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SPONSORS' SUPPORT AGREEMENT
Dated 11 March 1997
between
ADVANCED MICRO DEVICES, INC.,
AMD SAXONY HOLDING GMBH,
and
DRESDNER BANK AG,
as Agent and Security Agent
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INDEX
ARTICLE I Definitions and Accounting Terms 2
ARTICLE II Contribution of Equity Capital 26
ARTICLE III Sponsors' Loans 29
ARTICLE IV Cost Overruns Prior to Completion 32
ARTICLE V Completion Guaranty 35
ARTICLE VI Subsidies Undertaking 36
ARTICLE VII Pari Passu Undertaking 38
ARTICLE VIII AMD Inc. Share Pledge Agreement;
AMD Holding Security Documents 38
ARTICLE IX Sponsors' Guaranty 39
ARTICLE X Sponsors' Subordination Agreement;
AMD Inc. Subordination Agreement 39
ARTICLE XI Obligations Unconditional 40
ARTICLE XII Representations and Warranties 40
ARTICLE XIII Covenants 58
ARTICLE XIV Costs and Expenses; Indemnities; Taxes; Etc. 71
ARTICLE XV Miscellaneous 76
ARTICLE XVI Governing Law, Jurisdiction, and Language 79
SCHEDULE I - Existing Wafer Fabrication Plants
SCHEDULE II - Sponsors' Disclosure Schedule
SPONSORS' SUPPORT AGREEMENT
THIS SPONSORS' SUPPORT AGREEMENT, dated 11 March 1997, is made between ADVANCED
MICRO DEVICES, INC., a corporation organised and existing under the laws of the
State of Delaware, United States of America, with its chief executive office and
principal place of business at One AMD Place, Sunnyvale, California 94088,
United States of America ("AMD Inc."), AMD SAXONY HOLDING GMBH, Dresden,
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registered in the Commercial Register of the Dresden County Court, HRB 13931
("AMD Holding"; and, together with AMD Inc., collectively, the "Sponsors"), and
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DRESDNER BANK AG ("Dresdner"), as Agent under the Loan Agreement referred to
--------
below (in such capacity, the "Agent") for the Banks referred to below, and as
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Security Agent under such Loan Agreement (in such capacity, the "Security
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Agent") for the Secured Parties referred to below.
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W I T N E S S E T H :
WHEREAS, AMD Saxony Manufacturing GmbH, Dresden, registered in the Commercial
Register of the Dresden County Court HRB 13186 ("AMD Saxonia"), a wholly-owned
-----------
Subsidiary (such and other capitalised terms being used herein with the meanings
provided in Section 1.1) of AMD Holding, which is, in turn, a wholly-owned
-----------
Subsidiary of AMD Inc., has been formed for the purpose of constructing, owning,
and operating (i) the Plant and (ii) the integrated Design Center (the
construction, ownership, and operation of the Plant and the Design Center being
hereinafter called the "Project");
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WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, (i) the Sponsors
expect to make substantial subordinated loans to, and AMD Holding expects to
make substantial equity investments in, AMD Saxonia, and (ii) AMD Saxonia has
entered into a Syndicated Loan Agreement, dated 11 March 1997 (the "Loan
----
Agreement"), with the banks from time to time party thereto (hereinafter
---------
collectively called the "Banks" and individually called a "Bank"), Dresdner, as
Agent and Security Agent, and Dresdner Bank Luxembourg S.A., as Paying Agent (in
such capacity, the "Paying Agent"), providing, inter alia, for two separate
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senior secured term and standby facilities aggregating up to DM1,650,000,000
(one billion six hundred fifty million Deutsche Marks);
WHEREAS, the Sponsors desire that the Project be constructed and completed and
are entering into this Agreement with the Agent (for the benefit of itself and
the Banks) and the Security Agent (for the benefit of the Secured Parties), for
the purpose, among other things, of providing (i) certain assurances with
respect to the completion of the Project, and (ii) certain undertakings to and
for the benefit of the Secured Parties; and
WHEREAS, a condition precedent to the initial Advance is, inter alia, the
execution by the Sponsors of this Agreement and, in extending credit to AMD
Saxonia under the Loan Agreement, the Banks are relying on the undertakings of
the Sponsors contained herein;
NOW, THEREFORE, the Sponsors, the Agent (for itself and on behalf of the Banks),
and the Security Agent (on behalf of the Secured Parties), agree as follows:
ARTICLE I
Definitions and Accounting Terms
SECTION 1.1 Definitions. Unless otherwise defined herein, the following terms
(whether or not underlined) when used in this Agreement, including its preamble
and recitals, shall, except where the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular and
plural forms thereof):
"Advances" means all advances that the Banks make to AMD Saxonia pursuant
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to the Loan Agreement.
"Affiliate" means, with respect to any Person, a Person which, directly or
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indirectly, controls, is controlled by, or is under common control with, such
other Person; and, for purposes of this definition, the concept of "control",
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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 none of the Agent, the Security Agent,
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the Paying Agent, any of the Banks, nor any of their respective Affiliates,
shall be deemed to be Affiliates of (x) any AMD Company or (y) any other
Subsidiary of AMD Inc.
"Agent" has the meaning assigned to that term in the introduction to this
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Agreement.
"Agreement" means this Sponsors' Support Agreement, as the same may be
---------
amended or modified in accordance with the terms hereof and in effect.
"AMD Companies" means AMD Saxonia, AMD Holding, and AMD Inc., collectively.
-------------
"AMD Holding" has the meaning assigned to that term in the introduction to
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this Agreement.
"AMD Holding Assignment (U.S.A.)" means the AMD Holding Assignment of,
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inter alia, rights under the Wafer Purchase Agreements, in the form set out in
Schedule 56 to the Loan Agreement, between AMD Holding and the Security Agent.
"AMD Holding Assignment of Contractual Rights" means the AMD Holding
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Assignment of Contractual Rights, in the form set out in Schedule 55 to the Loan
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Agreement, between AMD Holding and the Security Agent.
"AMD Holding Assignment of Current Assets" means the AMD Holding Security
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Assignment of Current Assets, in the form set out in Schedule 52 to the Loan
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Agreement, between AMD Holding and the Security Agent.
2
"AMD Holding Charge of Bank Accounts" means the AMD Holding Charge of Bank
-----------------------------------
Accounts, in the form set out in Schedule 54 to the Loan Agreement, between AMD
-----------
Holding and the Security Agent.
"AMD Holding Global Assignment" means the AMD Holding Global Assignment, in
-----------------------------
the form set out in Schedule 53 to the Loan Agreement, between AMD Holding and
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the Security Agent.
"AMD Holding Research Agreement" means the AMD Holding Research, Design and
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Development Agreement, in the form set out in Schedule 34 to the Loan Agreement,
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between AMD Inc. and AMD Holding.
"AMD Holding Security" means all collateral security created pursuant to
--------------------
the AMD Holding Security Documents.
"AMD Holding Security Documents" means, collectively, the AMD Holding
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Assignment (U.S.A), the AMD Holding Assignment of Contractual Rights, the AMD
Holding Assignment of Current Assets, the AMD Holding Charge of Bank Accounts,
the AMD Holding Global Assignment, the AMD Holding Share Pledge Agreement, and
each other instrument or document designated by the Agent (with the consent of
each AMD Company) as an AMD Holding Security Document under and for purposes of
this Agreement.
"AMD Holding Share Pledge Agreement" means the AMD Holding Share Pledge
----------------------------------
Agreement, in the form set out in Schedule 51 to the Loan Agreement, between AMD
-----------
Holding and the Security Agent.
"AMD Holding Wafer Purchase Agreement" means the AMD Holding Wafer Purchase
------------------------------------
Agreement, in the form of Schedule 33 to the Loan Agreement, between AMD Inc.
-----------
and AMD Holding.
"AMD Inc." has the meaning assigned to that term in the introduction to
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this Agreement.
"AMD Inc. Guaranty" means the AMD Inc. Guaranty in the form set out in
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Schedule 27 to the Loan Agreement, executed by AMD Inc. in favour of AMD
-----------
Saxonia, the Agent, and the Security Agent for the benefit of the Secured
Parties.
"AMD Inc. 1996 Bank Credit Agreement" means the Credit Agreement, dated as
-----------------------------------
of July 19, 1996, between, inter alia, AMD Inc., the lenders party thereto, and
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Bank of America National Trust & Savings Association, as administrative agent.
"AMD Inc. Primary Bank Credit Agreement" means, from time to time:
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(i) the AMD Inc. 1996 Bank Credit Agreement; or
3
(ii) if the agreement referred to in paragraph (i) above is terminated or
cancelled, then any secured or unsecured revolving credit or term loan
agreement between or among AMD Inc., as borrower, and any bank or
banks, as lender(s), for borrowed monies to be used for general
corporate purposes of AMD Inc., with an original term of not less than
4 years and an original aggregate loan commitment of at least
$100,000,000 (one hundred million Dollars) or the equivalent thereof
in any other currency, and, if there is more than one such revolving
credit or term loan agreement, then such agreement which involves the
greatest original aggregate loan commitment(s) and, as between
agreements having the same aggregate original loan commitment(s), then
the one which has the most recent date; or
(iii) if the agreement referred to in paragraph (i) above and all of the
agreements, if any, which could apply under paragraph (ii) above have
been terminated or cancelled, then so long as paragraph (ii) does not
apply as the result of one or more new agreements being entered into,
the agreement which is the last such agreement under paragraph (i) or
(ii) to be so terminated or cancelled as in effect immediately prior
to such termination or cancellation.
"AMD Inc. Security" means all collateral security furnished pursuant to the
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AMD Inc. Share Pledge Agreement.
"AMD Inc. Senior Secured Note Indenture" means that certain Indenture,
--------------------------------------
dated as of August 1, 1996, between AMD Inc. and United States Trust Company of
New York, as trustee, relating to the issuance by AMD Inc. of $400,000,000 (four
hundred million Dollars) of its 11% Senior Secured Notes due 2003.
"AMD Inc. Share Pledge Agreement" means the AMD Inc. Share Pledge
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Agreement, in the form set out in Schedule 41 to the Loan Agreement, between AMD
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Inc. and the Security Agent.
"AMD Inc. Subordination Agreement" means the AMD Inc. Subordination
--------------------------------
Agreement, in the form set out in Schedule 42 to the Loan Agreement, between AMD
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Inc., AMD Holding, and the Security Agent.
"AMD Saxonia" has the meaning assigned to that term in the first recital of
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this Agreement.
"AMD Saxonia Assignment (U.S.A)" means the AMD Saxonia Assignment of, inter
------------------------------
alia, rights under the AMD Saxonia Wafer Purchase Agreement, in the form set out
in Schedule 50 to the Loan Agreement, between AMD Saxonia and the Security
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Agent.
4
"AMD Saxonia Assignment of Contractual Rights" means the AMD Saxonia
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Assignment of Contractual Rights, in the form set out in Schedule 49 to the Loan
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Agreement, between AMD Saxonia and the Security Agent.
"AMD Saxonia Assignment of Current Assets" means the AMD Saxonia Security
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Assignment of Current Assets, in the form set out in Schedule 44 to the Loan
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Agreement, between AMD Saxonia and the Security Agent.
"AMD Saxonia Assignment of Fixed Assets" means the AMD Saxonia Security
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Assignment of Fixed Assets, in the form set out in Schedule 45 to the Loan
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Agreement, between AMD Saxonia and the Security Agent.
"AMD Saxonia Assignment of Insurances" means the AMD Saxonia Assignment of
------------------------------------
Insurances, in the form set out in Schedule 46 to the Loan Agreement, between
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AMD Saxonia and the Security Agent.
"AMD Saxonia Charge of Project Accounts" means the AMD Saxonia Charge of
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Project Accounts, in the form set out in Schedule 48 to the Loan Agreement,
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between AMD Saxonia and the Security Agent.
"AMD Saxonia/Dresdner Subsidy Agreement" means the AMD/Dresdner Subsidy
--------------------------------------
Agreement, in the form set out in Schedule 25 to the Loan Agreement, between AMD
-----------
Saxonia and Dresdner.
"AMD Saxonia Disclosure Schedule" means the Disclosure Schedule attached to
-------------------------------
the Loan Agreement as Schedule 15, as it may be amended, supplemented, or
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otherwise modified from time to time by AMD Saxonia with the written consent of
the Agent.
"AMD Saxonia Global Assignment" means the AMD Saxonia Global Assignment, in
-----------------------------
the form set out in Schedule 47 to the Loan Agreement, between AMD Saxonia and
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the Security Agent.
"AMD Saxonia Hedging Contract" means the Agreement, in the form set out in
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Schedule 50a to the Loan Agreement, between AMD Saxonia and AMD Inc.
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"AMD Saxonia Land Charge" means the Grundschuld, in the form set out in
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Schedule 43 to the Loan Agreement, between AMD Saxonia and the Security Agent.
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"AMD Saxonia Research Agreement" means the AMD Saxonia Research, Design and
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Development Agreement, in the form set out in Schedule 36 to the Loan Agreement,
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between AMD Holding and AMD Saxonia.
"AMD Saxonia Security" means all collateral security created pursuant to
--------------------
the AMD Saxonia Security Documents.
5
"AMD Saxonia Security Documents" means, collectively, the AMD Saxonia
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Assignment (U.S.A), the AMD Saxonia Assignment of Contractual Rights, the AMD
Saxonia Assignment of Current Assets, the AMD Saxonia Assignment of Fixed
Assets, the AMD Saxonia Assignment of Insurances, the AMD Saxonia Charge of
Project Accounts, the AMD Saxonia Land Charge, the AMD Saxonia Global
Assignment, and each other instrument or document designated by the Agent (with
the consent of each AMD Company) as an AMD Saxonia Security Document under and
for purposes of this Agreement.
"AMD Saxonia Wafer Purchase Agreement" means the AMD Saxonia Wafer Purchase
------------------------------------
Agreement, in the form set out in Schedule 35 to the Loan Agreement, between AMD
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Holding and AMD Saxonia.
"Approved Project Budget" means:
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(i) initially, that certain Project Budget, in the form set out in
Schedule 6 to the Loan Agreement, which has been prepared by AMD
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Saxonia and approved by each Sponsor; and
(ii) at any time after such Project Budget has been updated, amended,
supplemented, or otherwise modified, and prior to Completion, any such
updated, amended, supplemented, or modified Project Budget having been
approved by each AMD Company (such approval of each Sponsor not to be
unreasonably withheld or delayed) and the Agent (which may, in its
sole discretion, consult with the Technical Advisor and the Banks'
Auditor) in accordance with ss.18.2 of the Loan Agreement.
The initial Approved Project Budget and (subject to the requirements of ss.
---
13.1(i)(d)(y)(1)) each subsequent Approved Project Budget from time to time in
----------------
effect shall itemise, separately from the other information set forth therein,
and on a Project Phase by Project Phase basis, the aggregate Capital Expenditure
then required to be made by AMD Saxonia in order to complete each then
uncompleted Project Phase of the Project and to achieve Completion. All
references herein to the Approved Project Budget shall, at any time, refer to
the Approved Project Budget as then in effect.
"Approved Project Schedule" means:
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(i) initially, that certain Project Schedule, in the form set out in
Schedule 7 to the Loan Agreement, which has been prepared by AMD
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Saxonia and approved by each Sponsor with respect to the schedule for
completing each Project Phase and for achieving Completion; and
(ii) at any time after such Project Schedule has been updated, amended,
supplemented, or otherwise modified, and prior to Completion, any such
updated, amended, supplemented, or modified Project Schedule having
been ap-
6
proved by each AMD Company (such approval of each Sponsor not to be
unreasonably withheld or delayed) and the Agent (which may, in its
sole discretion, consult with the Technical Advisor and the Banks'
Auditor) in accordance with ss.18.2 of the Loan Agreement.
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The initial Approved Project Schedule and (subject to the requirements of ss.
--
13.1(i)(d)(y)(2)) each subsequent Approved Project Schedule from time to time in
----------------
effect shall itemise, separately from the other information set forth therein,
and on a Project Phase by Project Phase basis, the then anticipated date for
completing each then uncompleted Project Phase and for achieving Completion. All
references herein to the Approved Project Schedule shall, at any time, refer to
the Approved Project Schedule as then in effect.
"Auditor" means Ernst & Young Wirtschaftsprufungsgesellschaft mbH or such
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other firm of auditors charged with duties relating to the Project as may be
appointed by AMD Saxonia with the consent of the Agent, such consent not to be
unreasonably delayed or withheld.
"Available Tranche A Amount" means, on any date, the excess, if any, of:
--------------------------
(i) the Total Tranche A Commitment Amount on such date;
over
(ii) the aggregate unpaid principal amount of all Tranche A Advances
outstanding on such date.
"Available Tranche B Amount" means, on any date, the excess, if any, of:
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(i) the Total Tranche B Commitment Amount on such date;
over
(ii) the aggregate unpaid principal amount of all Tranche B Advances
outstanding on such date.
"Average Production Cost Per Wafer" means, with respect to any Fiscal
---------------------------------
Quarter, the amount determined by dividing (x) the aggregate cost, determined in
accordance with GAAP, incurred by AMD Saxonia for the production of all Wafers
"Shipped" (as defined in the AMD Saxonia Wafer Purchase Agreement) during such
Fiscal Quarter (including all materials, labor, and other out-of pocket costs
and expenses, but excluding depreciation and interest expense), by (y) the
number of Wafers "Shipped" (as so defined) during such Fiscal Quarter.
"Banks' Auditor" means BDO Deutsche Warentreuhand AG
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Wirtschafts-prufungsgesellschaft or such other firm of auditors charged with
duties relating to the Project as may be appointed by the Banks with the consent
of AMD Saxonia, such consent not to be unreasonably delayed or withheld.
7
"Bank" and "Banks" have the respective meanings assigned to those terms in
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the second recital of this Agreement.
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"Business Day" means any day of the year on which banks are generally open
------------
for business in London, Frankfurt am Main, Dresden and, to the extent the same
relates to any obligation to be performed by AMD Inc., San Francisco.
"Capital Expenditure" means all acquisition or manufacturing costs in
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respect of fixed and movable assets in accordance with ss. 266 2 A II of the
Commercial Code and all acquisition costs for intangible assets in accordance
with ss. 266 2 A I of the Commercial Code, to the extent the same have a useful
operational life of more than one year (not being expenditures chargeable to the
profit and loss account).
"Capitalised Lease Liabilities" means, with respect to any Person, all
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monetary obligations of such Person under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as fixed or capitalised
leases or finance leases, and, for purposes of this Agreement, the amount of
such obligations shall be the capitalised amount thereof, determined in
accordance with GAAP, and the stated maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Cash Equivalent Investment" means any security or other instrument set out
--------------------------
in Schedule 23 to the Loan Agreement.
"Class A Sponsors' Loans" has the meaning assigned to that term in Section
-----------------------
3.1.
"Class B Sponsors' Loans" has the meaning assigned to that term in Section
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3.1.
"Completion" means the date on which the initial satisfaction of all
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conditions set forth in the Technical Completion Certificate (Obligors), the
Technical Completion Certificate (Technical Advisor), the Financial Completion
Certificate (Obligors), the Financial Completion Certificate (Banks' Auditor)
and the Financial Completion Certificate (Technical Advisor) set out in
Schedules 9, 10, 11, 12 and 13 to the Loan Agreement is confirmed to the Agent
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by the submission of properly executed originals of such Certificates.
"Completion Certificates" means the Scheduled Project Phase Completion
-----------------------
Certificates, the Technical Completion Certificates, and the Financial
Completion Certificates.
"Completion Date" means the date specified by the Agent in a notice to be
---------------
given to each AMD Company and each Bank as the first date on or as of which
Completion shall have occurred.
8
"Compliance Certificate" means an Annual Pricing Compliance Certificate, a
----------------------
Quarterly Pricing Compliance Certificate, or a Pari Passu Compliance
Certificate, as the case may be.
"Consent and Agreement" means:
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(i) in the case of the Sponsors, the Sponsors' Consent and Agreement;
(ii) in the case of the Contractor, the Contractor's Consent and
Agreement;
(iii) in the case of an Equipment Supplier, each Equipment Supplier's
Consent and Agreement; and
(iv) in the case of a Service Supplier, each Service Supplier's Consent
and Agreement.
"Contingent Liabilities" means, with respect to any Person, any agreement,
----------------------
undertaking, or arrangement by which such Person guarantees, endorses, or
otherwise becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment to, supply
funds to, or otherwise invest in, a debtor, or otherwise to assure a creditor
against loss) the indebtedness, obligation, or other liability of any other
Person (other than by endorsements of instruments in the course of collection),
or guarantees the payment of dividends or other distributions upon the shares of
any other Person. The amount of any Person's obligation under any Contingent
Liability shall (subject to any limitation set forth therein) be deemed to be
the outstanding principal amount (or maximum principal amount, if larger) of the
indebtedness, obligation, or other liability guaranteed thereby.
"Contractor" means Meissner & Wurst GmbH & Co., Ro(beta)bachstra(beta)e 38,
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70499 Stuttgart, registered in the Commercial Register of the Stuttgart County
Court HRA 1208.
