of AMD Holding and/or AMD Saxonia)
transfer of a controlling interest in AMD Holding and/or AMD Saxonia from
AMD Inc. and its Subsidiaries to one or more third parties;
(vi) the involuntary dissolution or winding up of the business of AMD
Holding and/or AMD Saxonia;
(vii) failure by AMD Holding or AMD Inc. to make any payment required
from it hereunder or under the AMD Inc. Guaranty, AMD Holding Wafer
Purchase Agreement, AMD Saxonia Research Agreement, AMD Holding Research
Agreement or Sponsors' Support Agreement within 45 days of the date due
therefor, or default by AMD Holding or AMD Inc. in the performance of or
compliance with any other term contained in this Agreement or any such
other agreement and such default shall not have been remedied or waived
within 30 days after receipt of notice from AMD Saxonia or, if the Loan
Agreement Termination Date has not yet taken place, the Agent of such
default;
(viii) any of AMD Holding's representations or warranties made herein or
in any statement or certificate at any time given by AMD Holding in writing
pursuant to this Agreement being false in any material respect on the date
as of which made, or any of AMD Inc.'s representations or warranties made
in the AMD Holding Wafer Purchase Agreement or the AMD Holding Research
Agreement or in any statement or certificate at any time given by AMD Inc.
in writing pursuant to any thereof being false in any material respect on
the date as of which made;
31
(ix) bankruptcy (Konkursverfahren), composition (Vergleichsverfahren)
---------------- -------------------
or enforcement proceedings (Gesamtvollstreckungsverfahren) are instituted
-----------------------------
against the assets (Vermogen) of AMD Holding and not withdrawn or denied
--------
within 30 days of the date the application for such proceedings is made; or
the institution of such proceedings is denied for lack of assets to cover
the costs of such proceedings;
(x) execution is issued (Einleitung der Zwangsvollstreckung) against
----------------------------------
all or a substantial part of the assets of AMD Holding unless such
execution is withdrawn within three weeks of the issuance thereof;
realization of such execution; or the realization of execution on the
equity shares of AMD Saxonia owned by AMD Holding;
(xi) the discontinuance of payments generally (Zahlungseinstellung) by
-------------------
AMD Holding;
(xii) the adoption of a resolution by the managing directors
(Geschaftsfuhrer) of AMD Holding for the institution of liquidation
---------------
proceedings (Liquidationsverfahrens) for AMD Holding;
----------------------
(xiii) a court having jurisdiction in the premises entering a decree or
order for relief in respect of AMD Inc. in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief
being granted under any applicable federal or state law;
(xiv) a decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over AMD Inc. or over all
or a substantial part of its property, having been entered; or the
involuntary appointment of an interim receiver, trustee or other custodian
of AMD Inc. for all or a substantial part of its property; or the issuance
of a warrant of attachment, execution or similar process against any
substantial part of the property of AMD Inc.; and the continuance of any
such events in this clause (xiv) for 90 days unless stayed, dismissed,
bonded or discharged; or
(xv) AMD Inc. having an order for relief entered with respect to it or
commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consenting to the entry of
an order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, or consenting to
the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; the making by AMD
Inc. of any assignment for the benefit of creditors; or the inability or
failure by AMD Inc. or the admission by AMD Inc. in writing of its
inability to pay its debts as such debts become due; or the Board of
Directors of AMD Inc. (or any committee thereof) adopting any resolution or
otherwise authorizing action to approve any of the foregoing.
32
SECTION 6.02. RIGHTS UPON TERMINATION.
-----------------------
(a) Promptly, but in no event later than 20 days following the
Termination Date,
(i) the Adjusted Selling Price Per Wafer for the Period ending
on the Termination Date shall be calculated in accordance with Section
3.03;
(ii) in the event that the Termination Date occurs before all of
the Excess Start-up Costs or the Start-up Cost Savings, whichever the case
may be, has been paid in accordance with Section 3.04, the amount of any
unpaid Excess Start-up Costs or Start-up Costs Savings shall be calculated
in accordance with Section 3.04;
(iii) if no Products were Shipped in the Period ending on the
Termination Date, the final Advance Payment Adjustment Amount for that
Period shall be calculated in accordance with Section 3.05;
(iv) the Fixed Cost Compensation Amount for the Period ending on
the Termination Date shall be calculated in accordance with Section 3.06;
and
(v) the Pari Passu Compensation Amount shall be calculated in
accordance with Section 3.12.