"Contractor's Consent and Agreement" means the Contractor's Consent and
----------------------------------
Agreement, in the form set out in Schedule 39 to the Loan Agreement, or in such
-----------
other form as is consented to by the Security Agent from the Contractor in
favour of the Security Agent.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust, or other instrument, document, or agreement
to which such Person is a party or by which it or any of its property is bound.
"Cost Overruns" means, at any time, the difference at such time between
-------------
Capital Expenditure estimated in the initial Approved Project Budget and, if
more, the actual Capital Expenditure incurred, in each case calculated on a
cumulative basis.
9
"Cost to Complete" means, at the time any determination thereof is to be
----------------
made, the amount then most recently determined by the AMD Companies and
certified to the Agent (or, in the event the Agent so requests, the amount then
most recently determined reasonably and in good faith by the Technical Advisor
and certified to the Agent upon its request (after consultation with the AMD
Companies), as the then aggregate amount of additional Capital Expenditure
required to be made to achieve Completion.
"Debt Service Reserve Account" means the reserve account referred to and
----------------------------
opened pursuant in ss. 19.4 of the Loan Agreement (including any sub-accounts
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into which such account may be divided), as such account may be renewed,
redesignated, or renumbered from time to time.
"Design/Build Agreement" means the Design/Build Agreement for the
----------------------
construction of the Plant and the Design Center, in the form set out in Schedule
--------
39 to the Loan Agreement, between the Contractor and AMD Saxonia.
--
"Design Center" means the research, design, and development facilities
-------------
constructed or to be constructed by AMD Saxonia and integrated with the Plant
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.
"Deutsche Mark Equivalent" means, with respect to any Class A Sponsors'
------------------------
Loan, the amount, expressed in Deutsche Marks, which results from the conversion
of Dollars to Deutsche Marks at a spot rate of exchange equal to the greater of
(i) DM 1.45 for $1.00 and (ii) the Agent's spot rate of exchange, expressed in
Deutsche Marks, for the sale of Dollars for Deutsche Marks prevailing on the
date two (2) Business Days prior to the date such Class A Sponsors' Loan is or
was due to be made.
"Deutsche Marks" and the sign "DM" mean lawful money of the Federal
-------------- --
Republic of Germany from time to time.
"Disclosure Schedules" means the AMD Saxonia Disclosure Schedule and the
--------------------
Sponsors' Disclosure Schedule, collectively.
"Dollars" and the sign "$" mean the lawful money of the United States of
------- -
America from time to time.
"Dresdner" has the meaning assigned to that term in the introduction to
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this Agreement.
"Encumbrance" means, (i) when used with reference to any Person organized
-----------
and existing under the laws of the Federal Republic of Germany, any security
interest in property or in rights to secure payment of a debt or performance of
an obligation, including, but not
10
limited to, mortgages (Hypotheken), land charges (Grundschulden), annuity
charges (Rentenschulden), contractual and legal pledges (vertragliche und
gesetzliche Pfandrechte) including pledges or mortgages in favour of execution
creditors (Pfandungspfandrechte und Zwangshypotheken), transfers of title by way
of security (Sicherungsubereignungen), assignments of claims or other property
or rights by way of security (Sicherungsabtretungen und sonstige Ubertragungen
von Sachen oder Rechten zur Sicherung), retention of title arrangements
(Eigentumsvorbehalt) including extended retentions of title (erweiterter und
verlangerter Eigentumsvorbehalt), and any other priority or preferential
arrangement of any kind or nature whatsoever, and (ii) when used with reference
to any other Person, any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge (including floating and fixed charges) against or interest in property to
secure payment of a debt or performance of an obligation, or other preferential
arrangement of any kind or nature whatsoever in respect of any property, but not
including the interest of a lessor under a lease which, in accordance with GAAP,
would be classified as an operating lease.
"Equipment Suppliers" means, collectively, each Person party to a contract
-------------------
or other agreement with AMD Saxonia in the capacity of a supplier of fixed or
tangible current assets for the Project; it being understood and agreed that AMD
Inc. or an Affiliate thereof (other than AMD Saxonia) may be an Equipment
Supplier.
"Equipment Supplier's Consent and Agreement" means, with respect to an
------------------------------------------
Equipment Supplier, such Equipment Supplier's Consent and Agreement, in the form
set out in Schedule 40 to the Loan Agreement or Annex 3 to Schedule 49 or Annex
----------- -----------
3 to Schedule 55 of the Loan Agreement, as the case may be, or in such other
-----------
form as is consented to by the Security Agent, which pertains to a Material
Equipment Supply Contract or which is otherwise required pursuant to the terms
of the Loan Agreement or the Security Documents.
"Equipment Supply Contract" means each agreement (also in the form of an
-------------------------
order) between AMD Saxonia and suppliers (including AMD Inc. or one of its
Affiliates) relating to the acquisition by, and delivery to, AMD Saxonia of
fixed or tangible current assets for the Project.
"Equity Capital" means registered stated capital (Stammkapital).
--------------
"Event of Default" means an event which would entitle the Banks to
----------------
terminate their commitments and the loan facilities pursuant to ss. 21 of the
------
Loan Agreement.
"Event of Termination" means any event which would entitle a party to an
--------------------
Operative Document to terminate such Operative Document in accordance with the
terms thereof; provided, however, that such event could reasonably be expected
-----------------
to have a material adverse consequence to the entirety of the transactions
contemplated by the Operative Documents.
11
"Financial Completion" is deemed to have occurred when:
--------------------
(i) all of the conditions set forth in the form of Financial Completion
Certificate (Obligors) have been satisfied in all material respects,
all of the statements of the AMD Companies appearing in said form of
Certificate are true and correct in all material respects, and the
Agent shall have received a fully executed counterpart of such
Certificate; and
(ii) the Agent shall have received a fully executed counterpart of the
Financial Completion Certificate (Banks' Auditor) and the Financial
Completion Certificate (Technical Advisor).
"Financial Completion Certificate (Banks' Auditor)" means a certificate, in
-------------------------------------------------
the form set out in Schedule 12 to the Loan Agreement (appropriately completed),
-----------
executed by the Banks' Auditor and delivered to the Agent.
"Financial Completion Certificate (Technical Advisor)" means a certificate,
----------------------------------------------------
in the form set out in Schedule 13 to the Loan Agreement (appropriately
-----------
completed), executed by the Technical Advisor, and delivered to the Agent.
"Financial Completion Certificate (Obligors)" means a certificate, in the
-------------------------------------------
form set out in Schedule 11 to the Loan Agreement (appropriately completed),
-----------
executed by the AMD Companies, and delivered to the Agent.
"Financial Completion Certificates" means the Financial Completion
---------------------------------
Certificate (Obligors), the Financial Completion Certificate (Banks' Auditor)
and the Financial Completion Certificate (Technical Advisor).
"Financial Ratio Calculation Date" means
--------------------------------
(i) the Completion Date; and
(ii) the date as of which the Fixed Charge Cover Ratio is, or is required
to be, calculated in any certificate of compliance furnished by AMD
Saxonia pursuant to ss. 16.2.1 of the Loan Agreement or the date so
----------
referred to in a confirmation relating to the financial covenants
given by the Auditor pursuant to ss. 16.2.2 of the Loan Agreement, in
----------
each case after the Completion Date.
"Financing Documents" means, collectively, the Loan Agreement, this
-------------------
Agreement, the Sponsors' Guaranty, the Sponsors' Subordination Agreement, the
AMD Inc. Subordination Agreement, the Sponsors' Loan Agreement, the AMD
Saxonia/Dresdner Subsidy Agreement, the SAB/Dresdner Subsidy Agreement, the
65/35 Burgschaft, the AMD Saxonia Hedging Contract, the Security Documents, each
Consent and Agreement, and each other
12
instrument or document designated by the Agent (with the consent of each AMD
Company) as a Financing Document under and for purposes of this Agreement.
"Fiscal Month" means any fiscal month of a Fiscal Year.
------------
"Fiscal Quarter" means any fiscal quarter of a Fiscal Year.
--------------
"Fiscal Year" means any period of approximately 12 consecutive calendar
-----------
months ending on the last Sunday in December; references to a Fiscal Year with a
number corresponding to any calendar year (e.g., the "1997 Fiscal Year") refer
to the Fiscal Year ending on the last Sunday in December occurring during such
calendar year.
"Fixed Charge Coverage Ratio" has the meaning assigned to that term in
---------------------------
ss.1 of Schedule 17 to the Loan Agreement.
---- -----------
"GAAP" means, (x) in the case of AMD Saxonia or AMD Holding or its
----
respective financial statements, those generally accepted accounting principles
in general use by the accounting profession (Grundsatze ordnungsgemasser
Buchfuhrung und Bilanzierung) and in effect on the Loan Agreement Effective Date
in Germany (it being expressly understood and agreed that AMD Saxonia's and AMD
Holding's monthly and quarterly financial statements shall be prepared on the
basis of a Fiscal Month or a Fiscal Quarter (rather than on the basis of a
calendar month or a calendar quarter, as the case may be), but shall be
reconciled on an annual basis), and (y) in the case of AMD Inc. or its financial
statements, generally accepted accounting principles set forth from time to time
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Approvals" means each and every authorization, consent,
----------------------
approval, licence, permit, franchise, certificate, exemption or order of or
filing or registration with, any Governmental Authority or legal or regulatory
body, federal, state, local or foreign except for (i) routine or periodic
information reports which, if not filed, would not in any case or in the
aggregate, adversely affect the due authorization, execution, delivery,
validity, legality, or enforceability of any of the Operative Documents, (ii)
filings of certificates or articles of incorporation, registrations or
qualifications of a foreign corporation or similar corporate filings, and (iii)
returns and filings with respect to taxes.
"Governmental Authority" means any nation or government, any state or other
----------------------
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
13
"Guarantors" means the Federal Republic of Germany and the Free State of
----------
Saxony in their respective capacities as guarantors pursuant to the 65/35
Burgschaft.
"Guaranty Decision" means the decision dated 2 July 1996 set out in
-----------------
Schedule 24 to the Loan Agreement concerning the guaranty application made by
-----------
AMD Saxonia, including the following documents as referred to therein:
(i) the specimen credit agreement F 13.09.1990 (1993 Edition)
Federal/State or THA
(ii) the General Terms and Conditions applicable to the assumption of
Guaranties by the Federal Republic of Germany and the States of the
Accession Territory (States) in the edition dated F 04.01.1993
Federal/State, together with
(iii) Notes relating to applications for guaranties and loans of the
Treuhandanstalt Berlin and/or Federal and State guaranties for
projects in the Accession Territory in the edition dated 1993 F
12.10.1990.
"Indebtedness" of any Person, means, without duplication:
------------
(i) all obligations of such Person for borrowed money and all obligations
of such Person evidenced by bonds, debentures, notes, or similar
instruments;
(ii) all obligations, contingent or otherwise, relative to the face amount
of all letters of credit, guarantees, and bankers' acceptances issued
for the account of such Person, whether or not drawn or paid;
(iii) all obligations of such Person as lessee under leases which have been
or should be, in accordance with GAAP, recorded as Capitalised Lease
Liabilities;
(iv) all net liabilities of such Person under or in connection with any
interest rate, currency, commodity, or other hedging contracts to
which such Person is a party;
(v) all other items which, in accordance with GAAP, would be included as
liabilities on the liability side of the balance sheet of such Person
as of the date at which Indebtedness is to be determined;
(vi) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (including pre-paid interest
thereon) secured by an Encumbrance on property owned or being
purchased by such Person
14
(including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall
have been assumed by such Person or is limited in recourse; and
(vii) all Contingent Liabilities of such Person in respect of any of the
foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer, respectively.
"Information Memorandum" means the Information Memorandum, dated September
----------------------
1996, entitled "AMD Saxony Manufacturing GmbH, Dresden: DM1,650,000,000
Information Memorandum Limited Recourse Financing", prepared and furnished by
the AMD Companies to the Agent, for distribution to prospective lenders under
the Loan Agreement, as such Information Memorandum may at any time be amended or
modified with the consent of each AMD Company and in effect.
"Initial Cash Balance" means, as at the Completion Date, the cash balance
--------------------
in the Project Accounts together with the then aggregate value of all Cash
Equivalent Investments.
"Instructing Group" means in respect of any matter, the Banks whose votes
-----------------
are required to pass a resolution on such matter as determined in accordance
with ss.ss. 22.5 and 22.6 of the Loan Agreement.
"License Agreement" means the License Agreement, in the form set out in
-----------------
Schedule 38 to the Loan Agreement, between AMD Inc., AMD Holding, and AMD
-----------
Saxonia.
"Loan Agreement" has the meaning assigned to that term in the second
-------------- ------
recital of this Agreement.
-------
"Loan Agreement Effective Date" means the date specified by the Agent in a
-----------------------------
notice given to the parties hereto as being the first date on or as of which (i)
the Loan Agreement has been executed and delivered by each of the respective
parties thereto, and (ii) the Agent has received each of the documents referred
to in ss.ss. 5.1.1 to 5.1.16 of the Loan Agreement, in each case in the form,
------------ ------
and with the substance, specified therein.
"Loan Agreement Termination Date" has the meaning assigned to that term in
-------------------------------
Section 15.7.
------------
"Management Plan" means the project concept dated February 1997, and
---------------
attached as Schedule 14 to the Loan Agreement, as the same may from time to time
-----------
be further amended or modified by AMD Saxonia (with the consent of each Sponsor,
whose consent will not be unreasonably delayed or withheld) in accordance with
the terms of this Agreement and the Loan Agreement and in effect.
15
"Management Service Agreement" means the Amended and Restated Management
----------------------------
Service Agreement, in the form set out in Schedule 37 to the Loan Agreement,
-----------
between AMD Inc., AMD Holding, and AMD Saxonia.
"Material Adverse Effect" means
-----------------------
(i) a material adverse change in, or a material adverse effect upon, the
operations, business, properties, condition (financial or otherwise),
or prospects of any AMD Company, or of AMD Inc. and its Subsidiaries,
taken as a whole;
(ii) with respect to the Contractor, a material adverse change in, or a
material adverse effect upon, the operations, business, properties,
condition (financial or otherwise), or prospects of the Contractor
and its Subsidiaries, taken as a whole;
(iii) with respect to an Equipment Supplier, a material adverse change in,
or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise), or prospects of such
Equipment Supplier and its Subsidiaries, taken as a whole;
(iv) with respect to a Service Supplier, a material adverse change in, or
a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise), or prospects of such Service
Supplier and its Subsidiaries, taken as a whole;
(v) a material impairment of the ability of any AMD Company, the
Contractor, any Equipment Supplier, or any Service Supplier to
perform its obligations under any Operative Document to which it is
or is to be a party; or
(vi) a material adverse effect upon (i) the legality, validity, binding
effect, or enforceability against any AMD Company, the Contractor,
any Equipment Supplier, or any Service Supplier of any Operative
Document, or (ii) the perfection or priority of any Security granted
under any of the Security Documents;
provided, however, that with respect to an event described in clause (ii),
----------------- -----------
(iii), (iv), or, with respect to the Contractor, an Equipment Supplier, or a
-----------
Service Supplier, clause (v) or (vi) above, such event could reasonably be
------------------
expected to have a material adverse consequence to the entirety of the
transactions contemplated by the Operative Documents.
"Material AMD Inc. Subsidiary" means, at any time, any Subsidiary of AMD
----------------------------
Inc. having at such time (either on an individual basis or on a consolidated
basis for such Subsidiary and its Subsidiaries) either:
16
(i) total (gross) revenues for the preceding four Fiscal Quarter period in
excess of 5% of gross revenues for AMD Inc. and its Subsidiaries on a
consolidated basis for such period, or
(ii) total assets, as of the last day of the preceding Fiscal Quarter,
having a net book value in excess of 5% of total assets for AMD Inc.
and its Subsidiaries on a consolidated basis as of such date,
in each case, based on the then most recent annual or quarterly financial
statements delivered to the Agent hereunder; provided, however, that AMD Saxonia
-------- -------
and AMD Holding shall, for purposes of this Agreement, each be deemed to be a
Material AMD Inc. Subsidiary.
"Material Equipment Supply Contract" means each Equipment Supply Contract:
----------------------------------
(i) pursuant to which AMD Saxonia incurs obligations in aggregate in
excess of DM 3,750,000, or
(ii) which has an initial term in excess of 12 months, or which has an
indefinite term and, in either case, cannot be terminated by AMD
Saxonia on less than 12 months' notice, or
(iii) which is listed in Part I of Schedule 40 to the Loan Agreement.
"Material Service Contract" means each Service Contract (with the exception
-------------------------
of the AMD Saxonia Wafer Purchase Agreement, the Management Service Agreement
and employment contracts):
(i) pursuant to which AMD Saxonia incurs obligations in aggregate in
excess of DM 2,500,000 during the term of the contract, or
(ii) which has an initial term in excess of 12 months, or which has an
indefinite term and, in either case, cannot be terminated by AMD
Saxonia on less than 12 months' notice, or
(iii) which is listed in Part I of Schedule 40 to the Loan Agreement.
"Operating Account" means the account or accounts referred to and opened
-----------------
pursuant in ss. 19.1 of the Loan Agreement (including any sub-accounts into
--------
which any such account may be divided), as such account may be renewed,
redesignated, or renumbered from time to time.
"Operative Documents" means, collectively, the Project Agreements, the
-------------------
Financing Documents, the AMD Inc. Primary Bank Credit Agreement, the AMD Inc.
Senior Secured Note Indenture, the Management Plan, each Project Budget, each
Project Schedule, each
17
Approved Project Budget, each Approved Project Schedule, the Information
Memorandum, the Completion Certificates, the Compliance Certificates, and each
other instrument or document designated by the Agent (with the consent of each
AMD Company) as an Operative Document under and for purposes of this Agreement.
"Opinion Reservations" means limitations on the enforceability of legal
--------------------
documents as a matter of German law or the law of the United States of America
or one of its states and as incorporated as qualifications to an enforceability
opinion in the legal opinions delivered to and accepted by the Agent under and
pursuant to ss. 5.1.11 of the Loan Agreement.
----------
"Organizational Documents" means, with respect to any AMD Company, its
------------------------
certificate of incorporation, Memorandum and Articles of Association, charter,
by-laws, and (except with respect to AMD Inc.) all shareholder agreements,
voting trusts, and similar arrangements applicable to any of its authorised
shares of capital stock.
"Paying Agent" has the meaning assigned to that term in the second recital
------------ --------------
of this Agreement.
"Perform in Accordance with the Plans and Specifications" means, for
-------------------------------------------------------
purposes of the Technical Completion tests, and when used for the period from
and after Technical Completion, the performance by the Plant, on a substantially
continuous basis substantially as intended under normal operating conditions, of
the functions for which it was designed in accordance with the Plans and
Specifications. In order to certify that the Plant is capable of performing
substantially as intended under normal operating conditions, the Technical
Advisor will during normal operations of the Plant (and without, to the extent
practicable, disrupting production at the Plant), observe the operation of the
Plant and its component parts to determine if the Plant and its component parts
(except for uninstalled spares):
(x) are in operation and performing normally; and
(y) demonstrate as a whole the operation of the principal component parts
of the Plant at production rates consistent with the design capacity
of the Plant (as observed by the Technical Advisor from the operating
log sheets and such other data as may be reasonably available and is
demonstrated from AMD Saxonia's operating reports, copies of which
will be obtained by the Technical Advisor).
The Technical Advisor will not be required to conduct specific tests on
individual pieces of the Plant or its component parts in making this
determination. In order to certify that the Plant has met the tests, or has
demonstrated performance equivalent to the tests, set forth in the definition
"Perform in Accordance with the Plans and Specifications", the Technical Advisor
will:
18
(i) in the case of demonstrated performance equivalent to the tests of the
Plant (or portion thereof), obtain and rely on copies of, review, and
analyze, AMD Saxonia's operating data comprising, but not limited to,
daily log sheets, yield test results, and product shipments and, based
upon the foregoing, will determine if the Plant (or such portion) has
demonstrated its required performance; and
(ii) in the case of a formal test run, observe the operations during normal
business hours to verify the operating rates and time of operation and
obtain and rely on copies of and review and analyse AMD Saxonia's
operating data (as specified in clause (i) above) to independently
determine if the Plant (or portion thereof) has demonstrated its
required performance.
"Permitted Encumbrances" means, (i) in the case of AMD Saxonia or AMD
----------------------
Holding, any Encumbrance arising by operation of law in the ordinary course of
business, Encumbrances arising in the ordinary course of business as a result of
a supplier retaining title to goods supplied pending payment for such goods, and
Encumbrances on the Security pursuant to the Security Documents, and (ii) in the
case of AMD Inc. or any Subsidiary of AMD Inc. (other than AMD Saxonia or AMD
Holding), a "Permitted Lien" under, and as defined in, the AMD Inc. Primary Bank
Credit Agreement.
"Person" means an individual or a corporation, partnership, trust,
------
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof), or other juridical
entity of any kind.