(b) Upon termination of this Agreement for any reason, AMD Holding
shall purchase all inventory and work-in-process of AMD Saxonia as of the
Termination Date. The purchase price shall be equal to the value thereof as
shown in the books of AMD Saxonia in accordance with German GAAP.
(c) Upon termination of this Agreement for any reason, any amounts due
from AMD Holding to AMD Saxonia pursuant to Sections 3.03, 3.04, 3.05, 3.06,
3.07, 3.10, 3.12, and/or 6.02 (b) (including any amounts calculated in respect
thereof pursuant to Sections 6.02(a) and (b)) shall be aggregated, and any
amounts due (whether in the form of an obligation to pay or credit) from AMD
Saxonia to AMD Holding pursuant to Sections 3.03, 3.04, 3.06, 3.10 and 4.04
(including any amounts calculated in respect thereof pursuant to Sections
6.02(a)) and the Management Service Agreement shall be aggregated. If the
aggregate amount payable by AMD Holding exceeds the aggregate amount payable
and/or to be credited by AMD Saxonia, then each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and
replaced by an obligation upon AMD Holding to pay to AMD Saxonia the excess of
the larger aggregate amount over the smaller aggregate amount. If the aggregate
amount payable by AMD Saxonia exceeds the aggregate amount payable by AMD
Holding, then each party's obligation to make payment of any such amount will be
automatically discharged and the amount of such excess shall be additional
compensation, to be retained by AMD Saxonia for the early termination of this
Agreement, and AMD Saxonia shall have no obligation to pay such amount to AMD
Holding.
SECTION 6.03. SURVIVAL. The provisions of Sections 3.14, 3.15, 3.16,
--------
6.02, 7.09, 7.10, 7.11 and 7.13 shall survive any termination of this Agreement.
33
ARTICLE VII
MISCELLANEOUS
-------------
SECTION 7.01. REPRESENTATIONS AND WARRANTIES GENERALLY. Each of AMD
----------------------------------------
Holding and AMD Saxonia hereby represents and warrants to the other as follows:
(a) Organization; Corporate Power. It is duly incorporated and validly
-----------------------------
existing under the laws of the jurisdiction of its organization, and has all
necessary power and authority to (i) own its assets and to carry on the business
in which it is engaged; and (ii) execute, deliver and perform its obligations
under this Agreement;
(b) Corporate Authority; No Conflict. The execution, delivery and
--------------------------------
performance by it of this Agreement have been duly authorized by all necessary
corporate action (including any necessary shareholder action) on its part, and
do not and will not (i) violate any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to it, or of its charter or by-laws or (ii) result
in a breach of, result in a mandatory prepayment or acceleration of indebtedness
evidenced by or secured by, or constitute a default under, any indenture or loan
or credit agreement, or any other agreement or instrument to which it is a party
or by which it or its properties may be bound, or require the creation or
imposition of any encumbrance of any nature upon or with respect to any of the
properties now owned or hereafter acquired by it, and it is not in default under
or in violation of its charter or by-laws or any law, rule, regulation, order,
writ, judgment, injunction, decree, determination, award, indenture or
instrument, which default or violation, individually or in the aggregate, would
reasonably be expected to have a material adverse effect on its financial
condition, business, operations, or prospects;
(c) Valid and Binding Obligations. This Agreement constitutes its
-----------------------------
legal, valid and binding obligation, enforceable against it in accordance with
its terms subject, however, to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and, as to enforceability, by general equitable principles; and
(d) No Litigation. No litigation, arbitration proceedings or
-------------
governmental proceedings are pending or to its knowledge, threatened, which
pertain to this Agreement or any of the transactions contemplated thereby.
AMD Holding acknowledges that it has no right to terminate this Agreement or
offset payments hereunder because of any breach by AMD Saxonia of the
representations and warranties contained herein.
SECTION 7.02. FORCE MAJEURE.
-------------
(a) A party to this Agreement shall not be liable for the consequences
of any failure to perform, or default in performing, any of its obligations,
other than its payment
34
obligations, under this Agreement if that party can show that such failure is
caused by Force Majeure.
(b) Where there has been any such failure, the said failure shall not
be considered non-compliance with any term or condition of this Agreement, and
all the obligations (other than payment obligations) and times which because of
such failure could not be fulfilled shall be deemed to have been suspended while
the failure continues. In addition, the party for whom such obligations and/or
times have been suspended shall be entitled to take reasonable steps during the
pendency of the relevant Force Majeure to limit its losses resulting from such
Force Majeure, and following the termination of such Force Majeure such
obligations and/or times shall continue to be suspended for such further
reasonable period as is necessary for such party to restore its capacity to
perform such obligations and/or meet such times.