"Plans and Specifications" means the plans and specifications to be
------------------------
prepared by AMD Saxonia and approved by each of the Sponsors (which approval
shall not be unreasonably delayed or withheld), the Technical Advisor, and the
Agent for the fitting out of the Plant and the Design Center, as the same may be
amended by AMD Saxonia from time to time with the consent of each Sponsor and
the Agent (which consent, in the case of each Sponsor, shall not be unreasonably
delayed or withheld); provided, that amendments to the plans and specifications
which do not, individually or in the aggregate, reduce or adversely affect the
value of the Plant and the Design Center in any material respect or the capacity
and purpose of the Plant as set out in the plans and specifications as
originally approved by the Technical Advisor and the Agent for purposes of the
Operative Documents shall not require the consent of the Agent.
"Plant" means the advanced silicon wafer production facility constructed or
-----
to be constructed by AMD Saxonia in or near Dresden, Germany to manufacture
integrated circuits in wafer form using high-volume semi-conductor wafer
fabrication processes.
19
"Primary Secured Obligations" means, at the time any determination thereof
---------------------------
is to be made, all Secured Obligations then owing and, whether or not then
owing, all Secured Obligations in respect of the principal of and interest on
the Advances.
"Project" has the meaning assigned to that term in the first recital of
------- -------------
this Agreement.
"Project Accounts" means the Debt Service Reserve Account and the Operating
----------------
Account.
"Project Agreements" means, collectively, the Wafer Purchase Agreements,
------------------
the Research Agreements, the Management Service Agreement, the License
Agreement, the Design/Build Agreement, the Equipment Supply Contracts, the
Service Contracts, the AMD Inc. Guaranty, and each other instrument or document
designated by the Agent (with the consent of each AMD Company) as a Project
Agreement under and for purposes of this Agreement.
"Project Budget" means the budget, in the form set out in Schedule 6 to the
-------------- ----------
Loan Agreement, with such changes (if any) to its form as the Agent may from
time to time reasonably require, of projected Capital Expenditure for the
implementation of the Project and the Project Phases in the implementation of
the Project, including a detailed projected sources and uses of funds statement,
broken down for each Project Phase on a Fiscal Quarter by Fiscal Quarter basis,
as prepared by AMD Saxonia and approved by each Sponsor in accordance with the
Management Plan and the Project Schedule, such approval not to be unreasonably
withheld or delayed.
"Project Costs" means all Capital Expenditure and other costs of the kind
-------------
referred to in the Approved Project Budget which are incurred by AMD Saxonia in
connection with the Project up to Completion.
"Project Phase" means each project phase set out in the Approved Project
-------------
Schedule contemplated for the implementation of the Project.
"Project Schedule" means the schedule, in the form set out in Schedule 7 to
---------------- ----------
the Loan Agreement, with such changes (if any) to its form as the Agent may from
time to time reasonably require, of Project Phases to be achieved during the
construction of the Project prior to Completion, as prepared by AMD Saxonia and
approved by each Sponsor, such approval not to be unreasonably withheld or
delayed.
"Projected Total Cost" means, at the time any determination thereof is to
--------------------
be made, the sum (without duplication) of
(i) the Capital Expenditure then or theretofore made or accrued,
plus
----
20
(ii) the Cost to Complete at such time.
"Relevant AMD Inc. Individual" means any Vice President or more senior
----------------------------
officer of AMD Inc., some or all of whose responsibilities include the Project.
"Requirements of Law" means, with respect to any Person, any law (statutory
-------------------
or common), treaty, rule, or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Research Agreements" means, collectively, the AMD Saxonia Research
-------------------
Agreement and the AMD Holding Research Agreement.
"SAB" means Sachsische Aufbaubank GmbH, a Gesellschaft mit beschrankter
---
Haftung organised and existing under the laws of Germany and registered in
Dresden, Germany, acting on behalf of the Free State of Saxony.
"SAB Related Agreements" means the AMD Saxonia/Dresdner Subsidy Agreement
----------------------
and the SAB/Dresdner Subsidy Agreement, collectively.
"SAB/Dresdner Subsidy Agreement" means the Agreement, in the form set out
------------------------------
in Schedule 26 to the Loan Agreement, between SAB and Dresdner.
-----------
"Same Day Funds" means, at the time of any determination, funds which are
--------------
immediately available to AMD Saxonia.
"Scheduled Project Phase Completion Certificates" means the Scheduled
-----------------------------------------------
Project Phase Technical Completion Certificate (Obligors) and the Scheduled
Project Phase Technical Completion Certificate (Technical Advisor).
"Scheduled Project Phase Technical Completion" when used with reference to
--------------------------------------------
a Project Phase, shall be deemed to have occurred when:
(i) all of the conditions set forth in the form of Scheduled Project Phase
Technical Completion Certificate (Obligors) attached to the Loan
Agreement as Schedule 9 thereto have been satisfied in all material
----------
respects, all of the statements appearing in said form of Certificate
are true and correct in all material respects, in each case with
respect to such Project Phase, and the Agent shall have received a
fully executed counterpart of such Certificate; and
(ii) the Agent shall have received a fully executed counterpart of the
Scheduled Project Phase Technical Completion Certificate (Technical
Advisor).
21
"Scheduled Project Phase Technical Completion Certificate (Obligors)" means
-------------------------------------------------------------------
a Certificate, in the form set out in Schedule 9 to the Loan Agreement
----------
(appropriately completed), executed by the AMD Companies, and delivered to the
Agent.
"Scheduled Project Phase Technical Completion Certificate (Technical
-------------------------------------------------------------------
Advisor)" means a Certificate, in the form set out in Schedule 10 to the Loan
-------- -----------
Agreement (appropriately completed), executed by the Technical Advisor, and
delivered to the Agent.
"Secured Obligations" means all actual and contingent obligations of AMD
-------------------
Saxonia to the Secured Parties under or arising out of the Financing Documents
and the Security Documents.
"Secured Parties" means the Agent, the Paying Agent, the Security Agent,
---------------
and the Banks, collectively.
"Security" means, collectively, the AMD Inc. Security, the AMD Holding
--------
Security, and the AMD Saxonia Security.
"Security Agent" has the meaning assigned to that term in the introduction
--------------
to this Agreement.
"Security Documents" means, collectively, the AMD Saxonia Security
------------------
Documents, the AMD Holding Security Documents, the AMD Inc. Share Pledge
Agreement, and each other instrument or document designated by the Agent (with
the consent of each AMD Company) as a Security Document under and for purposes
of this Agreement.
"Service Suppliers" means, collectively, each Person party to a contract or
-----------------
other agreement with AMD Saxonia in the capacity of a supplier of services for
the Plant or the Design Center.
"Service Supplier's Consent and Agreement" means, with respect to a Service
----------------------------------------
Supplier, such Service Supplier's Consent and Agreement, in the form set out in
Schedule 40 to the Loan Agreement or Annex 3 to Schedule 49 of the Loan
----------- -----------
Agreement, as the case may be, or such other form as is consented to by the
Security Agent, which pertains to a Material Service Contract or which is
otherwise required pursuant to the terms of the Loan Agreement or the Security
Documents.
"Service Contract" means each agreement (which may be in the form of an
----------------
accepted order) between AMD Saxonia and a Service Supplier relating to the
acquisition by, and delivery to, AMD Saxonia of services for the Project.
"65/35 Burgschaft" means the several maximum amount shortfall guaranties
----------------
issued by each of the Free State of Saxony (26%) and the Federal Republic of
Germany (39%) in accordance with the Guaranty Decision up to a maximum aggregate
amount of DM
22
1,072,500,000 (one billion seventy-two million five hundred thousand Deutsche
Marks), together with 65% of the shortfall of interest and costs, vested with a
first right of satisfaction in favour of the Banks over all security granted by
each AMD Company as security for the Banks' risk of recovery.
"Sponsors" has the meaning assigned to that term in the introduction to
-------- ------------
this Agreement.
"Sponsors' Applicable Share" means the applicable share of a Cost Overrun
--------------------------
determined in accordance with Section 4.2.
-----------
"Sponsors' Consent and Agreement" means the Sponsors' Consent and
-------------------------------
Agreement, in the form set out in Schedule 31 to the Loan Agreement, between the
-----------
Sponsors, the Agent, and the Security Agent.
"Sponsors' Disclosure Schedule" means the Disclosure Schedule attached as
-----------------------------
Schedule II, as it may be amended, supplemented, or otherwise modified from time
-----------
to time by the Sponsors with the written consent of the Agent.
"Sponsors' Guaranty" means the Sponsors' Guaranty, in the form set out in
------------------
Schedule 32 to the Loan Agreement, executed by the Sponsors in favour of the
-----------
Agent and the Security Agent for the benefit of the Secured Parties.
"Sponsors' Loan Agreement" means the Sponsors' Loan Agreement, in the form
------------------------
set out in Schedule 29 to the Loan Agreement, between the Sponsors, as lenders,
-----------
and AMD Saxonia, as borrower.
"Sponsors' Loans" means all loans made or to be made by AMD Inc. or AMD
---------------
Holding to AMD Saxonia in accordance with the terms of the Sponsors' Loan
Agreement, which loans are subordinated in accordance with the Sponsors'
Subordination Agreement.
"Sponsors' Subordination Agreement" means the Sponsors' Subordination
---------------------------------
Agreement, in the form set out in Schedule 30 to the Loan Agreement, executed by
-----------
the Sponsors, AMD Saxonia, and the Security Agent.
"Sponsors' Warranty Date" means each of the following dates which occurs
-----------------------
prior to the exercise of rights by the Security Agent under any of the Security
Documents: (i) the Loan Agreement Effective Date, (ii) each date AMD Saxonia
delivers a notice of drawing for an Advance under the Loan Agreement, (iii) each
date the AMD Companies deliver each Scheduled Project Phase Technical Completion
Certificate (Obligors), (iv) the date of Technical Completion, (v) the date of
Financial Completion, and (vi) each date the Sponsors deliver the certificate
referred to in Section 13.1(i)(c).
------------------
23
"Subsidiary" means with respect to (i) any Person organised and existing
----------
under the laws of the Federal Republic of Germany, a subsidiary within the
meaning of the term "abhangiges Unternehmen" in ss. 17 of the German Stock
Corporation Act (Aktiengesetz); and (ii) any other Person, a corporation or
other entity of which such Person or such Person and/or such Person's other
Subsidiaries own, directly or indirectly, more than 50% of the ordinary voting
power for the election of directors or others performing similar functions.
"Subsidies" has the meaning assigned to that term in Section 6.1.
--------- -----------
"Taxes" has the meaning assigned to that term in Section 14.5(a).
----- ---------------
"Technical Advisor" means Fraunhofer Institut fur Siliziumtechnologie,
-----------------
Itzehoe, or such other technical advisor as may be appointed by the Security
Agent with the consent of each AMD Company, which consent shall not be
unreasonably delayed or withheld.
"Technical Advisor's Report" means that certain report dated October 16,
--------------------------
1996 from the Technical Advisor to the Agent prepared for purposes of this
Agreement and the other Operative Documents and the transactions contemplated
hereby and thereby.
"Technical Completion" shall be deemed to have occurred when:
--------------------
(i) all of the conditions set forth in the form of Technical Completion
Certificate (Obligors) attached to the Loan Agreement as Schedule 9
----------
thereto have been satisfied in all material respects, all of the
statements appearing in said form of Certificate are true and correct
in all material respects, and the Agent shall have received a fully
executed counterpart of such Certificate; and
(ii) the Agent shall have received a fully executed counterpart of the
Technical Completion Certificate (Technical Advisor).
"Technical Completion Certificates" means the Technical Completion
---------------------------------
Certificate (Obligors) and the Technical Completion Certificate (Technical
Advisor).
"Technical Completion Certificate (Obligors)" means a certificate, in the
-------------------------------------------
form set out in Schedule 9 to the Loan Agreement (appropriately completed and
----------
with the legal opinion therein referred to attached), executed by the AMD
Companies, and delivered to the Agent.
"Technical Completion Certificate (Technical Advisor)" means a certificate,
----------------------------------------------------
in the form set out in Schedule 10 to the Loan Agreement (appropriately
-----------
completed), executed by the Technical Advisor, and delivered to the Agent.
24
"Total Tranche A Commitment Amount" means DM 1,500,000,000 (one billion
---------------------------------
five hundred million Deutsche Marks), as such amount shall be reduced by any
reductions to (but not utilizations of) the commitments of the Banks under
"Facility A" under the Loan Agreement.
"Total Tranche B Commitment Amount" means DM 150,000,000 (one hundred fifty
---------------------------------
million Deutsche Marks), as such amount shall be reduced by any reductions to
(but not utilizations of) the commitments of the Banks under "Facility B" under
the Loan Agreement.
"Tranche A Advances" means Advances made by the Banks or any Bank pursuant
------------------
to "Facility A" under the Loan Agreement.
"Tranche B Advances" means Advances made by the Banks or any Bank pursuant
------------------
to "Facility B" under the Loan Agreement.
"Uneven Capacity Allocation" has the meaning assigned to that term in the
--------------------------
AMD Saxonia Wafer Purchase Agreement.
"Unmatured Event of Default" means an event or circumstance which, with the
--------------------------
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied) constitute an Event of Default.
"Wafer" has the meaning assigned to that term in the AMD Saxonia Wafer
-----
Purchase Agreement.
"Wafer Fabrication Plant" has the meaning assigned to that term in the AMD
-----------------------
Saxonia Wafer Purchase Agreement.
"Wafer Purchase Agreements" means, collectively, the AMD Saxonia Wafer
-------------------------
Purchase Agreement and the AMD Holding Wafer Purchase Agreement.
SECTION 1.2 Accounting and Financial Determinations. Unless otherwise specified,
all accounting terms used herein shall be interpreted, all accounting
determinations and computations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with, GAAP. When used herein, the term "financial statements" shall include the
notes and schedules thereto, but need not include such notes or schedules when
used with reference to such statements of any Person as of any date other than
the end of a Fiscal Year of such Person. In the determination of any periods
pursuant to any provision hereof, unless otherwise specified, the term "from"
means "from (and including)", the term "to" means "to (and excluding)", and the
term "until" means "until (and excluding)".
25
SECTION 1.3 Construction. In this Agreement, unless the context requires
otherwise, any reference to:
"assets" includes any asset, property, or right and includes uncalled
------
capital;
"including" or "includes" means including or includes without limitation;
--------- --------
"law" and/or "regulation" includes any constitutional provision, treaty,
--- ----------
convention, statute, act, law, decree, ordinance, subsidiary or subordinate
legislation, order, rule, or regulation having the force of law, and any rule of
civil or common law or equity;
"order" includes any judgment, injunction, decree, determination, or award
-----
of any court, arbitration, or administrative tribunal;
"tax" includes any tax, levy, duty, charge, impost, fee, deduction, or
---
withholding of any nature now or hereafter imposed, levied, collected, withheld,
or assessed by any taxing or other authority and includes any interest, penalty,
or other charge payable or claimed in respect thereof, and "taxation" shall be
--------
construed accordingly; and
"winding-up" includes any winding-up, liquidation, dissolution, or
----------
comparable process in any jurisdiction.
SECTION 1.4 Miscellaneous. In this Agreement, unless the context requires
otherwise, (i) any reference to an Operative Document shall be to such Operative
Document as the same may have been or from time to time may be amended, varied,
re-issued, replaced, novated or supplemented, in each case in accordance with
the terms thereof and hereof, and in effect; (ii) any statutory provisions shall
be construed as references to those provisions as amended, modified, re-enacted,
or replaced from time to time; (iii) words importing a gender include every
gender; (iv) references to Sections and Schedules are to Sections of and
Schedules to this Agreement; and (v) references to this Agreement include its
Schedules. Section headings are inserted for reference only and shall be ignored
in construing this Agreement. A time of day, unless otherwise specified, shall
be construed as a reference to Frankfurt am Main time.
ARTICLE II
Contribution of Equity Capital
SECTION 2.1 Undertaking to Contribute. AMD Holding hereby undertakes to
contribute to AMD Saxonia, and AMD Inc. hereby undertakes to cause AMD Holding
to so contribute to AMD Saxonia (and AMD Inc. shall, to the extent necessary,
contribute sufficient funds, or otherwise cause sufficient funds to be made
available, to AMD Holding as shall be necessary to enable AMD Holding to so
contribute to AMD Saxonia), Equity Capital at the times and in the amounts set
forth in Section 2.2. For the avoidance of doubt:
-----------
26
(i) to the extent, but only to the extent, reflected in AMD Saxonia's
financial statements referred to in ss. 15.1.6 of the Loan Agreement
----------
(or, if not so reflected, as certified by AMD Inc. to the Agent and
the Security Agent as of the Loan Agreement Effective Date), amounts
contributed by the Sponsors to AMD Saxonia prior to the Loan
Agreement Effective Date shall be taken into account in determining
whether the Sponsors shall have complied with their obligations under
this Article II;
----------
(ii) the obligations of the Sponsors contained in this Article II are in
----------
addition to, and not in limitation of, their respective obligations
contained elsewhere in this Agreement and in the other Operative
Documents;
(iii) the Sponsors shall not be relieved of the foregoing obligations by
virtue of:
(a) any Sponsors' Loan made by either Sponsor pursuant to this
Agreement or the Sponsors' Loan Agreement; or
(b) any payment made by either Sponsor under the Sponsors' Guaranty;
and
(iv) the amounts set forth in Section 2.2 below are minimum aggregate
-----------
amounts of Equity Capital to be received by AMD Saxonia; nothing
contained herein shall be deemed to preclude AMD Holding from making
additional contributions to AMD Saxonia's stated capital or capital
reserves in order to fulfil the obligations of the Sponsors contained
in Article IV, V, VI, or VII, or for any other reason.
-------------------------
SECTION 2.2 Time of Contribution. The Equity Capital to be contributed to AMD
Saxonia under this Article II is due and payable to AMD Saxonia as follows:
(i) one or more instalments aggregating DM 108,750,000 (one hundred eight
million seven hundred fifty thousand Deutsche Marks) on or before the
date of the initial Advance under the Loan Agreement; it being
understood and agreed that, to the extent, but only to the extent,
reflected in AMD Saxonia's financial statements referred to
in ss.15.1.6 of the Loan Agreement (or, if not so reflected, as
---------
certified by AMD Inc. to the Agent and the Security Agent as of the
Loan Agreement Effective Date), all contributions to the Equity
Capital of AMD Saxonia prior to Loan Agreement Effective Date shall be
considered contributions to its Equity Capital for purposes of this
Section 2.2(i); and
--------------
(ii) in addition to the Equity Capital contributed or to be contributed
pursuant to Section 2.2(i) hereof, one or more additional instalments
--------------
aggregating
27
DM 108,750,000 (one hundred eight million seven hundred fifty thousand
Deutsche Marks) by the earlier to occur of:
(a) the acceleration of the Advances under the Loan Agreement
following the occurrence of an Event of Default (it being
understood and agreed that if, at the time of any such
acceleration, the Primary Secured Obligations are less than the
amount otherwise required to be contributed to AMD Saxonia under
this Section 2.2(ii), such contribution shall be made in an
---------------
amount which, when added to the aggregate amount of all Sponsors'
Loans and/or other contributions to AMD Saxonia's Equity Capital
or capital reserves then concurrently made, is equal to the
Primary Secured Obligations at such time); and
(b) December 31 1997;
provided, however, that such Equity Capital shall be required to be
-----------------
contributed in whole or in part at any time prior to such dates if,
but only to the extent that, the ratio of:
(x) the sum of
(1) the then aggregate outstanding principal amount of Sponsors'
Loans,
plus
----
(2) the then aggregate amount of AMD Saxonia's Equity Capital
and capital reserves,
to
(y) the then aggregate outstanding principal amount of the Advances,
is less than 25:75.
SECTION 2.3 Form of Contribution. The Equity Capital under this Article II shall
----------
be contributed in cash and in Same Day Funds to AMD Saxonia.
28
ARTICLE III
Sponsors' Loans
SECTION 3.1 Undertaking to Make Class A and Class B Sponsors' Loans. The
Sponsors, jointly and severally, hereby undertake that either Sponsor or both of
the Sponsors will make Sponsors' Loans to AMD Saxonia:
(i) in an aggregate principal amount of at least DM 290,000,000 (two
hundred ninety million Deutsche Marks) for all such Sponsors' Loans,
the exact amount thereof being equal to the Deutsche Mark Equivalent
of $200,000,000 (two hundred million Dollars) for all such Sponsors'
Loans, as contemplated by Section 3.2 (the "Class A Sponsors' Loans");
----------- -----------------------
and
(ii) in an aggregate principal amount of up to an additional DM 145,000,000
(one hundred forty five million Deutsche Marks) as contemplated by
Section 3.3 (the "Class B Sponsors' Loans").
----------- -----------------------
For the avoidance of doubt:
(i) the obligations of the Sponsors under the Sponsors' Loan Agreement
are intended to reflect, rather than to be in addition to, the
obligations of the Sponsors pursuant hereto;
(ii) to the extent, but only to the extent, reflected in AMD Saxonia's
financial statements referred to in ss.15.1.6 of the Loan Agreement
---------
(or, if not so reflected, as certified by AMD Inc. to the Agent and
the Security Agent as of the Loan Agreement Effective Date),
Sponsors' Loans and/or contributions (to the extent, but only to the
extent, not otherwise taken into account in determining whether AMD
Holding has complied with its obligations under Article II) by AMD
Holding to AMD Saxonia's capital reserves made to AMD Saxonia prior
to the Loan Agreement Effective Date shall be taken into account as
Class A Sponsors' Loans in determining whether the Sponsors shall
have complied with their obligations under this Article III;
-----------
(iii) although the obligations of the Sponsors contained in this Article
-------
III are in addition to, and not in limitation of, their respective
---
obligations contained elsewhere in this Agreement and in the other
Operative Documents, if the Agent shall have otherwise expressly
consented thereto in writing (which consent will not be unreasonably
withheld or delayed), the Sponsors shall be deemed to have complied
with their obligations to make Class A Sponsors' Loans and/or Class B
Sponsors' Loans to the extent, but only to the extent, that AMD
Holding shall have made additional contributions to AMD Saxonia's
Equity Capital (or other contribution to AMD Saxonia's
29
capital reserves) which contributions are not otherwise required to
be made pursuant hereto or to any other Operative Document;
(iv) the Sponsors shall not be relieved:
(a) of the foregoing obligation by virtue of any Equity Capital (or
other contribution to AMD Saxonia's capital reserves) contributed
or required to be contributed to AMD Saxonia pursuant to Section
-------
2.1 or (except as, and to the extent, provided in clause (iii)
--- ------------
above) otherwise;
(b) of any obligation to make Class A Sponsors' Loans (or to
contribute additional Equity Capital or other contributions to
AMD Saxonia's capital reserves in lieu thereof) by virtue of any
payment made by either Sponsor under the Sponsors' Guaranty; or
(c) of any obligation following Completion to make Class B Sponsors'
Loans until and unless the Sponsors shall have paid all amounts
payable under the Sponsors' Guaranty following a demand for
payment made by the Agent thereunder (it being understood and
agreed that the obligation of the Sponsors to make Class B
Sponsors' Loans shall be subject to the occurrence of
Completion);
(v) each Class A Sponsors' Loan shall be denominated in Deutsche Marks and
the Deutsche Mark Equivalent thereof shall be calculated for the
purpose of determining whether the Sponsors have complied with their
obligations under Section 3.2; provided, however, that any Class A
----------- -------- -------
Sponsors' Loan may, with the consent of the Agent (such consent not to
be unreasonably delayed or withheld), be funded in Dollars but for all
purposes of this Agreement and the Sponsors' Loan Agreement shall be
deemed to have been funded in Deutsche Marks in an amount which is
equal to the Deutsche Mark Equivalent thereof; and
(vi) the amounts set forth in this Section 3.1 are cumulative minimum
-----------
aggregate amounts for both Sponsors, collectively; nothing contained
herein shall be deemed to preclude the Sponsors (or either of them)
from making additional Sponsors' Loans in order to fulfil their
respective obligations contained in Article IV, V, VI, or VII, or for
-------------------------
any other reason.
SECTION 3.2 Time of Class A Sponsors' Loans. The Class A Sponsors' Loans will be
made in cash and in Same Day Funds and will be made as follows:
(i) at least DM 145,000,000 (one hundred forty five million Deutsche
Marks) for all such Class A Sponsors' Loans, the exact amount thereof
being equal
30
to the Deutsche Mark Equivalent of $100,000,000 (one hundred million
Dollars) for all such Class A Sponsors' Loans, by the earlier to occur
of:
(a) the acceleration of the Advances under the Loan Agreement
following the occurrence of an Event of Default (it being
understood and agreed that if, at the time of any such
acceleration, the Primary Secured Obligations are less than the
amount otherwise required to be lent to AMD Saxonia under this
Section 3.2(i), the amount of such Class A Sponsors' Loans shall
--------------
be an amount which, when added to the aggregate amount of all
Sponsors' Loans and/or other contributions to AMD Saxonia's
Equity Capital or capital reserves then concurrently made, is
equal to the Primary Secured Obligations at such time); and
(b) December 31, 1998; and
(ii) at least a further DM 145,000,000 (one hundred forty five million
Deutsche Marks) for all such Class A Sponsors' Loans, the exact amount
thereof being equal to the Deutsche Mark Equivalent of $100,000,000
(one hundred million Dollars) for all such Class A Sponsors' Loans, by
the earlier to occur of:
(a) the acceleration of the Advances under the Loan Agreement
following the occurrence of an Event of Default (it being
understood and agreed that if, at the time of any such
acceleration, the Primary Secured Obligations are less than the
amount otherwise required to be lent to AMD Saxonia under this
Section 3.2(ii), the amount of such Class A Sponsors' Loans shall
be an amount which, when added to the aggregate amount of all
Sponsors' Loans and/or other contributions to AMD Saxonia's
Equity Capital or capital reserves then concurrently made, is
equal to the Primary Secured Obligations at such time); and
(b) December 31, 1999;
provided, however, that such Class A Sponsors' Loans shall be required to be
-----------------
made in whole or in part at any time prior to the aforesaid dates if, but only
to the extent that, the ratio of:
(x) the sum of
(1) the then aggregate outstanding principal amount of Sponsors'
Loans,
plus
----
31
(2) the then aggregate amount of AMD Saxonia's Equity Capital
and capital reserves,
to
--
(y) the then aggregate outstanding principal amount of the Advances
under the Loan Agreement,
is less than 25:75.
SECTION 3.3 Time of Class B Sponsors' Loans. The Class B Sponsors' Loans will be
made in cash and in Same Day Funds and will be made upon first written demand by
the Security Agent to the extent necessary to remedy any shortfall in the Fixed
Charge Coverage Ratio as required by the Security Agent at any time and from
time to time following Completion if, on or as of a Financial Ratio Calculation
Date, AMD Saxonia's Fixed Charge Coverage Ratio is less than 125%.
SECTION 3.4 Additional Sponsors' Loans. In addition to the Class A Sponsors'
Loans and the Class B Sponsors' Loans, the Sponsors (or either of them) may,
from time to time, at their option make additional Sponsors' Loans in order to
fulfil their respective obligations contained herein or otherwise to provide
additional funds to AMD Saxonia.
SECTION 3.5 Terms of Sponsors' Loans. The making of Sponsors' Loans will be made
on the terms, and shall be subject to the conditions, contained in the Sponsors'
Loan Agreement which, as provided in Section 3.1, is intended to reflect, rather
-----------
than to be in addition to, the obligations of the Sponsors contained in this
Article III.
-----------
SECTION 3.6 Subordination of Sponsors' Loans. The Sponsors' Loans will be
subordinated on the terms and conditions contained in the Sponsors'
Subordination Agreement.
ARTICLE IV
Cost Overruns Prior to Completion
SECTION 4.1 Cost Overruns. In addition to, and not in limitation of, their other
obligations contained in this Agreement and the other Operative Documents, the
Sponsors, jointly and severally, hereby undertake to provide AMD Saxonia with
Same Day Funds (whether, in the case of AMD Holding, by contribution to AMD
Saxonia's Equity Capital (or other contributions to AMD Saxonia's capital
reserves), or, in the case of either Sponsor, through Sponsors' Loans)
sufficient to cover the Sponsors' Applicable Share of any Cost Overrun. The
Sponsors shall be relieved of any further obligations under this Article IV if,
but only if:
(i) the Sponsors shall have complied with each of their respective
obligations under Article II and, insofar as such obligations relate
----------
to Class A Sponsors'
32
Loans (or additional contributions to Equity Capital or AMD Saxonia's
capital reserves in lieu thereof), Article III; and
-----------
(ii) following a demand by the Agent for payment under the Sponsors'
Guaranty, the Sponsors shall have paid all amounts payable under the
Sponsors' Guaranty.
The Sponsors shall be required to provide AMD Saxonia with Same Day Funds in the
amount of the Sponsors' Applicable Share of any Cost Overrun:
(i) on or prior to the occasion of each drawdown of a Tranche B Advance,
and as a condition to the making thereof; and
(ii) promptly following any notice from the Agent or the Technical Advisor
to AMD Inc. to the effect that the Cost to Complete exceeds the funds
otherwise available to AMD Saxonia for such purpose (including,
without limitation, the Available Tranche A Amount, the Available
Tranche B Amount, and the balance, if any, of collected funds then on
deposit in the Operating Account, together with the then value of the
Cash Equivalent Investments acquired with the proceeds of the
Operating Account).
SECTION 4.2 Determination of Sponsors' Applicable Share.
(i) If and to the extent that Cost Overruns do not exceed DM 225,000,000
(two hundred twenty five million Deutsche Marks), the Sponsors'
Applicable Share thereof shall be 33-1/3% (ie, up to DM 75,000,000
(seventy five million Deutsche Marks)); and
(ii) If and to the extent that Cost Overruns exceed DM 225,000,000 (two
hundred twenty five million Deutsche Marks), the Sponsors' Applicable
Share thereof shall be 100%.
SECTION 4.3 Time of Payment. As and when required by Section 4.1, the Sponsors
-----------
will provide AMD Saxonia with cash in Same Day Funds to cover the Sponsors'
Applicable Share of any Cost Overrun.
SECTION 4.4 Post Completion Adjustment. Following Completion, if:
(i) AMD Holding has made contributions to AMD Saxonia's Equity Capital (or
other contributions to AMD Saxonia's capital reserves), other than
contributions of the minimum Equity Capital referred to in Article II;
----------
or
(ii) a Sponsor has made Sponsors' Loans to AMD Saxonia (other than Class A
Sponsors' Loans or Class B Sponsors' Loans),
33
in either case to enable AMD Saxonia to have sufficient funds to pay Cost
Overruns (the aggregate amount so contributed or lent to AMD Saxonia being
hereinafter called the "Sponsors' Cost Overrun Contribution"), then, provided
-----------------------------------
that no Event of Default, Unmatured Event of Default or Event of Termination has
occurred and is continuing, AMD Saxonia shall, at the request of a Sponsor, and
with the consent of the Agent, repay to such Sponsor Sponsors' Loans in an
amount which is equal to the excess, if any, of:
(i) the Sponsors' Cost Overrun Contribution
over
----
(ii) the Sponsors' Applicable Share of the Cost Overruns prior to
Completion.
The Agent shall be required to grant such consent unless it has actual knowledge
that an Event of Default, Unmatured Event of Default or Event of Termination
shall have occurred and be continuing.
SECTION 4.5 Determination of Cost Overruns. As soon as reasonably practicable
after a Cost Overrun has been identified by a Relevant AMD Inc. Individual or by
the Technical Advisor, the AMD Companies shall calculate the amount of any Cost
Overrun and furnish such calculation to the Agent (together with such additional
information as the Agent may reasonably request); provided, however, that if the
-----------------
Technical Advisor, acting reasonably and in good faith at the request of the
Agent, identifies and calculates a Cost Overrun or disagrees with the AMD
Companies' identification or calculation thereof, the Technical Advisor's
calculation shall, for purposes of this Agreement, be conclusive and binding.
The Agent will promptly advise the AMD Companies and the Banks of any
determination by the Technical Advisor pursuant to the proviso to the preceding
-------
sentence.
SECTION 4.6 Projected Total Cost. If, at any time, the Projected Total Cost
exceeds DM 3,159,000,000 (three billion one hundred fifty nine million Deutsche
Marks), then, as soon as reasonably practicable (and, in any case, within 10
Business Days) following receipt of a demand by the Agent pursuant to ss.
---
21.2(xxiii) of the Loan Agreement, an Event of Default shall be deemed to have
-----------
occurred unless AMD Inc. provides the Agent with such evidence as shall be
reasonably satisfactory to the Agent with respect to the ability of AMD Inc. and
AMD Saxonia to fund the entire remaining Cost to Complete, after giving effect
to the sum of (i) the Available Tranche A Amount, plus (ii) the Available
Tranche B Amount.
SECTION 4.7 Form of Contribution. The Sponsors may comply with their respective
obligations under this Article IV by making, either:
----------
(i) in the case of AMD Holding, a cash increase in the Equity Capital (or
other contributions to AMD Saxonia's capital reserves) of AMD Saxonia;
and/or
(ii) in the case of either Sponsor, further Sponsors' Loans to AMD Saxonia.
34
ARTICLE V
Completion Guaranty
SECTION 5.1 Completion Guaranty. The Sponsors (jointly and severally), hereby
agree to cause AMD Saxonia:
(i) to complete each Project Phase as soon as contemplated by the
Approved Project Schedule (it being understood and agreed that the
completion date for one or more Project Phases (other than the final
Project Phase) may be deferred for up to six (6) months in the
aggregate for all such deferrals on a cumulative basis provided that
no such deferral may affect the final deadline for Completion);
(ii) to achieve Completion as soon as contemplated by the Approved Project
Schedule and, in any event, on or before 30 December 2001; and
(iii) to take all such action, including, without limitation, all actions
before Governmental Authorities, as shall be necessary or appropriate
to enable AMD Saxonia to complete each Project Phase and to achieve
Completion as aforesaid.
For the avoidance of doubt, the obligations of the Sponsors contained in this
Article V are in addition to, and not in limitation of, their respective
---------
obligations contained elsewhere in this Agreement and in the other Operative
Documents; provided, however, that the Sponsors shall be relieved of their
-----------------
respective obligations under this Article V if, but only if:
---------
(i) the Sponsors shall have complied with each of their respective
obligations under Article II and, insofar as such obligations relate
----------
to Class A Sponsors' Loans (or additional contributions to Equity
Capital or AMD Saxonia's capital reserves in lieu thereof), Article
-------
III; and
---
(ii) following a demand for payment by the Agent under the Sponsors'
Guaranty, the Sponsors shall have paid all amounts payable under the
Sponsors' Guaranty.
SECTION 5.2 Notice of Scheduled Project Phase, Technical, and Financial
Completion. Upon the occurrence of each of the following, the Agent shall
promptly advise the Sponsors, AMD Saxonia, and the Banks thereof:
(i) Scheduled Project Phase Technical Completion for each Project Phase,
(ii) Technical Completion;
35
(iii) Financial Completion, and
(iv) Completion.
SECTION 5.3 No Double Recovery Under Article V and Sponsors' Guaranty. In the
event that the Sponsors default in the payment and performance of their
obligations under this Article V and, following any such default, the Agent
---------
institutes litigation or other adversary proceedings designed to compel the
Sponsors to perform such obligations or to pay damages for such failure, the
right of recovery against the Sponsors under this Article V is limited mutatis
--------- -------
mutandis to the amount set forth in Section 2.1 of the Sponsors' Guaranty and
-----------
any recovery by the Agent from the Sponsors hereunder shall, pro tanto, reduce
---------
the amount available to be recovered from the Sponsors under the Sponsors'
Guaranty.
For the avoidance of doubt, the obligations of the Sponsors under this Section
5.1 constitute a primary guarantee obligation (Garantievertrag) and not a surety
guarantee (Burgschaft).
ARTICLE VI
Subsidies Undertaking
SECTION 6.1 Subsidies. The Project will be supported by the following subsidies
and grants from the Free State of Saxony (hereinafter, the "Subsidies"):
---------
(i) a dedicated purpose investment grant in an aggregate amount of DM
476,687,000 (four hundred seventy six million six hundred eighty seven
thousand Deutsche Marks) which, together with the investment subsidies
in an aggregate amount of DM 23,813,000 (twenty three million eight
hundred thirteen thousand Deutsche Marks), totals an aggregate amount
of DM 500,500,000 (five hundred million five hundred thousand Deutsche
Marks); and
(ii) a dedicated purpose interest subsidy in an amount of DM 300,000,000
(three hundred million Deutsche Marks)
which, in each case, will be paid to AMD Saxonia by Dresdner Bank AG in Dresden,
in its capacity as house bank.
SECTION 6.2 Payment of Shortfall. The granting of the Subsidies is contingent on
the adherence by the Sponsors and AMD Saxonia to particular conditions,
requirements, and covenants. If, for any reason whatsoever, any AMD Company or
any Affiliate of any AMD Company breaches any such conditions, requirements, or
covenants, and, accordingly, causes the Subsidies not to be paid or, as a result
of any such breach, the Subsidies are required to be repaid (in either such case
the amount thereof being hereinafter called a "Shortfall"), then, without delay
---------
following its or their receipt of a demand therefor by the Agent, either:
36
(i) AMD Holding shall contribute Equity Capital (or other contributions to
AMD Saxonia's capital reserves) to AMD Saxonia, and AMD Inc. shall
cause AMD Holding to so contribute to AMD Saxonia (and AMD Inc. shall,
to the extent necessary, contribute sufficient funds, or otherwise
cause sufficient funds to be made available, to AMD Holding as shall
be necessary to enable AMD Holding to so contribute to AMD Saxonia);
and/or
(ii) one or both Sponsors shall make Sponsors' Loans to AMD Saxonia,
in either case in an aggregate amount (and, if the Subsidies have not yet been
provided, as and when the Subsidies, but for such breach, would have otherwise
been provided) equal to the Shortfall.
For the avoidance of doubt:
(i) the obligations of the Sponsors contained in this Article VI are in
----------
addition to, and not in limitation of, their obligations contained
elsewhere in this Agreement and in the other Operative Documents, and
shall survive Completion; and
(ii) the Sponsors shall not be relieved of the foregoing obligations by
virtue of:
(a) any prior Sponsors' Loans made by the Sponsors (or either of
them);
(b) any prior contributions of Equity Capital (or other contributions
to AMD Saxonia's capital reserves) by AMD Holding; or
(c) any payment made by either Sponsor under the Sponsors' Guaranty;
provided, however, that the Sponsors shall have no liability as aforesaid in
-----------------
respect of any Subsidies which fail to be provided at any time after the
foreclosure by the Security Agent upon any security provided by the Security
Documents, unless such failure is attributable to any such breach by AMD Inc. or
any of its Affiliates (other than AMD Saxonia or AMD Holding, if then Affiliates
of AMD Inc.) occurring after such foreclosure.
SECTION 6.3 Bridging of AMD Saxonia's Receipt of the Subsidies.
(a) It is understood and agreed that the Sponsors (jointly and severally)
will, in the case of AMD Holding, contribute Equity Capital (or other
contributions to AMD Saxonia's capital reserves), or, in the case of
either Sponsor, make Sponsors' Loans, to AMD Saxonia, in either case
as and to the extent that
37
AMD Saxonia requires such funds prior to and in anticipation of its
receipt of the Subsidies. If any such contribution or Sponsors' Loan
is made for such purpose prior to AMD Saxonia's receipt of the
Subsidies (or any portion thereof) then, to the extent that AMD
Saxonia subsequently receives the proceeds of such Subsidies, and
provided that no Event of Default, Unmatured Event of Default or Event
of Termination shall have occurred and be continuing, AMD Saxonia
shall, to the extent permitted by applicable law, repay Sponsors'
Loans to the extent of the aggregate amount of the proceeds of the
Subsidy so received, but without interest.
(b) The Sponsors' obligations to make contributions or loans under Section
-------
6.3 (a) shall terminate from the date of any foreclosure over the
-------
shares of AMD Holding or AMD Saxonia under the Security Documents.
ARTICLE VII
Pari Passu Undertaking
SECTION 7.1 Pari Passu Undertaking. AMD Holding has certain payment obligations
under, and as set forth in, the AMD Saxonia Wafer Purchase Agreement, including
an obligation under Section 3.12 thereof (which obligates AMD Holding to
------------
compensate AMD Saxonia for certain Uneven Capacity Allocations). AMD Inc.,
pursuant to the AMD Inc. Guaranty, has unconditionally guaranteed, inter alia,
----------
the obligations of AMD Holding under and in connection with the AMD Saxonia
Wafer Purchase Agreement. AMD Holding and AMD Inc. hereby jointly and severally
acknowledge and agree that the Secured Parties have an interest in the proper
performance by AMD Holding and AMD Inc. of their respective obligations under
the AMD Saxonia Wafer Purchase Agreement and the AMD Inc. Guaranty,
respectively, and, therefore, the parties hereto hereby agree that the Security
Agent may compel AMD Holding's and/or AMD Inc.'s performance of its or their
respective obligations thereunder.
ARTICLE VIII
AMD Inc. Share Pledge Agreement; AMD Holding Security Documents
SECTION 8.1 AMD Inc. Share Pledge Agreement. AMD Inc. has granted a first
priority security interest in the AMD Inc. Collateral pursuant to and on the
terms and conditions set forth in the AMD Inc. Share Pledge Agreement.
SECTION 8.2 AMD Holding Security Documents. AMD Holding has granted a first
priority security interest in the AMD Holding Security pursuant to and on the
terms and conditions set forth in the AMD Holding Security Documents.