SECTION 7.03. RELATIONSHIP OF PARTIES. AMD Holding and AMD Saxonia
-----------------------
shall at all times be independent contractors with respect to each other.
Nothing in this Agreement shall constitute either party hereto as the partner,
joint venturer, employee or agent of the other such party or of AMD Inc., and
neither AMD Holding nor AMD Saxonia shall act or omit to act in such a way as to
suggest the contrary to any Person.
SECTION 7.04. ASSIGNMENT. This Agreement shall be binding upon and
----------
enure to the benefit of each party hereto and their respective successors and
assigns; provided, however, that neither party hereto shall have the right to
transfer or assign its interest in this Agreement without the prior written
consent of both the other party hereto, AMD Inc. and, prior to the Loan
Agreement Termination Date, of the Agent; provided further that AMD Saxonia may
----------------
assign this Agreement to the Agent as security for obligations of AMD Saxonia
under the Loan Agreement and the Agent may assign this Agreement to any direct
transferee of the Plant in the proper exercise of the Agent's enforcement rights
in respect of such security.
SECTION 7.05. WAIVERS. No delay or omission in exercise of any right
-------
or remedy of either party or any default by the other, and no custom or practice
of the parties at variance with the terms of this Agreement, shall impair any
right or remedy otherwise available nor shall it be construed as a waiver of any
right or remedy. Any waiver by either party or any default must be in writing
and shall not be a waiver of any other default concerning the same or any other
provision. AMD Saxonia shall have no right to waive any of its rights or
remedies under this Agreement without the prior written consent of AMD Inc. and,
prior to the Loan Agreement Termination Date, the Agent.
SECTION 7.06. RIGHTS CUMULATIVE. The rights, remedies and powers of
-----------------
each of the parties contained in this Agreement are cumulative and not exclusive
of any rights, remedies or powers provided to the parties by Law. No single or
partial exercise by any of the parties hereto of any right, remedy or power
under this Agreement shall preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.
35
SECTION 7.07. NOTICES. All notices and other communications required
-------
or permitted to be given to or made upon any party hereto shall be in writing
and shall be personally delivered or sent by registered or certified mail,
postage pre-paid, return receipt requested, or by pre-paid telex, TWX or
telegram, or by pre-paid courier service, or by telecopier, to the respective
parties hereto at their respective addresses (or to their respective telex, TWX
or telecopier numbers) indicated below, or such other addresses or numbers
specified in a notice sent or delivered in accordance with the provisions of
this Section 7.07. Any such notice or communication shall be deemed to be given
for purposes of this Agreement on the day that such writing or communication is
delivered or, in the case only of a telex, TWX or telegram, sent to the intended
recipient thereof, or in the case only of telecopier, sent to the intended
recipient thereof with confirmation of receipt, all in accordance with the
provision of this Section 7.07.
If to AMD Holding:
AMD Saxony Holding GmbH
Xxxxxxxxxxxxxxxxx 00 X/X
00000 Xxxxxxx
Attention: Geschaftsfuhrer
Facsimile: x00 000 0000 000
with a copy to AMD Inc.:
Advanced Micro Devices, Inc.
Xxx XXX Xxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: x0 000 000 0000
If to AMD Saxonia:
AMD Saxony Manufacturing GmbH
Xxxxxxxxxxxxxxxxx 00 X/X
00000 Xxxxxxx
Attention: Geschaftsfuhrer
Facsimile: x00 000 0000 000
with a copy to:
Xxxxxxxx Xxxx XX
Xx. Xxxx-Xxxx 00
00000 Xxxxxxx
Attention: Direktion
Facsimile: + 49 351 489 1350
36
SECTION 7.08. NO EFFECT ON OTHER AGREEMENTS. No provision of this
-----------------------------
Agreement shall be construed so as to negate, modify or affect in any way the
provisions of any other agreement among any of AMD Inc., AMD Holding and AMD
Saxonia except as specifically provided in any such other agreement.
SECTION 7.09. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO ITS CONFLICTS OF LAWS PRINCIPLES. THE PARTIES
EXPRESSLY EXCLUDE APPLICATION OF THE UNITED NATIONS CONVENTION ON CONTRACTS FOR
THE SALE OF GOODS OF APRIL 11, 1980.
SECTION 7.10. DISPUTE RESOLUTION. Subject to Section 7.10 (j) below,
------------------
arbitration under this Section 7.10 shall be the exclusive means for a party to
seek resolution of any dispute arising out of, relating to or connected with
this Agreement, except that either party may bring an action before a competent
court for the issuance of provisional or protective measures.