38
ARTICLE IX
Sponsors' Guaranty
SECTION 9.1 Sponsors' Guaranty. Without intending to derogate from the
provisions of the Sponsors' Guaranty (and, in the event of any inconsistency
with this Section 9.1, the Sponsors' Guaranty shall prevail), the Sponsors
-----------
(jointly and severally), have agreed to guarantee, on the terms and subject to
the conditions of the Sponsors' Guaranty, the full and prompt payment when due,
whether by acceleration or otherwise, of all Secured Obligations of AMD Saxonia
to the Secured Parties under or in connection with the Financing Documents and
the Security Documents; provided, however, that as provided in the Sponsors'
-----------------
Guaranty, the cumulative right of recovery against the Sponsors with respect to
the Sponsors' Guaranty is limited to DM 217,500,000 (two hundred seventeen
million five hundred thousand Deutsche Marks), plus (as and to the extent
provided in the Sponsors' Guaranty) interest on such amount, if not paid when
due, and plus costs and expenses of enforcement. In furtherance of the
foregoing, the Sponsors have undertaken, pursuant to the terms of the Sponsors'
Guaranty, to pay to the Agent, upon first written demand following the
occurrence of an Event of Default and acceleration of the Advances a sum equal
to the lesser of:
(i) the aggregate amount of all Secured Obligations; and
(ii) DM 217,500,000 (two hundred seventeen million five hundred thousand
Deutsche Marks).
For the avoidance of doubt, the obligations of the Sponsors under the Sponsors'
Guaranty constitute a primary guarantee obligation (Garantievertrag) and not a
surety guarantee (Burgschaft), and are in addition to, and not in limitation of,
the other obligations of the Sponsors hereunder and under the other Operative
Documents.
ARTICLE X
Sponsors' Subordination Agreement; AMD Inc. Subordination Agreement
SECTION 10.1 Sponsors' Subordination Agreement. The Sponsors hereby agree to
subordinate the payment of the Junior Liabilities (under, and as defined in, the
Sponsors' Subordination Agreement) to the payment in full of all Senior
Liabilities (under, and as defined in, the Sponsors' Subordination Agreement),
on the terms and subject to the conditions of the Sponsors' Subordination
Agreement.
SECTION 10.2 AMD Inc. Subordination Agreement. AMD Inc. hereby agrees to
subordinate the payment of the Junior Liabilities (under, and as defined in, the
AMD Inc. Subordination Agreement) to the payment in full of all Senior
Liabilities (under, and as defined in, the AMD Inc. Subordination Agreement), on
the terms and subject to the conditions of the AMD Inc. Subordination Agreement.
39
ARTICLE XI
Obligations Unconditional
SECTION 11.1 Absolute and Unconditional Nature of the Sponsors' Obligations. The
obligation of the Sponsors to perform their respective obligations under this
Agreement, and the right of AMD Saxonia or the Agent or the Security Agent, as
applicable, to receive the proceeds of each payment to be made to or for the
account of AMD Saxonia as provided herein and in each of the other Operative
Documents, shall be absolute, irrevocable, and unconditional, it being the
intention of the parties hereto that all obligations of the Sponsors under or in
connection with this Agreement shall be paid and performed in all events in the
manner and at the times herein provided, irrespective of and without prejudice
to, in particular, any rights or remedies that are available to the other
parties hereto and thereto under any agreements or any applicable laws. The
Sponsors shall be entitled to setoff, and to raise rights of retention, in
respect of their respective payment claims hereunder and under the other
Operative Documents only to the extent their respective counterclaims are
undisputed or have been the subject of a final binding arbitral or court
decision.
ARTICLE XII
Representations and Warranties
SECTION 12.1 Representations and Warranties of AMD Inc. AMD Inc. hereby
represents and warrants to the Agent and the Security Agent as follows:
(i) Organization; Corporate Power.
AMD Inc. and each Material AMD Inc. Subsidiary:
(a) is a corporation duly incorporated, validly existing, and (where
the concept has a technical meaning) in good standing under the
laws of the jurisdiction of its incorporation;
(b) is duly qualified or licensed and (where the concept has a
technical meaning) in good standing as a foreign corporation
authorized to do business in each other jurisdiction where,
because of the nature of its activities or properties in such
jurisdiction, such qualification or licensing is required,
(c) has all requisite corporate power and authority to own, operate,
and lease its assets and properties and to carry on the business
in which it is engaged and in which it proposes to engage;
(d) that is an AMD Company, has all requisite corporate power and
authority:
40
(x) to execute, deliver, and perform its obligations under each
of the Operative Documents to which it is a party; and
(y) to assign, and grant a security interest in, the Security in
the manner and for the purpose contemplated by the Security
Documents to which it is a party; and
(e) is in compliance with all Requirements of Law
except, in each case referred to in clause (b), (c), or (e), to the
-----------------------
extent that the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
(ii) Corporate Authority; No Conflict.
The execution, delivery, and performance by each AMD Company of each
Operative Document to which any such AMD Company is a party, and the
grant by such AMD Company of a security interest in the Security in
the manner and for the purpose contemplated by the Security Documents
to which such AMD Company is a party, have been duly authorised by all
necessary corporate action (including any necessary shareholder
action) on the part of such AMD Company, and do not:
(a) violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination, or award presently
in effect binding on such AMD Company, or of the Organizational
Documents of such AMD Company;
(b) result in a breach of, result in a mandatory prepayment or
acceleration of indebtedness evidenced or secured by, or
constitute a default under, any indenture or loan or credit
agreement, or any other agreement or instrument, to which such
AMD Company is a party or by which such AMD Company or its
properties are bound; or
(c) result in, or require (in either case except as contemplated by
the Operative Documents), 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 any of the AMD
Companies (other than any right of set-off or banker's lien or
attachment that the Agent, the Security Agent, or any Bank may
have under the Operative Documents or applicable law), and none
of the AMD Companies is in default under or in violation of its
Organizational Documents, any of the Operative Documents to which
it is a party,
41
or any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination, award, indenture, agreement,
or instrument, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect.
(iii) Valid and Binding Obligations.
Each Operative Document which has been executed and delivered by an
AMD Company constitutes the legal, valid, and binding obligation of
such AMD Company, enforceable against such AMD Company in accordance
with its respective terms, subject, however, to the Opinion
Reservations.
(iv) Sponsor Security Documents.
(a) The provisions of each of the Security Documents which has been
executed and delivered by a Sponsor are effective to create in
favor of the Security Agent for the benefit of the Secured
Parties, a legal, valid, and enforceable first priority
Encumbrance on all rights, title, and interest of such Sponsor in
the Security described therein, subject only to Permitted
Encumbrances; and all necessary filings and recordings have been
made in the requisite offices in all of the jurisdictions
necessary or appropriate to perfect or continue perfected with
such priority such Encumbrance on such Security.
(b) Each Security Document which has been executed and delivered by a
Sponsor is effective to grant to the Security Agent a legal,
valid, and enforceable security interest on all rights, title,
and interest of the relevant Sponsor in the Security described
therein. When each such Security Document is duly recorded or
filed in the applicable recording or filing office(s), if any,
and the recording or filing fees and taxes, if any, in respect
thereof are paid and compliance is otherwise had with the formal
requirements of applicable law applicable to the recording and
filing of security documentation generally, such Security is
subject to a legal, valid, enforceable, and perfected first
priority Encumbrance.
(v) Financial Information; No Material Adverse Change.
(a) The audited consolidated balance sheet of AMD Inc. and its
Subsidiaries dated December 31, 1995, the unaudited consolidated
balance sheet of AMD Inc. and its Subsidiaries for the Fiscal
Quarter ending on or about December 30, 1996, and in each case
the related consolidated statements of income or operations,
share-
42
holders' equity and cash flows for the fiscal period ended on
such dates:
(x) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise
expressly noted therein, subject to ordinary, good faith
year-end audit adjustments, in the case of quarterly
financial statements;
(y) are complete and accurate in all material respects and
fairly present the consolidated financial condition of AMD
Inc. and its Subsidiaries as of the dates thereof and
results of operations and cash flows for the periods covered
thereby; and
(z) except as specifically disclosed in the Disclosure
Schedules, show all material indebtedness and other
liabilities, direct or contingent, of AMD Inc. and its
consolidated Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments, and Contingent
Obligations.
(b) Since December 31, 1995, there has been no Material Adverse
Effect, except as may be specifically disclosed in the Disclosure
Schedules.
(vi) Litigation.
Except as specifically disclosed in the Disclosure Schedules, there
are no actions, suits, proceedings, claims, or disputes pending, or to
the best knowledge of AMD Inc., threatened or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, against
any AMD Company or any other Subsidiary of AMD Inc. or any of their
respective properties which:
(a) purport to affect or pertain to this Agreement or any other
Operative Document, or the entirety of the transactions
contemplated hereby or thereby; or
(b) if determined adversely to such AMD Company or such other
Subsidiary, would reasonably be expected to have a Material
Adverse Effect.
43
No injunction, writ, temporary restraining order, or any order of
any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery, or
performance of this Agreement or any other Operative Document, or
directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
(vii) No Default or Termination.
No Event of Default or Unmatured Event of Default, and, to the best of
AMD Inc.'s knowledge, no Event of Termination, exists. None of the AMD
Companies nor any other Subsidiary of AMD Inc. is in default under or
with respect to any Contractual Obligation in any respect which,
individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect.
(viii) No Burdensome Restrictions.
None of the AMD Companies nor any other Subsidiary of AMD Inc. is a
party to or bound by any Contractual Obligation other than the
Operative Documents, or subject to any restriction in any
Organizational Document, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect.
(ix) Title to Properties; Encumbrances.
Each AMD Company and each other Material AMD Inc. Subsidiary has good
record and marketable title in fee simple to, or valid leasehold
interests in (or the equivalent for the relevant jurisdiction), all
real property necessary or used in the ordinary conduct of their
respective businesses, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The property of each AMD Company and each
other Material AMD Inc. Subsidiary is subject to no Encumbrances,
other than Permitted Encumbrances.
(x) Subsidiaries; Material AMD Inc. Subsidiaries.
(a) As of the Loan Agreement Effective Date, AMD Inc. has no
Subsidiaries other than those specifically disclosed in the
Disclosure Schedules and has no equity investments in any other
Person other than those specifically disclosed in the Disclosure
Schedules;
44
(b) As of the Loan Agreement Effective Date, there are no Material
AMD Inc. Subsidiaries other than those specifically disclosed in
the Disclosure Schedules;
(c) AMD Inc. is the direct legal and beneficial owner of 100% of the
issued and outstanding shares of capital stock of AMD Holding,
all of which shares have been validly issued;
(d) AMD Holding is the direct legal and beneficial owner of 100% of
the issued and outstanding shares of capital stock of AMD
Saxonia, all of which shares have been validly issued;
(e) AMD Holding has no Subsidiaries other than AMD Saxonia, and has
no equity investments in any other Person; and
(f) AMD Saxonia has no Subsidiaries and has no equity investments in
any other Person.
(xi) Insurance.
Except as specifically disclosed in the Disclosure Schedules,
properties of each Sponsor and each "Restricted Subsidiary" (under,
and as defined in the AMD Inc. 1996 Bank Credit Agreement) are insured
with financially sound and reputable insurance companies not
Affiliates of AMD Inc., in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where
such Sponsor or such "Restricted Subsidiary" (as so defined) operates.
(xii) Copyrights, Patents, Trademarks and Licenses, Etc.
Each AMD Company and each other Material AMD Inc. Subsidiary owns or
is licensed or otherwise has the right to use all of the patents,
trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations, and other rights that are reasonably
necessary for the operation of its respective businesses, without
conflict with the rights of any other Person, except for such
conflicts which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Except as
specifically disclosed in the Disclosure Schedules, to the best
knowledge of AMD Inc.:
(a) no slogan or other advertising device, product, process, method,
substance, part, or other material now employed, or now
contemplated to be employed, by any AMD Company or any other
Subsi-
45
diary of AMD Inc. infringes upon any rights held by any other
Person;
(b) no claim or litigation regarding any of the foregoing is pending
or, to the best knowledge of AMD Inc., threatened; and
(c) no patent, invention, device, application, principle, or any
statute, law, rule, regulation, standard, or code is pending or,
to the best knowledge of AMD Inc., proposed,
which, in any case described in (a), (b), or (c) above, could
reasonably be expected to have a Material Adverse Effect.
(xiii) Taxes.
Each Sponsor and each "Restricted Subsidiary" (under, and as defined
in, the AMD Inc. 1996 Bank Credit Agreement) have filed all material
US Federal, German, and other tax returns and reports required to be
filed, and have paid all material US Federal, German, and other taxes,
assessments, fees, and other governmental charges levied or imposed
upon them or their properties, income, or assets otherwise due and
payable, except those which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment
against either Sponsor or any "Restricted Subsidiary" (as so defined)
that would, if made, have a Material Adverse Effect.
(xiv) Governmental Approvals with Respect to the Operative Documents.
As of the date this representation and warranty is made or reaffirmed,
as the case may be, all Governmental Approvals (including, without
limitation, from the European Union, the Federal Republic of Germany,
and the Free State of Saxony) necessary for the due authorization,
execution, delivery, and performance by each of the AMD Companies of,
the legality or validity of the obligations of each of the AMD
Companies under, or the enforceability against each of the AMD
Companies of, each of the Operative Documents to which it is a party
and the due and timely payment by each of the AMD Companies of amounts
owing under each of the Operative Documents have been listed on
Schedule 20 to the Loan Agreement and, except as otherwise noted
-----------
therein, all of such Governmental Approvals have been duly obtained or
effected, and are in full force and effect, on the Loan Agreement
Effective Date.
46
(xv) Governmental Approvals with Respect to the Plant and the Design
Center.
As at the date this representation and warranty is made or reaffirmed,
as the case may be, all Governmental Approvals necessary for the
construction, ownership, use, and operation by AMD Saxonia of the
Plant and the Design Center or which are required in order that the
Plant and the Design Center may be operated for their intended
purposes and Perform in Accordance with the Plans and Specifications,
have been listed on Schedule 20 to the Loan Agreement, and all of such
-----------
Governmental Approvals (except those listed in Part B of Schedule 20
------ -----------
to the Loan Agreement) have been duly obtained or effected, are
sufficient for all purposes thereof, and are in full force and effect
on such date (and, in the case of Government Approvals that have
expired, each AMD Company has timely applied for renewal thereof and
such Governmental Approvals have been administratively extended under
applicable law); and AMD Inc. reasonably believes, after due inquiry,
that the Governmental Approvals set forth in Schedule 20 to the Loan
-----------
Agreement, together with all Governmental Approvals, if any, that may
be required in connection with the transactions contemplated by the
Operative Documents subsequent to the date on which this
representation and warranty is made or reaffirmed, as the case may be,
will be obtained at such time or times as may be necessary to avoid
material delay in, or material restrictions on the use or operation
of, the Plant and Design Center.
(xvi) Interruption of Business.
Neither the business nor the properties of an AMD Company are
presently affected by any fire, explosion, accident, strike, lockout,
or other dispute, drought, storm, hail, earthquake, embargo, Act of
God, or of the public enemy, or other casualty (whether or not covered
by insurance) which impairs, or, if such event or condition were to
continue for more than thirty (30) additional days would be likely to
impair, such AMD Company's ability to perform its obligations under
the Operative Documents.
(xvii) Prior Activities, etc.
Prior to the Loan Agreement Effective Date, neither AMD Holding nor
AMD Saxonia has engaged in any business, conducted any operations or
activities, nor incurred any obligations or liabilities (contingent or
otherwise), other than (a) as described in the Disclosure Schedules,
and (b) its obligations, if any, under the Operative Documents, and
activities reasonably incidental thereto.
47
(xviii) Status of AMD Holding and AMD Saxonia, etc.
(a) AMD Holding is an "Unrestricted Subsidiary" under, and for
purposes of, the AMD Inc. Senior Secured Note Indenture and is
not a "Restricted Subsidiary" under, and for the purposes of, the
AMD Inc. 1996 Bank Credit Agreement;
(b) AMD Saxonia is an "Unrestricted Subsidiary" under, and for
purposes of, the AMD Inc. Senior Secured Note Indenture and is
not a "Restricted Subsidiary" under, and for the purposes of, the
AMD Inc. 1996 Bank Credit Agreement; and
(c) the Indebtedness of AMD Saxonia under and in connection with the
Loan Agreement constitutes "Non-Recourse Debt" under, and for
purposes of, the AMD Inc. Senior Secured Note Indenture.
(xix) Accuracy of Information.
As of the date this representation and warranty is made or reaffirmed,
as the case may be, all factual information then or theretofore
furnished by or on behalf of any AMD Company to the Agent or any Bank
or the Technical Advisor for purposes of or in connection with any
Operative Document or any transaction contemplated thereby (including
the Information Memorandum, true and complete copies of which were
furnished to the Agent in connection with the execution and delivery
of this Agreement) is true and accurate (taken as a whole) in all
material respects on the date as of which such information is dated or
certified, and on such date such information (taken as a whole) was
not incomplete by omitting to state any material fact necessary to
make such information not misleading. Insofar as any such information
includes assumptions, estimates, or projections, such assumptions,
estimates, or projections have been made in good faith, with due care,
and with a diligent application of engineering, construction, and
accounting expertise reasonably available within AMD Inc. and its
Subsidiaries (it being understood that although any projections and
forecasts furnished by an AMD Company represent such AMD Company's
best estimates and assumptions as to future performance, which such
AMD Company believes to be fair and reasonable as of the time made in
the light of current and reasonably foreseeable business conditions,
such projections and forecasts as to future events are not to be
viewed as facts and that actual results during the period or periods
covered thereby may differ from the projected or forecasted results).
Without limiting the generality of the foregoing, as of the Loan
Agreement Effective Date, no new information has become available
which was not provided to the Technical Advisor prior to the Loan
Agreement Effective Date and which, had it been so
48
provided, could reasonably be expected to have caused the Technical
Advisor to express an unfavourable opinion with respect to the Project
in the Technical Advisor's Report.
(xx) Warranties of AMD Saxonia and AMD Holding.
Each of the representations and warranties made by AMD Saxonia or AMD
Holding in any Operative Document to which it is a party (other than
the representation and warranty of AMD Holding contained in Section
-------
12.2(ix) and the representation and warranty of AMD Saxonia contained
--------
in ss. 15.1.10 of the Loan Agreement) is true and accurate in all
-----------
material respects on each Sponsors' Warranty Date, except to the
extent that any such representation or warranty expressly relates
solely to an earlier date, and except, in the case of any
representation or warranty made on a Sponsors' Warranty Date described
in clause (vi) of the definition thereof, as otherwise provided in the
-----------
certificate referred to therein.
SECTION 12.2 Representations and Warranties of the Sponsors. The Sponsors,
jointly and severally, hereby represent and warrant to the Agent and the
Security Agent as follows (save in respect of Section 12.2 (ix) which is
-----------------
warranted by AMD Holding only):
(i) Organization; Corporate Power.
Each of AMD Holding and AMD Saxonia:
(a) is a Gesellschaft mit beschrankter Haftung duly organised and
existing under the laws of the Federal Republic of Germany and
registered in Dresden, Germany;
(b) is duly qualified or licensed as a foreign corporation authorized
to do business in each other jurisdiction where, because of the
nature of its activities or properties in such jurisdiction, such
qualification or licensing is required,
(c) has all requisite corporate power and authority to own, operate,
and lease its assets and properties and to carry on the business
in which it is engaged and in which it proposes to engage;
(d) has all requisite corporate power and authority
(x) to execute, deliver, and perform its obligations under each
of the Operative Documents to which it is a party; and
49
(y) to assign, and grant a security interest in, the Security in
the manner and for the purpose contemplated by the Security
Documents to which it is or is to be a party; and
(e) is in compliance with all Requirements of Law,
except, in each case referred to in clause (b), (c), or (e), to the
-----------------------
extent that the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
(ii) Corporate Authority; No Conflict.
The execution, delivery, and performance by each of AMD Holding and
AMD Saxonia of each Operative Document to which either such AMD
Company is a party, and the grant by each such AMD Company of a
security interest in the Security in the manner and for the purpose
contemplated by the Security Documents to which such AMD Company is a
party, have been duly authorised by all necessary corporate action
(including any necessary shareholder action) on the part of such AMD
Company, and do not:
(a) violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination, or award presently
in effect binding on such AMD Company, or of the Organizational
Documents of such AMD Company;
(b) result in a breach of, result in a mandatory prepayment or
acceleration of indebtedness evidenced or secured by, or
constitute a default under, any indenture or loan or credit
agreement, or any other agreement or instrument, to which such
AMD Company is a party or by which such AMD Company or its
properties are bound; or
(c) result in, or require (in each case except as contemplated by the
Operative Documents), 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 either of such AMD
Companies (other than any right of set-off or banker's lien or
attachment that the Agent, the Security Agent, or any Bank may
have under the Operative Documents or applicable law), and
neither of such AMD Companies is in default under or in violation
of its Organizational Documents, any of the Operative Documents
to which it is a party, or any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination, award,
indenture,
50
agreement, or instrument, which default or violation,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(iii) Valid and Binding Obligations.
Each Operative Document (which has been executed and delivered by
either AMD Holding or AMD Saxonia) constitutes the legal, valid, and
binding obligation of such AMD Company, enforceable against such AMD
Company in accordance with its respective terms, subject, however, to
the Opinion Reservations.
(iv) AMD Holding Security Documents.
(a) The provisions of each of the AMD Holding Security Documents
which has been executed and delivered by AMD Holding are
effective to create in favor of the Security Agent for the
benefit of the Secured Parties, a legal, valid, and enforceable
first priority Encumbrance in all rights, title, and interest of
AMD Holding in the AMD Holding Security described therein,
subject only to Permitted Encumbrances; and all necessary filings
and recordings have been made in the requisite offices in all
jurisdictions necessary or appropriate to perfect or continue
perfected with such priority such Encumbrance on such Security.
(b) Each AMD Holding Security Document which has been executed and
delivered by AMD Holding is effective to grant to the Security
Agent a legal, valid, and enforceable security interest in all
rights, title, and interest of AMD Holding in the AMD Holding
Security described therein. When each such Security Document is
duly recorded or filed in the applicable recording or filing
office(s), if any, and the recording or filing fees and taxes, if
any, in respect thereof are paid and compliance is otherwise had
with the formal requirements of applicable law applicable to the
recording and filing of security documentation generally, such
AMD Holding Security is subject to a legal, valid, enforceable,
and perfected first priority Encumbrance.
(v) Financial Information; No Material Adverse Change.
(a) The audited consolidated balance sheet of AMD Holding and its
Subsidiaries as at 31 December 1996, and the audited balance
sheet of AMD Saxonia as at 31 December 1996, and in each case the
related consolidated statements of income or operations,
sharehol-
51
ders' equity and cash flows for the period from incorporation
to such date:
(x) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise
expressly noted therein, subject to ordinary, good faith
year-end audit adjustments;
(y) are complete and accurate in all material respects and
fairly present the consolidated financial condition of AMD
Holding and AMD Saxonia, or the financial condition of AMD
Saxonia, as the case may be, as of the date thereof and
their results of operations and cash flows for the period
covered thereby; and
(z) except as specifically disclosed in the Disclosure
Schedules, show all material indebtedness and other
liabilities, direct or contingent, of AMD Holding and AMD
Saxonia as of the date thereof, including liabilities for
taxes, material commitments, and Contingent Obligations.
(b) Since the respective dates of incorporation of AMD Holding and
AMD Saxonia, there has been no Material Adverse Effect with
respect to AMD Holding or AMD Saxonia, except as may be
specifically disclosed in the Disclosure Schedules.
(vi) Litigation.
Except as specifically disclosed in the Disclosure Schedules, there
are no actions, suits, proceedings, claims, or disputes pending, or to
the best knowledge of the Sponsors, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority,
against AMD Holding or AMD Saxonia or any of their respective
properties which:
(a) purport to affect or pertain to this Agreement or any other
Operative Document, or the entirety of the transactions
contemplated hereby or thereby; or
(b) if determined adversely to such AMD Company would reasonably be
expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order, or any order of any
nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery, or
performance of this Agree-
52
ment or any other Operative Document, or directing that the
transactions provided for herein or therein not be consummated as
herein or therein provided.
(vii) No Default or Termination.
No Event of Default or Unmatured Event of Default, and, to the best of
the Sponsors' knowledge, no Event of Termination, exists. Neither AMD
Holding nor AMD Saxonia is in default under or with respect to any
Contractual Obligation in any respect which, individually or together
with all such defaults, could reasonably be expected to have a
Material Adverse Effect.
(viii) No Burdensome Restrictions.
Neither AMD Holding nor AMD Saxonia is a party to or bound by any
Contractual Obligation (other than the Operative Documents), or
subject to any restriction in any Organizational Document, or any
Requirement of Law, which could reasonably be expected to have a
Material Adverse Effect.
(ix) Solvency.
AMD Holding is not insolvent as a matter of German law.
(x) Title to Properties; Encumbrances.
AMD Saxonia has good record and marketable title in fee simple to, or
valid leasehold interests in (or the equivalent for the relevant
jurisdiction), all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could
not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. AMD Holding has no real property or
leasehold interests. The property of each of AMD Holding and AMD
Saxonia is subject to no Encumbrances, other than Permitted
Encumbrances.
(xi) Subsidiaries; Material AMD Inc. Subsidiaries.
(a) AMD Holding is the direct legal and beneficial owner of 100% of
the issued and outstanding shares of capital stock of AMD
Saxonia, all of which shares have been validly issued;
(b) AMD Holding has no Subsidiaries other than AMD Saxonia, and has
no equity investments in any other Person; and
53
(c) AMD Saxonia has no Subsidiaries and has no equity investments in
any other Person.
(xii) Insurance.
Except as specifically disclosed in the Disclosure Schedules,
properties of AMD Holding are insured with financially sound and
reputable insurance companies not Affiliates of AMD Inc., in such
amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and
owning similar properties in localities where AMD Holding operates.
(xiii) Copyrights, Patents, Trademarks and Licenses, Etc.
Each of AMD Holding and AMD Saxonia owns or is licensed or otherwise
has the right to use all of the patents, trademarks, service marks,
trade names, copyrights, contractual franchises, authorizations, and
other rights that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other
Person, except for such conflicts, if any, which would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Except as specifically disclosed in the
Disclosure Schedules, to the best knowledge of the Sponsors:
(a) no slogan or other advertising device, product, process, method,
substance, part, or other material now employed, or now
contemplated to be employed, by AMD Holding or AMD Saxonia
infringes upon any rights held by any other Person;
(b) no claim or litigation regarding any of the foregoing is pending
or, to the best knowledge of the Sponsors, threatened; and
(c) no patent, invention, device, application, principle, or any
statute, law, rule, regulation, standard, or code is pending or,
to the best knowledge of the Sponsors, proposed
which, in any case described in (a), (b), or (c) above, could
reasonably be expected to have a Material Adverse Effect.
(xiv) Taxes.
AMD Holding has filed all material German and other tax returns and
reports required to be filed, and has paid all material German and
other taxes, assessments, fees, and other governmental charges levied
or imposed
54
upon it or its properties, income, or assets otherwise due and
payable, except those which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment
against AMD Holding that would, if made, have a Material Adverse
Effect.
(xv) Governmental Approvals with Respect to the Operative Documents.
As of the date on which this representation and warranty is made or
reaffirmed, as the case may be, all Governmental Approvals (including,
without limitation, from the European Union, the Federal Republic of
Germany, and the Free State of Saxony) necessary for the due
authorization, execution, delivery, and performance by each of AMD
Holding and AMD Saxonia of, the legality or validity of the
obligations of each of such AMD Companies under, or the enforceability
against each of such AMD Companies of, each of the Operative Documents
to which it is a party and the due and timely payment by each of such
AMD Companies of amounts owing under each of the Operative Documents
have been listed on Schedule 20 to the Loan Agreement and, except as
-----------
otherwise noted therein, all of such Governmental Approvals have been
duly obtained or effected, and are in full force and effect, on the
Loan Agreement Effective Date.
(xvi) Governmental Approvals with Respect to the Plant and the Design
Center.
As of the date on which this representation and warranty is made or
reaffirmed, as the case may be, all Governmental Approvals necessary
for the construction, ownership, use, and operation by AMD Saxonia of
the Plant and the Design Center or which are required in order that
the Plant and the Design Center may be operated for their intended
purposes and Perform in Accordance with the Plans and Specifications,
have been listed on Schedule 20 to the Loan Agreement, and all of such
-----------
Governmental Approvals (except those listed in Part B of Schedule 20
------ -----------
to the Loan Agreement) have been duly obtained or effected, are
sufficient for all purposes thereof, and are in full force and effect
on such date (and, in the case of Government Approvals that have
expired, each of AMD Holding and AMD Saxonia has timely applied for
renewal thereof and such Governmental Approvals have been
administratively extended under applicable law); and the Sponsors
reasonably believe, after due inquiry, that the Governmental Approvals
set forth in Schedule 20 to the Loan Agreement, together with all
-----------
Governmental Approvals, if any, that may be required in connection
with the transactions contemplated by the Operative Documents
subsequent to the date on which this representation and warranty is
made or reaffirmed, as the case may be, will be obtained at such time
or times as may be necessary to avoid
55
material delay in, or material restrictions on the use or operation
of, the Plant and Design Center.
(xvii) Interruption of Business.
Neither the business nor the properties of AMD Holding or AMD Saxonia
are presently affected by any fire, explosion, accident, strike,
lockout, or other dispute, drought, storm, hail, earthquake, embargo,
Act of God, or of the public enemy, or other casualty (whether or not
covered by insurance) which impairs, or, if such event or condition
were to continue for more than thirty (30) additional days would be
likely to impair, such AMD Company's ability to perform its
obligations under the Operative Documents.
(xviii) Prior Activities, etc.
Prior to the Loan Agreement Effective Date, neither AMD Holding nor
AMD Saxonia has engaged in any business, conducted any operations or
activities, nor incurred any obligations or liabilities (contingent or
otherwise), other than (i) as described in the Disclosure Schedules,
and (ii) its obligations, if any, under the Operative Documents, and
activities reasonably incidental thereto.
(xix) Status of AMD Holding and AMD Saxonia, etc.
(a) AMD Holding is an "Unrestricted Subsidiary" under, and for
purposes of, the AMD Inc. Senior Secured Note Indenture and is
not a "Restricted Subsidiary" under, and for purposes of, the AMD
Inc. 1996 Bank Credit Agreement;
(b) AMD Saxonia is an "Unrestricted Subsidiary" under, and for
purposes of, the AMD Inc. Senior Secured Note Indenture and is
not a "Restricted Subsidiary" under, and for purposes of, the AMD
Inc. 1996 Bank Credit Agreement; and
(c) the Indebtedness of AMD Saxonia under and in connection with the
Loan Agreement constitutes "Non-Recourse Debt" under, and for
purposes of, the AMD Inc. Senior Secured Note Indenture.
(xx) Accuracy of Information.
As of the date this representation and warranty is made or reaffirmed,
as the case may be, all factual information then or theretofore
furnished by or on behalf of AMD Holding or AMD Saxonia to the Agent
or any Bank or the
56
Technical Advisor for purposes of or in connection with any Operative
Document or any transaction contemplated thereby (including the
Information Memorandum, true and complete copies of which were
furnished to the Agent in connection with the execution and delivery
of this Agreement) is true and accurate (taken as a whole) in all
material respects on the date as of which such information is dated or
certified, and on such date such information (taken as a whole) was
not incomplete by omitting to state any material fact necessary to
make such information not misleading. Insofar as any such information
includes assumptions, estimates, or projections, such assumptions,
estimates, or projections have been or will be made in good faith,
with due care, and with a diligent application of engineering,
construction, and accounting expertise reasonably available within AMD
Inc. and its Subsidiaries (it being understood that although any
projections and forecasts furnished by an AMD Company represent such
AMD Company's best estimates and assumptions as to future performance,
which such AMD Company believes to be fair and reasonable as of the
time made in the light of current and reasonably foreseeable business
conditions, such projections and forecasts as to future events are not
to be viewed as facts and that actual results during the period or
periods covered thereby may differ from the projected or forecasted
results). Without limiting the generality of the foregoing, as of the
Loan Agreement Effective Date, no new information has become available
which was not provided to the Technical Advisor prior to the Loan
Agreement Effective Date and which, had it been so provided, could
reasonably be expected to have caused the Technical Advisor to express
an unfavourable opinion with respect to the Project in the Technical
Advisor's Report.
(xxi) Warranties made by AMD Saxonia.
Each of the representations and warranties made by AMD Saxonia in any
Operative Document to which it is a party (other than the
representation and warranty contained in ss. 15.1.10 of the Loan
-----------
Agreement) is true and accurate in all material respects on each
Sponsors' Warranty Date, except to the extent that any such
representation or warranty expressly relates solely to an earlier
date, and except, in the case of any representation or warranty made
on a Sponsors' Warranty Date described in clause (vi) of the
-----------
definition thereof, as otherwise provided in the certificate referred
to therein.
SECTION 12.3 Repetition of Representations and Warranties. The representations
and warranties contained in Sections 12.1 and 12.2 shall be repeated on each
------------- ----
Sponsors' Warranty Date, except to the extent that any such representation and
warranty expressly relates solely to an earlier date, and except, in the case of
the Sponsors' Warranty Date described in clause (vi) of the definition thereof,
-----------
as otherwise set forth in the certificate referred to therein.
57
ARTICLE XIII
Covenants
SECTION 13.1 Affirmative Covenants of AMD, Inc. AMD Inc. agrees, so long as any
Primary Secured Obligations shall remain outstanding or any Bank shall have any
commitment under or arising out of the Loan Agreement, that it will, and will
cause each other AMD Company to, unless in either case the Security Agent shall
have enforced any of the Security or the Agent (acting on the instructions of an
Instructing Group) shall have otherwise consented in writing:
(i) furnish to the Agent (with copies for each of the Banks):
(a) as soon as possible and in any event within ten (10) Business
Days after a Relevant AMD Inc. Individual shall have obtained
actual knowledge of the occurrence of a Cost Overrun, an Event of
Default, an Unmatured Event of Default or an Event of
Termination, or a change in the Projected Total Cost, the
statement of an authorised officer of AMD Inc. setting forth the
details thereof which has occurred and the action (if any) which
AMD Inc. or any other AMD Company proposes to take with respect
thereto;
(b) as soon as available, and in any event within forty-five (45)
days after the end of each of the first three Fiscal Quarters of
each Fiscal Year of AMD Inc., (x) consolidated financial
statements consisting of a consolidated balance sheet of AMD Inc.
as at the end of such Fiscal Quarter and a consolidated statement
of income and statement of shareholders' equity and cashflows
(including source and application of funds) of AMD Inc. for such
Fiscal Quarter and for the Fiscal Year through such Fiscal
Quarter, setting forth in comparative form the corresponding
figures for the corresponding periods of the preceding Fiscal
Year, all in reasonable detail and certified (subject to ordinary
good faith year end audit adjustments) by an authorised financial
officer of AMD Inc. as being complete and accurate in all
material respects, and as fairly presenting in accordance with
GAAP, consistently applied, the financial position and results of
operations of AMD Inc. and its Subsidiaries, and (y)
consolidating financial statements consisting of a consolidating
balance sheet of AMD Inc. as at the end of such Fiscal Quarter
and a consolidating statement of income and statement of
shareholders' equity and cashflows (including source and
application of funds) of AMD Inc. for such Fiscal Quarter and for
the Fiscal Year through such Fiscal Quarter, setting forth in
comparative form the corresponding figures for the corresponding
periods of the preceding Fiscal Year, all in reasonable detail
and
58
certified (subject to ordinary good faith year end audit
adjustments) by an authorised financial officer of AMD Inc. as
being complete and accurate in all material respects, and as
having been developed and used in connection with the financial
statements referred to in clause (x) above;
----------
(c) as soon as available, and in any event within ninety (90) days
after the end of each Fiscal Year of AMD Inc., (x) financial
statements consisting of a consolidated balance sheet of AMD Inc.
as at the end of such Fiscal Year and a consolidated statement of
income and statement of shareholders' equity and cashflows
(including source and application of funds) of AMD Inc. for such
Fiscal Year, setting forth in comparative form the corresponding
figures for the preceding Fiscal Year, all in reasonable detail
and certified by independent certified public accountants of
recognised national standing as fairly presenting in accordance
with GAAP, consistently applied, the financial position and
results of operations of AMD Inc. and its Subsidiaries, and (y) a
certificate from each Sponsor confirming, as of the date of such
certificate, that, except as otherwise therein set forth, each of
the representations and warranties made by each AMD Company in
any Operative Document to which it is a party is true and
accurate in all material respects on the date of such
certificate, except to the extent that any such representation or
warranty expressly relates solely to an earlier date;
(d) (x) in connection with the completion of any Scheduled Project
Phase, (1) a Scheduled Project Phase Technical Completion
Certificate (AMD Companies), and (2) a Scheduled Project Phase
Technical Completion Certificate (Technical Advisor), and (y) as
soon as available, and in any event within ten (10) days after
the completion of any Scheduled Project Phase, (1) a Project
Budget and (2) a Project Schedule relating to the Project,
setting forth in reasonable detail a description of all of the
Capital Expenditures which have been made during each Scheduled
Project Phase with respect to the Project to the date thereof and
those which are anticipated to be made during each Project Phase
prior to Completion; provided, however, that if, at any time, any
-----------------
AMD Company or the Agent (acting on the instructions of an
Instructing Group), determines that it is appropriate to amend,
supplement, or otherwise modify the Approved Project Budget, or
the Approved Project Schedule, the parties hereto hereby agree to
discuss in good faith any such proposed amendment, supplement, or
modification; provided, further, that (a) neither the Agent nor
-----------------
the Banks shall be
59
obligated in any matter, as a result of any such discussions or
otherwise, to agree to any amendments, supplements, or other
modifications to the Approved Project Budget or Approved Project
Schedule which would reduce or relax the then required financial
performance of AMD Saxonia with respect to the Project, and (b)
each of the Agent and the Banks reserve(s) all rights hereunder
in the event that such discussions fail to produce an amendment
or other supplement to, or modification of, the Approved Project
Budget or the Approved Project Schedule. In the event (but only
in such event) that AMD Saxonia (with the consent of each
Sponsor) and the Agent agree to amend, supplement, or otherwise
modify any Approved Project Budget or any Approved Project
Schedule, as the case may be, then such amended, supplemented, or
otherwise modified Approved Project Budget or Approved Project
Schedule, as the case may be, shall thereafter be the "Approved
--------
Project Budget" or the "Approved Project Schedule" for all
-------------- -------------------------
purposes hereof until further changed, if at all, pursuant to
this Section 13.1(i)(d);
------------------
(e) promptly following AMD Inc.'s or such other AMD Company's receipt
or transmission thereof pursuant to the terms of the AMD Holding
Wafer Purchase Agreement, and unless otherwise concurrently
delivered by another AMD Company pursuant thereto, a copy of each
Compliance Certificate to be delivered pursuant thereto;
(f) promptly following AMD Inc.'s or such other AMD Company's receipt
or transmission thereof, and unless otherwise concurrently
delivered by another AMD Company to the Agent under an Operative
Document, a copy of each notice, report, schedule, certificate,
financial statement, or other document furnished pursuant to any
of the Operative Documents if such notice, report, schedule,
certificate, financial statement, or other document could
reasonably be considered material to the Agent or any Bank in
connection with the Operative Documents and the entirety of the
transactions contemplated thereby;
(g) promptly following the occurrence of (x) any change in the
identification of the applicable AMD Inc. Primary Bank Credit
Agreement pursuant to the definition thereof contained in Section
-------
1.1, or (y) any consent or waiver or amendment or modification
---
with respect to the incorporated covenants, related definitions,
or ancillary provisions of the AMD Inc. Primary Bank Credit
Agreement or of the AMD Inc. Senior Secured Note Indenture,
notice of such
60
change and the basis therefor or of such consent or waiver or
amendment or modification and the basis therefor; and
(h) such other information with respect to the business affairs,
financial condition, and/or operations of AMD Inc. and its
Subsidiaries (including AMD Saxonia) and Affiliates as the Agent
or any Bank (acting through the Agent) may from time to time
reasonably request for purposes of the transactions contemplated
by the Operative Documents.
(ii) pay and perform all of its obligations under each of the Operative
Documents to which it is a party in the manner and at the time
contemplated therein.
(iii) cause AMD Holding at all times to be a wholly owned Subsidiary of AMD
Inc. and cause AMD Saxonia at all times to be a wholly owned
Subsidiary of AMD Holding.
(iv) promptly following a request by the Agent or any Bank (acting through
the Agent) to do so, permit the Agent, the Technical Advisor, the
Auditor, or any of their respective representatives to have reasonable
access during normal business hours to any of the Wafer Fabrication
Plants owned or controlled by AMD Inc. or any of its Subsidiaries or
Affiliates and to such books and records of AMD Inc. and its
Subsidiaries or Affiliates as may be necessary or reasonably desirable
(in the good faith discretion of the Agent or any Bank) to verify
compliance by each AMD Company with its obligations under the
Operative Documents to which it is a party; provided, that such access
--------
shall be exercised in a manner which does not disrupt the operations
of the Plant, the Design Center, or the relevant Wafer Fabrication
Plant in any material respect.
(v) prior to Completion, cause AMD Saxonia to use Sponsor Loans, Equity
Contributions, and Advances solely to pay Project Costs and, if
applicable, Cost Overruns incurred to complete the Project in
accordance with the Plans and Specifications.
SECTION 13.2 Negative Covenants of AMD Inc. AMD Inc. agrees, so long as any
Primary Secured Obligation shall remain outstanding or any Bank shall have any
commitment under or arising out of the Loan Agreement, that it will not, and not
permit any other AMD Company to, unless in either case the Security Agent shall
have enforced any of the Security or the Agent (acting on the instructions of an
Instructing Group) shall have otherwise consented in writing:
61
(i) terminate, amend or modify, or agree to the termination, amendment or
modification, of any Operative Document, other than (w) the AMD Inc.