(a) The parties hereto agree to submit any dispute, controversy or
claim ("DISPUTE") arising out of, relating to or in any way connected with this
Agreement to final and binding arbitration in Santa Xxxxx County, California,
under the Commercial Arbitration Rules and Supplementary Procedures for
International Commercial Arbitration of the American Arbitration Association
("AAA") then in force except as modified in accordance with the provisions of
this Section 7.10.
(b) The arbitral tribunal shall be composed of three arbitrators, one
appointed by each party, and the two arbitrators so appointed shall, within 15
days appoint a third arbitrator who shall be chosen from a country other than
those of which the parties are nationals, who shall be fluent in English, and
who shall act as Chairman of the tribunal.
(c) In arriving at decisions, the arbitrators shall apply the terms and
conditions of this Agreement in accordance with the laws of California.
(d) The award shall be deemed a U.S. award for purposes of the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958
(the "NEW YORK CONVENTION"). The English language shall be used in the arbitral
proceedings and all exhibits and other evidence in a language other then English
shall be accompanied by English translations when submitted into evidence before
the arbitral tribunal.
(e) The arbitrators are empowered to render the following awards in
accordance with any provision of this Agreement or any related agreement: (i)
enjoining a party from performing any act prohibited, or compelling a party to
perform any act required, by the terms of this Agreement or any related
agreement and any order entered pursuant to this Agreement and (ii) ordering
such other legal or equitable relief, including any provisional legal or
equitable relief, or specifying such procedures as the arbitrator deems
appropriate, to resolve any Dispute submitted for arbitration. The parties shall
be entitled to discover all
37
documents and other information reasonably necessary for a full understanding of
any legitimate issue raised in the arbitration. They may use all methods of
discovery customary under U.S. federal law, including but not limited to
depositions, requests for admission, and requests for production of documents.
The time periods for compliance shall be set by the arbitrators, who may also
set limits on the scope of such discovery. The arbitrators shall not be
empowered to award consequential or punitive damages.
(f) Either party may file an application in any proper court described
in Section 7.11 hereof for a provisional remedy in connection with an arbitrable
controversy hereunder, but only upon the ground that the award to which the
applicant may be entitled may be rendered ineffectual without provisional
relief.
(g) The arbitrators shall issue to both parties a written explanation
in English of the reasons for the award and a full statement of the facts as
found and the rules of law applied in reaching the decision.
(h) Any monetary award shall be made and shall be payable in DM free of
any tax or any deduction.
(i) The award of the arbitral tribunal will be the sole and exclusive
remedy between the parties regarding any and all claims and counterclaims with
respect to the subject matter of the arbitrated dispute. An award rendered in
connection with an arbitration pursuant to this Section 7.10 shall be final and
binding upon the parties, and any judgment upon which an award may be entered
and enforced in any court of competent jurisdiction.
(j) Notwithstanding the foregoing, the parties agree that any disputes
hereunder relating solely to accounting matters shall be resolved by an auditor,
appointed as provided below, acting as an expert (and not as an arbitrator), and
that the resolution by such independent auditor of any such matter shall be
conclusive between the parties absent manifest error. Such auditor shall be
appointed by mutual agreement of the parties' respective auditors, and, if prior
to the Loan Agreement Termination Date, of the Agent and shall be an independent
and internationally known certified public accounting firm with no affiliation
with either the parties, the Agent or any of their respective auditors.
(k) Notwithstanding the foregoing, the parties agree that any dispute
between the parties and/or the Technical Advisor as to the Capacity of the Plant
or any Wafer Fabrication Plant shall be resolved by an independent technical
consultant, appointed by the parties as provided below, acting as an expert (and
not as an arbitrator), and that the resolution of the independent technical
consultant shall be conclusive between the parties absent manifest error. Such
technical consultant shall be appointed by mutual agreement of the parties and,
prior to the Loan Agreement Termination Date, the Agent, and shall be an
independent and internationally known technical consultant with relevant
expertise regarding the manufacture of Wafers and similar products.
SECTION 7.11. CONSENT TO JURISDICTION AND FORUM; AMD HOLDING AND AMD
------------------------------------------------------
SAXONIA APPOINTMENT OF AGENT FOR SERVICE OF PROCESS.