Primary Bank Credit Agreement or the AMD Inc. Senior Secured Note
Indenture (each of which may be amended, modified, or terminated in
accordance with Section 13.3), (x) the Equipment Supply Contracts that
------------
are not Material Equipment Supply Contracts, (y) the Service Contracts
that are not Material Service Contracts, or (z) in the case of the
Project Budget, the Approved Project Budget, the Project Schedule, the
Approved Project Schedule, and the Management Plan, as expressly
provided hereunder; provided, that AMD Inc. may terminate the AMD
--------
Holding Wafer Purchase Agreement or the AMD Holding Research Agreement
only in accordance with the express termination provisions thereof;
provided, further, that AMD Holding may terminate the AMD Saxonia
-----------------
Wafer Purchase Agreement or the AMD Saxonia Research Agreement only in
accordance with the express termination provisions thereof; and
provided, further, that the AMD Saxonia Hedging Contract may be
-----------------
terminated only in accordance with the express termination provisions
thereof. The foregoing notwithstanding, AMD Saxonia may amend or
modify, or agree to the amendment or modification of, the Design/Build
Agreement, any Material Equipment Supply Contract, any Material
Service Contract, or the Plans and Specifications to the extent such
amendment or modification does not, individually or in the aggregate,
decrease or adversely affect (x) the value or use of the Plant and the
Design Center (or of the rights of the Banks with respect thereto) in
any material respect, (y) the Anticipated Capacity of the Plant
(under, and as defined in, the AMD Saxonia Wafer Purchase Agreement),
or (z) the capacity of the Plant to perform, on a substantially
continuous basis, the functions for which it was specifically designed
in accordance with the plans and specifications as originally approved
by the Technical Advisor and the Agent for purposes of the Operative
Documents; provided, that no such amendment or modification will,
--------
individually or in the aggregate, be inconsistent with the Approved
Project Budget or the Approved Project Schedule or materially increase
the Cost to Complete.
(ii) create, incur, or suffer to exist any Encumbrance with respect to its
rights under or in respect of the Sponsors' Loan Agreement.
(iii) permit AMD Holding or AMD Saxonia to amend their respective
Organizational Documents.
SECTION 13.3 Incorporated Covenants of AMD, Inc. AMD Inc. agrees, so long as any
Primary Secured Obligation shall remain outstanding or any Bank shall have any
commitment under or arising out of the Loan Agreement, that it will, unless the
Security Agent shall have enforced any of the Security or the Agent (acting on
the instructions of an Instructing Group) shall have otherwise consented in
writing, duly keep, perform, and observe, for the benefit of
62
the Agent, the Security Agent, and the Secured Parties, each and every
affirmative, negative, and informational covenant contained in each of (x) the
AMD Inc. Senior Secured Note Indenture, and (y) the AMD Inc. Primary Bank Credit
Agreement (to the extent that such covenants are applicable to AMD Inc.
thereunder), all of which covenants, together with related definitions and
ancillary provisions, are hereby incorporated herein by reference as if such
terms were set forth herein in full; provided, however, that:
(i) with respect to the AMD Inc. Primary Bank Credit Agreement referred to
in clause (i) of the definition thereof:
----------
(a) any references to the "Agent" shall be deemed to be references to
the Agent (except where such term is used in Sections 6.06, 6.14,
--------------------
and 7.01 thereof);
--------
(b) any references to the "Banks" shall be deemed to be references to
the Banks (except where such term is used in Section 6.06 or 7.01
------------ ----
thereof);
(c) any references to the "Majority Banks" shall be deemed to be
references to an Instructing Group (except where such term is
used in Section 6.14 thereof);
------------
(d) any references to the "Agreement" shall be deemed to be
references to this Agreement (except where such term is used in
Section 7.05(a) thereof);
---------------
(e) any references to the "Loan Documents" shall be deemed to be
references to the Operative Documents (except where such term is
used in Section 6.12 or 7.01(b) thereof);
------------ -------
(f) any references to the "Collateral Documents" shall be deemed to
be references to any Security Documents to which AMD Inc. is a
party (except where such term is used in Sections 6.06 and 7.02
------------- ----
thereof);
(g) any references to an "Event of Default" shall be deemed to be
references to an Event of Default (or, in the case of Section
-------
7.02(d) thereof, but subject, in any case, to Section 13.3(iv),
------- ----------------
an Unmatured Event of Default which is described in ss. 21.2(i)
-----------
of the Loan Agreement);
(h) any references to a "Default" shall be deemed to be references to
an Unmatured Event of Default;
63
(i) any references to a "Material Adverse Effect" shall be deemed to
be references to a Material Adverse Effect;
(j) any references to "So long as any Bank shall have any Commitment
hereunder, or any Loan or other Obligation shall remain unpaid or
unsatisfied" shall be deemed to be references to "So long as any
Bank shall have any commitment to make Advances under the Loan
Agreement or any of the Primary Secured Obligations shall remain
unpaid or unsatisfied"; and
(k) for purposes of each "Compliance Certificate" to be delivered
pursuant to Section 6.02(a) thereof, the following additional
---------------
paragraph shall be deemed to be included after the initial
paragraph thereof:
"Reference is also made to that certain Sponsors' Support
Agreement, dated 11 March 1997 (as extended, renewed,
amended or restated from time to time, the "Sponsors'
---------
Support Agreement"), between the Company, AMD Saxony Holding
-----------------
GmbH and Dresdner Bank AG, as Agent and Security Agent.
Except where such terms are used in the first sentence of
the immediately preceding paragraph, the terms "Banks" and
"Agent" shall, for purposes hereof, have the respective
meanings assigned thereto in the Sponsors' Support
Agreement.";
(ii) with respect to the AMD Inc. Senior Secured Note Indenture:
(a) the reference to "so long as any Notes are outstanding" contained
in Section 4.03 thereof shall be deemed to be a reference to "so
------------
long as any Bank shall have any commitment to make Advances under
the Loan Agreement or any of the Primary Secured Obligations
shall remain unpaid or unsatisfied", and the reference to "the
Holders of the Notes" contained in Section 4.03 thereof shall be
------------
deemed to be a reference to "the Agent and the Banks";
(b) the references to "this Indenture" and "the Trustee" contained in
Section 4.06 thereof shall be deemed to be references to "this
------------
Agreement" and "the Security Agent and the Agent", respectively;
(c) subject to Section 13.3(iv), the reference to "no Default or
----------------
Event of Default" contained in clause (a) of Section 4.07 thereof
---------- ------------
(which follows clause (v)) shall be deemed to be a reference to
----------
"no Event of Default or Unmatured Event of Default"; the
reference to
64
"Event of Default" in the proviso which follows clause (c) of
------- ----------
Section 4.07 thereof shall be deemed to be a reference to "Event
------------
of Default"; and the reference to "a Default" in the penultimate
paragraph of Section 4.07 thereof shall be deemed to be a
------------
reference to "an Event of Default or an Unmatured Event of
Default";
(d) the reference to "the Holders of the Notes" contained in Section
-------
4.15 thereof shall be deemed to be a reference to "the Agent and
----
the Banks";
(e) the reference to "the Notes, this Indenture and the Collateral
Documents pursuant to a supplemental indenture or other documents
or instruments in form reasonably satisfactory to the Trustee"
contained in clause (ii) of Section 5.01 thereof shall be deemed
----------- ------------
to be a reference to "each of the Operative Documents to which
AMD Inc. is a party pursuant to one or more documents or
instruments in form reasonably satisfactory to the Agent"; and
(f) the references to "this Indenture" contained in Section 5.02
------------
thereof shall be deemed to be references to "this Agreement"; and
the reference to "the obligation to pay the principal of,
premium, if any, and interest, if any, on the Notes" contained in
Section 5.02 thereof shall be deemed to be a reference to "its
------------
obligations under each of the Operative Documents to which it is
a party";
(iii) with respect to the AMD Inc. Primary Bank Credit Agreement referred
to in clause (ii) of the definition thereof, such modifications to the
-----------
provisions incorporated in this Agreement as shall be appropriate to
make them applicable to this Agreement and consistent with the Project
shall be deemed to be made; and
(iv) if (x) AMD Inc., during the pendency of an Event of Default, or an
Unmatured Event of Default described in ss.21.2(i) of the Loan
Agreement, at its sole option, desires to be released from the effects
of Section 13.3(i)(g), as it relates to Section 7.02(d) of the AMD
------------------ ---------------
Inc. Primary Bank Credit Agreement described in clause (i) of the
definition thereof, or (y) AMD Inc., during the pendency of an Event
of Default or an Unmatured Event of Default, at its sole option,
desires to be released from the effects of Section 13.3 (ii)(c), as it
--------------------
relates to Section 4.07 of the AMD Inc. Senior Secured Note Indenture,
------------
AMD Inc. may (but shall not be required to) deliver written notice to
the Agent (with a copy to the Paying Agent) referring to this Section
13.3 (iv) and demanding that the Banks (I) accelerate the Loan
Agreement and (II) make a demand for payment in full under the
Sponsors' Guaranty on, or as soon as practicable after, the first date
that the Banks are
65
entitled to do so. In the event that the Banks do not so accelerate
the Loan Agreement and make such demand under the Sponsors' Guaranty,
or, as the case may be, give notice (the "Sponsors' Guaranty Notice")
-------------------------
to AMD Inc. that they intend to do so on, or as soon as practicable
after, the first date that the Banks are entitled to do so, in each
case within 90 days of the date the Sponsors' Guaranty Notice is
delivered to the Agent, then with effect from such 90th day (or, if
after having given the Sponsors' Guaranty Notice, the Banks do not so
accelerate the Loan Agreement and make demand under the Sponsors'
Guaranty on, or as soon as practical after, the first date they are
entitled to do so):
(a) in the case of clause (x) above, the parenthetical expression
contained in Section 13.3(i)(g) shall be deemed to read as
------------------
follows: "(except when such term is used in Section 7.02(d)
---------------
thereof)"; and
(b) in the case of clause (y) above, Section 13.3(ii)(c) shall be of
-------------------
no further effect.
The provisions and definitions of the applicable AMD Inc. Primary Bank Credit
Agreement, and the AMD Inc. Senior Secured Note Indenture, as incorporated by
reference in this Agreement, shall continue to be binding on AMD Inc. after
giving effect to any consent or waiver with respect to such provisions or to any
amendment or modification or (in the case of the AMD Inc. Senior Secured Note
Indenture only) termination thereof, in each case given or made in accordance
with the terms of and by the parties to the applicable AMD Inc. Primary Bank
Credit Agreement or the AMD Inc. Senior Secured Note Indenture.
SECTION 13.4 Affirmative Covenants of the Sponsors. The Sponsors, jointly and
severally, agree, so long as any Primary Secured Obligations shall remain
outstanding or any Bank shall have any commitment under or arising out of the
Loan Agreement, that AMD Holding will (and, at all times prior to the exercise
of rights by the Security Agent under any of the Security Documents, AMD Inc.
will cause AMD Holding to), unless the Agent (acting on the instructions of an
Instructing Group) shall have otherwise consented in writing:
(i) duly and punctually pay and perform all of its obligations under each
of the Operative Documents to which it is a party in the manner and at
the time contemplated therein.
(ii) pay or discharge (a) all taxes, assessments, and governmental charges
or levies imposed upon it or upon its income or profits or any
property belonging to it prior to the date on which penalties attach
thereto, and (b) all lawful claims prior to the time they become an
Encumbrance upon any property of AMD Holding, and other than taxes,
assessments, charges, levies, or claims included in clauses (a) and
-----------
(b) above which are not, individually or collectively, substantial in
---
aggregate amount; provided, that
--------
66
(after providing notice thereof to the Agent) AMD Holding shall not be
required to pay or discharge any such tax, assessment, charge, levy,
or claim while the same is being contested by it in good faith and by
appropriate proceedings and adequate book reserves have been
established with respect thereto, and so long as the lien or charge
resulting from the nonpayment or non-discharge of such tax,
assessment, charge, levy, or claim shall not, individually or in the
aggregate, have a Material Adverse Effect.
(iii) cause AMD Saxonia to preserve and maintain its corporate existence,
rights, privileges, and franchises in the jurisdiction of its
incorporation, and cause AMD Saxonia to not have operations in any
other jurisdiction.
(iv) comply in all material respects with all laws, rules, regulations, and
governmental orders (Federal, state, local, and foreign) having
applicability to it or to the business or businesses at any time
conducted by AMD Holding except to the extent that any such
noncompliance, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
(v) promptly following AMD Holding's receipt or transmission thereof,
unless otherwise concurrently delivered by another AMD Company to the
Agent under an Operative Document, furnish to the Agent a copy of each
notice, report, schedule, certificate, financial statement, or other
document furnished pursuant to any of the Operative Documents if such
notice, report, schedule, certificate, financial statement, or other
document could reasonably be considered material to the Agent or any
Bank in connection with the Operative Documents or the entirety of the
transactions contemplated thereby.
(vi) promptly following a request from the Security Agent to do so and at
AMD Holding's own expense, take all such lawful action as the Security
Agent may reasonably request to enforce or secure the performance by
each other AMD Company under any Operative Document to which AMD
Holding is a party of such AMD Company's respective obligations under
and in connection with the applicable Operative Document in accordance
with the respective terms thereof, and exercise any right of
termination or remedy available to AMD Holding thereunder or in
connection therewith to the extent and in the manner reasonably
directed by the Security Agent, including, without limitation, the
institution of legal or administrative actions or proceedings to
compel or enforce performance by each other AMD Company of its
respective obligations thereunder, or to recover any payment due AMD
Holding thereunder.
67
(vii) keep, or cause to be kept, adequate records and books of account, in
which complete entries are to be made reflecting its business and
financial transactions, such entries to be made in accordance with
GAAP consistently applied in the case of financial transactions or as
otherwise required by applicable rules and regulations of any
governmental agency or regulatory authority (federal, state, local or
foreign) having jurisdiction over AMD Holding, or the transactions
contemplated by this Agreement or the other Operative Documents to
which it is or will be a party.
(viii) maintain, obtain or effect all Governmental Approvals which may at
any time or from time to time be necessary for the due authorization,
execution, delivery, performance, legality, validity, or
enforceability of each of the Operative Documents to which it is or
will be a party.
(ix) prior to Completion, cause AMD Saxonia to use Sponsor Loans, Equity
Contributions and Advances solely to pay Project Costs and, if
applicable, Cost Overruns incurred to complete the Project in
accordance with the Plans and Specifications.
SECTION 13.5 Negative Covenants of the Sponsors. The Sponsors, jointly and
severally, agree, so long as any Primary Secured Obligation shall remain
outstanding or any Bank shall have any commitment under or arising out of the
Loan Agreement, that AMD Holding will not (and AMD Inc. will not, at any time
prior to the exercise of rights by the Security Agent under any of the Security
Documents, permit AMD Holding to), unless the Agent (acting on the instructions
of an Instructing Group) shall have otherwise consented in writing:
(i) terminate, amend or modify, or agree to the termination, amendment or
modification, of any Operative Document, other than (w) the AMD Inc.
Primary Bank Credit Agreement or the AMD Inc. Senior Secured Note
Indenture (each of which may be amended, modified or terminated in
accordance with Section 13.3), (x) the Equipment Supply Contracts that
------------
are not Material Equipment Supply Contracts, (y) the Service Contracts
that are not Material Service Contracts, or (z) in the case of the
Project Budget, the Approved Project Budget, the Project Schedule, the
Approved Project Schedule, and the Management Plan, as expressly
provided hereunder; provided, that AMD Inc. may terminate the AMD
--------
Holding Wafer Purchase Agreement or the AMD Holding Research Agreement
only in accordance with the express termination provisions thereof;
provided, further, that AMD Holding may terminate the AMD Saxonia
-----------------
Wafer Purchase Agreement or the AMD Saxonia Research Agreement only in
accordance with the express termination provisions thereof; and
provided, further, that the AMD Saxonia Hedging Contract may be
-----------------
terminated only in accordance with the express termination provisions
thereof. The foregoing notwithstanding, AMD Saxonia may amend or
modify, or agree to the amendment
68
or modification of, the Design/Build Agreement, any Material Equipment
Supply Contract, any Material Service Contract, or the Plans and
Specifications to the extent such amendment or modification does not,
individually or in the aggregate, decrease or adversely affect (x) the
value or use of the Plant and the Design Center (or of the rights of
the Banks with respect thereto) in any material respect, (y) the
Anticipated Capacity of the Plant (under, and as defined in, the AMD
Saxonia Wafer Purchase Agreement), or (z) the capacity of the Plant to
perform, on a substantially continuous basis, the functions for which
it was specifically designed in accordance with the plans and
specifications as originally approved by the Technical Advisor and the
Agent for purposes of the Operative Documents; provided, that no such
--------
amendment or modification will, individually or in the aggregate, be
inconsistent with the Approved Project Budget or the Approved Project
Schedule or materially increase the Cost to Complete.
(ii) engage in any activities other than those contemplated by the
Operative Documents to which it is a party or the transactions
contemplated thereby and activities reasonably incidental thereto.
(iii) create, incur, assume, or suffer to exist any Encumbrance in, upon,
or with respect to any of its properties or assets, whether now owned
or hereafter acquired, or assign or otherwise convey any right to
receive income to secure any obligation, except (1) as contemplated by
the AMD Holding Security Documents, and (2) for Permitted
Encumbrances.
(iv) create, incur, assume, or suffer to exist any Indebtedness, whether
current or funded, except current accounts and other amounts payable
in the ordinary course of business, and except to the extent
contemplated by the Operative Documents.
(v) create, incur, assume, or suffer to exist any obligations as lessee
for the rental or hire of real or personal property of any kind
whatsoever.
(vi) assume, guarantee, or endorse, or otherwise become directly or
contingently liable in respect of, any obligation of any Person,
except pursuant to the Operative Documents to which it is a party.
(vii) merge with or into or consolidate with any Person, or, acquire,
lease, or purchase, all or substantially all of the assets or stock of
any class of, or any partnership or joint venture interest in, any
Person, or create or acquire any Subsidiary, except for the
acquisition of AMD Saxonia.
(viii) sell, lease, assign, transfer, or otherwise dispose of any of its
assets, including its accounts receivable, except as contemplated by
the Operative
69
Documents; or issue or sell any shares of any class of its capital
stock to any Person except to AMD Inc.
(ix) make any loan or advance or extend any credit to any Person other than
AMD Saxonia or as contemplated by the AMD Holding Wafer Purchase
Agreement, or purchase or otherwise acquire the capital stock or
obligation of, or any investment in, any Person other than AMD
Saxonia, in each case other than Cash Equivalent Investments which
have been pledged to the Security Agent pursuant to the AMD Holding
Security Documents.
(x) apply for or become liable with respect to any letter of credit or
acceptance financing; or enter into or become liable with respect to
any interest or currency swap, hedge, exchange, or other similar
obligation.
(xi) purchase any shares of any Person, other than AMD Saxonia, or redeem
any of its shares, declare or pay any dividend thereon or make any
distribution to its shareholders, except for any such redemption or
distribution made as a result of the transactions contemplated by
Section 4.4 or 6.3.
----------- ---
(xii) except as provided in the Management Service Agreement, pay any
salary, compensation, or bonus of any character to any officer,
director, or employee of AMD Holding or any Affiliate thereof or
provide any such Person with any medical, surgical, dental, hospital,
disability, unemployment, retirement, pension, vacation, or insurance
benefit of any kind or adopt, establish, or maintain any plan, fund,
or program to provide any such benefit.
(xiii) enter into any transaction with AMD Inc. or an Affiliate thereof
(other than AMD Saxonia) on a basis materially less favourable to AMD
Holding than would be the case if such transaction had been effected
with a Person other than AMD Inc. or an Affiliate thereof.
(xiv) open or maintain a bank account with any Person, except for demand or
other deposit accounts at the Agent and at Security Agent.
(xv) amend or modify the Organizational Documents of AMD Saxonia.
(xvi) issue any power of attorney or other contract or agreement giving any
Person power or control over the day-to-day operations of AMD
Holding's business, except as contemplated by the Operative Documents.
(xvii) commence, or join with any other creditor in commencing, any
bankruptcy, reorganization, or insolvency proceeding with respect to
AMD Saxonia or AMD Inc.
70
(xviii) enter into any agreement other than as contemplated by the
Operative Documents to which it is or will be a party or under any
instrument or document delivered or to be delivered by it hereunder or
thereunder, or in connection herewith or therewith.
(xix) make any significant change in accounting treatment or reporting
practices, except as required by GAAP, or change its Fiscal Year.
(xx) create, incur, assume, or suffer to exist any Encumbrance with respect
to its rights under or in respect of the Sponsors' Loan Agreement,
except as set forth in the Security Documents.