---------------------------------------------------
38
(a) Subject to Section 7.10, all judicial proceedings brought against
either party hereto with respect to this Agreement may be brought in Santa Xxxxx
County, California, and by execution and delivery of this Agreement, each such
party accepts for itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of such courts. In addition, each
such party hereby irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such proceedings, and hereby further irrevocably and
unconditionally waives and agrees to the fullest extent permitted by law not to
plead or claim that any such proceeding brought in any such court has been
brought in an inconvenient forum.
(b) AMD Holding hereby irrevocably appoints CT Corporation Services as
its agent to receive on behalf of AMD Holding and its property service of copies
of the summons and complaint and any other process which may be served in any
proceeding in any state or federal court of competent jurisdiction in the State
of California.
(c) AMD Saxonia hereby irrevocably appoints CT Corporation Services as
its agent to receive on behalf of AMD Saxonia and its property service of copies
of the summons and complaint and any other process which may be served in any
proceeding in any state or federal court of competent jurisdiction in the State
of California.
SECTION 7.12. JUDGMENT CURRENCY. The parties hereto agree that,
-----------------
without prejudice to Sections 7.10 and 7.11 above:
(a) if, for purposes of obtaining hereunder an arbitral award or
judgment of any court, it is necessary to convert a sum due hereunder in DM into
another currency, the rate of exchange used shall be that at which in accordance
with normal banking procedures the prevailing party could purchase DM with such
other currency on the Business Day preceding that on which the final award or
judgment (as applicable) is given; and
(b) the obligation of each of the parties hereto in respect of any sum
due hereunder from it (the "PAYOR") to the other party (the "RECIPIENT") shall,
notwithstanding any judgment in a currency other than DM, be discharged only to
the extent that on the Business Day following receipt by the Recipient of any
sum adjudged to be so due in such other currency, the Recipient may, in
accordance with normal banking procedures, purchase DM with such other currency;
in the event that the DM so purchased is less than the sum originally due to the
Recipient, the Payor, as a separate obligation and notwithstanding any such
judgment or award, hereby agrees to indemnify and hold harmless the Recipient
against such loss, and if the DM so purchased exceeds the sum originally due to
the Recipient, the Recipient shall remit to the Payor the excess.
SECTION 7.13. LANGUAGE. This Agreement is in the English language,
--------
which language shall be controlling in all respects.
SECTION 7.14. ENTIRE AGREEMENT. This Agreement, the AMD Saxonia Research
----------------
Agreement, the License Agreement, the Sponsors' Subordination Agreement (as
39
defined in the Loan Agreement) and the Management Service Agreement embody the
entire agreement and understanding between the parties with respect to the
subject matter hereof. Neither party has relied upon any representation or
warranty of the other party in entering into this Agreement except as expressly
set forth herein. AMD Holding further acknowledges and agrees that its
obligations hereunder shall remain in full force and effect notwithstanding the
breach by AMD Saxonia of any representation or warranty contained herein.
SECTION 7.15. COUNTERPARTS. This Agreement may be executed in one or
------------
more counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple counterparts and attached to a
single counterpart so that all signature pages are physically attached to the
same document.
SECTION 7.16. AMENDMENTS. No modifications or amendments to this
----------
Agreement shall be binding unless in writing and executed by each of the parties
hereto. In addition, no modification or amendment to this Agreement may be made
without the prior written consent of AMD Inc. and, if prior to the Loan
Agreement Termination Date, the Agent.
SECTION 7.17. EMU. The European Economic and Monetary Union
---
anticipates the introduction of a single currency and the substitution of the
national currencies of Member States participating in the Monetary Union. On the
date on which the DM is replaced by the single currency, conversion into such
currency shall take effect. The denomination of the original currency shall be
retained for so long as this is legally permissible. Conversions shall be based
on the officially fixed rate of conversion. Neither the introduction of the
single currency nor the substitution of the national currencies of the Member
States participating in European Monetary Union nor the fixing of the official
rate of conversion nor any economic consequences that arise from any of the
aforementioned events or in connection with European Monetary Union shall give
rise to any right to terminate prematurely, contest, cancel, rescind, modify, or
renegotiate this Agreement or any of its provisions or to raise any other
objections and/or exceptions or to assert any claims for compensation. This
Agreement shall continue in full force and effect in accordance with its terms.
IN WITNESS OF THE FOREGOING, AMD Holding and AMD Saxonia have caused this
Agreement to be executed by their authorized representatives as of the date
first written above.
AMD SAXONY HOLDING GMBH
/s/ Xxxxxx X. Xxxxxxx
_______________________________________
Its: Managing Director
AMD SAXONY MANUFACTURING GMBH
/s/ Xxxx X. Xxxxxxx
_______________________________________
Its: Managing Director