SECTION 13.6 Recourse to AMD Inc. for Breach of Covenant. It is expressly
understood and agreed by the parties hereto that the obligations of AMD Saxonia
under the Loan Agreement are intended to be limited recourse obligations from
the perspective of AMD Inc. and that the covenants of the Sponsors contained in
this Article XIII are not intended to represent a guaranty of AMD Saxonia's
------------
obligations under the Loan Agreement. Accordingly, (i) neither AMD Inc. nor its
assets (other than its interests in AMD Holding) shall be exposed to liability
(whether in damages or otherwise) for breach of any covenant contained in this
Article XIII to the extent that such damages would otherwise result in AMD Inc.
------------
incurring greater financial exposure than the aggregate amount otherwise agreed
to be payable by AMD Inc. pursuant to this Agreement and the other Operative
Documents, and (ii) AMD Holding shall have no right of contribution against AMD
Inc. arising from any payment made by AMD Holding under this Agreement or the
Sponsors' Guaranty to the extent that AMD Inc. provides funds for the purpose of
such payment by contributions to AMD Holding's stated capital or capital
reserves and/or by loans to AMD Holding; provided, however, that the provisions
-----------------
of this Section 13.6 shall not be construed to absolve AMD Inc. for its
------------
liability, whether in damages or otherwise, for actions or omissions
constituting fraud or misrepresentation or breach of warranty; and provided,
---------
further that the provisions of this Section 13.6 shall not preclude the Security
------- ------------
Agent from seeking temporary relief (if otherwise available) for any prospective
breach by AMD Inc. of its covenants contained in this Article XIII.
ARTICLE XIV
Costs and Expenses; Indemnities; Taxes; Etc.
SECTION 14.1 Costs and Expenses. The Sponsors, jointly and severally, agree to
pay (to the extent not previously paid by AMD Saxonia promptly following a
demand by the Agent therefor, it being understood and agreed that the Agent will
demand such payment for the costs and expenses of the preparation of this
Agreement) all costs and expenses (including reasonable legal fees and expenses)
of the Agent, the Security Agent, and the Paying Agent in connection with the
negotiation, preparation, execution, and delivery of this Agreement, any
amendments or modifications of (or supplements to) this Agreement, and any and
all other documents furnished pursuant hereto or in connection herewith, as well
as all costs and
71
expenses (including, without limitation, reasonable attorneys' fees and
expenses) if any, in connection with the enforcement of this Agreement or any
other agreement furnished by them prior to the enforcement by the Security Agent
of any of the Security pursuant hereto or in connection herewith.
SECTION 14.2 General Indemnity. The Sponsors, jointly and severally, hereby
agree to indemnify, exonerate, and hold the Agent, the Security Agent, and the
Paying Agent, and each of the officers, directors, employees of the Agent, the
Security Agent, and the Paying Agent (herein collectively called the
"Indemnitees") free and harmless from and against any and all actions, claims,
-----------
losses, liabilities, damages, and expenses, including, without limitation,
reasonable legal fees and expenses (herein collectively called the "Indemnified
-----------
Liabilities"), which may be incurred by or asserted against the Indemnitees or
-----------
any Indemnitee as a result of, or arising out of, or relating to, or in
connection with:
(i) the failure by either Sponsor to comply with its respective
obligations under this Agreement, the Sponsors' Guaranty, and the
Sponsors' Loan Agreement (subject, in the case of Indemnified
Liabilities arising from Article XIII, to the provisions of Section
------------ -------
13.6);
----
(ii) the inaccuracy by either Sponsor of any of its representations and
warranties contained in any of the Operative Documents to which it is
a party as and when made or reaffirmed as the case may be (provided
that AMD Inc. shall have no liability under this Section 14.2 in
------------
respect of any inaccuracy by AMD Holding of the representation and
warranty contained in Section 12.2 (viii)); and
-------------------
(iii) any investigation, litigation, or proceeding related to this
Agreement or the consummation of the transactions contemplated hereby,
whether or not any such Indemnitee is a party thereto, and, to the
extent that the foregoing undertaking may be unenforceable for any
reason, the Sponsors, jointly and severally, hereby agree to make the
maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 14.3 Undertaking to Contribute. AMD Inc. hereby undertakes that in the
event:
(i) a liability is imposed on AMD Saxonia and/or AMD Holding as a result
of the German tax authorities recharacterising interest on the
Sponsors' Loans as dividends; or
(ii) a liability is imposed on AMD Saxonia and/or AMD Holding as a result
of the German tax authorities ruling that AMD Saxonia and/or AMD
Holding is not sufficiently profitable (the "Liabilities"),
-----------
72
and in either case (x) provided all remedies and/or appeals under the provisions
of the German and U.S.A. (Income and Capital) Tax Treaty, to the extent
applicable, have been exhausted and (y) only to the extent that AMD Saxonia is
not able to repay the Advances in the amounts and at the times scheduled, that
it will contribute Equity Capital (or other contributions to AMD Saxonia's
capital reserves) to AMD Holding (and AMD Inc. shall to the extent necessary and
depending on where the Liability arises, contribute sufficient funds or
otherwise cause sufficient funds to be made available, to AMD Holding as shall
be necessary to enable AMD Holding to so contribute to AMD Saxonia and AMD Inc.
shall cause AMD Holding to do the same) in an amount not exceeding the
Liabilities that, when added to amounts then available to AMD Saxonia, is
sufficient to pay the Primary Secured Obligations.
SECTION 14.4 SAB Related Agreements Indemnity. The Sponsors, jointly and
severally, hereby agree to indemnify, exonerate, and hold the Agent, and each of
the officers, directors, employees of the Agent (herein collectively called the
"SAB Indemnitees") free and harmless from and against any and all actions,
---------------
claims, losses, liabilities, damages, and expenses, including, without
limitation, reasonable legal fees and expenses (herein collectively called the
"Indemnified SAB Liabilities"), which may be incurred by or asserted against the
---------------------------
SAB Indemnitees or any SAB Indemnitee as a result of, or arising out of, or
relating to, or in connection with, the SAB Related Agreements (other than any
such Indemnified SAB Liabilities finally determined by a court of competent
jurisdiction to have resulted from the gross negligence or wilful misconduct of
an SAB Indemnitee), and, to the extent that the foregoing undertaking may be
unenforceable for any reason, the Sponsors, jointly and severally, hereby agree
to make the maximum contribution to the payment and satisfaction of each of the
Indemnified SAB Liabilities which is permissible under applicable law.
SECTION 14.5 Payments Free and Clear of Taxes, etc. Each of the Sponsors hereby
agrees that:
(a) All payments by such Sponsor hereunder shall be made to the Person
entitled thereto in Same Day Funds, free and clear of and without
deduction for any present or future income, excise, stamp, or
franchise taxes and other taxes, fees, duties, withholdings, or other
charges of any nature whatsoever imposed by any taxing authority on
such payments, but excluding taxes imposed on or measured by such
Person's net income or receipts or the net income or receipts of any
branch thereof (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made by
either of the Sponsors hereunder is required in respect of any Taxes
pursuant to any applicable law, rule, or regulation, then such Sponsor
will, subject to Section 14.5(d),
---------------
(i) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
73
(ii) promptly forward to such Person (with a copy to the Security
Agent) an official receipt or other documentation satisfactory to
the Security Agent evidencing such payment to such authority; and
(iii) pay to such Person such additional amount or amounts as is
necessary to ensure that the net amount actually received by such
Person will equal the full amount such Person would have received
had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any Person
entitled to receive a payment under this Agreement with respect to any
payment received by such Person hereunder, such Person may pay such
Taxes and the Sponsors will promptly pay such additional amounts
(including any penalties, interest, or expenses, but only (in the case
of penalties or interest) to the extent not resulting from a negligent
or wilful failure to pay any or all of such Taxes by such Person, as
the case may be) as is necessary in order that the net amount received
by such Person after the payment of such Taxes (including any Taxes on
such additional amount) shall equal the amount such Person would have
received had no such Taxes been asserted.
(b) The additional amount or amounts that either Sponsor shall be required
to pay pursuant to clause (iii) of Section 14.5(a) shall be reduced,
------------ ---------------
to the extent permitted by applicable law, by the amount of the
offsetting tax benefits, if any, as determined by the relevant Person
in the exercise of its sole discretion, which such Person actually
receives and utilises as a result of such Sponsor's payment under
clause (i) of Section 14.5(a) to the relevant authority (it being
-----------------------------
expressly understood and agreed that such Person shall be required to
use commercially reasonable efforts to claim or utilise any such
benefit which may be available to it unless it believes in good faith
that to do so would be inconsistent with its internal tax and other
policies or if, in its good faith judgment, it would be disadvantaged
in any respect with respect to its tax position or planning).
(c) Subject to the relevant Person complying with Section 14.5(d) below,
---------------
if either of the Sponsors fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the applicable
recipient hereunder the required receipts or other required
documentary evidence, such Sponsor shall indemnify such Person for any
incremental Taxes, interest, or penalties that may become payable by
such Person as a result of any such failure.
(d) Each Person entitled to receive a payment hereunder that is entitled
to claim an exemption (either on its own account or for the account of
the relevant Sponsor) in respect of all or a portion of any Taxes
which are otherwise required to be paid or deducted or withheld
pursuant to this Section 14.5 in respect of any payments made by a
------------
Sponsor hereunder shall, within a reasonable time after receiving a
written request from such Sponsor, provide such
74
Sponsor with such certificates as may be appropriate in order to
obtain the benefits of such exemption.
(e) Without prejudice to the survival of any other agreement of the
Sponsors hereunder, the agreements and obligations of the Sponsors
contained in this Section 14.5 shall survive the payment in full of
------------
the principal of and interest on the loans and other financial
accommodations made to AMD Saxonia under the Loan Agreement.
SECTION 14.6 Judgment. The Sponsors hereby agree that:
(a) If, for the purposes of obtaining a judgment in any court, it is
necessary to convert a sum due hereunder in Deutsche Marks into
another currency, the rate of exchange used shall be that at which in
accordance with normal banking procedures the Security Agent could
purchase Deutsche Marks with such other currency on the Business Day
preceding that on which final judgment is given.
(b) The obligation of each of the Sponsors in respect of any sum due from
it to the Security Agent, the Agent, the Paying Agent, or any Bank
hereunder shall, notwithstanding any judgment in a currency other than
Deutsche Marks be discharged only to the extent that on the Business
Day following receipt by the Security Agent, the Agent, the Paying
Agent, or such Bank, as the case may be, of any sum adjudged to be so
due in such other currency, the Security Agent, the Agent, the Paying
Agent, or such Bank, as the case may be, may, in accordance with
normal banking procedures, purchase Deutsche Marks with such other
currency; in the event that the Deutsche Marks so purchased are less
than the sum originally due to the Security Agent, the Agent, the
Paying Agent, or any Bank, in Deutsche Marks, such Sponsor, as a
separate obligation and notwithstanding any such judgment, hereby
indemnifies and holds harmless the Security Agent, the Agent, the
Paying Agent, and each Bank against such loss, and if the Deutsche
Marks so purchased exceed the sum originally due to the Security
Agent, the Agent, or such Bank in Deutsche Marks, the Security Agent,
the Agent, the Paying Agent, or such Bank, as the case may be, shall
remit to the relevant Sponsor such excess.
SECTION 14.7 License Agreement. With respect to the License Agreement,
(a) AMD Inc. hereby waives, and agrees to cause each of its Subsidiaries
other than AMD Saxonia to waive, any and all rights, claims and/or
causes of action such Person now has or in the future may have against
AMD Saxonia, its successors and assigns, the Agent, the Security
Agent, the Paying Agent, any Bank, any receiver appointed to operate
the Plant, or a third party purchaser of the capital stock, or of all
or substantially all of the assets, of AMD Saxonia (herein
collectively referred to as the "Beneficiaries" and individually as a
-------------
"Beneficiary"), based on: (i) its use, in any manner whatsoever, of
-----------
any Non-Proprietory Know-how or of Information Residuals (as such
terms are defined
75
in the License Agreement); (ii) its use, within the scope of the
license granted in Section 3(a) of the License Agreement, of the
------------
Developed Intellectual Property (as defined in the License Agreement),
or (iii) its use, in any manner whatsoever, of Post Research Agreement
AMD Saxonia Developed Improvements or Post Research Agreement AMD
Saxonia Developed Intellectual Property (as such terms are defined in
the License Agreement). The preceding sentence notwithstanding, AMD
Inc. does not waive any rights, claims or causes of action based on
the infringement and/or misappropriation of any patents, copyrights,
mask works, trademarks and trade secrets, whether registered or not,
which are owned by AMD Inc. or by an Affiliate of AMD Inc. other than
AMD Saxonia and not licensed to AMD Saxonia under the License
Agreement; provided, however, that the use of Information Residuals
shall not be deemed to constitute an infringement and/or
misappropriation of any intellectual property rights of AMD Inc. or
any of its Subsidiaries (other than AMD Saxonia).
(b) each Sponsor hereby acknowledges and agrees that, following the
termination of the AMD Saxonia Wafer Purchase Agreement, the operation
of the Plant by AMD Saxonia, its successors and assigns, or by a
Beneficiary shall not, absent a separate infringement or other
unlawful violation, under the License Agreement or otherwise, of a
proprietary, substantial, and identifiable right of AMD Inc., or any
of its Subsidiaries other than AMD Saxonia, constitute: (i) a breach
of the terms of the License Agreement or of any of the Service
Agreements (as defined in the License Agreement), or (ii) an
infringement upon any intellectual property right of AMD Inc. or its
Subsidiaries other than AMD Saxonia; and
(c) except where such failure was due to a breach by AMD Saxonia of its
covenants to cooperate with AMD Inc., if AMD Inc. fails to complete
the document removal process set forth in Section 9 of the License
Agreement within the period required therein following the termination
of the AMD Saxonia Research Agreement, AMD Inc. and its Subsidiaries
other than AMD Saxonia shall be deemed to have waived any and all
rights, claims and/or causes of action they have or in the future may
have against AMD Saxonia, its successors and assigns, or against a
Beneficiary based on the disclosure or use, for any purpose, by such
Person of any documentation left in the Plant on the grounds that such
documentation or the information contained therein is proprietary to
AMD Inc. or its Affiliates or Subsidiaries other than (in either case)
AMD Saxonia.
ARTICLE XV
Miscellaneous
SECTION 15.1 No Waiver; Modifications in Writing. No failure or delay on the
part of the Agent or the Security Agent in exercising any right, power, or
remedy hereunder shall operate
76
as a waiver thereof, nor shall any single or partial exercise of any such right,
power, or remedy preclude any other or further exercise thereof or the exercise
of any other right, power, or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Agent or the Security Agent at law or otherwise. No amendment, modification,
supplement, termination, or waiver of or to any provision of this Agreement, or
consent to any departure by either Sponsor therefrom, shall be effective unless
the same shall be in writing and signed by or on behalf of the Agent and the
Security Agent. Any waiver of any provision of this Agreement, and any consent
to any departure by either Sponsor from the terms of any provision of this
Agreement, shall be effective only in the specific instance and for the specific
purpose for which given. No notice to or demand on either Sponsor in any case
shall entitle such Sponsor to any other or further notice or demand in similar
or other circumstances.
SECTION 15.2 Severability of Provisions. In case any provision of this Agreement
is invalid or unenforceable, the validity or enforceability of the remaining
provisions hereof shall remain unaffected. The parties hereto shall have an
obligation to replace any invalid or unenforceable provision by a valid and
enforceable provision which approximates best the economic purpose of the
invalid provision.
SECTION 15.3 Termination. This Agreement and the obligations of the parties
hereunder shall terminate on the day that AMD Saxonia has paid in full all of
the Primary Secured Obligations, and the Banks shall have no other or further
commitments under the Loan Agreement; provided, that such obligations shall
---------
automatically revive and be reinstated if and to the extent that AMD Saxonia
shall subsequently have obligations to any Secured Party under or in connection
with any of the Operative Documents.
SECTION 15.4 Assignment. This Agreement shall be binding upon and shall inure to
the benefit of each party hereto and their respective successors and assigns;
provided that neither AMD Inc. nor AMD Holding shall have the right to transfer
--------
or assign its rights under this Agreement without the prior written consent of
the Agent and the Security Agent.
SECTION 15.5 Notice. All notices, demands, instructions, 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, and shall be deemed to be given for purposes of this Agreement on
the day that such writing is delivered or sent to the intended recipient thereof
in accordance with the provisions of this Section 15.5. Unless otherwise
------------
specified in a notice sent or delivered in accordance with the foregoing
provisions of this Section 15.5, notices, demands, instructions, and other
------------
communications in writing shall be given to or made upon the respective parties
hereto at their respective addresses (or to their respective telex, TWX or
telecopier numbers) indicated below.
77
To the Security Agent:
Dresdner Bank AG, as Security Agent
Dr. Kulz-Ring 10
01067 Dresden
Attention: Direktion
Facsimile No.: (49) 351 489-1350
To the Agent:
Dresdner Bank AG, as Agent
Dr. Kulz-Ring 10
01067 Dresden
Attention: Direktion
Facsimile No.: (49) 351 489-1350
To AMD Inc.:
Advanced Micro Devices, Inc.
One AMD Place
Sunnyvale, California 94088
Attention: General Counsel
Facsimile No.: (1) (408) 749-3945
To AMD Holding:
AMD Saxony Holding GmbH
Washingtonstrasse 16 A/B
01139 Dresden
Attention: Geschaftsfuhrer
Facsimile No.: 49 351 8412 150
SECTION 15.6 Relationship to Other Agreements. The rights of the Agent and the
Security Agent pursuant to this Agreement are in addition to any other rights or
remedies which the Agent and the Security Agent may have under statutory law or
other agreements between one or more of the Agent, the Security Agent, the
Banks, and AMD Inc. or AMD Holding.
SECTION 15.7 Effectiveness of Agreement; Survival; Expiry of Obligation. This
Agreement shall not be effective for any purpose whatsoever prior to the
execution and delivery of the Loan Agreement by each of AMD Saxonia and the
Agent. Subject to Section 15.3 hereof, the obligations of the Sponsors under
------------
this Agreement shall terminate, except as otherwise
78
provided herein, upon the payment in full of all of the Primary Secured
Obligations to the Secured Parties under or in connection with the Financing
Documents and the Security Documents, and the expiration or termination of all
of their respective commitments thereunder (the "Loan Agreement Termination
--------------------------
Date"); provided, however, that the obligations of the Sponsors contained in
---- -----------------
Article XIV hereof shall survive any termination of this Agreement. Except as
-----------
provided in Section 2.4 of the Sponsors' Guaranty, the obligations of the
-----------
Sponsors under the Sponsors' Guaranty shall expire once the Agent advises the
Sponsors that Completion has occurred.
SECTION 15.8 EMU. European Economic and Monetary Union anticipate the
introduction of a single currency and the substitution of the national
currencies of Member States participating in Monetary Union. On the date on
which the Deutsche Mark 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.
ARTICLE XVI
Governing Law, Jurisdiction, and Language
SECTION 16.1 Governing Law. The form and execution of this Agreement and all
rights and obligations of the parties arising hereunder shall be governed by the
Laws of the Federal Republic of Germany.
SECTION 16.2 Jurisdiction. Each of AMD Inc. and AMD Holding hereby submits to
the exclusive jurisdiction of the courts in Frankfurt am Main for any dispute
arising out of or in connection with this Agreement. AMD Inc. states that
Advanced Micro Devices GmbH, whose address is Rosenheimerstrasse 143b, 81671
Munich, Germany, Attention: Legal Department, Tel: +49 89 450 530, Fax: +49 89
406 490, Telex: 841523883, is its accredited agent for service of process and
hereby undertakes to maintain an agent for service in Germany. The foregoing
submission to jurisdiction shall not (and shall not be construed so as to) limit
the rights of the Agent or the Security Agent to take suits, actions, or
proceedings against a Sponsor to enforce any judgment rendered by the courts in
Frankfurt am Main in any other court or entity of competent jurisdiction where
such Sponsor has assets, nor shall the taking of suits, actions, or proceedings
to enforce any such judgment in one or more jurisdictions preclude the taking of
enforcement proceedings in any other jurisdiction, whether concurrently or not.
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SECTION 16.3 Use of English Language. This Agreement has been executed in the
English language. All certificates, reports, notices, and other documents and
communications given or delivered pursuant to this Agreement shall be in the
English language and, if reasonably requested by the Agent, shall be accompanied
by a certified German translation thereof. In the event of any inconsistency,
the English language version of any such document shall control.
IN WITNESS WHEREOF, each of the parties set out below has caused this Agreement
to be duly executed and delivered by its respective officer or agent thereunto
duly authorized as of the date first above written.
ADVANCED MICRO DEVICES, INC.
By /s/ Marvin D. Burkett
---------------------------
Its
----------------------------------------
AMD SAXONY HOLDING GMBH
/s/ Marvin D. Burkett
---------------------------
DRESDNER BANK AG, as Agent and Security Agent
/s/ Dr. Hans-Jurgen Menzel /s/ Horst Oechsler
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Sponsors' Support Agreement - Advanced Micro Devices Inc., AMD Saxony Holding GmbH and Dresdner Bank AG
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